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Millennium interview with Tonga's retiring Prime Minister, Baron Vaea (78)

Nuku'alofa, Tonga


From Matangi Tonga Magazine Vol. 15, no. 1, March 2000.

When HM King Taufa‘ahau Tupou IV finally accepted the resignation of Tonga’s 78-year-old Prime Minister, Hon. Baron Vaea, on December 3, 1999, it ended another intriguing saga of Tongan politics. Strange as it may sound, this was the case of a Prime Minister who had wanted to retire and go home after serving five decades in the public service—but he was not allowed to.

Interview by Pesi Fonua. 

Baron Vaea. Nuku‘alofa. 11 January 2000

When HM King Taufa‘ahau Tupou IV finally accepted the resignation of Tonga’s 78-year-old Prime Minister, Hon. Baron Vaea, on December 3 last year, it ended another intriguing saga of Tongan politics. Strange as it may sound, this was the case of a Prime Minister who had wanted to retire and go home after serving five decades in the public service—but he was not allowed to.

When he finally agreed to our interview, on January 11, it was obvious why this overworked man had insisted on retirement. Baron Vaea was one exhausted person—and toward the end of our hour-long interview he couldn’t keep his eyes open. This was after sharing with us his views and insights on Tongan politics.

Baron Vaea had no time to dwell on his achievements of the past. His focus remained on unresolved problems. He talked about the desperate need by the Tongan people for capital funds, the government’s drastic budget cutting, the uncertain future of the water supply, the pollution caused by old vehicles, and the unproductive lifestyle of Tongan youth.

Pesi Fonua: What is it like to be the Prime Minister of the Kingdom of Tonga?
Hon. Baron Vaea of Houma: it is alright. In other countries there are parties, and different parties come together under one Prime Minister. Ours is only one House; there is a Parliament and a Monarchy. His Majesty presides over the Privy Council, and the Prime Minister over the Cabinet, but generally all the views are similar, and during voting time the margin is very narrow, 3-4, 4-5, and in most cases we all agree.

But no one has any initiative to say, let’s push for the development of tourism, or this or that, because all ministries have their own budgets and working programs. Few changes can be made, especially now that the Treasury is not operating properly, and there have been cuts—so much cutting, to the point that no new project can be implemented.

This country has to do something about it because our neighbour Samoa is moving ahead, so is Fiji, simply because of the development of their Private Sectors. But we are hardly making any headway, because only a few individuals are willing to mortgage their land in order to raise loans.
I think it would be most appropriate now to bring in experts from the UN, to have a good look at our economy and to give us recommendations. I was told that a team from China would be here in February, looking at agriculture, and to suggest what might be best for Tonga to grow for export to Asia.

You must have found it very difficult to run a government under a severely trimmed budget?

It was very difficult indeed, and I have suggested for ministries to hold things as they were for a while. What they did in Fiji under a similar situation, was to lay off over 10,000 civil servants. The same approach was adopted in the Cook Islands. But in Tonga the Ministers agreed for their budgets to be cut, and to keep the public servants at work. Unfortunately, this kind of approach does not give us any hope for further development, no, it is just slowing things down. The horse is moving a bit too fast and you have to slow him down, and calm down, but there is no new initiative. If we want a new initiative then we should bring in someone from outside with an independent view to tell us what to do.

So in reality this year will be no different from last year?

Yes, that is how things are, and I think the Minister of Finance knows that, and that is why he is not coming back to work until the beginning of February.

During your time as Prime Minister was there a project that you might say was the highlight?

One thing that bothers me is the number of vehicles that are rusting away in people’s homes, and on the side of the roads. I have suggested that the owners should be identified to make them responsible for taking the dead vehicles to the rubbish dump, if the owner does not do it himself, then it should be carried out by government who will charge the owner.

My main concern is our water supply, because the question is, how long are we going to be able to live on this island? If the time comes and there is no water, what are we going to do? They already have problems with their water supply in Ha‘apai, but remember that Ha‘apai is a low-lying island, just like Tongatapu, so once the water supply is contaminated, it could cause a mass migration. Old oil and old batteries are all going underground into our underground water lens, and I am very concerned about our water supply.

The Retirement Fund for the Public Servants, was one big project that was finally put into place last year.

The Retirement Fund—a lot of people resigned from the service after that. The scheme is good for the younger ones, but for the older generation, we would much prefer to remain with the old scheme. The new scheme is inappropriate for us.

Baron Vaea. Nuku‘alofa. 11 January 2000

The number of portfolios of a Tongan Prime Minister appears to be overwhelming, because you were also responsible for the Ministries of Agriculture, Fisheries, Marine, the Tonga Broadcasting Commission, Tonga Telecom, the Government Printing Department and the government newspaper, the Tonga Chronicle?

It was alright, but at times too much, because the Prime Minister should concentrate on his responsibilities which have already been prioritised, first privatisation, and so on.
Fisheries, for example, we have been talking about it for years, and policies have been approved to exploit our fisheries resources so that the government could earn some revenue. But we have been holding back, meanwhile our fish resource has been fished out by other people. When the issue of fisheries was discussed recently in Hawai‘i, it was stressed that we should try and get maximum benefit from our fisheries resources, because if we kept allowing other people to fish our resources they would be getting more than ourselves.

We have a lot of well-educated people in our base industries, tourism, agriculture, and fisheries, but I think it is best to bring in an independent assessor to advise government on which government enterprise should be privatised. He could also deal with the current trend of raising the salaries of staff higher than that of the ministries whenever a government enterprise is privatised.

Is it important for us to make any political changes in order to attract more foreign investment to Tonga?

The stumbling block is a difference of opinion among ourselves and it is not a new phenomena. For example, His Majesty decided that he was going to China for a number of reasons—TongaSat etc. The other side then proposed for him not to go. Don’t go, they said—but His Majesty had already made up his mind that he was going to go. China is a communist country and one thing they do not like is monarchies. The proposed visit was confirmed, while the Minister of Foreign Affairs, Crown Prince Tupouto‘a was still pressing the King not to go.

His Majesty wanted to go because he felt that he was not going to China or to Taiwan, he was going to the Chinese people, and if he was not going then it might seem that he had something against the Chinese people.

When His Majesty confirmed that he was going to China, the Minister of Foreign Affairs pointed out that if his ministerial advice was not heeded then there was no point of him being the Minister of Foreign Affairs, he would go home—and so he retired.

On the eve of the King’s trip to China in preparation for the signing of the Treaty, discussions continued on why Tonga should terminate its relationship with Taiwan in favour of the Mainland. The question from Taiwan was, what is the offer from China, is it just so that you can join the UN?

I knew that Mainland China had offered something…and the response from Taiwan was, please hold it right there—if they are going to increase their offer we are willing to increase ours as well. The visit to China was all set and there stood the two offers.

The visit was probably in support of TongaSat and that was fine, but the outcome was the termination of the Taiwanese presence in Tonga and the resignation of the Minister of Foreign Affairs, because his advice was not accepted.

Looking at the state of our economy, what do you think is the best approach for us to take? To build factories or to get more focused on what is working now, such as remittances and overseas commercial ventures, such as the building of markets for Tongan produce in Pagopago and elsewhere, and the registration of more orbital slots?

A lot of things can be done, but our primary problem remains a lack of capital, and that really is the main cause of all our problems. On the other hand there is an element of uncertainty, and we can’t make up our minds what to do. For example, how we changed over from Taiwan to the Mainland China, a change that still has a big question mark hanging over it. Why did we have to change? This is a point that was put forward when we discussed the trip to China. We don’t care if it is Taiwan or China, because the same kind of people are living in Taiwan and in China, and Tonga is not an enemy of the Chinese. But after more than 26 years of diplomatic relations with Taiwan, some believe that we are losing when we change over. Meanwhile, Tonga’s economy remains precarious on whether we will survive through to next year or not.

It is interesting that we may be still in a recession, but people continue to build big houses throughout the country, and there are more and newer cars on the roads?

Something actually happened to the mind of the people during the reign of Tupou I, when he took the land and distributed it to the people. The ownership of land became very much a part of the Tongan psyche. A Tongan is very attached to his piece of land—different from a Fijian or a Samoan, it is not so important to them. A Tongan values it so much that he writes the name of his son on it.

In Hawai‘i, Fiji and elsewhere in the Pacific people live on the community land with their families, which is different from living on a piece of land that is yours.

This attachment to the land is the reason why suddenly someone arrives from America or New Zealand to build a house on their land, the piece of land is still very important to them, and when they have enough money to build, they return to their land.

Now that we can mortgage our land, would it be possible for us to develop and sell our properties as freehold, as it is in other countries?

It is definitely possible, in order for the people to have access to some capital funds. The desperate need by the people for capital funds has not been solved. In other countries the Private Sector is assisted by government. There has been a Cabinet Decision that was passed last year for government to give all assistance that would enable the Private Sector to develop. There are of course limitations to this decision because the relationship between the borrower and the bank is a matter between them. There should be some government assistance to encourage the people to invest, because the more enterprising they are, the more it contributes to  raising our standard of living. I proposed for a paper to be prepared, but unfortunately the Minister of Finance is going away and he will not be back until the second or the third of February.

But when the opportunity arises we should borrow and earmark funds for different industries, tourism, agriculture, etc., and then work together with the people. It is all about investment.

So if there is something that we have to work toward during the 21st century, is it to turn our land assets into cash, and for more capital to be made available to the Tongan Private Sector?

Exactly, that is what we should be talking about, and for a bigger market, thanks to New Zealand, Australia, Hawai’i and the USA for allowing some of our people to reside and work there. It is estimated that our population is 100,000 here and another 100,000 overseas. I am astounded with the achievements that our people have made overseas. In Maryland, Sydney, we were invited to a restaurant and a night club owned by a Tongan. There is also another Tongan, in the same area, who runs a security service employing about 250 people.

So a number of major changes will take place as we are entering the 21st century?

A lot of changes will take place. The approach to change varies from country to country, but we are different in the sense that we are a kingdom, and we tend to change gradually. We hope though that very soon our Private Sector will be in a firm position, because it will also mean a strong economy, a growing economy.

There has been a lot of discussions about ways of improving our economy, and there are also some changes which need to be made to our political system?

Most definitely that is what will happen. It is very important for us at the moment to know the thinking of the people, something that was not very important in the past. All these changes will come naturally, because a person will not continue to sit and get his back burnt in the hot sun, he will naturally look for shade under the tree.

With regards to our membership at the UN, what are the conditions that we have to abide by?

Yes. We have to apply, and there are countries that should support us. There is a fee, which varies from country to country.

Baron Vaea tees off the 2000 golf season. Nuku‘alofa. January 2000

What do you think will be our position with regards to the concept of western democracy. We are alone in the region with our interpretation of the word ‘democracy’, and we also seem to be indifferent to the world view on the issue of democracy. What do you think will happen in the future, taking into account that the UN in general is in support of western democracy?

There is a hope that there will be a lot of benefits that we will get from being a member of the UN. There are UN organisations such as FAO, UNESCO and others which we have been working closely with even before we became a member of the UN. Now that we are a member of the UN, we are still a member of those organisations. There are also other organisations, which we could become a member of now that we are in the UN. To take advantage of some of these opportunities is something that I don’t know if we have a good team to handle those issues or not. There is a team to discuss trade, and there is a team to deal with our foreign earnings, but unfortunately the guy who is responsible (the Minister of Finance) is on leave. That is the main reason why we want to build up the Private Sector because a lot of revenue will flow from the Private Sector to government.

My personal view is that government representatives and the Private Sector should double their efforts in securing the best deal for us with regards to a good source of quality goods, and to implement activities which could help in the development of the country.  

You know following our membership with the UN, we have heard of people like Clinton talking about political issues, such as Western Democracy which has been stressed as one of the working policies of UN and the USA. Would it be possible for members of the UN to pressure us to conform to a certain political ideal?

That is happening right now if a member does not operate according to UN principals, constitutions and regulations. I remember in the Commonwealth, we terminated the membership of Nigeria because they did not abide by the principals and regulations of the Commonwealth. Fiji was also kicked out because of the coup.

The establishment of the Small Industry Centre in 1980 was a definite move by government to establish a manufacturing industry, to provide employment opportunities and to produce import substitution. The current trend for a global economy and free trade between countries, calls for a new approach to our industrial and economic development. Where do we stand with regards to the development of a manufacturing industry, where locally made goods could be more expensive than imported goods?

The establishment of the SIC came about because of our geographical position, we are very isolated and relied heavily on shipping for our foreign trade. His Majesty has been working tirelessly to solve that problem by improving shipping as the first step toward improving international trading.

We are self-sufficient in our traditional life style and each family has gardens, and livestock, but there is a growing demand for imported goods, food, clothes and vehicles. The SIC was established with the hope of being able to meet the demand of the people for manufactured imported goods.

After establishing the SIC, there were problems, foremost was a lack of capital funds for the Private Sector, and government was not in a position to assist in that area so the development of the SIC remains sluggish.

Looking back at the 20th century it seems that we have gone around full circle with regards to the kind of agricultural products that we are trying to export. We opted to cultivate new crops such as squash, then we ran into problems, and now we find it is more profitable to grow traditional crops such as manioke?

The return from a container of manioke sold in Australia is better than from the same quantity of squash exported to Japan. That is fine because people have a choice, but generally speaking our venturing into commercial activities runs into all sorts of problems. For example, poultry farming. At one stage there were four or five poultry farms in Tongatapu alone, but now only the Vete Poultry is still running. The decline in our poultry farming followed a decision by New Zealand to raise its price of chicken feed. It was a trade move, and effectively it became cheaper to import chicken and eggs from New Zealand than to buy from local poultry farms. So local farmers were put out of business.

The Taiwanese government was informed that we will be eating chicken and sipi from New Zealand to the tune of about $20 million per annum, and they were willing to help narrow our trade deficit with New Zealand by sending us a brand new chicken feed production unit—beautiful. But [it is not in production yet] that is how things are working out, the original plan was set to be able to achieve a certain objective but we just end up importing chicken again.

In the squash industry we wanted to turn our excess squash into powder, because every year we could commercially export only about 8000 tonnes but our annual yield is over 10,000 tonnes. It was a good idea and the machine is here, excepting for the most important elements, which are still in Korea.

The other machine that we have brought from Korea that is not working was for the making of asphalt roads. What we have got running is the chip-sealer but not the asphalt.

We have been having a few problems with the Koreans after they came here and said that they were going to set up a plant to produce gas but it did not materialise. The Koreans were not happy about the exposure in the media about the prayer meetings that they held in various places and about their plan to turn sea water into gas. We went to Korea and have a look at it, but the gas project came to a standstill.

It seems that whenever we talk about manufacturing, and the importation of raw materials, it seems we are in for a slow death because of our small market base and we can’t expand our market overseas?

That is true. At the beginning, the objective was for us to gradually change our lifestyle and to increase our income. That was the intention but there were a number of difficulties. For a start, there was nothing that we can use as collateral if we want to borrow money from the bank. Lending was already available, but at that time we could not even use our land as collateral.

One of the conditions for investment in Tonga is that there should be a Tongan partner as the major shareholder. There is a belief that any development can be only considered real development if Tongans are active partners of those enterprises, and share the benefits from those enterprises. Has there any change in that policy?

With regards to investment it has become very difficult to maintain a 50-50 partnership between a foreigner and a Tongan because a Tongan may have the land but not the capital.

So what do you think will happen?

With foreign investors we have to be very careful.  A foreign investor was here in December, a person who was here a few years ago with another investor, John Myer. They were doing some work at the airport, then they left because the International Police were after them, on some personal affairs of theirs.

Anyway, this person was here, proposing for the government to endorse him to liaise with a bank in the USA which was willing to invest 1.2 billion to finance all of Tonga’s Development Plan. Enough for all the projects that we want to implement: fisheries, hotels, manufacturing, aviation, an aircraft for the transportation of produce overseas, sporting facilities, including a swimming pool and a whole lot of other amenities that we need. All he was asking for was to be endorsed by the Tongan government so that he could liaise with the bank.

I took the letter to Cabinet and their recommendation was to hold it because it was definitely money laundering. So that was the end of that. This kind of investment has already taken place overseas, and after being endorsed by governments most of the funds are spent on something else. So that is how difficult it is to deal with this kind of situation. Some may probably say do it, but we decided not to touch it.

Things seem to be going around in a circle, privatisation, for example. After we decided that privatisation was the way to go, we find that most of the government businesses that were corporatised are still seeking government financial support?

That is true. Hawai‘i fell, so did Tahiti, Fiji and others under the control of foreign powers, but we were saved because we signed treaties with the powerful countries of Europe at the time, just before they moved into the Pacific. And that event sticks in the mind of Tongans. Sometimes I think it would be best if Tonga changed and followed what the rest of the world is doing, we should let go of some our beliefs and the way that we do things which seems to weigh us down.

And the youth of today are very different, they refuse to go to school until they have a good breakfast, different from the past when children ran to school with empty stomach, and had their meal when they come back from school. That demand and our hanging on to the glory of our past are still there. Our thinking is to welcome change, but the policy that we run our lives under is still the old style—religious activities still occupy most of our time and attention.

At times like this government can lead the way, by encouraging people to go into business or joint ventures, and by going to the IMF to secure development funds, which we can borrow from the bank. Now Clinton has said that millions will be set aside for developing countries, so things are happening in that direction. The question is: are we trying hard enough to get some of this financial capital? There is an obvious lack of capital.

The other factor is the doubt over agriculture, because agricultural production is carried out by the growers but the marketing is carried out by Tonga Trade. If Tonga Trade, for example, accepted the price for a certain good at 25 seniti, the growers might disagree because they think is too low, and they will not make any money to repay their loans.

Tonga seems to stand alone when we are discussing some of those issues, and while the rest of the region decides to do things in one way we go the other? When we disagree we look back to our past when we got away unscathed by colonialism?

That is right, and the problem is because of our unwillingness to part with the past and join the rest of the world. We are moving forward but still carrying a lot of things with us.

Now we have been shown constantly on the TV youth singing and promoting a Christian life style, and a big percentage of the population are focusing on that life style, while there are other issues such as manufacturing, food production, areas which will require a certain amount of commitment. When we look at the commitment that people are making to church activities it is difficult to see how the same people would be attracted to opportunities elsewhere. I think it is a responsibility of government to negotiate with organisations and individuals on how to provide those opportunities. There have been a number of ideas, one was to establish EEZ in the area where the SIC is now. The idea was for Tonga to be a distribution point for goods for other island countries. Ships would come in and unload goods here, which we will distribute to other countries. It was a good idea but it did not happen.

Our shipping: now we have to let go of the Pacific Forum Line, and our shipping service is further reduced. Because of all these problems, there was a thought about getting experts from the UN to come in and assess the situation, look at our economy, population, our land, and then give a report with recommendation of what is best for us to do to revive our economy. All this will be funded by the UN. Similar work has been done by Tonga Trade and the Cabinet but has not been done properly.

What is your view of our privatisation program?

Well, the enterprises that have been privatised, for example, Tonga Timber. This is something that we have been discussing with New Zealand, and it is a fault on our part. New Zealand is saying that they have been developing the forestry in ‘Eua for 26 years, they brought seeds and planted and now we have started milling. But New Zealand is not happy because after all the work they have been doing, suddenly the Minister of Land sub-divided the whole area into tax allotments and distributed them to the people to grow their gardens. The New Zealand government was not very happy, particularly because the timber was milled by Tonga Timber and then sold with a profit margin. But New Zealand is saying sell it to the people only at cost price because it is an aid project. So we have met and that project is now being looked after by a committee.

Some have been very successful and some not. Tonga Telecom is making money, and by July they will take over from Cable and Wireless, so they will be in an even better position.

So with regards to privatisation, we have agreed that that is definitely the way to go?

Yes, but there are still areas that we have to look at carefully. The Power Board, for example, they told us that the price would drop from 36 seniti to 27 seniti per unit, but after that they asked us to pay another $5 per month. On top of that the street lights will have to be switched off, and they will have to look into it again to see if things are working according to plan. I don’t think it is warranted for the consumers to pay another $5.00. Our power supply is just not satisfactory, there are too many stoppages, and I don’t know if they are making any money or not.

There was a government decision last year or the year before for government services that had been privatised and were employing civil servants, to pay back the government’s investment so that they could become fully independent, and there was no need for government subsidy because they were running well. For example, in agriculture when the machine pool and the sawmill and its staff were still being paid by government.

There has been a lot of concern about the size of the civil service and their productivity. In other countries they simply send them home. Has there been any decision by government on that issue?

I really believe there is overstaffing, even though the same amount of work can be done with a smaller work force,  and it is very costly for government to keep such a big work force. The situation has to be reviewed, but the minister is not here. This would have been a good time to deal with it so that by March something is already in place, and there will be recommendations on what should be done by identifying the problems, and how to boost the development of the private sector.

Now that you are retiring, how are you going to spend your time?

I am now on leave, which will run until July, and following that I will work with the private sector, and what I was talking to you about, I will do it outside. I will start with agriculture. I belong to a group of growers and I will start with them, then spread out to include storage and marketing. We will also include livestock and poultry, but I am personally interested in ducks, it is a good source of protein for local consumption and for export. My thinking is that with root crops and livestock, an 8-acre tax allotment is adequate, allowing those who have been trained in office work to work in offices while others could utilise the land commercially.

The Chinese Ambassador told me that a Chinese team will be here in February to look at our land, the appropriate kind of crops to be grown and the kind of fertiliser to be used.

The other thing that I am looking at is the Police and their responsibilities. They are also investigating a whole lot of other things. I thought that the police were only supposed to investigate something if someone complained, but not to go out and investigate because someone said that so and so should be Prime Minister. We all know that is a prerogative of His Majesty, but instead the police are going around investigating who spread such a story, so that they will take him to court.

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8 June 2009   Baron Vaea passes away after a long life of service