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Governor sees “real potential” for Am Samoa’s economic prospects

Gov, Lemanu with President of the Senate
This despite high inflation and threats to the tuna industry
fili@samoanews.com

Pago Pago, AMERICAN SAMOA — In his fiscal year 2024 Budget Plan Executive Summary letter to Fono leaders, Gov. Lemanu P. S. Mauga informed lawmakers that the government’s proposed revenue streams for the new fiscal year indicates the local economy is vibrant, but he also cited risk factors for future economic prospects.

At the outset of his proposed FY 2024 budget submission of more than $664 million, the governor points out that it’s with “great hope that through our shared responsibility this budget document will chart the future for our territory in the upcoming year.”

Lemanu declared that: “Despite our successes in dealing with the overlapping challenges stemming from the pandemic, geo-political risks, and the persistent high inflation that maybe leveling off, a potential economic downturn still remains.”

“Even with these uncertainties, we are cautiously optimistic about ASG’s record level revenues. These revenues indicate that our local economy is vibrant and has grown more resilient,” he points out.

The governor reminded lawmakers that American Samoa continues to reap benefits from the inflow of federal aid.

“Together with our local funds, this aid has given us the opportunity to improve and better our community through improvements in public parks for our kids to enjoy, new school buildings for curriculum, better roads for access in case of emergency, and so much more,” he said.

And with “confidence,” the governor said that, “I am glad to report that our financial position is sound and our revenue streams are strong. This provides the tapestry of financial stability needed for our FY2024 Budget Plan.”

Lemanu also shared with the Fono the long-standing concerns pertaining to increases in the cost of living and its impact on those who are at the bottom of the economic ladder.

“Not too long ago, we increased the minimum wage as well as the payroll for the general government workforce to help offset the high cost of living,” he points out. “Since we began this journey three years ago, our revenues have surged significantly and have given us the capacity to increased our general fund operational budget by 30%.”

He said a minor portion of the revenue pool goes to sustain the wage increases, but for the most part has been used to ease the burden on those struggling due to the high cost of living.

For the proposed FY 2024 budget, he said that funding allocation “has been strategically developed to ensure our priorities on healthcare, education, public safety, economic development and infrastructure development are being addressed.”

“We continue to leverage federal funding to ease the burden on our local funds. Ultimately, adequate funding must be provided so government services to the community will continue to be provided for the benefit of our community,” he points out.

ECONOMIC OUTLOOK

The governor also shared his view on the territory’s economic outlook, as lawmakers prepare to tackle the FY 2024 budget, which is the priority agenda for the current Legislative session.

Lemanu explained that the post pandemic recovery, the current environment of persistent high inflation, geo- political conflicts, and risks in global economies including the United States continue to create uncertainty over future economic prospects.

“Other factors that pose risks include those with cannery operations such as the minimum wage increases, shrinking market for fishing grounds, environmental enforcement, and uncertainty with future extensions of the [federal] 30(A) tax exemption,” he explained.

But despite these issues, the governor noted that meeting demand in production base on existing contracts including niche markets are expected to provide stability in cannery operation.

“With help of the guest workers program, the cannery is running near maximum capacity with future plan to sustain production levels to meet demands,” he said.

(Samoa News notes that the guest workers program — referred to by the governor, is the local law that allows the cannery to hire workers from Samoa; while the “fishing grounds” pertains to the federal government proposal to expand the sanctuary marine monument status of the Pacific Island Remote Area, which American Samoa considers a critical fishing area for the vessels fishing for the cannery.)

In his letter, the governor reminded lawmakers that federal aid received by the American Samoa Government will certainly continue to stimulate the economy and create job growth despite risk of high prices and potential for a slowdown.

“There have certainly been an increase in business activities like home repairs and project construction being supported by post pandemic federal aid,” he said. “In addition, the government will continue its efforts to establish labor intensive industries including attracting new ones to provide employment opportunities for our people.”

In his final take on economic outlook, the governor reiterated that the increase in government wage compensation continues to provide economic stimulus to help ease the burden of the high cost of living and family obligations.

“Our local economy will continue to be supported by a strong pool of federal aid with prospect of persistent inflation (high prices) leveling off. There is real potential for sustaining economic growth and averting a slowdown,” he said.

Samoa News will report in future editions on other issues cited in the governor’s letter.