Wednesday, August 31, 2005

Tonga: at the tipping point?

A strike by public employees in the tiny South Pacific island of Tonga, a feudal kingdom in a post-modern world, is now in its sixth week. If anything demonstrates with utter clarity the profound reach and pace and intent of corporate globalization, it is to be found in off-the-track places like this, barely noticed in North America, but where astonishingly familiar stories unfold.

The immediate issue is a new public service salary scheme which has granted huge increases to senior officials in the kingdom, even by Canadian standards (the equivalent of $60K), while ordinary public employees are so poorly paid that some can't even afford to buy shoes. 400 or so of the country's 4500 public employees were offered no increase at all. Indeed, public service employees have had no raise for nearly twenty years, during which time high inflation has raged. The Public Service Association (PSA) leading the strike is demanding increases for its members of 60-80%, meaning, in reality, that some of its members earning annual salaries in the order of $1,100 might be able to provide a tiny bit better for their families. The government has countered with an offer of 30%.

The strike has gained considerable public sympathy. Dr. Ana Akavola, for example, who runs the radiology department at Vaiola Hospital, got a 28% increase, but she walked out after seeing people in her department get increases no higher than 8%, with some getting nothing. Students rioted when their college principal was fired for supporting the strike. Religious leaders are climbing on board: Reverend Simote Vea, general secretary of the Tonga Council of Churches, says that ministers "are more openly talking about political issues than before. It used to be a kind of taboo." The Queen herself was recently subject to a mild rebuke from the pulpit in her own church.

A support march in Nuku'alofa, the capital of Tonga located on the island of Tongatapu, attracted 10,000 anti-government demonstrators, a huge number considering that only 67,000 people live on the island. The expatriate community has rallied round the strikers, with a large group in Auckland conducting a vigorous demonstration outside a luxury home belonging to the King. (The royal family owns $8.2 worth of property in Auckland. Just turned 87, the King is presently in Auckland getting medical treatment.) New Zealand, Fijjian and Australian unions have pitched in with aid as well.

The PSA has flatly rejected resolution efforts by a seasoned New Zealand labour mediator, former Employee Court Chief Judge Thomas Goddard, who has since returned home. Besides a series of demands ranging from pay increases to a return to the old salary structure, the PSA is now demanding political reform:it wants the King-appointed cabinet to be elected. Otherwise, said strike committee chair Finau Tutone, there can be no guarantee that an agreement with his union would be adhered to. Pesi Fonua, the editor of the Matangi Tonga on-line news outlet, observes that the current strike is now effectively calling for "regime change."

The strike is unprecedented in Tonga. This is a country where the royal family and hereditary nobility (like "Tonga" itself, largely a construction of Wesleyan missionaries in the early 19th century) are firmly, if not absolutely, in charge. They own most of the land, and the royals have vast business holdings as well. The King, Taufa'ahau Tupou IV, and his immediate family, are rolling in vast wealth. Privatization meant handing the state electricity company over to the personal ownership of the Crown Prince,
Tupouto'a Tuku'aho, while the King’s daughter, Princess Salote Mafile'o Pilolevu Tuku'aho, made a huge personal fortune grabbing up geosynchronous satellite slots connecting Asia with the US West Coast.

The King is noted for spending fortunes in public revenue on frankly squirrelly schemes such as a process to turn seawater into fuel, and another to burn used tires for profit (Greenpeace put a stop to that one). He once proposed leasing the population's DNA to an Australian genetics firm, and he started a program of selling passports at high prices to Asians. The latter actually turned a tidy profit of $30 million, but that completely disappeared, having been left in the hands of an American magnet salesman who earlier on had petitioned successfully to be appointed as the King's Court Jester. I didn't make this up. The locals have a name for that sort of thing: fakatonga, the "Tongan Way."

It should come as no surprise that the demands of the strikers are beginning to include fundamental democratic reforms. The current Parliament (Fale Alea) consists of thirty seats: twelve Cabinet members appointed by the King, nine seats allocated to the nobility, and nine provided for the commoners. Recently the Cabinet was expanded to include two noble MPs and two commoner MPs. But the people are restless: a pro-democracy movement has been gently agitating for more than a decade. In terms of reform, it has been fairly cautious. In 2002, for example, the Tonga Human Rights and Democracy Movement demanded a restructuring of government, with an elected lower house of twenty-one members, and an upper house of nine nobles (the approval of both Houses would have been required to approve legislation), with the King still free to appoint the Prime Minister and the cabinet.

The King is no fan of strong criticism, and he got the constitution changed in October 2003 to permit the banning of newspapers. That galvanized thousands of Tongans to demonstrate in Nuku’alofa in the largest public protests ever seen up to that time. The King was particularly galled by the cheeky Taimi o Tonga, published in New Zealand, which he had failed in earlier attempts to keep out of the country. What appears to be a genuinely independent judiciary would simply not back his efforts. And this continued: the Supreme Court ruled last October, with due apologies to His Majesty, his cabinet and Parliament, that the constitutional change was in conflict with other parts of the constitution, and once more the ban was thrown out.

The attempt to muzzle press criticism was not a move favoured by all of the royals. The Crown Prince was cautiously opposed; a royal nephew, before the constitutional change took place, said that such a move would turn Tonga into a "police state." The Minister of Police at the time, however, one Clive Edwards (his father was British, hence his distinctively unPolynesian name), publicly supported the ban and the constitutional amendment, claimed that pro-democracy forces numbered only about fifty vocal people, and proclaimed that democracy, in any case, was "too expensive" for Tonga.

But perhaps he was just doing his job at the time. Edwards was later sacked from Cabinet, and re-emerged this past May as a born-again democrat, running for a commoner's seat in Parliament in a by-election and winning. He’s now front and centre in the protest, urging the strikers to take anti-scab measures and demanding democratic reform. (For his part, the Prime Minister, Prince 'Ulukalala Lavaka Ata, found it "unusual" for a former Minister of Police to be doing this, and accused Edwards of incitement to riot.)

There are no political prisoners in Tonga, no secret police, no torture: that's not the way Polynesians do things. There are many things I like about the place, actually. This is a country that expropriated a golf course to make way for a sacred burial ground, a kind of Oka in reverse. One Catholic church has a thriving fish and chips restaurant in the basement. Homosexuality is not illegal, despite the power of the churches, and transgendered people are, as in Samoa, an important component of the social fabric. The capital city, Nuku'alofa, boasts Internet cafes and pretty decent cappuccino, a good beer called Ikale (Eagle), the brewery part-owned, unsurprisingly, by the royal family, and the people do know how to celebrate. Huge crowds came out for the opening of Parliament in 2003 when I was there, and the mood was not that of a people living in fear.
But the differences between rich and poor, between nobles and commoners, are enormous. Shanty-dwellers on the outskirts of Nuku'alofa have been ordered by the King to move, but they have no place to go. Unemployment is high, and people are leaving the island at the rate of 2,500 a year, which has a not-insignificant effect on the local economy. Indeed, almost as many Tongans now live offshore as in Tonga, and their remittances, making up most of the country's income, are essential in keeping the place afloat.

The impetus for the current popular reform demands arose from structural adjustments begun in 2002. The government undertook a modernization of the public service, something that should have a familiar ring for Canadian federal public employees. Restructuring began at the top: senior officials were rewarded with salaries even higher than those of cabinet ministers. Privatization has been good to the Crown Prince, as noted, giving him a formerly state-run electric power company; in addition, he runs a telecommunications company that competes with the publicly-owned Tonga Telecommunications Corporation.

Earlier this year, thousands of people took to the streets in a protest against increases in electricity rates, demanding that the Crown Prince-owned electricity monopoly, Shoreline, be returned to the state. It was a not-so-thinly disguised pro-democracy march, shadowing forth the current upheaval.

If you think you might have detected a sour whiff of the IMF in all of this "restructuring," you'd be correct. Earlier last year, in July, the IMF Executive Directors held a "consultation" with Tonga, expressing "concern" at the slow pace of "structural reforms." In their own words:

Directors considered that concerted efforts to limit the wage bill--which remains high by regional standards--and to contain transfers to public enterprises and the rest of the economy will be key elements in consolidating the fiscal deficit. In this regard, Directors expressed concern about the direction of the public service reforms underway, which could undermine much needed wage restraint and impede a genuine restructuring of the civil service. They reiterated the importance of public enterprise reform to improve the efficiency of these enterprises and significantly reduce any transfers to them.

Directors agreed that improvements in the country's medium-term growth prospects will require the authorities to expedite the implementation of structural reforms in the public sector and take steps to promote private sector development.

It is not clear precisely what the nature of the concerns about "direction" are, but Tongan officials jumped to. "Structural adjustment" is a priority, said the Governor of the Bank of Tonga, Siosiua T.T. 'Utoikamanu, at the IMF's annual meeting in Washington, D.C. a few months later. In a prepared statement, he noted that "the two Bretton Woods institutions [the IMF and the World Bank] continue to be valued partners," and assured them that the Tongan government is continuing to take the necessary steps to "pursue its reform objectives," including "structural changes to the public service to achieve higher levels of efficiency."

The Asian Development Bank is also involved:

In 2003, the Government focused on implementing the Economic Public Sector Reform Program (EPSRP), which has the primary aims of maintaining a stable macroeconomic environment and achieving sustainable economic growth led by private sector development.

The EPSRP, recognizing the likely uneven impact of any rightsizing actions on women and youth, has established a unit in the Prime Minister’s department to monitor such impact, and has earmarked funding for mitigation measures.

The editor of Matangi Tonga, Pesi Fonua, notes that the structural reform initiative was supposed to ensure that jobs would be created to absorb public employees displaced when the public service was eventually downsized. There is no doubt, of course, that public service reform in Tonga is necessary: it's part, after all, of a creaky governance structure that people are now in the streets demonstrating against.

But privatization has not improved the lot of ordinary Tongans. Things just haven't gone according to plan, as the earlier demonstrations against electricity increases indicated: privatization has meant high executive salaries, the waiving of electricity bills for cronies, and a rate increase for everybody else. Free trade, Fonua points out, is presently "more of a threat…than an advantage," and an Open Skies policy hasn't made any difference whatsoever in international air travel to Tonga.

In fact, if there was ever living proof that the "one size fits all" privatization nostrum prescribed by the IMF is unworkable and destructive, lass' Sie nach Tonga kommen, to paraphrase JFK. The IMF demands have, in classic dialectical fashion, unleashed forces in Tonga that seem poised to make fundamental positive changes. Imposing a cold, ideologically-bound economic formula on Tonga has succeeded in causing enormous dislocations--but it has also brought the people together with an increasing confidence in their collective strength.

The status quo is clearly untenable, as frail as the King himself. There are just too many modern ideas flowing into the Kingdom of Tonga, too many stresses and strains between old and new. But the privatization reforms imposed by the IMF are yielding a double effect, no doubt doubly unwelcome to the powers that be: they are putting an exploitative hierarchical system in serious jeopardy, and they are increasing the resolve of ordinary Tongans to reach for something better than the further enrichment of the already rich through "structural reform". It's a perilous journey, and I wish them well.





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