Tonga's growth slower than slow [1]
Friday, June 30, 2006 - 17:25. Updated on Monday, October 6, 2014 - 11:48.
Recent restrictions on lending by Commercial banks that have been introduced by the Tongan National Reserve Bank is an exercise that is faced by any growing economy around the world, according to the ANZ Bank's Managing Director for the Pacific, Mike Guerin who was in Nuku...alofa on Thursday June 29.
He said that a growing economy like Tonga needed to look after its reserves well.
All we can do as a commercial bank is be an intermediary for the money the country holds in reserves, we take deposits which is some of the wealth of the country and look after them, there is only so much money that goes around and as a commercial bank we use that the best way we can in supporting our deposits.... Mike said that liquidity is the underlying issue for Tonga, "and the country has so much reserves, but it is just like a person...s own bank account, there is only so much money in it and he can spend it wisely but cannot spend beyond that.
"Tonga is experiencing a slow GDP growth, but it is not going through an economic depression, but more of a slower growth than what we would really like."
Mike was visiting Nuku'alofa for the first time since he was appointed as the Managing Director for the Pacific six months ago.
Government sells shares
With regards to the Government of Tonga selling off its 40percent shares in the Westpac Bank of Tonga, Mike said from their view increasingly few of the world...s nations have the Government direct ownership in a private enterprise like the banking arena.
He said Governments around the world have the roles of support with regards to the framework, the legal standing and the protection of things like foreign reserves, which allow private enterprises to grow.
"The argument in a lot of these countries is that the private enterprise has the best ability to unlock the wealth and the government...s role is providing the framework to make sure that as the wealth grows it is spread amongst its population," he said.