Where and how Pasifika Festival fits into Samoa’s export plan…
Today and tomorrow, Auckland’s iconic Pasifika Festival celebrates its 25th year of showcasing Pacific culture and culinary delights. It is the world’s largest of its kind and continues the global Pasifika wave made by Disney’s Moana last year and at this year’s Oscars.
The Moana link will be highlighted by Auckland band Resonate performing their famous ‘Moana Mash Up’ that’s gone viral online with millions of hits and a thumbs-up from United States talk show queen Ellen DeGeneres.
However, underneath the hype, glitter and deals that serve the ‘Davos-class’ corporations and individuals harvesting the Pasifika brand; are 25 business delegations from seven Pacific islands still searching for ways to claim their pound of flesh from what, essentially, is their product. Simply put, you can have all the Davos Class at Western Springs but if there’s no Pacific people, then there’s no Pasifika Festival.
This is about money, and in terms of trade for Pacific islands, there is an imbalance.
TRADE IMBALANCE: NZ ($1.4BILLION) VS ($0.1BILLION) ALL PACIFIC COUNTRIES
Auckland University Business School’s Dr Manuka Henare highlighted this when interviewed by Maori TV, “The trade with the Pacific is a growing trade and one of the problems we have is that it’s a bit one way. So we sell more to the Pacific than we buy from the Pacific and that’s something we have to correct because there’s an imbalance in trade.”
Dr Henare’s quote is an understatement. According to New Zealand’s Ministry of Foreign Affairs and Trade, in 2013 New Zealand exported goods worth NZ$1.368billion to the Pacific and only NZ$103million were imported from the Pacific.
That trade deficit needs to be addressed and the Pacific islands also need to be proactive and aggressive in the redress. New Zealand government and businesses can only do so much without Pacific island involvement and intervention.
In Samoa’s case, they needed to be proactive in this area, especially with its graduation in January 2014 from Least Developing Nation (LDC) to developing country status which makes it no longer eligible for certain aid and forfeited other international concessions.
On top of that, its main export earner, Yazaki, is set to close by the end of this year and with it, an estimated $60million annual contribution to the Samoan economy.
But since its independence on 1 January 1962, Samoa has had to learn to fend for itself, many times the hard way, but has always shown its resilience to survive.
One of those harsh early lessons is what still drives current Prime Minister Tuilaepa Sailele Naioti Malielegaoi. “As long as I’m Prime Minister, Samoa will never, ever again, ‘ai pakua moa’,” he told the writer during an interview in 2010, referencing 1982 when Samoa was virtually bankrupt.
‘Pakua moa’ or chicken frames were the luxury food item during those 1980s times. As one website described chicken frames, “chicken frames–whether ground or whole–are too bony to be a staple in a dogs diet.”
Since Tuilaepa took over as Minister of Finance in 1991, the Samoan economy has gone from strength to strength. However, living on borrowed money as the Samoan economy has over decades is a constant source of nervousness especially with its narrow resource base, small population, isolation from international markets, and a miniscule exclusive economic zone (EEZ) that provides more than 50% of its total export earnings.
In their 2014 bilateral trading: New Zealand exported SAT$180m (NZ$103m) to Samoa; while Samoa exported SAT$5.6million (NZ$3.2million made up of NZ$1.1m Taro, NZ$0.8m Beer, NZ$0.23m Prepared food).
The trade imbalance is enormous but there is optimism from a man who has grown to a position of central influence in Samoa’s private sector development: businessman Tagaloa Eddie Wilson.
He is also the President for the Samoa Association of Manufacturers and Exporters (SAME) and the leading figure in redressing the trade deficit with New Zealand, as well as the driving force behind the 2014 ‘Buy Samoa-Made’ brand on which networks are built and business certifications for Samoa businesses and products to better access and compete in international markets are coordinated.
SAMOA’S EXPORT LANDSCAPE
Talking exclusively to Pacific Guardians, Tagaloa’s brief topography of Samoa’s export landscape, “Samoa’s total export bill is around SAT$80million annually. That’s from our hard-core products – included in that is Yazaki which is estimated at SAT$60million. But Yazaki will be gone by the end of this year, so if we don’t do anything, we’re looking at net export earnings of SAT$20-30million annually.
“For us at home, it’s that SAT$20-30million portion we’re looking to increase to $120million by 2020. It’s safe to say, that in the Buy Samoa campaign that we started in 2014, we are now seeing direct growth in our domestic exports from SAT$30million to an estimated SAT$50million. It has given us confidence that the 2020 target is realistic and achievable.”
Tagaloa’s 2020 goal reference is one of the objectives in Samoa’s Trade Export Plan that was officially launched in December 2016.
Another component of the Plan explains where and how events, such as the Pasifika Festival, fit.
REASON FOR PASIFIKA FESTIVAL PARTICIPATION
“The export plan’s priority focus is on Samoa’s main export products, agriculture and fisheries, which means that the Pasifika Festival provides an excellent opportunity to promote and showcase the ‘not-so-strong’ export elements of our economy – our coconut-based products, water, garments, handicrafts,” said Tagaloa.
That is the strategy behind Tagaloa’s 2017 group, who have export ready products for the international market.
They are part of 25 companies from seven Pacific Islands countries under the Pacific Path to Market programme organized the Auckland-based Pacific Islands Trade & Invest (PT&I).
The programme presents a structured approach to the market in New Zealand, starting with export capability building workshops in the Pacific Islands followed by an invitation to a select group of companies based on their potential to export. The selection process is conducted in partnership with the local Economic Development Agency.
According to PT&I Trade Commissioner, Mr Michael Greenslade, “As well as trade into New Zealand, it is really important for us to also focus on pan-Pacific trade. We will use this opportunity to engage with the representatives of the Economic Development Agencies to help create opportunities for increased trade between the islands themselves.”
WHAT SAY NEW ZEALANDERS?
The other two important aspects of Pasifika Festival to Samoa’s export plan is to gain feedback from New Zealand’s Pasifika communities, general public, businesses and other ethnic communities; and getting them to buy Samoa-Made products.
“For our Samoan community here, perhaps they could look at supporting their relatives back home in a slightly different way, by buying ‘Buy-Samoa Made’ products.”
“Let’s say they buy a Siamu Popo (Coconut Jam) here in New Zealand. It means they are giving money to the company back in Samoa to buy the coconuts from people who are gathering and selling the coconuts back home. The more Samoan Made products sold in New Zealand, the more money that’s going to the grassroots – that’s the way we’re looking at it.”
How do you know it’s working, Tagaloa was asked.
“The price of coconuts has gone up by 40%, also the price of copra, of cocoa, all those prices have increased. Right now coconuts are being bought for $0.50 to $1, in the past, they were as low as $0.05 a coconut. For cocoa that buying price has tripled and global prices for cocoa beans have also increased.
And secondly, trade is a two-way channel said Tagaloa.
“We also want to hear from our people. What is it they need or want, what are the product gaps? Do they want new coconut products? Because if they do then we’re here to listen and see how we can make those happen.”
A SAMOA BONDED WAREHOUSE IN MANGERE IS CRITICAL
This trip could also see a critical success factor for the New Zealand market activated revealed Tagaloa.
“It has always been SAME’s vision that there ought to be some central distribution unit here in New Zealand. We had the Prime Minister’s support to look at that in 2014 but we always felt that the private sector would take the lead make that happen,” said Tagaloa.
“So far that hasn’t happened. But what I’m seeing is that since 2014, our exports have increased substantially to New Zealand but we’re also hearing from companies they’re struggling. There are a lot of costs in getting the goods here and then distributing them to the market as individual entities.
“Since 2014, we have built our capacity back home, we’re building the export market here, and so this a centralized hub where all our small individual businesses can centralize our freight, transport, administration, marketing, distribution will cut down costs and increase efficiency and profile of our Buy Samoa-Made brand. That is something SAME, with government support, can do.”
It is possibly the “most important element now for Samoa to put all parts of the puzzle together,” he added.
He is also adamant that the initiative must be private sector led.
“The government shouldn’t have to fork out the costs of the products going to market, those are business costs and businesses should be responsible. What the government support looks like in this case is ‘providing the land to locate the ‘Buy Samoa-Made hub’, said Tagaloa.
“The Prime Minister said to me in 2014, ‘point lou lima Tagaloa po’o fea o Magele e aumai iai oloa Samoa’.
“When we had that conversation I told the Prime Minister to wait and see how the private sector could take up the cause by 2017.
“I now see the growing relevance of setting up a private-sector led distribution channels which will make our products and access to them more efficient and cost-effective.
“It is now the right time, I feel, to sit down and revisit that with the PM. That we should now look to establish a bonded warehouse where all the products are centralized, and the one point of distribution.
“That’s the future for increasing our exports. It also raises the profile of our brand and centralizes the place where people can access all the varieties of ‘Buy Samoa-Made’ products, make their orders and network to maximize the value chain.”