The bigger picture

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Dear Editor,

Well it goes back to that question “What does China get out of these projects?”

Quite a few people automatically go to the usual brain dead reply that China wants Samoa’s land. 

No, what china gets out of these deals is that their workers are employed working on it and it is their companies that get the deals from the Chinese government to build these things. 

If China is going to pay $400 million up front to make this airport happen, then their government wants something out of it for the benefit of their people. 

Samoa doesn’t have a cool $400 million lying around. There are certainly not enough taxpayers in Samoa to pay enough tax to fund something like this up front. 

There are no other regional financial institutions or governments that would ever agree to building something like this in Samoa. 

So yes, this is exactly what China gets out of it. It is either that or you can wait another 50 years for enough money to be saved up for Samoa to build an airport like this where Samoa can dictate that its workers work on it.

What does Samoa get out of it? 

Samoa gets a modern airport built. This airport becomes a catalyst for economic growth because it facilitates more aircraft and flights and therefore more people flying into Samoa. 

Already Tahiti Nui has signed up to fly into Samoa several times a week, including direct flights to Asia and the US mainland, as well as providing competition for Air New Zealand on the Auckland-Apia route. 

Those people come with foreign cash to spend in Samoa’s economy and it is that money that goes into Samoan pockets. 

The tourism earnings for Samoa are already at over $300 million a year. This will only grow in years to come. The capacity of the current airport cannot handle 2 flights at once. In fact, it can barely handle 1 big flight.

What else does Samoa get out of it? 

The increased retail space at the airport is able to provide for ways for the airport to pay for itself (hence the loan repayments). Samoan products and retailers to market their wares to an increased market.

Furthermore, the development loan is at something like 2% concessional rates and with long grace periods. Tell me what commercial bank would ever loan out at such stupidly low rates and long grace periods?

 

PS Jeffrey

 

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