Editor,

TONGA'S recent 2011-2012 Budget strategies are a misguided financial planning wish-list. Finance Minister Hon. Sunia Fili failed to utter a single word about spending cuts while "living on the hog" is how Government plans to spend the last penny of the last Big Loans (No more loans . . . 05 Jul 2011).

First, threats of "No More Loans" is irresponsible financial planning. Borrowing money is a way of life, and a necessity in big businesses and governments. How else can large corporations and governments raise capital to fund start-up, expand services, and business activities, but to borrow from banks and other governments? Issuing Government bonds is another way of borrowing money from citizens, corporations, and governments.

Loans Diversification

Secondly, a better approach for Tonga would have been to use the "diversification" approach: Rather than borrowing the entire TOP$118 million from one lender (China), it should have been spread out and diversified among several sources. The old proverb comes to mind, "Don't put all your eggs in one basket," warns us of such risky business decisions.

Tonga's vulnerability to a formidable financial lender like China reminds us of how Fiji sold her soul to England (1859) to pay off Fiji's debts claimed by the United States. Threats of U.S. Navy war ships blasting away at Suva was not taken lightly. Another historical account included King Siaosi Tupou I of Tonga who, with His cousin Chief Ma'afu of Lau, demanded payments from Fiji's Chief Thakombau, or suffered an all-out-war and annexation to Tonga.

Where are "Spending Cuts?"

England paid off the Americans and convinced Tonga to leave Fiji with Chief Ma'afu being one of the signatories effecting the annexation of Fiji to England. It is believed this was one of the reasons England spared Tonga from colonial rule. And to avoid "history repeating itself" in Tonga, high finance obligations are not for poor nations with poor friends.

The Minister of Finance and Parliament owed it to the people of Tonga to propose spending cuts to reduce dependency on large foreign loans. Someone in government should have the guts to announce spending cuts starting with the 26 CEOs and 4,000 civil servants. Obviously, almost 5% of the population of Tonga continues to "live on the hog" while 95% of the people lives in poverty.

Loans are not the problem; they are essential to financing operations and services. High overhead costs and a top-heavy labor force are the culprits. Reduce the size of government, cutting waste and corrupted practices will provide better services for the people, thus growing the business sector to create more jobs for more people to pay more taxes.

Sione Akemeihakau Mokofisi, MBA

samokofisi [at] email [dot] phoenix [dot] edu