1.  DEVELOPMENT OF THE SMA AND GOVERNMENT CONSULTATION PROCESS

This case study illustrates the consultation process that took place between the SMA and the Government of Samoa and other private sector players since 1996 and up to now. The study outlines the approach undertaken by SMA to position itself in order to address the present and future needs of its members taking into account the political, social, economic, trade and environmental issues confronting the private sector. Emphasis is placed on the interactions that took place, the problems encountered and the lessons learned for both present and future consultation with government.

1.1  Government Development Plans

The Samoan Government came out in 1996-1997 with a Statement of Economic Strategy (SES) which focused on the promotion of the private sector as the engine of economic growth. Of significant impact were government policies for:

• Economic reform
  This involved substantial reduction in tariff to a maximum rate of 20% as well as a reduction in corporate and personal income tax rates.

• Review of regulatory framework
  This involved phasing out the incentives schedule, upgrading consumer protection legislation, and liberalizing financial institutions laws.

• Preparation of Samoa for accession to the World Trade Organization.

The above economic and regulatory changes brought about a complete new outlook for business developments as well as the private sector in Samoa. In essence, there was a clear call for businesses and the private sector to be competitive and face global market challenges.

1.2  SMA Response and Initiatives for Other Private Sector Players

In response to the challenges offered by the governments proposed economic reforms, the SMA, in consultation with other private sector players, undertook the following measures:

• Identified common needs and problems of members.

• Established the competitiveness position of the private sector against other PIC trading partners.

• Identified existing anomalies that impeded a level playing field for the private sector.

• Developed dialogue with relevant government bodies regarding existing problems.

A joint sub-committee of the SMA and the Samoa Chamber of Commerce was selected to look into the above matters and undertake the necessary consultation with appropriate authorities. Based on the findings of this committee, a "Matters of Common Interest Report" was drawn up to highlight the anomalies and other barriers towards the enhancement of a competitive private sector.

The initial problems encountered related mainly to the inadequate or lack of consultation that had taken place between the government and the private sector. Other problems were inherent ones. These problems can be listed as follows:

• Government SES
  This was seen by some as "lip service" only. There was limited dialogue between government and private sector before the economic reform measures took place.

• Insufficient attention given to the need for the institutional strengthening of public sector.

• Infrastructure services and costs not competitive; charges cannot be reduced.

• Member problems
  Some members were hard to convince to support government economic reforms and develop an effective consultation process.

• Some were coming from protectionism school of thought.

• Some did not trust government due to lack of consultation in the past.

• Existing operations were not efficient.

• Implications of WTO (threat of imported products competition).

The lack of one voice for the private sector to address issues with government has been a concern as well.

1.4  The Win-Win Situation Approach

The approach adopted to address the problems identified was the win-win situation. Both government and the private sector had to improve their competitiveness in order for the economic reforms to succeed and local producers of goods and services to face global competition. The steps undertaken in this approach included:

• An international independent consultants company verifying the aspects raised in the joint report on "Matters of Common Interest" prepared jointly by the SMA and SCOC. An official submission to the government was then presented "to pave the way for a competitive private sector." This was immediately accepted as a common interest to both the public and private sectors.

• Proactive participation on government advisory boards as well as direct consultation, support and encouragement of government reform policies (movement away from protectionism and trade barriers) in exchange for policies aimed at promoting the competitiveness of the public sector. This includes plans to improve efficiency of public bodies in control of utilities, electricity, telecommunication, and water.

• Increase consultation links with government through more representation on various boards such as Tertiary Education; Labor and Safety; Trade Commerce and Industry; Environmental and Y2000 committees.

• Proactive dialogue took place with government on initiatives undertaken by the SMA and its members to enhance the competitiveness of the manufacturing sector in line with the SMA Five Year Strategic Plan, which was developed based on these consultations and input from members, government and other economic operators.

2.  THE SMA FIVE YEAR STRATEGIC PLAN

Based on the events of the consultation process that took place between the SMA, SMA members, government, relevant public officials, and other players in the private sector, a Five Year Strategic Plan was commissioned and launched in late 1998.

The Strategic Plan adopted the following vision and mission statements:

2.1  Vision of the Samoa Manufacturers Association

"The Samoa Manufacturers Association…by the year 2003, is to be recognized internationally as a positive example of an association that has enabled local manufacturers to compete successfully in domestic, regional, and world markets."

2.2  Mission Statement

"The Samoa Manufacturers Association's purpose is...to assist the development of an efficient, profitable, competitive, and quality based expanding manufacturing sector."

2.3  Consultation and Interaction with Government

The SMA Five Year Strategic Plan placed top priority on strengthening consultation and interaction with government based on:

• Mutual trust and respect.

• Submissions prepared with well founded and reasoned arguments.

• Dialogue maintained at high level of quality and relevance.

• Active participation on government-assigned bodies.

Input on export and trade promotion has been a key feature in the consultation process. This is a key element highlighted in the strategic plan to enhance the competitiveness of members. Joint export and trade promotions with neighboring countries have successfully taken place under the leadership of the Minister of Trade, Commerce and Industry at the time in 1997, 1998, and 1999.

2.4  Present and Future Scope for Business Association Consultations with Governments

Based on the foregoing and as advocated in other similar forums/consultations (The Role of the Private Sector in the Future Relations between ACP, EU, and APEC) the following issues are presented as possible present and future agendas for business associations and governments to adopt:

• Joint efforts and dialogue with the common objective of promoting the interests of the private and public sectors through competitiveness.

• Provision of opportunities for institutional strengthening and training to enable the attainment of expertise in the latest technology and enhancement of operating efficiency.

• Rehabilitating infrastructure (energy, telecommunication, water and transportation).

• Good governance and transparent policies conducive to an enabling environment for trade, investment, and business growth.

• Promoting regional integration. This would include efforts to jointly promote and facilitate: trade, export and tourism markets, joint training programs, and cross border infrastructures such as shipping and communication.

• Provide opportunities for venture capital availability and other funding assistance to finance business growth and/or to enhance competitiveness.

• Research and technological developments to support trade and creation of new opportunities for business and enhancement of service. This would include focus on the development of product quality and environmental standards that will enhance competitiveness in the global market.

3.  CONCLUSION

In conclusion, I would like to quote from the remarks made by President Clinton at the 1999 Annual Meeting of the IMF and World Bank where he stated:

"I hope we will start the new millennium with a new resolve: to give every person in the world — through trade and technology, through investments in education and health care — the chance to be part of a widely shared prosperity, in which all the peoples' potential can be developed more fully."

For our part in the Pacific Region, I would like to challenge our private sectors and governments to lead our communities into the new millennium through a partnership approach to enhance the competitiveness of both the private and public sectors.

I would like to suggest that private sector organizations must ultimately aim at facilitating opportunities to enhance the competitiveness of the provision of goods and service by our members. Our ability to provide goods and services competitively is a prerequisite to the success or failure of the private sector as the engine of economic growth in our region.

Our governments, on the other hand, should facilitate this process through good governance and the implementation of transparent policies to enhance the competitiveness of both the private and public sectors, and to encourage investment in research/technology, trade, export/tourism, and essential public services and utilities.

The success of these joint efforts can only be achieved through an effective consultation process based on mutual trust and respect; and with a genuine goal of a win-win situation for our private sectors, our governments and the communities that we serve.