Report launched on End Poverty Day outlines new findings and how Tonga can secure progress into the future
NUKU'ALOFA, Tonga, October 17 - The World Bank has launched the Tonga Poverty and Equity Assessment, an important new report that provides insights into changes in poverty and inequality in Tonga between 2015 and 2021, based on data from Household Income and Expenditure Surveys. The report examines key trends in monetary poverty in the country and offers recommendations for progress in the future.
Despite major challenges-including cyclones, the COVID-19 pandemic, and a 2022 volcanic eruption-Tonga reduced the poverty headcount from 27.4 percent in 2015 to 20.6 percent in 2021. It also reduced inequality, although rural areas continue to face higher poverty rates than urban areas.
"This new research gives us a clearer picture of where Tonga stands today and how we can work with the government and other partners to continue to reduce poverty," said Stefano Mocci, World Bank Resident Representative for the South Pacific. "Investing in education and health along with creating more job opportunities will be critical to Tonga's success moving forward. This report offers a vital roadmap to help the country navigate its challenges and build a more resilient and inclusive future for all Tongans."
Remittances have played an important role in Tonga's poverty reduction. In 2021, nearly 90 percent of households received remittances, which made up 45 percent of the country's GDP. While acknowledging the lifeline remittances provide, the report stresses the need to diversify income sources and manage Tonga's reliance on temporary labor migration programs, which can create labor shortages and negative social impacts on families and communities. Ensuring the sustainability of these programs while mitigating their downsides will be crucial for Tonga's long-term development.
The report documents significant improvements in living standards between 2015 and 2021. The share of households that owned essential assets such as cars increased from 37 percent to 55 percent, and the share of households owning a mobile phone rose from 82 percent to 97 percent. Access to basic services also rose, with 90 percent of households having flush toilets by 2021, up from 82 percent in 2015. Significant gaps remain between rural and urban areas in terms of access to services and economic opportunities, however.
The report stresses the need to strengthen social protection systems and ensure that they can quickly scale up in response to crises such as natural disasters. These programs need to prioritize the most vulnerable, including women, seniors, and people with disabilities. Given Tonga's increasing vulnerability to frequent shocks and natural disasters, a strong safety net is essential to protect households from falling back into poverty.
The assessment also identifies the need to improve education and job training to enable more Tongans to access better-paying jobs, both domestically and abroad. Better-skilled workers are essential for diversifying the economy. Vocational training, alongside investments in digital literacy, will help Tongans enter sectors with higher growth potential, particularly tourism.
