New Boost for Economic Recovery in Tonga

NEWS RELEASE

New Boost for Economic Recovery in Tonga
World Bank Board Approves Grant to Assist Delivery of Health, Education and Other Services for 104,000 People

WASHINGTON, November 15, 2012 - Today the World Bank Board of Directors approved a US$1.8 million grant for Tonga, to help strengthen the economy and improve critical service delivery for its population of 104,000 people.

Over the last four years, Tonga has suffered shocks that have taken a major toll on households and the economy: a dramatic slump in remittances, major natural disasters, and recent food and fuel price hikes, all in the context of the global economic crisis. Funding for essential services has been put at risk, which could jeopardize people's access to schools and hospitals when they are needed most. Extreme poverty among the Tongan people increased by over a third between 2001 and 2009.

“Children going to school, families getting the healthcare they need: these things matter,” said Ulrich Zachau, World Bank Country Director for the Pacific Islands. “We are pleased to be able to support the Government to help secure these critical gains, through a focus on growth, and on services that benefit all. For communities across the country, access to essential services is crucial in the fight against poverty."

The Second Economic Recovery Operation is the second in a series of grants, designed to assist the government in sustaining key services for the Tongan people. It will also support measures to reduce costs for local businesses by streamlining licensing procedures, and to ensure improvements in public financial management. The operation builds on progress made under the first Tonga Economic Recovery Operation, approved in 2011.

Developed through extensive consultations with government and closely supporting the efforts of other donors and development partners, the operation will be funded by a grant from the International Development Association, the World Bank’s fund for the poorest countries.
For more information on the World Bank in the Pacific, please go to www.worldbank.org/pi

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