Rough Passage For
p. 55 · Read in the full issue
That Tongan Bank
Tonga’s projected new Bank of the South Pacific (PIM, Feb, p 55) has run into stiff opposition from powerful sections of the Tongan Estab lishment even before it has got off the ground.
This is clear from various reports reaching PIM since publication of the article.
As the PIM article reveal ed, the charter of the bank en titles an American former as sociate of billionaire Howard Hughes, Mr John Meier, and his backers, to do almost any thing they like in the kingdom.
One PIM correspondent writes; “Opposition first ap peared in the ranks of the government itself. But those who disagreed could not win.
“Then the battle shifted to the Bank of Tonga, whose board of directors were, and are, very much against the set ting up of the new bank.
“They believe that the set ting up of the BoSP, and the all-embracing concessions given to it, are a breach of the understanding between the Tongan Government and the Bank of Tonga (in which the Bank of New Zealand, the Bank of New South Wales and the Bank of Hawaii each holds 20% equity, and the Tongan Government the remaining 40%).
“At its annual meeting in June, 1977, the board of directors of the Bank of Tonga (comprising two Tongan Government rep resentatives, and one rep resentative each from the three above-named banks) ap proached the Tongan Govern ment and his Majesty King Taufa’ahau Tupou IV about the matter.
“But the move brought lit tle joy. The establishment of BoSP and all that it entails was then a fait accompli."
Speculating as to how Mr Meier and his associates were able to get royal approval for the bank, another correspon dent writes: “As to the financ ing of the stated projects, if they are going to be set up at all, I am inclined to think that Messrs Meier & Co had to make the extravagant pro mises which they have made
in order to get his Majesty to agree to the setting up of the BoSP under the most liberal of banking charters. They needed this first so as to facilitate their shopping around for funds.
“I do believe that they didn’t have very much money behind them, but now that they have these concessions, they are in a very strong posi tion to go shopping using his Majesty’s name and that of the Tongan Government.”
The correspondent says that a number of informed people are sceptical as to whether the bank and its publicised pro jects will ever materialise.
They tend to equate the affair with that of the Japanese millionaire, Sasakawa, who some years ago promised Tonga a national airline, plus a number of other things, which came to nothing.
The correspondent says that one theory current in Tongan circles is that some people in the government are becoming disheartened with tied aid from New Zealand and Australia. They believe that only substantial projects such as those proposed by the BoSP which include a 250-apart ment condominium project budgeted at $25 million, and a 550-bedroom luxury hotel costing even more as the nucleus of a tourist village are the answer, rather than the small and piecemeal projects undertaken by New Zealand and Australia.
He is sceptical of reports that the Australian Govern ment has promised Tonga about $3 million towards the upgrading of the country’s telecommunications facilities, a scheme in which the BoSP has been said also to be in volved, writing; “I cannot see the Australian Government agreeing to giving Tonga such an amount, or any amount for that matter, to be used as sug gested.
“In general, the Australian Government is rather reluc tant to give any of the Pacific Islands aid which would be used for ventures in which private enterprises, even of Australian origin, hold some equity.