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Economic Issues in the Fisheries Sector of Tonga A thesis submitted in fulfilment of the requirements for the Degree of Doctor of Philosophy in Economics at the University of Waikato by Halahingano Tu‘akolo Siufanga ROHORUA ______ University of Waikato 2009 -i- Abstract There are certain characteristics of island economies that are considered hindrances to their „development‟. For example, island economies often lack the economies of scale necessary for enhanced economic development and are too remotely located from the world‟s major international financial and trading centres to fully exploit the marketing and trading opportunities that are available. However, for island economies in the South Pacific, the sea also offers great opportunities for sustained economic development. The relative abundance and accessibility of fisheries resources means that if these resources are properly managed and exploited, island economies have much potential for social and economic development. At the same time, the sea provides a significant means of basic livelihood for many rural communities in these Island countries. A major and enduring challenge is therefore to ensure that island economies in the South Pacific utilise their sea resources for social and economic development without jeopardising their communities‟ basic livelihoods. This thesis, using a combination of quantitative and qualitative methodologies, focuses on the island economy of Tonga, examining a range of economic issues in its fisheries sector both at the national level (focusing on the fisheries export) and local level (focusing on the domestic fisheries). It begins with a discussion of fish exports, including an analysis of the return to fisher-people in Tonga from fish exported to Tonga‟s major overseas fish markets. Included in the analysis of Tonga‟s fish exports are two important variables: the size of the local fish operations in Tonga, and the types of fish exported overseas. Secondly, as fish are also caught for domestic consumption, economic development issues facing Tonga‟s domestic fisheries are assessed. Only four per cent of Tongan households earn income from fishing activities. However, the overall contribution of subsistence fisheries in Tonga is estimated at more than T$12million per year. For low income earners, there is a high value associated with self-caught fish, with domestic fishing serving a critical safety net for those at the lower end of the socio-economic ladder. Even so, although fish is an important component of household diet in Tonga, an analysis of Pacific Islands New Zealand Migration Survey (PINZMS) data indicates that the consumption of fish is related to the age, -ii- education, household size and income of the head of the household, with fish being more likely to be part of the family diet where the head of the household is older and more highly educated. The assessment of domestic fisheries includes a case study of the mangrove- dependent rural island community of Pangaimotu in Vava„u, where the fisheries have traditionally been the main source of livelihood. It is argued, with reference to the application of an inter-sectoral economic model, that economic development activities in Pangaimotu need to take account of the critical relationship between mangroves and fisheries resources. The symbiotic relationship between mangroves and fisheries is, however, an issue that is easily overlooked by economic development planners. What the analysis (which compares fishing, tourism and forestry) reveals is that although the best management option appears to be to increase the number of fisheries workers, an increase in tourism, despite its potentially negative impact on fish harvest, would provide an incentive for the community, leading to increased income and, therefore, improved infrastructure and social development. Highlighted by this research project as a whole is the impact on the fisheries sector in Tonga not only of events happening in the Pacific region, but also of global events, especially those involving fisheries, such as the growing importance of the global fish trade, and the increasing importance of aquaculture in ensuring sustainability. For small island communities for whom fish is an important part of the staple diet, the challenge is to find a solution to the potential conflict between increased economic development activities and sustainable resource utilisation. -iii- Notes Note on publications A number of papers have been produced from this thesis. The papers are as follows: Refereed Journal Articles . “Efficient remittance services for development in the Pacific” Asia-Pacific Development Journal 14(2): (2007). With John Gibson, Geua Boe-Gibson, and David McKenzie. “How cost elastic are remittances? Estimates from Tongan migrants in New Zealand” Pacific Economic Bulletin 21(1): 112-128 (2006). With John Gibson and David McKenzie. Refereed Posters . “Natural Experiment Evidence on Whether Selection Bias Overstates the Gains from Migration” Presented at the 26th Conference of the International Association of Agricultural Economists, Gold Coast, August 12-18, 2006 (with John Gibson, David McKenzie, and Steven Stillman). Conference Papers . “Migration and Remittances in the Pacific”, BRCSS New Settlers Research Network National Conference, Auckland University, New Zealand, February 2007. “Expectations about Continuing to Remit and Returning Home”, Pacific Transnationalism: Tracing ties to the homeland, La Trobe University, Melbourne, Australia, November 2006. “An inter-sectoral economic model for optimal sustainable mangrove use in the small island economy of Tonga”, NZARES Annual Conference, Nelson, New Zealand, August 2006. “An examination of issues on the Fisheries Sector in small island economy: the case of fish export from Tonga”, NZARES Annual Conference, Blenheim, New Zealand, June 2004. “Descriptive Study of the Fisheries Sector in Tonga”, Waikato Management School Student Research Conference, October 2002 Note on chapter seven Chapter seven is the result of a joint work with my chief supervisor, Dr Steven Lim -iv- Dedication This thesis is dedicated to my beloved brother and mentor, Rev‟d Tui ki Ha„anai Pongi, who was called to rest during the course of this journey. Toka ā ‘i he fiemalie! Acknowledgements I would like to acknowledge the support and trust that my chief supervisor, Dr Steven Lim, provided throughout this journey. To Dr Anna Strutt and Professor Frank Scrimgeour, the other members of my panel of supervisors, a big thank you to you both for your support. To Dr Dan Marsh of the Economics Department for your support and guidance especially in assisting me in the presentation of data and information, many thanks indeed. To Professor John Gibson for invaluable support and encouragements throughout this journey, thank you indeed. Many thanks too for the support I received from other staff of the University of Waikato – to Dr Hemi Whaanga for his support with the formatting of the thesis – I thank you. To Associate Professor Dr Winifred Crombie, for kindly proofreading the thesis, my sincere thanks and humble gratitude. To Sione Naulivou and his family, mālo fau e lotu mo e fakalotolahi. To my other colleagues at the Centre for Foundation Studies, thank you for your encouragement and belief that I can do it. To the Economics Department of the University of Waikato for office space and support with tuition fees, that is much appreciated. To the NZAID for the financial support for the fieldwork – my humble thanks. Many thanks to all those who kindly agreed to participate in this research in Tonga. To the Government of Tonga, thank you for granting me the permission to undertake the study of fisheries in Tonga. To the staff of the Ministry of Fisheries, Ministry of Finance, Statistics Department, Ministry of Lands and Survey for the provision of maps, Department of Environment for your support and openness to discussions and provision of data – all that assistance and support I received from the Tonga Government institutions is very much appreciated. To the Managing Director of the Tonga Development Bank and Staff of the Research Division – -v- your assistance and the support I also received from „Ofa Po„oi has been invaluable. To the staff of the Tonga Development Bank in Vava„u – thanks for access of information and support during the study. To Lennie Nitt (Tonga Maritime), Tracy Holden („Alatini Fisheries), Naitilima Tupou (Sea Star Fishing) and other fish exporters from Tonga – thank you for openly providing information to support this study. To the fish sellers at Tu„imatamoana fish market and those at Neiafu, many thanks for your support. To the people of Pangaimotu, Vava„u: Koloamatangi mo hou‘eiki, Tevita Tu„i„onetoa mo ha‘a taki fonua, Siaosi Tu„i„onetoa mo e kau toutai and to all the women at Pangaimotu – malo e ‘ofa, thank you so much for giving up your time to kindly assist in the field work. To Po„uli Tongia and his staff of Hinakauea Beach Resort – mālo fau e ‘ofa. To many friends who continue to show interest in this journey, your support has been invaluable. To Dr Ana Hau„alofa„ia Koloto, my best friend and mentor – thank you for continuing to push me this far. For their prayers, Rev Taufa and Seini Filiai and their family – mālo fau e lotu.