High communication costs hold back Samoans

The high cost of telecommunication services and lack of education and training are few of the many hurdles that inhibit Samoans from capitalising on remote hiring and working, according to a new study.

Samoa is one of seven Pacific island countries covered in a study published by the World Bank in December 2020.

The “Pacific Island Countries in the Era of COVID-19: Macroeconomic Impacts and Job Prospects” report examines the impacts of the COVID-19 pandemic on Pacific countries and also provides solutions. 

“Limited access to telecommunications services remains a key obstacle to the digitization of work and financial systems in these countries,” the report states.

Internet penetration remains low and mobile phone access varies but remains consistently below the average for middle-income countries.

Internet on mobile phones is even more limited, the report notes. 

While phone costs in places like Tonga are comparable to the average of developing countries in the East Asia and Pacific region, costs are twice as high in Samoa which reduces the ability of low-income households to use phone services.

Samoa's major telecommunications companies Digicel and Vodafone were asked to comment on the World Bank-authored report that cited high phone and internet costs.

Vodafone Chief Executive Officer Nofoasaefa Satish Sharma and Digicel Samoa C.E.O. Mark Witthuhn have not responded to questions sent by this newspaper as of press time.

The most prominent labor-market trend that has emerged out of COVID-19 is the swift and substantial adoption of remote working across countries and most industries, the report states.

The prevalence of home-based work has led to a surge in demand for telecommunications services, infrastructure and devices, which in turn presents employment opportunities in these industries in the short - and medium - term.

The high cost of subscribing to broadband or accessing mobile cellular services is likely to weaken low-income households’ access to broadband internet. 

For instance, the prices of fixed-broadband service are equivalent to 12 per cent of Gross National Income (G.N.I.) per capita in Samoa; and by 2017, 41 per cent of the population have access to internet in Tonga compared to 34 per cent in Samoa. 

It is likely those at the higher end of the income distribution and those in urban areas, who have better access to digital resources, are more likely to benefit from any moves towards distance learning and remote working. 

“The extent that Pacific economies can benefit from the rising digital economy depends largely on the development of sectors that are accepting of home-based work and how workforces adapt to remote working,” the report states. 

“On the supply side, workers in the seven countries in our study are largely low- and semiskilled, with limited access to education and training facilities.”

Less than 75.5 per cent of the working-age population (15+) in Samoa, for instance, has completed secondary school.

Poor education and training quality are also a challenge. 

“Upskilling the labor force, both in technical and soft skills needed to manage digital work arrangements, is therefore vital for Pacific workers to compete and capitalize on the transition to remote hiring and remote working,” the report states. 

“More importantly, the higher-than expected feasibility and productivity of remote working could lead to a more fundamental shift in business models.

"This trend, if it materializes, could allow Pacific workers to surpass geographic borders – both domestic and international – and be employed remotely.” 

The trend could also enable domestic employers to access non-local talent at lower costs and significantly save on rent and other overheads by reducing or giving up physical office space. 

Industries that have the highest share of jobs that can be performed remotely and hence are most likely to benefit from this remote adoption are: (i) educational services; (ii) professional, scientific, and technical services; (iii) management of companies and enterprises; (iv) finance and insurance; and (v) information. 

The trend, however, cuts both ways; qualified Pacific workers may find themselves vying for the same jobs as workers elsewhere.

Across developed countries, the COVID-19 pandemic has led to increased labor demand in several industries, the World Bank points out.

In Australia, supermarkets, e-commerce, and supply chain businesses have been hiring in large numbers to meet increased demand for truck and delivery drivers, warehouse workers and packers, cleaners, customer service agents, and call center operators.

Healthcare, transport and logistics, mining and mining services, manufacturing, agriculture and public services have also experienced higher labor demand. 

Similar patterns are also observed in the United States, where labor demand remains strong for jobs in nursing, telecommunication software, technical support (including customer relations, I.T., supply chain logistics), and essential retail – including pharmacies and grocery stores. 

Much of this hiring has resulted from short-term spikes in domestic demand for essential goods and services in response to life under quarantine and is unlikely to last after social distancing measures ease. 

Some, however, reflects more permanent structural economic change. 

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