Tonga and ADB
In the Spotlight
ADB’s interventions in the Pacific should help countries reduce the high cost of doing business and providing services, develop capacity to manage risks from economic shocks, natural disasters, and climate change, as well as promote the creation of competitive high value-added goods and services.
A dynamic public–private sector partnership; infrastructure; and the integration of environmental sustainability, disaster risk management, and climate change adaptation into planning and program implementation, are the main areas of ADB assistance as envisaged in the 2016–2018 Tonga operations business plan.
The outlook for Tonga's financial year 2016 is unchanged from previous estimates as the government is expected to continue its expansionary fiscal policy.
ADB is working with the Government of Tonga to build up the country’s resilience to natural disasters and to help it achieve the goal of providing half of all electricity from renewable energy sources by 2020, said a new ADB energy report.
The economy of Tonga is characterized by large volumes of subsistence agriculture, extreme vulnerability to natural hazards, and a heavy reliance on external income (donor aid and remittances). In the medium term, Tonga’s development prospects depend on the continued implementation of structural reforms that will improve economic productivity, remove bottlenecks to growth, and strengthen macroeconomic resilience.
ADB and other development partners are working closely with the Government of Tonga to implement a Joint Policy Reform Matrix that ensures that priority areas are addressed, and that policy reforms are realized. The medium-term policy goals for the government include maintaining macroeconomic stability, particularly in light of the large debt overhang, and improving economic management. Policy reforms must also seek to achieve sustained economic growth led by the private sector, while maintaining education and health standards.