You are here


Is Scenic leaving a symptom of problems for Tongan economy?

Nuku'alofa, Tonga

Scenic Hotels left Tonga abruptly two weeks ago after 8 years in their facility near the airport. Whether it was a problem with their landlord, their partner, or their own decision; one thing is clear – they were not making money and except for walking away from a large investment did not appear to be unhappy to leave Tonga.

It is quite possible that their business plan of catering to transit passengers on their way to and from the other islands and bringing in regional groups that Tonga could not previously host, was derailed by the opening of the Tanoa International Dateline Hotel two years ago. The Tanoa is in the city centre and also has many regional connections that lead to hosting events in Tonga.

It is also quite possible that Scenic was not happy with the lack of support and occasional anti-business bias that the Tongan government has displayed in recent years. Although “Private Sector” is the new buzzword in government pronouncements, actions speak louder than words.

Take for example, the Foreign Exchange Act that was passed in 2018. It appears that neither the Parliament that passed the Act nor the government departments assigned to enforce the Act really understand it’s effect. If they did they would know that it affects negatively any of them who hold property or send money overseas and although I can’t name names I would wager it would be possible to count the number on one hand that don’t have some connection to overseas money or property.  The Reserve Bank says they aren’t going to enforce certain sections of the Act, but tell me, when have you ever know a government to have a power that they didn’t use (or misuse more to the point)?  And how is this going to affect anyone (Tongan or otherwise) who is right now considering investing in a business in Tonga?

There are other current examples like the new Foreign Investments Act recently passed by Parliament.  It is nothing new as the restrictions of certain business activity to Tongans only has been around a long time – farming, fishing, bakeries, and restrictions on wholesale and retail businesses.  The real need if this act is going to be effective is to utilize public input, make the process transparent, and when decisions are made they should be made public and enforced with an even hand.  Business and insecurity do not work well together.

Other examples exist.  A new business has a maze of government requirements to complete and no road map to show how to get there. New regulations on business activities are enacted with little chance of public comment.

Scenic is gone and Pacific Fisheries may go soon. There have been several other major business closures in the last few months. These businesses provide job opportunities and wages for men and women in Tonga. Should we not look at the causes? Should we not look at how to attract more business instead of creating new reasons not to do business in Tonga?  How is employment going to be found for the large youth population in Tonga if business is not flourishing? Perhaps it’s time to seriously address the issue of economic growth in Tonga and how to make it happen.

Dean Bishoprick