Am. Samoa Governor Calls For Speedy Creation Of Bank

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Bond financing in place; Territorial Bank necessary for development

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Feb. 15, 2016) – With the American Samoa Economic Development Authority’s Series 2015 B bonds sold, Gov. Lolo Matalasi Moliga has called for implementing "with speed" the Territorial Bank of American Samoa, and at the same time is asking the ASEDA for a revenue analysis to assess the government’s ability to collect enough revenue for the required repayments for the Series A, B and C bonds (or debt service) without compromising government operations. The latter is to answer Fono concerns about the issue, which should include the worst case scenario of one or both canneries leaving the territory, according to the governor.

This was revealed in Lolo’s Feb. 1 letter to ASEDA board vice chairman Utu Abe Malae, who — along with ASEDA board chair Uelinitone Tonumaipea and the rest of the board — were praised by the governor for their hard work, which he said allowed the Territory to get funds to finance projects to "accelerate the pace of economic development process."

ASEDA Series A & C bonds were sold last August while Series B was sold Jan. 29.

Lolo says the next step is to "expeditiously implement" projects funded by the ASEDA bonds to achieve economic benefit. The governor urged ASEDA to expedite implementation of all approved projects except for the airport jet fuel tank relocation and the Rapiscan projects.

"We need to address public complaints on the placement of the jet fuel tank in proximity to the proposed location of the Community Swimming Pool," Lolo wrote to Utu, who is also president of the Rotary Club, which is spearheading the swimming pool project. Lolo also says that senators’ concerns over the benefits of the Rapiscan "necessitate thorough investigation."

Senators have argued that $10 million spent on the Rapiscan project is too expensive and this money can be better used for other government services. They also believe that Homeland Security should be responsible for this project.

Lolo also informed Utu that the bank project "must be implemented with speed" given its postive impact "on expanding economic activities which will in turn broaden the American Samoa Government’s revenue base."

To ensure that the project date for the opening of the bank is met, Lolo says it is necessary that a timeline incorporating benchmarks needs to be developed so that everyone is on the same page, and requested for ASEDA to prepare such a Time-Line Schedule "to get us to the opening of the bank". He said he would like to share this information with Fono leaders as soon as possible.

Lolo went on to say that the Fono’s concern with the financial capacity of the government to meet the debt service demands while not compromising the operation of ASG needs to be addressed, and requests "the performance of a revenue analysis to assess whether our economy can sustain the generation of revenues to meet our debt service requirements" and satisfy the operating needs of the government.

He suggests, "This analysis should investigate economic factors which might shrink revenue collection," and noted that the "worst case scenario is the departure of one or both of the canneries."

The governor’s letter was copied to Fono leaders, all ASEDA board members, as well as the lieutenant governor and the governor’s chief of staff.

Several lawmakers in both the Senate and House have voiced concerns since last year as to whether the government would have sufficient revenue to pay the debt service as well as meet ASG’s operations with the government budgeting $104 million in local revenue for the current fiscal year. In addition, the Fono leaders raised their concerns with the governor during meetings.

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