World Bank $30m in support for Tonga’s most vulnerable

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WASHINGTON D.C., December 15, 2020 – The World Bank’s Board of Executive Directors has approved a US$30 million operation to support Tonga’s recovery following the impacts of COVID-19 and Cyclone Harold. Tonga is currently responding to two major shocks to its economy, with COVID-19 having severely impacted Tonga’s tourism, retail and construction sectors – affecting at least 30 percent of the economy. In addition, the country was also hit hard by April’s Category 4 Tropical Cyclone Harold, which affected approximately 27 percent of the population, and is estimated to have caused damages and losses of more than 12 percent of the country’s total Gross Domestic Product (GDP). In response, the Tonga: Supporting Recovery After Dual Shocks Development Policy Operation will support Tongan businesses, workers and vulnerable households to recover from these dual shocks, with the aim of building a more resilient, sustainable and inclusive economic recovery for Tonga. The funding supports social welfare payments from the Tongan Government to many of the country’s most vulnerable, including the elderly, people living with a disability, families facing challenges meeting school fee payments, and workers and business owners affected by the dual shocks. “While Tonga has made some progress in minimizing the combined impacts of Cyclone Harold and the global impacts of COVID-19, both have affected us significantly,” said the Hon. Tevita Lavemaau, Tongan Minister of Finance. “There is still much to be done. With this support from the World Bank, we will be able to help our most vulnerable citizens, communities and businesses to recover better, and bolster our resilience to future climate-related and economic shocks.” This funding of US$30 million supports an economic and social stimulus package that includes social welfare payments to more than 4,400 elderly Tongans and more than 1,000 people living with disabilities, and financial support for secondary school students to stay in school.