Public Private Partnerships of Tonga


The private sector in Tonga remains fairly undeveloped. However, several strategies are currently underway which are attempting to strengthen private sector influence over the country’s economy.

In 2008 the Asian Development Bank (ADB) carried out an assessment of the private sector in Tonga. The Tonga: Private Sector Assessment 2008 report provided a framework for private sector reform in a bid to help improve the Tongan business environment, making the country more attractive to investment and encouraging job creation.

The ADB assessment found that business confidence has been significantly eroded in recent years, due to both the impact of the global economic crisis and the remaining constraints to private sector development. This has been the case despite wide ranging private sector-oriented reforms taking place since 2007. To help rectify these issues, and build confidence in Tongan business opportunities, the ADB recommended a widespread reform of the license and permit processes involved in establishing and running businesses, both for Tongans and for foreigners.

The Tonga Economic Update and Outlook 2012, jointly commissioned by the ADB and the Australian Agency for International Development (AusAID), highlights investment in private sector-led growth as a method of promoting the sustainable and inclusive growth of the Tongan economy. Prior to the report, the government made several improvements to the policy environment for economic growth and private sector development. This included liberalising trade and foreign direct investment legislation, simplifying the tax system and reforming state-owned enterprises.

The 2011–14 Tonga Strategic Development Framework was drawn up by the Ministry of Finance and National Planning with the aim of providing principles and directions to guide the work of the present administration over its four-year term. One such objective is to create a dynamic public and private sector partnership as the engine for growth of the Tongan economy. A well-formed public and private sector partnership will enable growth and by extension create employment and revenue to fund government operations, the framework suggests.