Official Explanation

lONGANS and Europeans, through a series of articles recently pub led in both languages in the Gov iment-owned weekly Chronicle, ve been given an explanation for ; reasons for Tonga’s financial sition.

Naturally there has been no in the articles that un cessary Government spending has ded to the situation. The articles ve stressed that there is no easy ad to prosperity, and exhort the pulation to work harder.

The articles have said there has en an accumulated imbalance of ide over the last four years, arising ainly from the fall in copra pro ction as a result of hurricanes, upled with the “necessarily heavy tlay” on development projects.

The articles reveal that the ssible need for exchange and im rt restrictions was realised at least ist a year ago; regulations were Id in abeyance because it was still >ped “the kingdom might yet pull rough”. But by last January it came clear that urgent steps were eded.

The articles said that the Treasury d “not considered it necessary yet require private bank balances erseas to be paid into Government count”, but if the situation >rsened (and the Government had ► reason to believe it would) then is could happen.

See "When Tonga's Treasury

Was Stony Broke", p. 91.