Tonga

Tonga experienced in 2022 what climate scientists had long predicted for Pacific island nations: a volcanic eruption so powerful it severed the undersea cable connecting the kingdom to the world, demonstrated how utterly dependent these economies are on external links, and previewed the cascading failures that future disasters will bring.

The Polynesian kingdom was never colonized—the only Pacific island nation that can make this claim. British protection beginning in 1900 preserved the monarchy while preventing annexation by Germany or the United States. Independence came gradually, with full sovereignty restored in 1970. The Tu'i Tonga dynasty has ruled for over a millennium, making it one of the world's oldest continuous monarchies.

But surviving colonization didn't mean escaping dependency. Tonga's economy developed around three supports: subsistence agriculture on small island holdings, remittances from Tongans abroad, and foreign aid. The remittance pillar became dominant: by the 2010s, 83% of Tongan households received overseas transfers, primarily from family in Australia, New Zealand, and the United States. Remittances reached 44% of GDP—among the highest ratios in the world.

On January 15, 2022, the Hunga Tonga–Hunga Ha'apai underwater volcano produced the largest atmospheric explosion since Krakatoa. The eruption sent ash clouds 58 kilometers into the atmosphere, generated tsunamis that struck coastlines across the Pacific, and severed the single fiber-optic cable connecting Tonga to global communications. Within hours, 80% of the population was affected. Mobile money systems—the primary mechanism for receiving remittances—went offline precisely when families needed emergency funds.

The recovery has been slow and constrained. GDP growth reached 2.7% in FY2025, driven by reconstruction grants and remittances that resumed once communications were restored. The IMF provided $18 million in emergency financing. Inflation has cooled to 1.4%. But medium-term prospects remain weak: the IMF projects just 1.2% potential growth, reflecting persistent outward migration, limited economies of scale, and the certainty of future natural disasters.

Today, the fundamental structure hasn't changed. Tongans abroad send money home to Tongans who remain. Agriculture remains subsistence-level. Tourism—primarily cruise ships and niche visitors for whale watching—provides some foreign exchange but cannot absorb the young population seeking opportunity.

By 2026, Tonga's trajectory depends on whether reconstruction can create resilience or merely restore fragility. Digital financial infrastructure needs hardening—satellite backup for the cable, mobile money systems that function during outages. But these are technical fixes for a structural challenge: an economy that exists because Tongans leave, sending money back to an archipelago that cannot offer them opportunity.