Tonga: US$8.4 Million To Strengthen Resilience And Fight COVID-19

World Bank supporting efforts to strengthen public financial management, disaster resilience, labor, together with COVID-19 response funding

The World Bank’s Board of Executive Directors has approved a US$5.5 million operation for Tonga to strengthen public financial management, enhance Tonga’s resilience to the effects of climate change, and improve access to skills training and both domestic and international labor opportunities.

In addition, a further US$2.9 million in World Bank support has been made available for Tonga’s COVID-19 response to support health-sector preparedness and to purchase critical health equipment, including personal protective equipment (PPEs) for health workers, together with ventilators, monitors and other equipment.

The Tonga First Resilience Development Policy Operation, the first of two planned operations over the next 18 months, supports reforms to deliver improved management of public finances and public assets, implement a new national housing recovery and resilience policy, and improve access to skills and training courses that can help Tongans take full advantage of domestic and international job opportunities. The operation also supports reforms that are designed to increase participation by Tongans – particularly Tongan women – in regional labor mobility programs, such as those offered by Australia and New Zealand.

With Tonga one of six countries in the Pacific Islands listed as being at high risk of debt distress before COVID-19 hit the region, the new operation will support the Government’s efforts to boost fiscal sustainability by improving revenue administration and strengthening the public sector remuneration system with an updated classification of public service roles, as recommended by Tonga’s Public Service Commission and Cabinet.

The new operation will also help ensure better outcomes for those affected by climate-related disasters, through the adoption of a policy to guide housing recovery and reconstruction programs in the aftermath of a disaster. The new policy is expected to help determine the support that will be provided to Tongan families whose homes were damaged or lost in last month’s Tropical Cyclone Harold, for example.

In addition, the new operation will help increase labor mobility program participation by Tongans – particularly women, who until recently made up just 12 percent of program participants. The operation will support the approval of new policy frameworks for labor mobility and the technical/vocational education sector. These policies are designed to help increase the supply of skilled workers in the domestic labor market, and help more Tongans access the considerable benefits of Australian and New Zealand government labor schemes, while ensuring families remaining in Tonga are fully supported.

“Given the economic impacts we are now seeing from COVID-19, building resilience – both to COVID-19 itself, and to financial and climate change-related impacts – is critically important to safeguard the future of all Tongans,” said the Hon. Tevita Lavemaau, Tongan Minister for Finance. “We’re pleased to be working closely with the World Bank to help deliver these important reforms and build resilience for our country at this challenging time.”

“As Tonga, and the world, responds to the impacts of the global COVID-19 pandemic, we are seeing how critical a stable, more resilient economy is for all Tongans,” said Michel Kerf, World Bank Country Director for Papua New Guinea and the Pacific Islands. “We are proud to support Tonga in its efforts to deliver important policy reforms that will benefit more Tongan families for years to come.”

The US$5.5 million policy operation is a direct grant financed through the International Development Association, the World Bank’s fund for the world’s poorest countries, with the $2.89 million in COVID-19 support to Tonga delivered through the Contingency Emergency Response Component (CERC) of the Tonga Climate Resilient Transport Project. This support is in addition to the $4.5 million disaster insurance payout for Tonga, through the World Bank-supported Pacific Catastrophe Risk Insurance Company (PCRIC), in the wake of last month’s Category Five Tropical Cyclone Harold.

The World Bank works in partnership with 12 countries across the Pacific, supporting 86 projects totaling US$1.8 billion in commitments in sectors including agriculture, aviation and transport, climate resilience and adaptation, economic policy, education and employment, energy, fisheries, health, macroeconomic management, rural development, telecommunications and tourism.

The World Bank Group’s response to COVID-19

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are increasing disease surveillance, improving public health interventions, and helping the private sector continue to operate and sustain jobs. Over the next 15 months, we will be deploying up to $160 billion in financial support to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery, including $50 billion of IDA resources in grants or on highly concessional terms.

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