By Pesi Fonua

Tonga needs more remittances and more foreign aid flowing into the country, if it is to maintain a balance of trade with Australia and New Zealand, its main trading partners, Hon. Afu'alo Matoto, the Minister of Information said last week.

Tonga is in a difficult situation because while it is importing more than it exports to these countries the value of the pa'anga is fluctuating lower to the value of the New Zealand, Australian, and the Fijian dollars. Although the pa'anga is currently holding its value against the US dollar, at the same time the value of the US dollar is dropping against the Australian and the New Zealand dollars.

Afu'alo, commenting on the economy, said that remittances and foreign aid are the two main sources of foreign currency earnings for Tonga at the moment.

His view Tonga's immediate prospects for the future, "is a perpetuation of the current situation."

Afu said that Tonga had chosen to be a part of the global economy and to abide by the rules and regulations of the global economy, which "has made things very expensive for us."

He gave as an example of the new Building Code, "which we all agree is good but inadvertently has pushed up the cost of building a house, and of course the premium on insurance."

Afu said that it is the same with our trading with Australia and New Zealand. There is no concession in the prices of goods that they export to the islands. "They are charging us the same price that they ask from other countries."

With regards to PACER, the Free Trade agreement between Forum Island countries and New Zealand and Australia he said that these two countries are now demanding to have the same trade arrangement as the Pacific Islands were currently negotiating with the European Union, EPA agreement. "Our EPA agreement negotiation with the European Union is on hold until next December."

The Europeans are negotiating for a total free trade between Europe and the islands, but the islands are a bit weary because they have very little to trade with the Europeans.

Afu said that Tonga and other islands are hoping to negotiate to enable Pacific islanders to find jobs on European ships and sports people to play in Europe, "but those are just trivial opportunities, comparing with allowing European products and services free access into Tonga."

This is the kind of free access that is demanded by New Zealand and Australia, and Tonga's only hope of balancing the trade imbalance is the New Zealand scheme of allowing Tongan seasonal workers to work temporarily in New Zealand. There is also talk for a similar scheme in Australia.

Afu expressed his concern over the preoccupation by Tongans for a political restructuring of our political system. The question is would it make any different?

"Any political change now I think will only set us further back.

"Tongans have to look hard to find an opportunity within the system where they can make a living. With regards to small shops, the Chinese have got a strong foothold on it. One Chinese starts with one Falekoloa in town, then expands and has one or two Falekoloa's out in the villages. I think we have to look at other opportunities," he said referring to services such as plumbing, house painting and other skills which are in high demand but are not readily available.

Before he was appointed as a Cabinet Minister Afu'alo was formerly the General Manager of the Tonga Development Bank, an executive with the Bank of Tonga, the Secretary for Finance, Tongan's Accountant General for a number of years. He was recently Tonga's acting Minister of Finance.