Trade Commission report cites challenges to investment in Am Samoa

Pago Pago, AMERICAN SAMOA — Among the challenges cited in a federal government report when it comes to investment in American Samoa, includes the “onerous process of obtaining a business license” and “restrictions on foreigners purchasing land”. It further points out that in terms of value, investments are in natural resource sectors and are concentrated in resource-based economies — American Samoa is not mentioned.

Released on Monday, the report by the U.S. International Trade Commission (USITC) covers the period of 2017 to 2021 for 22 Pacific Islands economies and includes a sector profile, which focuses on Foreign Direct Investment (FDI) in Pacific Island economies.

And the report titled — “U.S-Pacific Islands Trade and Investment: Impediments and Opportunities” — provides data and analysis for the individual Pacific island economies, which includes a limited-summary section on American Samoa.

“Total reported FDI in American Samoa was $125 million in 2021,” according to the report. And data included in the report shows total reported FDI in 2020 was $104 million while it was $94 million in 2019 and $34 million in 2018.

For 2021, the USITC report said that one of the largest investments in American Samoa is South Korea’s StarKist tuna cannery, which is the largest private employer and the second-largest employer overall on American Samoa.

The broadband industry has also seen recent investment, according to the report and explained that Fiji-based Amalgamated Telecom Holdings acquired Bluesky Communication, formerly owned by Spain’s Amper S.A.

“Industry representatives, however, have noted that demand for broadband is low because of a lack of cellular subscriptions,” the report said but didn’t specify the industry representatives who were interviewed.

Footnotes in the report states that industry representative interviewed by USITC staff was conduct in Mar. 31 this year; while a US government official interview by USITC staff was in Mar. 30.

“Industry representatives have also noted several challenges to investment in American Samoa, including the onerous process of obtaining a business license, such as physically having to travel to different departments, costly electricity, and restrictions on foreigners purchasing land,” the report says.

Samoa News notes that the American Samoa Commerce Department website (https://www.doc.as.gov), provides a portal to apply for a business license online as well as a link to “Invest American Samoa” — for those looking to invest in the territory.

One of the investment projects is “Technology”, with information on the portal explaining that Gov. Lemanu P.S Mauga has initiated the development of the Innovation & Technology Campus to leverage the government's $150 plus million investment into modernizing the territory's telecommunications infrastructure.

“With the fiber-to-the-premises project complete and the purchase of a spur to link American Samoa  (AS) to the Hawaiki Submarine cable, broadband resources are near unlimited,” it says.

BACKGROUND

Summary of the USITC report, states that FDI in Pacific Island economies appears to be affected by factors consistent with academic literature on the determinants of inward FDI.

These factors include large market size, availability of natural resources, geographic proximity to the investing country, and domestic factors such as robust regulatory environments and the rule of law, among others. Therefore, countries with large reserves of natural resources and larger consumer markets, such as Papua New Guinea and Fiji, tend to attract more foreign investment.

And the majority of investment, in terms of value are in natural resource sectors and are concentrated in resource-based economies such as Papua New Guinea, the Solomon Islands, and, to a lesser extent, Fiji.