Pago Pago, AMERICAN SAMOA — In his cover letter to the Fono, which includes the proposed fiscal year 2021 budget for the American Samoa Government, Gov. Lolo Matalasi Moliga also provided a “economic outlook” for the territory before he leaves office next January.

The governor explained that the “advent of the COVID-19 pandemic” has devastated the global economy, including the U.S. — with unemployment running rampant creating uncertainty, future economic prospects are being scaled back.

“Fortuitously, bold decisions in the form of exempting StarKist from the Coronavirus restrictions reduced and nullified potential economic backlash attributed to the COVID-19 induced negative effects,” the governor said, referring to the exemption on the hours of operations and bus transportation for cannery workers.

Prior to COVID-19’s arrival, the governor said support granted by ASG facilitated StarKist’s decision to relocate production operations from California to American Samoa thus expanding cannery production capabilities which came in handy with the articulation of the National Food Security Policy demanding full production from all food processing and manufacturing companies in the US.

“Understandingly, this production trend will end as inventory buildup reaches saturation point, but encouraging [is] StarKist will again seek expansion in the production of programs for the US Department of Agriculture which handles military, school lunch, and other ASNAP programs,” Lolo said.

According to the governor, the US economy is on a recovery path, but the speed at which it will progress is determined by the rate of the COVID-19 pandemic being contained.

“American Samoa, unfortunately, is still placed under the cloud of uncertainty,” said the governor and cited the reasons for uncertainty, which he has cited in the past:

•     StarKist operating status being threatened due to the removal of the federal 30(A) Tax Credit;

•     implementation of the federal minimum wage hike which became effective in 2018;

•     continuing escalation in the cost of fish;

•     increased prohibition placed on fishing grounds;

•     financial onslaught in the enforcement of federal environmental regulations; and

•     steady departure of fishing vessels from home porting in American Samoa because of “frivolous and insensitive enforcement of US Coast Guard rules and regulation and now environmental prohibitions.”

Lolo told Fono leaders that the “most pressing hurdle is the price fixing litigation” against StarKist which could result in hefty fines that will certainly affect StarKist’s financial posture. (Samoa News notes that the current price fixing case is at the federal level, for the civil case against StarKist and the other two major US tuna producers.)

“These operating impediments, which are all federally imposed, undermines the competitiveness of StarKist with low-wage fish products processing countries around the globe,” the governor points out.

“It is our hope that the change in fiscal and economic policies by the Trump Administration will reenergize our economic environment,” the governor said.

He said that what American Samoa “drastically needs” is for the federal government to restore federal tax incentives such as the 30(A) tax credit, repeal the automatic minimum wage hike, grant the territory a federal cabotage waiver, re-open high seas fishing, reduce the size of ocean monuments, and establish more economically sensitive enforcement policies of the US Environmental Protection Agency and the US Cost Guard rules and regulations.

Lolo went on to says that local investment in the Hawaiki cable has already begun to bear fruits to the actualization of vision to prompt the development of the technology based industry thus creating “our third diversification pillar to reduce our sole dependence” in the fishing industry and ASG.

“It is encouraging to note that local companies are pursing the establishment of call centers and other business ventures which will certainly create jobs for our people,” he said.

Furthermore, agreements have been signed facilitating technology partner with other Pacific islands such as French Polynesia. Similarly, agreements are being negotiated with other Pacific islands that will become the springboard for technology-based companies.

Hawaiki cable is the only local investment mentioned by the governor, who tells Fono leaders that ASG will continue its aggressive efforts to establish labor intensive industries to provide needed employment opportunities for local residents.

“Exploration of other sources of venture and investment capital outside the federal realm is being pursued recognizing the financial constraints stymieing our efforts to grow our economy, improve the lives of our people and secure a prosperous and sustainable economy for our future generations,” he said.

(Samoa News will report in future editions other issues mentioned in the governor’s cover letter, which is a small-sized booklet.)