The World Bank has announced that it has setup a US$5 million support operation to aid Tonga’s recovering economy.

The operation seeks to reduce costs for the private sector and improve the use of public resources. In Washington, USA, last week, the World Bank's  board of executive directors approved $5 million for the “First Economic Support Development Policy Operation to help the Kingdom of Tonga overcome recent economic shocks, support job creation, and build economic resilience”.

World Bank country director for the Pacific Islands, Franz Dree-Gross stated “The operation will support the government of Tonga to create conditions for stronger growth and improved economic resilience, both which are important to ensure that Tonga can continue to improve the quality of life for all citizens”.

The World Bank stated that Tonga’s small size and remoteness posed unique ecnomic challenges and make the country of 104,000 people extremely vulnerable to external shocks. The Global Financial Crisis hit the country hard, with a substantial decline in remittances and tourism revenue negatively affecting hourseholds. “Despite many gains  the country has faced a slow and difficult recovery.”

Tonga’s Minister for Finance and National Planning, Hon. Lisiate  'Akolo appreciated the support project. “This operation supports government-led reforms that will build business confidence in the economy and improve how we mobilize and utilize public resources to best serve the people of Tonga,” he stated.

The operation is funded through a US$2.5 million grant and a US$2.5 million highly concessional credit from the International Development Association (IDA), the World Bank's fund for the poorest countries.