Overseas work will boost economic recovery, bank says

The Asian Development Bank is backing overseas labour opportunities for Samoa’s economic relief, in its latest Pacific Economic Monitor.

Released on Tuesday, the A.D.B.s analysis says while tourism won’t recover soon, Samoa should capitalise on Australia and New Zealand’s need for imported labour.

If barriers to seasonal labour could be smoothed out the economic pressure could be significantly alleviated, analyst James Webb writes.

“Ultimately, pushing hard to expand the seasonal worker schemes for the upcoming season would substantially alleviate the economic and fiscal pressures facing Samoa… without exposing domestic populations and health systems to the threat of COVID-19 from inbound tourism.”

So far, Samoa has not publically revealed whether seasonal workers will be sent to Australia or New Zealand, even as other Pacific Islands begin sending groups to parts of Australia to relieve the local worker shortage there. 

A major concern for the Government is how to get those exported workers home again safely when required. There are still hundreds of Samoans in New Zealand who have been there since last year’s picking season who started new contracts instead of coming home.

In the seafaring industry, over 200 sailors on cruise and cargo ships have been waiting months to get home safely too, though many work in countries harder hit by the pandemic.

But New Zealand and Australia desperately need the labour, with growers and exporters calling for help before their produce rots on the ground.

A.D.B. reports New Zealand will have just 11,000 out of a typical 70,000 backpackers who typically take on seasonal picking jobs, and Australia is looking at needing an extra 26,000 people on farms and orchards. 

Ministry of Commerce, Industry and Labour’s head of the seasonal work scheme Lemalu Nele Leilua has previously said thousands of workers are ready to go, as soon as New Zealand or Australia call for them.

Majority are already vetted and have their approvals to join a Recognised Seasonal Employer scheme with a registered employer in New Zealand or the Seasonal Work Programme or Pacific Labour Scheme in Australia.

Meanwhile the A.D.B. points out that while the local economy in Samoa continues to contract, remittances continue to flow in consistently. 

Remittances increased 6.2 per cent in the year to September 2020, despite fears that Australia and New Zealand would be facing economic crises of their own, and remittances would drop.

With gross domestic product project to contract 10.7 per cent in 2021 from 3.5 per cent in 2020, and inflation projected to grow 1.7 per cent from 1.5, the A.D.B. is expecting Samoa to have a bumpy recovery from the pandemic.

A timeframe on tourism’s bounceback is unknown. In the last week, New Zealand announced a travel bubble with the Cook Islands will open in March, and another with Australia is on the cards for the first quarter of next year. 

No discussions with Samoa have been discussed by officials yet. 

“Any expansion of this travel bubble to include South Pacific destinations—perhaps starting with the Cook Islands, Fiji, and Niue—is likely to be pushed back into 2021 at the earliest,” the A.D.B. states.

The latest global forecasts project a 4.4 per cent global contraction this year, with recovery of 5.2 per cent in 2021.

In its latest report, the A.D.B. recommends countries focus their efforts on the most vulnerable in their populations, as the effects of COVID-19 on the economy exacerbates existing crises.

People with disabilities or suffering social exclusion, people losing their jobs and unable to replace them, young and older people could be further at risk because of the pandemic.

“The poorest and most marginalized communities are more at risk to the threats of food shortages and malnutrition because of COVID-19 impacts on food supply,” the A.D.B. writes.

Social protection mechanisms have to be developed and improved across the region to avoid widespread damage.

The region’s developing countries on average spent 28.9 per cent of their COVID-19 response budgets on social protection measures. 

But the multilateral bank is concerned this spending is not sustainable into the future.

“The pandemic has highlighted the important role of social protection systems in providing relief to vulnerable groups in the face of crisis.

However, higher spending on these measures, coupled with lower government revenues because of the economic downturn, is expected to translate to wider fiscal deficits.

“Without additional external financing, these countries will be forced to make significant cutbacks in other expenditures or to add considerably to public debt.”

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