Tonga foreign investment changes damaging - MP Featured
8 March, 2019. A Tonga Noble MP says both local and foreign businesses are likely to suffer after the passage of the Foreign Investment Act 2019.
The legislative change sparked concerns last year with at least one major business saying it may have to reduce its operation and lay off dozens of staff if new rules on foreign ownership were applied.
Noble MP Lord Fusitu'a is one of just three members to vote against the act.
He said the measure purported to protect local businesses and encourage foreign investment.
But Fusitu'a said it was likely to hamper local business operators because they will have no say over which companies get reserved or restricted status - the categories that aim to foster Tonga business.
"And it will disencourage foreign investment because it means that foreign investors cannot invest in local companies up to a certain threshold and still receive the benefits of being considered a local company.
Assuming that wasn't the intention but unfortunately, in my estimation, that will be the net effect."
The act was passed last week.
- RNZI
3 comments
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THE NET EFFECTS WILL BE THE "SAME OLD MOLI-TONGA"...OR SHALL WE SAY, "SAME OLD VAI FAKA-TONGA?". These policymakers are still in the "Stone Age" with Maui and Hikule'o. They think "tuputupu-lea-fonua" and their pie-in-the-sky wishes will appear. We cannot have GPS-schooled minds run our country.
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Points well taken , so what's the solution ? because we can see whats happening and who's responsible , but how do rectify the wrong and by who? Nobody seems to give a " Hoot and a howl " what's going on . No one has come up with a solution yet ,for all the government shortfalls .
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KUDOS LORD FUSITU'A SPEAKING AGAINST ILL-ADVISED GOVERNMENT "PROTECTIONISM". Protecting local businesses in the expense of foreign investors is an economic suicidal act. And MPs lined up for the whole lot of them tol go over the cliffs.
Lord Fusitu'a identified one of the culprits, which is Government's "quid-pro-quo" favorites by granting them special privileges in the expense of the country's aggregate interests. Meanwhile, competitive business activities (foreign investment companies) are eliminated thus handing over the un-competitive market to ill-funded, non-competitive fishing and below-par operators.
Therefore, Tonga suffers under its own weight of incompetent and underfunded businesses. Especially in the fishing industry where expensive fishing fleets are required to fish Tongan waters. As a result, local under-capitalized fishing fleets stay close to shore while international fishing pirates are having a field day poaching Tongan waters.