ASG focuses on 4 opportunities for expanding American Samoa’s economy
Pago Pago, AMERICAN SAMOA — The US Government Accountability Office (GAO) informed US Congressional members that American Samoa’s efforts to reduce its dependency on the territorial government and the tuna canning industry continue with attempts to diversify the local economy.
Efforts to diversify the local economy are among several issues covered in the GAO’s June 11th report on American Samoa: economic trends, status of tuna canning industry and stakeholders view on minimum wage increases.
In the report ASG informed GAO that the territory’s dependence on the government and the tuna canning industry “has exposed the economy to external risks, including changes in federal grant funding and global competition in the tuna canning industry.”
“To reduce this dependence, the government has developed plans to diversify the economy,” the GAO report said. It notes that American Samoa’s economic development implementation plan for fiscal years 2014 to 2017 and the economic development strategy for 2018 to 2022 outline economic development goals for sectors such as transportation and tourism, as well as action items to achieve these goals.
ASG has identified ecotourism as an economic opportunity because the island’s mountains, tropical rain forests, coral reefs, and the National Park of American Samoa may be attractive to tourists.
However, GAO notes that ASG has cited the federal restrictions on competition in passenger air carrier service to American Samoa as an impediment to developing the tourism sector.
GAO explained that the federal government restricts foreign airlines from carrying U.S. domestic passengers or cargo between U.S. locations, other than as part of a through trip involving a foreign location (cabotage), unless authorized by the U.S. Department of Transportation on the basis of specific criteria.
As of August last year, Hawaiian Airlines provides two weekly flights between Honolulu and Pago Pago, with a third weekly flight added during peak travel seasons, said GAO referring to peak travel season in the summer and Christmas holiday time.
In recent years, said GAO, the American Samoa government’s efforts to diversify the economy have centered on the development of the telecommunications industry. It says that ASG has made major investments in telecommunications infrastructure over the past 5 years, through the American Samoa TeleCommunications Authority (ASTCA).
And ASTCA officials told GAO that they have managed the development of the territory’s telecommunications infrastructure projects. For example, in 2015, the federally funded Broadband Linking the American Samoa Territory (BLAST) project was completed and it replaced the territory’s copper infrastructure with a fiber optic network capable of delivering high-speed data, voice, and cellular backhaul services.
ASTCA officials also informed GAO that the Hawaiki cable project, completed and activated in 2018, added bandwidth to the BLAST network by connecting the territory via an underwater cable branch to the main Hawaiki cable trunk in Hawaii.
The ASTCA officials stated that the Hawaiki cable is a 15,000 kilometer, high-capacity underwater cable connecting Australia and New Zealand to the mainland United States, American Samoa, and Hawaii; and that ASG invested approximately $30 million to acquire its connection to the Hawaiki cable, using funding from American Samoa’s 2018 general revenue bond series.
According to ASTCA officials, other ongoing, multi-million dollar projects to enhance the territory’s telecommunications infrastructure include projects to upgrade BLAST bandwidth distribution and replace the territory’s 2G network with LTE technology.
“The American Samoa government believes that the newly activated Hawaiki cable and BLAST fiber optic network have raised the territory’s potential to develop new industries tied to telecommunications, including information communication technology and business process outsourcing,” said GAO.
According to an American Samoa Department of Commerce (ASG-DOC) survey of over 50 public and private stakeholders, 64% of respondents—the largest share—identified information communication technology as one of the most promising economic development opportunities for the territory.
The next four most promising opportunities identified by approximate share of respondents included attracting investors for capital investment projects (58%), general tourism (47%), ecotourism” (47 percent), and federal programs (47%), GAO reports based on information from ASG-DOC.
Despite progress made, GAO said that American Samoa’s telecommunications industry is still at an early stage of development as ASG seeks to attract new telecommunications businesses, including a proposed call center, by identifying various competitive advantages for locating in American Samoa.
ASG-DOC officials stated that these advantages include an English-(American) speaking workforce with the lowest labor costs in the United States, and the territory’s qualification as an on-shoring location for call centers and other business process outsourcing operators.
Officials at both ASG-DOC and ASTCA informed GAO that they are currently developing a territorial broadband strategy and proof-of-concept for a call center industry, expected to be released in mid-2020.
Additionally, ASTCA officials expect the Territorial Bank of American Samoa that opened in October 2016 to support the efforts to develop the telecommunications industry by encouraging investment in financial technology businesses.
ASTCA officials stated that the “bank is partnering with the authority to develop internet banking services, which are expected to be offered in the next 2-3 years,” said GAO.