Tonga floats Development Bank for the Pacific

Setting up a regional development bank gained the support of the Association of Development Financing Institutions of the Pacific meeting in Nuku’alofa last month. Tonga’s Acting Prime Minister Samiu Vaipulu floated the idea when he opened the regional conference. He noted the establishment of the Asian Development Bank, a Caribbean Development Bank and an African Development Bank and the most recent announcement of another development bank by the BRICS group of countries, namely Brazil, Russia, India, China and South Africa.

“I urge all of you, the bank practitioners and institutions to move the development bank from being recognised as a national aspiration to a regional ambition by seriously considering the setting-up of a Pacific Development Bank,” Vaipulu told delegates. He also moved for this regional bank to be set up in Tonga, saying that the government would fully support it.

He suggested the proposed Pacific Development Bank would provide an alternative for financial institutions sometimes accused of attaching stringent and unfair conditions to their developmental loan facilities. General Manager and CEO of Tonga’s Development Bank, Leta Havea Kami told Islands Business magazine that such an institution would be a “conduit for funding to come to small island states.” Although the regional development bank has been discussed in previous meetings over the years, Kami said that since the challenge has been made at a government level, it has become more specific.

“It’s now about how to actually get about setting it up. We can do the ground work but it’s for ministers to do the lobbying.” This was the 29th Annual General Meeting for ADFIP. Acting PM Vaipulu noted that the countries in the region were small and served small markets, but the impact it makes are significant.

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