Brief on IFC's PPP advisory support to the government of Samoa in a PPP to establish a new national airline, Virgin Samoa (formerly Polynesian Blue) and restructuring the flagship carrier.
Samoa’s Low-Cost Carrier Takes Off
From Handshake Issue #10: Tourism
As a small, isolated country in the Pacific, Samoa is heavily dependent on tourism for jobs and economic development. The government’s objectives for the aviation industry included providing safe, modern, efficient, and affordable international air transport to Samoa to support expansion of the tourism industry. Operating Polynesian Airlines in a commercially and financially sustainable manner was also a high government priority.
State-owned enterprises (SOEs) place a significant and unsustainable strain on the economies of Fiji, Samoa, and Tonga. They absorb large amounts of scarce capital on which they provide very low returns. This study reveals the core levers of SOE reform and the rapid progress that can be made in implementing them where the political will to do so exists. While the study focuses on three countries that are heavily involved in SOE reform and have broadly similar SOE portfolios and legislative frameworks, the core lessons from their experience are applicable throughout the Pacific region.
This is the fourth comparative study of SOE performance in the Pacific undertaken by the Asian Development Bank (ADB), and the first to include island countries from the Atlantic Ocean (Republic of Cabo Verde, or “Cabo Verde”), the Caribbean (Jamaica), and the Indian Ocean (Mauritius). This expansion of the study was specifically requested by the Pacific island countries to provide a more global benchmark for their SOE sectors. The study assesses SOEs’ impact on the participating countries’ economies, and identifies key performance drivers and reform strategies to guide future policy action. A key theme is finding the balance between the roles of the public and private sectors.