AUCKLAND LAW PROFESSOR CALLS TONGA ‘BANKRUPT’

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Prime Minister Sevele denounces the report

Bruce Hill MELBOURNE, Australia (Radio Australia, Dec. 9, 2010) – Tonga's prime minister has denounced an anonymous report alleging the country is 'virtually bankrupt'.

Dr Fred Sevele says while the country faces economic difficulties, the government can still pay its wages bill and has never defaulted on its loans.

The report was supplied anonymously to Professor Bill Hodge, of the Law Faculty at Auckland University.

Professor Hodge has told Radio Australia's Pacific Beat program it shows an economy in dire straits.

"The state of Tonga's economy is probably no worse than Ireland or Portugal or Greece, but the remittances are down, the exports are down, the expenditures on government salaries are up," he said.

"So the accounts look quite dire, and one of the most ominous suggestions is that offshore aid donor money, which was bespoke and specific, has been captured or converted into general expenditures.

"Now there's no verification of that, it's only a suggestion - but that's basically what the document shows, there's a lot of red ink, and sort of a hospital pass for any incoming government."

Tonga's caretaker prime minister, Dr Fred Sevele, says the report is not factually correct, and has criticised Professor Hodge for saying it indicates Tonga is the equivalent of an insolvent organisation.

"Tonga, like 98 per cent of most countries in the world are facing some difficult times, financially and economically - and we have admitted that," he said.

"We have been running a sensible budgetary policy and procedures, and although things have been difficult to say that we are facing bankruptcy is totally untrue.

"We are still able to pay our wages and salaries, we have not had to lay off people as has happened in a number of other countries, we have not defaulted on our debt or our commitments. We have nothing to hide, we have nothing to be ashamed of."

Dr Sevele has also highly critical of the fact that the report has been sent out anonymously.

"People believe in what they write and put out in a very critical fashion about Tonga or about any other country, they should face up and say who wrote the report," he said.

Professor Hodge acknowledges that with Tongan politics in the balance after the democratic elections and the makeup of the next government still uncertain, an anonymous and possibly politically motivated report should be approached with some suspicion.

 

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