CASE STUDY: Role of remittances in Tongan economy

Keywords: Remittances, economic growth, financial sector development, bounds test, Tonga


Inward remittances have been a great support to Pacific Island Countries, including Tonga. Aside from being a major source of foreign exchange earnings, they supplement domestic savings and real resources. This paper examines the role of remittances in the economic growth of Tonga’s during a 28 year period (1981-2007).


Asian Development Bank (2009). Navigating the Global Storm. Manila: Asian Development Bank.
Narayan, P.K. (2005). “The saving and investment nexus for China: evidence from cointegra-tion tests”, Applied Economics, 37: 1979-1990.
Narayan, P.K. and Smyth, R. (2006). “The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration”, Energy Policy, 33: 467-474.
National Reserve Bank of Tonga (2008), Annual Report, Nuku’alofa: NRBT.
Pesaran, M.H., Shin, Y. and Smith. R. (2001). “Bounds testing approaches to the analysis of level relationships”, Journal of Applied Econometrics, 16: 289-326.
UNESCAP (2007). Economic and Social Survey, 2007. Bangkok: UNESCAP.
World Bank (2006). Home and Away: Expanding Job Opportunities for Pacific Islanders through Labour Mobility. Washington D.C.: World Bank.
World Bank (2008). World Development Indicators 2008 CD ROM. Washington D.C.: World Bank.
World Bank (2009a). “Migration and Remittance Data”. Washington D.C.: World Bank.,,contentMDK:21352016~pagePK:64165401~piPK:64165026~theSitePK:476883,00.html (accessed on 29 December, 2009).
World Bank (2009b). “WDI Online Word Development Indicators”. Washington D.C.: World Bank. (accessed on 28 December, 2009).