Where is Tonga's trade development?

By Bob Fisher

Tonga has numerous vibrant national resources that are fast asleep when they should be generating revenues and driving enterprise. Looking at the trade development of the small Pacific island countries one wonders whether Fiji is one of those that became birds, while Tonga remains among those still crawling.

Tonga is a peaceful and stable country. These are enviable attributes but you cannot take them to the bank.

Our revenues accrue from a very small basket, and one with several holes. Trade (exports and investments), globally renowned as the firmest foundation of sustainable economic development plays a minor role in Tonga’s development drama. Over the last ten years our exports of goods have not crossed the US$20 Million mark. US19 Million dollars was the best effort in 2014.  Services are no better, in spite of the enormous potential in tourism.

Tonga's lifeline has been remittances. These come from individuals. They are directed at families and do not accrue any taxes save for small levies and perhaps one can count the taxes eventually paid by the financial companies that disburse the transfers. What is sad about remittances is that not only have they been declining, in real and absolute terms, having failed to recover from the global crisis they are also the kind that is rooted in hope. Tongans can only hope that these remittances will continue to come - even if the amounts are less. Hope in its essence hinges on uncertainty. Uncertainty is an enemy of trade and investment.

Tonga needs solid income streams entrenched in sustainable sectors, and there are ways this can happen.

The days of copra have long gone, but there is much more than copra. Countries that have leapfrogged development stages have not remained stuck on past success. They have thrived on innovation, disruption, nurturing new sectors and developing new robust products. Products mean both goods and services. In Tonga’s case with regard to services we can look at ICT, financial services and tourism. How far has Tonga stretched these? There are numerous vibrant national resources that are fast asleep when they should be generating revenues and driving enterprise.

Physical Heritage

Tonga's heritage has a global repute but how much value does it bequeath the nation? Think about the history. This undisputed oldest civilization in the Polynesia. What is the price of this historical treasure Tongans call their heritage? One can refer to Egypt for a familiar script to sing from. In Egypt one comes across the famous and absolutely popular “Sound and Light Shows” that happen at night. Visitors spend the day touring sites; they come back at night for detailed narratives about the story belying the places they visited. The pyramids and the Temple of Kanark are good examples.  In a similar manner, can Tonga promote the blow holes in Houma; the tombs in Lapaga with striking similarities to the pyramids; the archeologically valuable Lapita civilization; or the gigantic trilithon, Ha'amonga? Why not? Even Tonga's royal residences can be wonderful attractions in all their manifestations.

Submarine Cable

Another incredible resource is the submarine cable. For all the cost this infrastructure sunk, has Tonga really exploited it? Our telecommunication costs are not only erratic but way above those in Fiji and New Zealand. The cost in Tonga is said to be three times more than New Zealand and double that in Fiji. Present such to investors and they respond with their feet. The better choices are obvious. Tongans need to ask hard questions why our costs are that much higher. It is possible to investigate the cost structures instead of just lying back and giving up on what could end up being an economic assault. One can go further and interrogate the wisdom of letting the factory shells in the small industries centre lie unused and dilapidated. The list of Tonga's idle and underutilized resources is endless. If we are to grow it is high time we made our assets sweat - and that includes workers, especially those in public service.

Goods

Tonga is home to precious items with overwhelming global demand and fabulous prices. The seafood has hardly been harvested. Oil seeds sell literally like hot cakes worldwide. Extra virgin coconut oil is high value fast moving consumer good in Europe. We have had remarkable presence and reputation in the squash market in Japan and South Korea but with retarded growth.

Tonga has tremendous potential. We need to find the formula for transformation. Perhaps we should dare to question how we have done things in the past. Maybe we should interrogate our culture, including religion, and ask how their tight grip could be holding us captive. We can also evaluate the quality of the business environment and ask if it is facilitating or frustrating entrepreneurship.

Eckhart Tolle said, “For a bird to fly it must open its wings”. It is not clear if Tonga's business environment has opened up. The structure, context and content of the private sector, supposed to be "the engine of growth", could also be suspect. Could it be a small, unserviced engine or perhaps in disrepair?

We must agree to ask hard questions. Only then can we grow wings and learn to fly.