From Matangi Tonga Magazine, Vol. 16, no. 2, September 2001.

The tragedy in America and the possibility of a long drawn out war between the USA and an enemy, which had yet to be clearly identified, could have a negative impact on the Tongan economy, said Tonga’s Minister of Finance, and the Governor of Tonga National Reserve Bank, Hon. Siosiua ‘Otuikamanu.

He said that a down turn in the American economy could result in a rise in unemployment, and the estimated 40,000 Tongans who were living in the USA would be vulnerable to losing their jobs, because most of them were employed in the trade sector of the USA labour force. This would affect remittances sent home to Tonga.

“In difficult times like this building projects may be postponed, and people might think twice about hiring a housemaid. These are areas where a lot of Tongans are employed.”

Siosiua said that Tongans in the USA contributed 60 per cent of the estimated $85 million remittances that flowed into Tonga annually. He told a media workshop on economic and financial reporting that the remittances from Tongans overseas brought in four times more than Tonga’s annual total exports of about $20 million. He said that to offset a drop in remittances because of the crisis in the USA, Tonga might have to increase exports and cut down on imports.

Relief Package

The Minister was asked if the government had a relief package for businesses such as hotels, and fishing companies that had been affected by the grounding of international air services. He said that a committee had been assessing the impact on Tonga of what was happening in America, and government would make a decision based on the committee’s findings before the end of September.