What Informal Economy – Drugs?

Anti-government protestors, Nicaragua. Associated Press.

 

Nicaragua is the poorest Central American country on the brink of a bloody brutal civil war.  More than 200 people have been killed by police and pro-government para-militaries.  Anti-government protestors have home-made weapons that fire rocks.  They can’t combat an organised, armed state force.

The death toll rises while politicians argue about the violence.  This week’s CNBC report by David Reid said a one-year old boy was shot dead by police.   Among pundits, however, it’s felt that Nicaragua had it coming.

The political naivety of ordinary voters is at fault.  Because in 2006 when Daniel Ortega was elected President, unrealistic expectations swept the nation.  People thought this revolutionary leader of the Sandinista National Liberation Front, who took up arms to overthrow the right-wing government of President Anastasio Somoza DeBayle in 1979, would change the world.

Rebecca Gordon captured these idealistic sentiments in her opinion for The Nation called, ‘What Will Become of Nicaragua?’

There was a time when Nicaragua’s imaginative, idiosyncratic revolution offered the world an example of how a people might shuck off the bonds of US dominance and try to build a democratic country devoted to human well-being.  I know, because I saw a little of that example during the six months I spent in Nicaragua’s war zones in 1984.

Ortega’s leftist reforms were meant to liberate the poor and working class masses.  It never happened.  Instead, the Sandinistas failed at developing jobs and the national economy outside of the informal economy, the drug trade, which keeps the country in money.

The US State Department labelled Nicaragua a primary transit route for drug trafficking in which 90 percent of the cocaine trafficked to the United States comes through the passageway of Mexico and Central America.

The depressing fact about Ortega’s presidency is that the state dictates to citizenry.  In just over ten years, the Nicaraguan President has warped the constitutional to eliminate opposition parties.  Plus, he’s lengthened the time the President can serve as head of state and head of government.  He holds the two top jobs conflated into one.

By tightening the reins on the judiciary, electoral council, and journalists, it’s almost impossible to go against Ortega.  Not unless objectors stage a rebellion and topple the government.

Steven Kinzer for the Boston Globe pinned the problematic Nicaraguan tail to the donkey.

Repressive rule was imposed on Nicaragua slowly, one outrage at a time.  For more than a decade Nicaraguans grumbled but did not act.  This spring they finally erupted.  Their example is an object lesson to other countries.  People may seem to accept government corruption and the steady creep of autocracy, but they have limits.  Political explosions can come without warning.

Anti-government protestors, Nicaragua. Oswaldo Rivas – Reuters.

 

 

 

On 19 April 2018, a street demonstration took place.  A mix Nicaraguans – young people who’re unemployed and students, along with the elderly, church leaders, and trade unionist, demanded Ortega and his wife Rosario Murillo Zambrana whom he appointed Vice-President in 2016 leave office.

The President had cut pensions and raised social security payments.  What did he anticipate the people of an impoverished state would do – thank him?  The one factor that drives citizens of all classes and religions to public protest is when people can’t feed their families because basic freedoms to earn a living are taken from them.

Ortega reacted by crushing demonstrators with gunfire and violence.  The national cost?  Killing and destruction aside, Ciara Nugent for Time calculated the financial loss, keeping in mind that 30% of 6 million Nicaraguans live on $2 a day.

 

With roads blocked, universities occupied and many businesses open only a few hours a day. Nicaragua has ground to a halt.  Economists say the crisis has cost the extremely poor country upwards of $600 million.

 

Does this story sound and look like Tonga in the making?  Yes.  For the reason that Nugent identified in the Nicaraguan dilemma.

 

Nicaragua cannot afford the current chaos – and Ortega and Murillo have become a big part of the problem.  They have had their moment.  Nicaragua would benefit from a fresh start.

‘Akilisi Pohiva in 1998. Pesi Fonua.

 

Tonga’s Prime Minister Akilisi Pohiva has had his moment too.  Arguably in the 1990s before the riot of November 16th 2006 burnt down 80% of Nuku’alofa’s central business district, discrediting the name of his pro-democracy movement.

A jury said he was not guilty of sedition charges brought against him by the Crown.  Pohiva’s involvement in prompting the riot and arson is murky.  Whether he initiated the incident or not doesn’t stop Tongans opposed to his government from exclaiming that the very people who burnt down Nuku’alofa are now running the country into the ground.

Leftist revolutions are marked by histories of violence to gain control of government.  As Chairman Mao Zedong of the People’s Republic of China said: “Every Communist must grasp the truth, political power grows out of the barrel of a gun.”

Is Akilisi Pohiva a communist?  Some Tongans contend he is.  Pohiva has spouted Karl Marx in interviews, but hasn’t claimed outright his government is socialist.  That’s the problem: people don’t know what he stands for.  How can voters trust a Prime Minister that switches his political colours to suit his family’s interests?

Gone is the simplistic duality between the upper and common classes because Pohiva’s cabinet are the regime in power with cash in pocket.  His policies are populist and changeable.  The one constant is that he sways media narratives by censorship and fear tactics against journalists.

Kalafi Moala’s memoir, In Search of the Friendly Islands, made no mistake about naming Akilisi Pohiva as the prime mover of Nuku’alofa’s 2006 riot.  Pohiva’s speechmaking was seen as a political tactic for urging an uprising against the government of former Prime Minister Feleti Sevele, his arch rival.

 

The climatic crescendo of the Pangai Si’i started on Tuesday the 14th, when ‘Akilisi Pohiva spoke to the group that had gathered, and literally put out a call to war.  He said: “We will assert our rights by force, and snatch the power and authority.”

Akilisi Pohiva, Tonga’s Prime Minister. Kalino Latu.

The popular narrative is that the civil servants strike hijacked by Pohiva’s pro-democracy politics spurned the rioters to burn and loot the town.  That may be true.  Bur for Tongan voters, the stage of protest was set by the 2005 tax reforms.

Consumption tax and taxing farmers was initiated by the reigning King Tupou VI’s government.  That is, until he resigned as Prime Minister on 13 February 2006.  Tupou VI was replaced by Feleti Sevele, described by Radio New Zealand as a “popularly elected MP” and “long time pro-democracy advocate.”

Before the six-week Tongan civil servants strike began on 22 July 2005, there was the farmers protest on 9 June 2005 for completely different reasons to the government’s 5,000 state employees.  A public demonstration of 56 tractors drove through Nuku’alofa for a tax exemption on agricultural supplies introduced in April.

The government kowtowed by excusing large-scale growers, while small-scale farmers were forced to pay tax.  Repeating the cycle of political behaviour, in February 2006 the government bent to its state employees.  Cabinet went against a parliamentary select committee report carried out during the strike.  Here it was stated: “This [the civil servants pay increase] has serious implications for the Tongan economy.”

Audrey Young for New Zealand Herald noted that the parliamentary report advised: “It is predicted that the full impact [of the civil servants strike] will be evident in mid 2006.”

 

It says the Tongan Finance Minister is pursuing major economic reforms “including public sector restructuring” in order to make the strike settlement affordable.  The report does not elaborate on what “the full impact” means but any unrest caused through unkept promises could coincide with the Pacific Islands Forum that Tonga is scheduled to host in August.

6-week civil servants strike, Tonga. Trevor Loudon.

Civil unrest was predicted.  In retrospect the strike settlement was, and still is, unaffordable.  Civil servants received a 60%, 70%, 80% pay rise depending on how high-up the hierarchy an employee is positioned.  Revenue for salaries is raised by slaying the local economy with tax increases so that the cost of fat-cat politicians and senior bureaucrats is burdened by ordinary people.

Ironically in 2005 Mateni Tapueluelu, a Radio New Zealand correspondent in Tonga, reported on the farmers demonstrating against consumption tax.  In 2018 Tapueluelu is Tonga’s Minister for Revenue and Customs, and the Prime Minister’s son-in-law.  This former journalist who once advocated for the farmers being tax free is now staunchly opposed to a parliamentary review of the tax system.

Why wouldn’t he?  Revenue is the government income earner to pay salaries.  Tapueluelu’s tax exemption on cyclone relief containers of food for 6-months, and building materials for 2-years, has lost Pohiva’s government millions.  Economic recovery after Cyclone Gita hit Tongatapu and Eua on 12-13 February won’t happen if opposition MPs disrupt the minister’s authority to collect tax.

See here’s the thing: in any country the ordinary people’s interests are about material and financial security.  The twist is that in Tonga, the ordinary people have never won a break from any government, especially the Pohiva regimes of 2014 to 2017, and 2017 to 2021.

Government employees, big farmers, and Democratic Party MPs have gained from the 2005 and 2006 chaos, which shaped today’s unstable political and economic climate.  Is there a fresh start from Akilisi Pohiva’s Democratic Party politics that are a big part of the problem?

Progress is hampered by political instability, yes.  The question is, what’s escalating the trouble?  Answer: a Prime Minister who’s fanatical about reforming the law to win control over Privy Council, the police, and media instead of fixing a broke economy.

Akilisi Pohiva, Tonga’s Prime Minister. Koro Vaka’uta.

 

 

Enter Siamelie Latu, a retired military officer and diplomat.  He’s president of the newly formed People’s National Party.  What’s the National Party purpose?  To counter Akilisi Pohiva’s Democrats with Christian conservativism.  Partisan politics, how unoriginal.  Latu interviewed for Radio New Zealand on the National Party alternative.

 

To maintain the rule of monarchy in the Constitution forever and as a Christian country we believe that Christian belief is to lead the performance of the party.  We also aim at maintaining our Tongan values.  Tongan society is guided by four core values.  First is mutual respect.  Second is sharing, cooperating and fulfilment of mutual obligation.  Thirdly is humility and generosity and last is loyalty and commitment.

 

So what are conservative policies, and how is the National vision distinctive from the Democrats?  Latu didn’t say.  He pointed to democracy as politically challenging for Tongans believing it “is not in our roots.”

 

We believe that democracy is not in our roots.  One thing that we Tongans should always remember is that no one else knows what is best for us other than ourselves.  We all talk about democracy but we do not know what it looks like.  It has a different shape and a different colour for different countries.

 

Christianity is not in our ancient roots either.  Like democracy, it’s a belief system that migrated to the Pacific Islands with 18th and 19th century British and French missionaries.

Is the Tongan system of parliament and government problematic?  Or is the government of the day at odds with factions of society who don’t support the Democrats in power?

Perhaps the cabinet minister who’s hardened the dividing line between pro and anti-government groups is Tui Uata.  Appointed from outside government to Minister for Commerce, Consumer, Trade, Innovation and Labour, his force of personality on television appearances and social media has a polarizing effect.

Left: Tui Uata, Minister for Labour. Fale Alea o Tonga.

The 2018 EU meeting for the ACP (African, Caribbean, and Pacific) Council of Ministers was held in Togo, West Africa, on 29 May.  Representing Tonga, Uata couched the informal economy in the agricultural sector.  He argued food security and employment were the top priorities for up to 80% of 100,000 plus Tongans engaged in subsistence or small-holder farming.

 

The idea of the subsistence living which we transform to what we call the informal sector, which was further mentioned as the small holder.  Their first priority of the informal sector, of the subsistence of the small holder, it is first food security for their families.  Secondly, it is their form of employment on a national level, on a regional level, and on an ACP [African, Caribbean, and Pacific] level.  I would argue if we did an assessment, this would be between 60 to 80 percent of our employment.

 

Food security and cash income is not just the basis of a functional household, but an entire nation’s health and wellbeing.  The Minister was correct.  But where it doesn’t add up is that in reality, Tonga’s informal economy is similar to Nicaragua – the drug trade.  And whether we like it or not, the problem lies in creating jobs and sustaining a formal economy based on paying income tax.

The 2018-2019 budget was passed in parliament at midnight on Wednesday 20 June.  Two weeks to thrash out between government and opposition MPs, the excessively long sessions were unproductive.  Political theatrics, massive egos, and grudge matches occupied centre stage, diminishing the quality of informed debate.

Playing to the crowd for popular applause, the opposition pushed a parliamentary committee recommendation to increase police funding by $1.5 million pa’anga.  They wanted a war on drugs, but failed to grasp that state enforcers – police and customs – were regionally known as the weak link in border security.

New Zealander Grant O’Fee, Tonga’s former Police Commissioner from 2012 to 2014, raised this point with Stuff NZ.  “Taking bribes” from suppliers or drug traffickers was common practice in a poor Pacific country.

 

It’s easy to ride in on your big white horse and say, ‘stop taking bribes off motorists,’ but if you’re getting paid $5,000 pa’anga a year, look at the condition the poor buggers are living in.

2006 riot, Nuku’alofa Tonga. Reuters.

When Corruption in Paradise by Tony Wall and Blair Ensor was published about Tonga in 2016, we refuted the parachute journalism of white males dropping in on a small island Kingdom to write up their assumptions.

 

Unless Tonga cleans up its act, it will remain a target for international crime groups, threatening the stability of the region and opening up places like New Zealand and Australia to activities such as drug smuggling, money laundering and people trafficking.

 

We still feel the same.  It’s no news to us.  What would be useful is if Tonga’s 26 MPs to the Legislative Assembly researched economic development before blethering in chambers.  Because all we ever hear are plans and schemes for increasing aid donations and remittances to support dependency and addiction – including drug dependency.  Real jobs and stable incomes go a long way to fixing broken homes and lives.

Authors

Dr Teena Brown is an anthropologist and senior lecturer in the Faculty of Maori and Indigenous Development at Auckland University of Technology.

Melino Maka, chairs the Tongan Advisory Council in Auckland, New Zealand and publishes the news and current affairs website, tonganz.net.

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