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American Samoa Travel Guide

Economy

The territorial government and the tuna canneries each employ about 40 percent of the workforce.

The Government of American Samoa receives an annual US$110 million in subsidies and grants from Washington. In fact, the territory gets more money in U.S. aid than the entire budget of independent Samoa, although American Samoa has one-third the population. American Samoans receive a total of US$18 million a year in federal social security payments. This, and diverging living standards, ensure that the two Samoas will never be reunited.

Residents of the territory pay exactly the same level of income tax as stateside taxpayers, and all such revenue is retained by the Government of American Samoa. Three-quarters of the local budget of US$300 million is spent on paying the salaries of the 5,000 government employees.

The local government has established an industrial park at Tafuna near the airport where companies can lease land on which to build factories. The advantage here is the territory's low minimum wages and duty- and quota-free tariff relationship with the United States.

In 1999, a Korean company, Daewoosa Samoa, began producing cheap men's jackets to be sold by major U.S. retailers. Daewoosa faced legal action and fines over the exploitation of its 300 female Vietnamese "guest workers," and in 2001, the sweatshop closed its doors. The factory owner Kil-Soo Lee and several managers were arrested by FBI agents and taken to Honolulu to face involuntary servitude and forced labor charges.

Tourism development has been hampered by unstable air connections to Honolulu, a reputation for overpriced accommodations, environmental degradation, and poor marketing. Even the creation of National Park of American Samoa has failed to stimulate tourism.

Of the 30,268 international arrivals in 2006, less than 10 percent were actual tourists. The rest came on business, to visit relatives, for employment, or in transit. Most were from the other Samoa, with U.S. citizens a distant second. Arrivals from independent Samoa declined sharply after a tightening of entry requirements in 2005.

Air service is restricted by a federal "cabotage" law, which prohibits foreign airlines from carrying passengers between two American airports. Thus only U.S. carriers such as Hawaiian Airlines are allowed to operate between Pago Pago and Honolulu, leading to high fares and limited service.

The government-owned Rainmaker Hotel only made a profit during two years of its three decades of operations and repeated attempts to sell the building have failed. In 2004 one wing of the Rainmaker was leased to local businessman Tom Drabble as "Sadies by the Sea".

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