Tonga

THE realm of King Tupou IV, also ranked “Subsistence Affluence”, has hit on a scheme to ensure its growth outruns that of its island neighbours. It is the country’s Small Industry Centre where the Govern ment has provided the infrastructure for small export industries to set up.

“Tonga is doing remarkably well with the centre,” Mr McCabe said. “They are building fibreglass boats, surf skis, leather jackets and even make knitted jumpers for the US market.” The Tongan Government provides the buildings and facilities such as water, power and phones to make set ting up in Tonga as attractive as possible.

“They have reduced tax to attract busi ness and have streamlined the system to attract foreign investors,” Mr McCabe said.

Tonga is also attracting foreign invest ment with low rental and labour costs.

However, there are constraints to the es tablishment of a great many more manu facturing companies because like most Pacific nations, raw products are few, there is a limited market in the area and trans port costs to other more profitable desti nations are high.

Tonga is one of the more densely pop ulated nations with more than 150,000 people living on scattered islands with a total land area of less than 700 square km.

The GNP is about $All5m, or $lll per capita. Tonga also receives some income from the 40,000 Tongans who are working in Australia, the US and New Zealand. But income from remittances is irregular and

is often spent by the families on imported goods. It is also obtained at the cost of a large proportion of the country’s skilled labour.

However, all is not well with the coun try’s copra production. The largest indus trial concern is the desiccated coconut plant, largely financed by Australian aid, which has been rebuilt three times and is still not fully operational. For the factory to run at full capacity, Tonga would have to become a net importer of coconuts at a time when demand and prices for the product are sluggish at best.