2023 Finding balance study [1]
Friday, March 17, 2023 - 19:27
A new study ‘2023 Finding Balance’ tracks the progress and impact of State Owned Enterprises reform and commercialization in countries, including Tonga.The study was launched on 16 March, at Tanoa Hotel.
The Prime Minister Hon. Hu’akavameiliku, as Acting Minister for Public Enterprises, said the SOE portfolio recorded an average portfolio return in the period 2015-2023 at 4.8 percent.
The study is a series that tracks the progress, performance and impact of State Owned Enterprises (SOE) reform and commercialization in participating countries, including Tonga.
This is the seventh benchmarking study, which includes nine countries. The first study was launched in 2009, where Tonga was among the first three countries that agreed to participate. At the time achieved the comparatively highest average return on equity at 7.2%.Tonga has continued to participate in every publication since.
“The 2009 study also disclosed there was significant scope for improvement in the State-Owned Enterprises legal, governance, and monitoring framework in Tonga,” he said, resulting in substantial amendments to the Public Enterprise Act introduced in 2010 and other reforms introduced in subsequent years,” he said.
In addition, State-Owned Enterprises reform is an ongoing process and Tonga’s continuing participation in the Finding Balance studies has been invaluable.
“We can share lessons learned with our neighbouring Pacific Island countries and from other participating countries. For example, Tonga’s experience with power IPPs as a leading edge, as well as its State-Owned Enterprises monitoring capabilities currently undertaken by our Ministry of Public Enterprises.“
He said Tonga also observed with interest how Samoa had developed and implemented its skills-based director selection and appointment process.
Since the State-Owned Enterprises reform is ongoing, Tonga continues to adopt reforms that strengthen the commercial focus of the SOE, improving legal, governance and monitoring framework and to undertake reforming transactions, such as public private partnerships and power IPPs.
“These reforms improve service delivery and efficiency and offer competitive tariffs. Indeed, there is always room for improvement.”
Hon Hu’akavameiliku said that Government, SOE boards, management and private sector partners and the Ministry of Public Enterprises are working together to achieve higher performance, even though COVID 19 has had an adverse impact on performance.
“Government’s role is ensuring and implementing an effective legal framework, supporting ongoing reform, and appointing best qualified directors. State-Owned Enterprises boards and management must develop value-adding business plans and create an environment within their State-Owned Enterprises that encourages innovation and best-practice.”
He said while principal objective of every SOE is to be profitable with sustainable profitability, it is only possible if the needs of customers are met and employers remain efficient.
“The government therefore expects every SOE to be customer-focused and be able to deliver outcomes that enhance service delivery.
“I am reassured Tonga will continue to benefit from our continuous ongoing participation together with the added benefit to other participating countries and all of the reports.”
He acknowledged the ongoing and invaluable support through the Private Sector Development Initiative, which prepared the Finding Balance studies, the Asian Development Bank, the Australian Department of Foreign Affairs and Trade and the New Zealand Ministry of Foreign Affairs and Trade.