Remittances stabilise Samoa’s economy, says Maiava
Remittances are not only important to low income families living below the poverty line, but it has also been an “economic stabiliser” for Samoa.
So says the Governor of the Central Bank of Samoa, Maiava Atalina Ainuu-Enari, in response to questions sent to her by the Sunday Samoan.
“One of the main positive impacts of remittances is that it is an additional source of income for many low income families in Samoa,” she said.
“Remittances can then be used by these low income families to pay for education (school fees), health (medical bills), build homes and buying cars – in addition to daily expenses like food and transport."
“A small portion of these remittances are invested, for example, setting up a small family business, buying property.”
Maiava highlighted during the tsunami in 2009 and cyclones in the past (1991-2000) rebuilding the lives of those affected.
“What this means is that in the aftermath of natural disasters, the inflow of private remittances for families and churches has been quick, and has allowed those most affected (families and businesses) by these disasters to quickly rebuild and recover (hence stabilising the economy) while official assistance and aid may take longer to arrive and disburse.”
She explained that New Zealand has traditionally been Samoa’s source of remittances, given that it has the largest Samoan diaspora.
“And we have the Treaty of Friendship with New Zealand, where 1,100 residents of Samoa are eligible to migrate to New Zealand under this scheme,” she added.
“What this means is that there is a steady increase in the number of Samoan immigrants to New Zealand, which will normally translate to increasing remittances from New Zealand."
“Also, the New Zealand dollar has been fairly strong in the past few years, which also contributed to the large nominal value of remittances from New Zealand.”
Maiava acknowledged the senders of remittances from abroad, as they directly contribute to the livelihood of their respective families in Samoa.
“These remittances are directly financing their families’ and churches’ domestic consumption and financial commitments and obligations to their local communities, and possibly to a lesser extent through investments."
“The main recipients of remittances are individuals and families at an average of 68 per cent, while the second largest recipients of remittances are churches and charitable organizations at 11 per cent on average."
“The bulk of remittances that is received, come through the money transfer operators (average 80 per cent) with 20 per cent received through the commercial banks.”
Tourism and Remittances are the largest foreign exchange earner for the country. These foreign exchange are kept as the country’s official foreign reserves, and used to make much needed foreign payments on imported goods (oil, cars, food) and services (transport services).