Editor's Comment, by Pesi Fonua
2014 started off with a bang for Tonga.
On January 6 the Prime Minister Lord Tu‘ivakano sacked his Minister of Finance, Hon. Lisiate ‘Akolo, apparently over a disagreement on how to fund a 5% salary rise for public servants.
Five days later on January 11, Cyclone Ian struck a devastating blow on the northern islands of Ha‘apai, inflicting damage that is running into multi-millions of pa‘anga.
The impact on the Tongan economy of the cyclone and the salary rise for civil servants at this point of time is a matter of great concern.
Tonga’s More-Democratically-Elected Government (MDE) has been struggling during the past three years to cope with the national foreign debt and to balance the National Budget without cutting back on its expenses or increasing its revenue.
Tonga's Gross Domestic Products (GDP) growth is expected to drop below its current ignominious 1.3% percent unless there is a significant increase in remittances and tourism earnings.
Eleven months from now, in November 2014 Tongans will go to the polls to elect new members of parliament. As Tongans are preparing to pick their teams to find solutions to Tonga's many problems, it is important to look at some of the immediate challenges that are confronting Tonga.
• 44% COLA
The 44% Cost of Living Adjustment (COLA) of the salaries of Civil Servants that was initially proposed by the Public Service Commission may be viewed as a measurement of the decline in Tonga’s standard of living since the last COLA in 2009.
The value of the Tongan pa‘anga is continuing its current decline.
• Cabinet reshuffles
The continued reshuffling of the cabinet ministers during the past three years rolls on – even to the point of recruiting ministers from the so-called opposition. The latest new minister ‘Aisake Eke, is not a member of the so-called Party but, in fact, has been very much part of the opposition in the House.
The rapidly revolving door to Cabinet proves that the new system of government does not provide Tonga with a pool of capable candidates for cabinet minister selection.
• Medical costs
Tongan taxpayers carry the burden of the medical bills for cabinet ministers. It is alarming to know that cabinet ministers, civil servants and members of parliament do not have medical insurance.
There is a clear absence of industries that might employ many people, and boost exports to bring in foreign earnings.
There is a lack of technical skills in Tonga to maintain a reasonable standard of living.
• Obstacles to investment
The taxation liabilities on new investments, and also the taxation liabilities on injections of donor aid funds for private sector projects, continue to be obstacles to growth for local businesses, which are surviving in a declining economy.
• Reduced spending in local economy
The impact of the well-intentioned new National Retirements Benefits Fund has taken millions out of the spending power of wage-earners and put it into bank deposits. When commercial banks cannot lend locally their investments, surely, must be placed overseas where our savings will help to drive the turnover in other economies – not ours.
• Agricultural exports
It remains a challenge to boost exports particularly of Tonga's abundant agricultural products to our island neighbours Fiji, Samoa, Niue and the Cook Islands.
• Vava‘u and Ha‘apai tourism setbacks
Outer islands tourism has suffered serious setbacks from political posturing over domestic airlines, even before Cyclone Ian blew in.
And so on.
The challenge now is for the voters to find a new MDE Government that can effectively lead Tonga under the current electoral system.