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LESSONS:

Outer Islands Agriculture Development in Tonga (Loan 1412-TON)

sector: Agriculture, Natural Resources, and Rural Development | country: Tonga | region: Pacific Islands

1. As restructuring took much longer than anticipated, long-term resident consultants would have been more effective in maintaining progress than intermittent inputs. Since capacity constraints are significant in microstates, ADB must be sensitive to the need for ongoing support at times of significant change if it plans to encourage implementing agency restructuring. [Main text, paras. 61, 95]

2. The scale of a technical assistance (TA) must recognize the size and strength of the recipient institution, and ensure general political support for the TA. Without such support, successful institutional change is impossible. The experience with the Tonga Trade TA exemplifies the difficulties of applying large-scale assistance to small and new organizations. Tonga Trade did not have the staff or financial resources to use the TA effectively, especially the training component, when it was provided. In addition, the continuing understaffing of Tonga Trade, as well as its subsequent changes in orientation, suggests that support for the organization s direction and role as specified in the RRP was not universal at higher levels of Government. [Main text, paras. 94, 96]

3. When using commercially orientated organizations to achieve non-commercial objectives, ADB and the government should acknowledge possible conflicts and gear financial arrangements to realistic assessments of commercial outcomes. The telecommunications component was implemented efficiently, and has improved the target population s communications with the outside world. However, this phone system will be a cash drain to Tonga Telecommunications Corporation (TTC) for some time. Although TTC has contributed to the achievement of important development goals, its weak financial performance might conflict with its new corporate status. The new telephone system is connected only tenuously with the project objectives to increase agriculture productivity on the outer islands, reduce income disparities between households on different island groups, and stimulate agriculture exports. [Main text, paras. 73, 98]

Beneficiaries have appreciated the provision of agriculture access roads which have produced social and economic benefits. The provision of roads might be the most efficient way to stimulate economic growth in areas with agricultural land not served by roads.

The goal of privatizing within a short period was unrealistic. It did not reflect the limited size and strength of the agriculture export sector, which was expected to assume the major role in financing and directing the organization to be privatized. The expectations of the private sector far exceeded its ability to deliver.

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