Alarm bells on declining economy, election candidates and Polynesian Airlines
It is undeniable that these are tough times on so many different fronts.
It is why the story titled “Economy falls faster than ever” published on the front page of the Weekend Observer was hardly surprising. Placed next to another story titled “Surge in election candidates number” which told us that 200 candidates have signed up for the General Election, the front page spoke volumes.
Indeed, it was a timely reminder about the challenges before the nation today and what these candidates are signing up to address. Tough times require tougher leaders and in light of what we are seeing unfold before our very eyes today, quality leadership demands making the right decisions about public monies and how they are spent. This is needed now more than ever before.
Why? Well the answer is simple. Last Friday, the Central Bank of Samoa (C.B.S.) released an update of the economy for the first quarter of the current Financial Year showing that the nation’s economic decline is accelerating.
The update revealed that Samoa’s total economic output for the first quarter of the current Financial Year was some 11.9 per cent lower when compared to the same period the year before. The total Gross Domestic Product has also fallen in value from $556.33 million for the June quarter in 2019 to just $489.89 million.
But that’s not all. The latest report from the Central Bank showed Samoa’s economy performed by a total of 7.1 per cent worse in the previous financial year on the basis of an annual comparison. The large drop is driven mostly by a plunge in the value of tourism from $539.53 million in 2018-2019 to $375.3 million in 2019-2020.
The current period showed zero dollars in total receipts from visitor arrivals, as opposed to $120.44 million in the two months to August last year. Total exports on the other hand for the first quarter stood at $21.76 million, 18.7 per cent lower than 2019 when they had reached $26.77 million.
In a nutshell, things are not looking positive for Samoa. Of course the same could easily be said about other countries, large and small, given the impact of the global coronavirus pandemic and the border shutdown.
But the onus is on the Government leadership to be prudent and make wise decisions to ensure the nation survives the next few months and possibly years.
Which brings us to another story titled “Former Airline chief wants change, sounds alarm” published on the front page of the Sunday Samoan. This time, the story is about former Chief Executive Officer of Polynesian Airlines, Fauo'o Fatu Tielu, confirming his election candidacy and sounding the alarm bells on the Government’s spending. Among a number of issues he raised, Fauo’o revisited the move by the Government to revive international flights for Samoa through what is now called the Samoa Airways.
“This [airline] will bankrupt the Samoan government; they cannot afford to fund Samoa Airways. They should have never revoked the agreement with [Virgin Blue],” said Fauo’o.
“I think it is the wrong move to revive international flights, we should seek partnerships with other bigger airlines to survive the market. The airline business is always challenging and there should be financial stability.”
Fauo’o makes a lot of sense. As the former top man at Polynesian Airlines who turned the airline’s debts around to a profit, Fauo’o’s voice is one of reason and should be listened to.
Looking at Samoa Airway’s journey since it launched in 2017, it has been a tough old time for the Government. It’s mind boggling that for a national carrier, the airline remains without an aircraft.
But that’s only part of the problem. While the airline’s books remain hidden from public view, the little information that has been made public thus far has revealed that the airline’s losses have already run into millions of tala.
Those figures were well before the measles crisis crushed Samoa and now the Coronavirus pandemic, which has truly knocked the life out of the tourism industry, upon which the Government had pinned all hopes for Samoa Airways survival.
Another issue Fauo'o raised was the construction of a $17 million Ti'avea Airport. “This is one of the projects the Government knew is a bad investment yet they still went ahead with it,” he said, adding that the project should have never been built in the first place.
It’s hard to disagree with Fauo’o. At a time like this, every sene counts. There is no place for bad spending especially for a country that has very little money to start with.
Fauo’o’s fears and criticisms are well placed and there are some very valid reasons for them, especially given the fact the last time the government tried to run such a huge commercial operation with Polynesian Airlines, it nearly bankrupted the country.
Today, the writing is on the wall. With a declining economy due to a number of unavoidable and unforeseen circumstances and the woes in the tourism industry, this is definitely not the time for another Polynesian Airlines.
What do you think?