2021 Index of Economic Freedom

Samoa

OVERALL SCORE61.9
WORLD RANK89
Rule of Law

Property Rights48.5

Judicial Effectiveness28.2

Government Integrity32.7

Government Size

Tax Burden78.9

Government Spending71.1

Fiscal Health95.2

Regulatory Efficiency

Business Freedom75.5

Labor Freedom80.8

Monetary Freedom80.0

Open Markets

Trade Freedom66.4

Investment Freedom55.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 0.2 million
  • GDP (PPP):
    • $1.2 billion
    • 3.5% growth
    • 2.9% 5-year compound annual growth
    • $6,787 per capita
  • Unemployment:
    • 8.4%
  • Inflation (CPI):
    • 2.2%
  • FDI Inflow:
    • $1.0 million

Samoa’s economic freedom score is 61.9, making its economy the 89th freest in the 2021 Index. Its overall score has decreased by 0.2 point, primarily because of a decline in property rights. Samoa is ranked 16th among 40 countries in the Asia–Pacific region, and its overall score is above the regional and world averages.

Although it slipped a bit in the global rankings this year, Samoa’s economy has remained moderately free for the past four years. For the country to regain lost ground, the government will need to implement deep, broad, and well-institutionalized reforms to improve scores for property rights and especially judicial effectiveness and government integrity.

IMPACT OF COVID-19: As of December 1, 2020, no deaths had been attributed to the pandemic in Samoa, but the economy was forecast to contract by 5.0 percent for the year.

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Background

A small South Pacific archipelago with a population of fewer than 200,000, Samoa was administered by New Zealand until independence in 1962. It is now a multiparty, unicameral parliamentary democracy dominated by the Human Rights Protection Party, which holds 47 of the 50 seats in parliament. Prime Minister Tuilaepa Aiono Sailele Malielegaoi, in office since 1998, was reelected in 2016. Two-thirds of the workforce is employed in fishing and agriculture, which produce 90 percent of exports, and the economy relies heavily on emigrants’ remittances. The government is encouraging more offshore banking and foreign investment in manufacturing. Samoa hosted the 2019 Pacific Games, which supported economic growth through infrastructure investments and higher tourism receipts.

Rule of LawView Methodology

Property Rights 48.5 Create a Graph using this measurement

Judicial Effectiveness 28.2 Create a Graph using this measurement

Government Integrity 32.7 Create a Graph using this measurement

Although property rights are recognized, Samoa lacks an efficient legal framework for their adequate protection and for the enforcement of contracts. Eighty percent of the land is communally held. The judiciary is independent but heavily influenced by the executive. Although corruption and bribery are criminalized and prosecuted and the laws appear to be applied impartially, official corruption is still a major cause of public discontent.

Government SizeView Methodology

The top individual income and corporate tax rates are 27 percent. Other taxes include value-added and excise taxes. The overall tax burden equals 25.5 percent of total domestic income. Government spending has amounted to 31.0 percent of total output (GDP) over the past three years, and budget surpluses have averaged 0.2 percent of GDP. Public debt is equivalent to 48.9 percent of GDP.

Regulatory EfficiencyView Methodology

Business freedom in Samoa is little changed from the prior year, but its position relative to other more reform-minded countries has eroded. The three pieces of legislation that govern the labor market are consistent with core international standards. According to the Ministry of Finance’s budget report, subsidies as a percentage of GDP declined from 1.0 percent in 2017 to 0.2 percent in 2019.

Open MarketsView Methodology

Samoa has two preferential trade agreements in force. The trade-weighted average tariff rate is 9.3 percent, and one formal nontariff measure is in effect. Other barriers to trade persist, and policies critical to market openness have not advanced. Investment in some sectors is restricted. The small and underdeveloped financial sector is dominated by banking, but a significant portion of the population remains unconnected to the formal banking system.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Singapore89.70.3
2New Zealand83.9-0.2
3Australia82.4-0.2
4Taiwan78.61.5
5Malaysia74.4-0.3
6Japan74.10.8
7South Korea740.0
8Kazakhstan71.11.5
9Thailand69.70.3
10Indonesia66.9-0.3
11Brunei Darussalam66.60.0
12Philippines64.1-0.4
13Kyrgyz Republic63.70.8
14Mongolia62.46.5
15Fiji62.2-1.2
16Samoa61.9-0.2
17Vietnam61.72.9
18Vanuatu60.5-0.2
19Papua New Guinea58.90.5
20China58.4-1.1
21Uzbekistan58.31.1
22Bhutan58.3-3.8
23Tonga57.5-1.3
24Cambodia57.30.0
25Bangladesh 56.50.1
26India56.50.0
27Solomon Islands56.53.6
28Sri Lanka55.7-1.7
29Tajikistan55.23.0
30Burma55.21.2
31Maldives55.2-1.3
32Laos53.9-1.6
33Afghanistan53-1.7
34Pakistan51.7-3.1
35Nepal50.7-3.5
36Micronesia50.4-1.6
37Turkmenistan47.40.9
38Timor-Leste44.7-1.2
39Kiribati44.4-0.8
40North Korea5.21.0
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