Tonga must avoid wage increases and spending too much on South Pacific Games, says IMF

    The International Monetary Fund has warned the Tongan government not to raise wages and to keep an eye on costs during the South Pacific Games.

    An IMF team visited the kingdom in February and met with Prime Minister ‘Akilisi Pohiva, Finance Minister Dr ‘Aisake Valu Eke, the Governor of the National Reserve Bank of Tonga Dr. Sione Ngongo Kioa, senior government officials and business representatives.

    In a statement released after the visit, IMF team leader Yasuhisa Ojima said Tonga needed to “closely control the spending programme for the South Pacific Games to avoid any potential cost overruns” while it struggled to maintain a sustainable economy.

    According to Ojima, Tonga’s economy grew by about two percent in the financial year ending in June 2014, largely driven by agriculture and construction. This followed a contraction in the previous financial year caused by the completion of a large capital project.

    However, Ojima warned that lifting the kingdom’s potential growth was a key challenge.

    He said the country’s Strategic Development Framework would play an important role in making growth more sustainable.

    Structural reforms would be important to supporting the private sector and raising the possibility of financial growth.

    The IMF has recommended revising the Foreign Investment Act as part of these reforms.

    In the meantime, grants and remittances have bolstered the country’s financial reserves and inflation has been kept down.

    “Inflation has remained moderate at around zero to three percent in recent years, reflecting low global food prices and, more recently, a sharp decline in oil prices,” Ojima said.

    The Tongan government would face financial pressure due to the reconstruction in the wake of Cyclone Ian and demands for wage increases for civil servants.

    However, while the kingdom would continue to face challenges, Ojima said there had been progress in some areas, notably in “improving commercial banks’ balance sheets and strengthening the legal framework of the financial sector.”

    “The IMF will continue to support Tonga’s reform efforts by providing technical assistance in the areas of public financial management, banking regulation and supervision and macroeconomic statistics,” Ojima said.

    The main points

    • The International Monetary Fund has warned the Tongan government not to increase wages and to keep an eye on costs during the South Pacific Games.
    • The IMF said the kingdom needed to “closely control the spending programme for the South Pacific Games to avoid any potential cost overruns” while it struggled to maintain a sustainable economy.
    • It said the Tongan government would face financial pressure due to the reconstruction in the wake of Cyclone Ian and demands for wage increases for civil servants.
    • However, while the kingdom would continue to face challenges, there had been progress in some areas, notably in “improving commercial banks’ balance sheets and strengthening the legal framework of the financial sector.”

    For more information                                                                                                  

    ‘IMF Staff Concludes 2015 Article IV Mission to the Kingdom of Tonga’ (IMF)

    1 COMMENT

    1. Kuo ‘oatu ha fakatokanga ‘a e sino fakapaʻanga fakavahaʻapuleʻanga koi a ko e International Monetary Fund pe IMF ki he pule’anga Tongá ke fakamamaʻo mei ha hiki vāhenga pea tokanga ke mātuʻaki fakasiʻisiʻi ʻene fakamole ʻe fai ʻi he Keimi ʻa e Pasifiki Sauté ʻoku ʻamanaki fakahoko ʻi Tonga he 2019.

      Naʻe ʻaʻahi atu ki Tonga ha timi ʻa e IMF ʻi Fēpueli ʻo feʻiloaki mo e Palēmiá ʻAkilisi Pōhiva, Ministā Paʻanga Dr ʻAisake Valu Eke pehē ki he kōvana ʻo e Pangikē Pule ʻa Tongá Dr Sione Ngongo Kioa fakataha mo ha kau ʻofisa māʻolunga ʻi he puleʻangá pehē ngaahi pisinisí.

      ʻI ha fakamatala kuo toki tukú ni mai hili ʻa e ʻaʻahi ko ʻení ne pehē ai ʻe he taki ʻo e timí ni Yasuhisa Ojima ʻoku fiemaʻu ke mapuleʻi ʻaupito ʻe Tonga ʻene polokalma fakamole ki he Keimi ʻa e Pasifiki Sauté ke maluʻi ha mole lahi lolotonga ʻokú ne tautauʻafeinga ke ʻi ha tuʻunga fakaʻekonōmika ʻoku pau mo tolongá

      Fakatatau ki he lau ʻa Ojima ne tupu e ʻekonōmika ʻa Tongá ʻaki ʻa e pēseti ʻe ua ʻi he taʻu fakapaʻanga ne ʻosi ʻi he Sune 2014 ʻa ia ne tupu ʻeni mei he ngoue mo e langa ne fai he fonuá. Ko e tupu fakaʻekonōmika ʻeni hili ia ha holo lahi ʻi he taʻu ki muʻá tupu mei he kakato ʻo ha polōseki fakapaʻanga lahi ne fakahoko.

      Neongo iá ne fakatokanga ʻa Ojima ko e pole tefito ia ki Tonga ʻa e pau ke ne feinga ke hikiʻi e ngaahi faingamālie kotoa pe ʻe ala tupu ai e ʻekonōmiká. Naʻá ne pehē ʻe tokoni lahi heni ʻa e fokotuʻutuʻu Strategic Development Framework ʻa e fonuá ki ha tolonga ange ʻa e tupu kuo maʻú.

      Naʻá ne toe pehē foki ʻe mahuʻinga ha liliu fakafaʻunga ke poupou ki he ngaahi sekitoa taautahá pehē ki hano hikiʻi ʻo e faingamālie ki ha tupu fakapaʻangá.

      Naʻe fokotuʻu pea poupouʻi mai ʻe he IMF hano toe fakaleleiʻi e lao ʻinivesi paʻanga ʻi mulí foki.

      ʻI he taimi tatau ʻoku hikiʻi ʻe he ngaahi tokoni mei mulí mo e tā paʻanga ʻa e kakai Tonga mei muli ki Tongá ʻa e paʻanga mohe ʻa e fonuá mo ne pukepuke hifo ʻa e infeleisiní (tō kehekehe ʻa e totongi koloá mo e mahuʻinga ʻo e paʻanga ʻoku totongiʻaki).

      ʻI he ngaahi taʻu ki muí ni mái naʻe lotoloto pe nofo holo ʻa e ʻinifelesiní ʻi he pēseti ʻe noa ki he tolu ʻa ia ne hoʻata mai heni ʻa e tō lalo ʻa e ngaahi totongi ʻo e meʻa kakai ʻi he kolopé pea ki muí ni ʻaupito maí ko e tūʻulu lahi ko ia ʻi he totongi loló, ko e lau ia a Ojima.

      ʻE fehangahangai ʻa Tonga mo ha ngaahi hohaʻasia fakapaʻanga tupu ʻeni mei he toe langa ko ia kuo fai hili ʻa e Saikolone ko ʻIení mo ha fiemaʻu ke hiki e vāhenga ʻo e kau ngāue fakapuleʻangá.

      Neongo iá lolotonga e fononga atu ʻa Tonga mo e ngaahi pole ʻokú ne fepaki mo iá, ne pehē ʻe Ojima ʻoku ʻi ai ʻa e lalaka ki muʻa ʻi he ngaahi tafaʻaki ʻa ia ko e lahi tahá ko e tuʻunga fakapaʻanga ʻo e ngaahi pangikeé mo hono fakamālohia koi a ʻo e faʻunga fakalao ʻo e ngaahi sekitoa fakapaʻangá.
      ʻE hokohoko atu pe ʻa e IMF ʻi hono tokoniʻi ʻa e ngaahi feinga liliu ʻa Tongá he tafaʻaki fakapaʻangá ʻaki hano ʻoatu ha ngaahi tokoni fakatekinikale ʻi he ngaahi ʻēlia ʻo hono puleʻi e paʻanga ʻa e kakaí, lao ki he pangikeé mo hono siofi pehē ki he setisitika ʻo e mākolo ʻekonōmiká, ko e lau ia ʻa Ojima.

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