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ADB releases funds for government response to COVID-19 pandemic

Radio & TV Tonga, Nuku’alofa, 29/06/2020

The Asian Development Bank (ADB) have announced the release of a 27.67 million Tonga pa’anga grant from its Asian Development Fund to help finance the Government of Tonga’s response to the coronavirus disease (COVID-19) pandemic, and support the country’s long-term economic recovery.

The public health emergency declared on March 20th in response to the COVID-19 pandemic and the border closure have put pressure on the country’s health systems and the broader economy.

The government announced a 60 million pa’anga short-term assistance program—the Economic and Social Stimulus Package—to combat COVID-19. ADB’s Public Management Economist from its Pacific Subregional Office in Fiji James Webb said, This ADB-supported program will help limit the adverse social and economic impacts stemming from the COVID-19 pandemic and builds on previous policy-based operations to strengthen Tonga’s macroeconomic resilience.

ADB’s assistance is policy-based, meaning the funds are released as budget support once policy actions outlined in the program are successfully completed.

Tonga is presently free of COVID-19 cases, but the first reform area of the program will help fund the management and control of the pandemic and help mitigate the immediate impact on the government’s fiscal sustainability. Other policy actions will help build macroeconomic resilience by addressing sources of fiscal risk.

The second reform area supports vulnerable households and guards against the immediate effects of employment and loss of income for those in the private sector, and will also strengthen public service management and expand the labor supply into semi-skilled opportunities. This will lessen the impacts of future economic shocks by diversifying sources of remitted income and increasing the financial capacity of households.

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