Economy of Samoa - Natural Disasters

Natural Disasters

The effects of three natural disasters in the early 1990s were overcome by the middle of the decade, but economic growth cooled again with the regional economic downturn. Long-run development depends upon upgrading the tourist infrastructure, attracting foreign investment, and further diversification of the economy.

Two major cyclones hit Samoa at the beginning of the 1990s. Cyclone Ofa left an estimated 10,000 islanders homeless in February 1990; Cyclone Val caused 13 deaths and hundreds of millions of dollars in damage in December 1991. As a result, gross domestic product declined by nearly 50% from 1989 to 1991. These experiences and Samoa's position as a low-lying island state punctuate its concern about global climate change.

Further economic problems occurred in 1994 with an outbreak of taro leaf blight and the near collapse of the national airline Polynesian Airlines. Taro, a root crop, traditionally was Samoa's largest export, generating more than half of all export revenue in 1993. But a fungal blight decimated the plants, and in each year since 1994 taro exports have accounted for less than 1% of export revenue. Polynesian Airlines reached a financial crisis in 1994, which disrupted the tourist industry and eventually required a government bailout.

The government responded to these shocks with a major program of road building and post-cyclone infrastructure repair. Economic reforms were stepped up, including the liberalization of exchange controls. GDP growth rebounded to over 6% in both 1995 and 1996 before slowing again at the end of the decade.