American Samoa

Economic Environment

The Territory of American Samoa lies south of the equator between about 13° and 15° South latitude and 169° and 171° West longitude. Its seven islands and two atolls account for 76.1 square miles of land dispersed over 150 miles of the Pacific. The largest island of Tutuila accounts for 56 square miles, or 70 percent, of the total land area. Pago Pago Harbor, one of the best natural deepwater harbors in the Pacific, is located on Tutuila. The terrain of American Samoa is rugged with high volcanic mountains descending sharply to a limited amount of level land. Its tropical climate has year-round temperatures between 70 and 90 degrees, with frequent rainfall and humidity averaging 80 percent.

The estimated population of American Samoa was 67,084 as of July 2001, with about 38 percent of the population under 15 years old, 57 percent between 15 and 64 years old, and 5 percent 65 and over. The estimated growth rate was 2.42 percent. With an estimated 24.88 births per 1,000 people and 4.31 deaths and 3.58 migrations per 1,000 people, the population of American Samoa is expected to increase significantly over the next several years.

In November 2000, Tauese P. Sunia was reelected to serve a second four-year term as governor of American Samoa. Democrat Sunia narrowly beat out independent Lealaifuaneva Peter Reid with 50.7 percent of the votes compared to Reid's 47.8 percent.

The major sources of income in American Samoa are the tuna canneries, government services, and remittances from Samoans overseas. In 1998, the two fish canneries located in Pago Pago provided more than 5,000 jobs, surpassing the American Samoa Government as the Territory's largest employer. Exports of canned tuna and related products to the U.S. totaled about $400 million that same year. It should be noted, however, that the majority of cannery workers come from neighboring Samoa (formerly known as Western Samoa). In addition, the future viability of the tuna industry in American Samoa depends on its continued duty-free status and tax exemption and on a competitive wage scale. Without these tax exemptions and with the growth of foreign competitors with lower payroll costs, the future of the canneries could be in jeopardy.

The American Samoa Government (ASG) is now the Territory's second largest employer, yet it still employs approximately one-third of the workforce. With no local or municipal sublevels, the American Samoa Government is highly centralized and performs all basic government functions plus a few more. Despite continuing pressure for greater government efficiency, the ASG is heavily influenced by the paternalism of the matai (chief) system and has found it difficult to reduce its payroll. Many in the ASG perceive their role in social and economic development as providers of jobs and incomes, in addition to government services.

Many of those who do not wish to work in government or canning immigrate to the United States in search of other work. More Samoans currently live abroad than in American Samoa. An estimated 70,000 Samoans live in the United States, with 20,000 of them in Hawaii. This large number of overseas Samoans account for the large amount of remittances sent home, which contributes to American Samoa's economy.

Efforts to diversify the economy are limited by the lack of natural resources, land, and infrastructure typical of Pacific Island communities. Hopes of establishing successful garment factories were diminished when the island's first garment factory, which opened in 1996 and made brand-name clothes for the U.S. market, ran into legal problems concerning the mistreatment of foreign labor. Although the ASG has been looking for other manufacturers to take over the idle facility, none have started operations at this time. There is potential, however, in tourism, especially ecotourism, with the establishment of the National Park of American Samoa in 1993. The 8,000-acre park, which spreads over three islands, protects the only mixed species paleotropical rainforest in the United States, and includes 1,000 acres of the finest coral reef in the Territory.

In 1997, the most recent year for which complete data was available, there were a total of 10,735 air arrivals (excluding those from Western Samoa) to American Samoa, with the majority, or about 78 percent, arriving from the United States, New Zealand, and Australia. With the development of improved visitor accommodations and with proper marketing, especially in collaboration with Western Samoa, which received 44,231 air arrivals (excluding those from American Samoa) in 1997, tourism in American Samoa has much growth potential.

Aside from the current and potential income generating industries, agriculture continues to provide for the subsistence needs of the American Samoa people. If emphasized, however, agricultural production could help reduce food imports and even improve job opportunities. Unfortunately, two-thirds of American Samoa is too steep and therefore unsuitable for most farming purposes. In addition, farmers must now compete with industrial users for the largest area of level land, which is on the Tafuna Plain near the international airport.

According to Bank of Hawaii's 1997 economic report on American Samoa, estimated Gross Domestic Product that year was $253 million, with a per capita GDP of $4,295. For its 1996 to 1997 fiscal year, the American Samoa Government had revenues of $121 million (37 percent in local revenues and 63 percent in U.S. grants), with expenditures of $127 million. In fiscal year 1999, excluding grants, the ASG expended $48.8 million on revenues of $46.7 million, continuing a 20-year history of deficit spending.