KINGDOM OF TONGA - SPREP

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Strategic Development Plan 8 2006/07-2008/09 (EPSRP) formulated in late 2001. A development vision was also expressed in a Poverty Partnership Agreement between Government and the Asian Development Bank (ADB) signed in December 2002. 1.2.1 SDP7 SDP7 set out the long-term vision and guiding values for policy development, presented objectives, goals and targets, and elaborated policy guidelines for 11 Strategic Result Areas (SRAs) and the three priority sectors of agriculture, fisheries and tourism. The priority objectives as listed were: • Well educated and skilled labour force, and a healthy population • Efficient, well structured state owned enterprises • Sound and encouraging environment for the development and increased involvement of the private sector in economic activity • Efficient and well structured government sector, with the qualities of good governance and accountability • Well maintained physical infrastructure • Prevent or minimise the degradation of the environment and misuse of resources • Active participation of civil society organisations and the community in economic development • Equitable distribution of development benefits • Low crime and guaranteed national security • Stable macro-economic environment. The primary economic goal was to: “Build a dynamic and highly competitive economy driven mainly by the private sector and [supported by] an efficient public sector.” The associated target was to: “Achieve a steady rate of long term GDP growth in real terms of slightly above 5 percent.” Five of the SRAs focussed exclusively or mainly on the economic goal. As shown in section 1.3, performance fell well short of this target. Eleven social goals were specified covering employment, education, health, social welfare (social safety nets and care for the aged and vulnerable) and environmental protection. The various social goals could be summed into the general goal of continuing to improve human development outcomes. The associated target was to: “Elevate Tonga to the High Human Development Category of the UNDP Global Human Development Index…before 2010.” As noted above, this was achieved in 2005. Six SRAs focussed on achieving social goals. Looking to the Future, Building on the Past 4
Strategic Development Plan 8 2006/07-2008/09 Government’s development vision presented in the Poverty Partnership Agreement with ADB in late 2002 was as follows: • The Government of Tonga desires sustained, sustainable and equitable economic growth and to provide its people with basic education, health and other basic services in an effective and efficient manner, thus ensuring an enhanced quality of life for all. • The Government of Tonga aims to achieve better governance for effective policies, institutions and markets. • The Government of Tonga wants to address the special needs of the least well-off, the more vulnerable, marginalised and disadvantaged groups in its society. 1.2.2 EPSRP EPSRP was supportive of SDP7 and focused on fiscal, public service, financial sector and private sector reform, as well as monitoring and mitigation of the impact of reforms in these areas. It was endorsed by Cabinet and commenced implementation in early 2002, with financial support for the fiscal, public service and social mitigation components from a US$11 million ADB loan. There were five particular concerns behind the formulation of EPSRP, as explained in EPSRP: Basic Information (Prime Minister’s Office, April 2002). First, it was agreed that Government could not afford its existing pattern of expenditure. Second, it was agreed that too much of public spending went on wages and salaries instead of operations and investment. Third, it was felt that the economy was too dependent on aid and remittances. Fourth, there were too few opportunities for young people. Fifth, unemployment and inflation were on the rise, resulting in increased poverty. EPSRP’s objectives therefore were to: • Achieve sustainable fiscal balance by strengthening public expenditure management, enhancing revenue generation and improving the efficiency and effectiveness of resource use in the public enterprise sector • Improve public service delivery to the private sector and the general public by establishing the institutional framework for a performance oriented public service and promoting efficient and effective performance management • Improve financial sector performance by improving the effectiveness of monetary policy and management and enhancing financial intermediation by the Tonga Development Bank (TDB) Looking to the Future, Building on the Past 5
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