Tonga Economy

Economy

Tonga, a small, open, South Pacific island economy, has a narrow export base in agricultural goods. Squash, coconuts, bananas, and vanilla beans are the main crops, and agricultural exports make up two-thirds of total exports. The country must import a high proportion of its food, mainly from New Zealand. Tourism is the second largest source of hard currency earnings following remittances. The country remains dependent on external aid and remittances from Tongan communities overseas to offset its trade deficit. The government is emphasizing the development of the private sector, especially the encouragement of investment, and is committing increased funds for health and education. Tonga has a reasonably sound basic infrastructure and well-developed social services. High unemployment among the young, a continuing upturn in inflation, and rising civil service expenditures are major issues facing the government.