43152-012: Economic Support Program | Asian Development Bank

Tonga: Economic Support Program

Sovereign (Public) Project | 43152-012 Status: Closed

ADB is helping Tonga preserve key social sector spending programs that have come under pressure as a result of the global economic crisis. The project will provide budgetary support to the government to maintain spending on basic social services, such as health and education, and continue reforms designed to make the economy more competitive, sustainable, and private sector-driven.

Project Details

Project Officer
Tora, Laisiasa Natakubu Pacific Department Request for information
  • Tonga
  • Public sector management
Project Name Economic Support Program
Project Number 43152-012
Country Tonga
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0185-TON: Economic Support Program
concessional ordinary capital resources lending / Asian Development Fund US$ 10.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Public sector management / Economic affairs management - Public expenditure and fiscal management - Social protection initiatives

Gender Equity and Mainstreaming

To maintain fiscal responsibility in the short term, while ensuring social sector expenditure is protected, the government will need to reduce planned expenditure, and continue critical reforms to address underlying structural constraints. If these constraints are not removed, sound fiscal management and increased economic resilience will not be achievable. Possible government responses comprise fiscal, structural, and social policy measures, supported by prudent monetary policy.

The government will need budget support to (i) protect essential social expenditure for segments of society most adversely affected by the crisis, and (ii) advance structural reforms to improve medium-term competitiveness and productivity.

Project Rationale and Linkage to Country/Regional Strategy Just as Tonga's economy began to recover from recent domestic shocks the civil service strike in 2005 and civil disturbances in 2006 and the impact of global economic developments such as high oil and food prices in 2008, the prospects for economic growth have come under increasing pressure as a result of the global economic crisis. Recent recorded declines in remittances, a significant slump in trade tax receipts, weak export demand, declining tourism revenues, and weakening of credit flow within domestic banking, show that Tonga is now clearly feeling the impact of the crisis, somewhat sooner and to a greater extent than initially expected. The government revised projected revenue for FY2010 down by 18.6%, to T$140.1 million from T$172.2 million. Government is forecasting a fiscal deficit of 10.3% of gross domestic product (GDP). As a result of this expected decline in revenue, as well as recent poor agriculture and tourism data, the government revised its GDP growth forecast for FY2010 down to 0.4% (from 1.7%).
Impact The impact will have a higher and more inclusive economic growth path.
Project Outcome
Description of Outcome The main outcome will be a timely and effective response to the Global Economic Crisis.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

The program intends to provide quick-disburing budget support to allow the Government to effectively respond to the economic, fiscal and social impacts of the Global Economic Crisis (GEC).

Maintenance of fiscal responsibility.

Structural and governance improvements.

Support the vulnerable through targeted actions.

Communication and ownership of economic and fiscal management initiatives.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Tora, Laisiasa Natakubu
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Subregional Office in Suva, Fiji
Executing Agencies
Ministry of Finance and National Planning
Mr. Aisake Eke
[email protected]
Ministry of Finance & Economic Planning P O Box 87 Nuku
Prime Minister's Office
Kingdom of Tonga
Concept Clearance 23 Jun 2009
Fact Finding 25 May 2009 to 02 Jun 2009
MRM 29 Jul 2009
Approval 03 Dec 2009
Last Review Mission -
PDS Creation Date 06 Aug 2009
Last PDS Update 27 Oct 2010

Grant 0185-TON

Approval Signing Date Effectivity Date Closing
Original Revised Actual
03 Dec 2009 21 Dec 2009 26 Feb 2010 31 Dec 2010 30 Jun 2011 30 Jun 2011
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 10.00 Cumulative Contract Awards
ADB 10.00 03 Dec 2009 10.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 03 Dec 2009 10.00 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory -

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Title Document Type Document Date
Economic Support Program Project/Program Completion Reports Oct 2012
Economic Support Program Progress Reports on Tranche Releases May 2011
Grant Agreement (Special Operations) for Economic Support Program between Kingdom of Tonga and Asian Development Bank dated 21 December 2009 Grant Agreement Dec 2009
Economic Support Program Reports and Recommendations of the President Nov 2009

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

Title Document Type Document Date
Tonga: Economic Support Program Validations of Project Completion Reports Sep 2014

Related Publications

None currently available.

The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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