Pacific Islands Society

PO Box 632 | Ebensburg, PA 15931 | USA

843.271.6891 ph pacificislandssociety.org web
Domestic Non-Profit Organization
Global Risks: Unemployment and
Underemployment in the Pacific
Islands
Security Scholar: Ms. Lora Vaioleti
Published: September 1, 2014
I look at that painting of the vaka sailing into
the high seas, and I wonder where has that
spirit of enterprise gone? - Dr Timote Vaioleti,
talanoa, April 2014.
It was the last day of 2013, and I sat cross-
legged on the hot floor of my Auntys lounge
room in Tongatapu. I was surrounded by 14
young Tongan males; the latest group to be
recruited to Aotearoa New Zealand for
temporary horticultural work under the
Recognised Seasonal Employment scheme
(RSE). We were bringing the men, and boys,
together for the last time to discuss
expectations, to emphasise the privilege of this
opportunity, and perhaps most importantly, to
try to explain how freezing the South Island of
New Zealand can be to a people ignorant to
that kind of discomfort. Of those who sat in the
room, nearly one-third were relatives of mine,
with all who were leading the meeting being of
my immediate family. As we asked the workers
to introduce themselves and offer their reason
for going to New Zealand for this labour-
intensive work, responses were unwavering and
unanimous - the men were going to work for
their family. Remittance was an expectation,
and a mere function of a deep-set sense of
social obligation to kin.
Opportunities for employment in Tonga remain
an ongoing challenge with the most recent
unemployment rate of 13% published in 2003.
For youth in Tonga, the challenge is surely
greater as a lethargic private sector and
outwardly-focused government offer little hope
for realising the potential of a youthful
population ranked the most highly educated of
the Pacific small island states. The World
Economic Forum (WEF) Global Risks 2014
report has highlighted unemployment and
underemployment as the second highest overall
Global Risk of Highest Concern in 2014.
1
The
report speaks particularly to the challenge of
youth unemployment stating that in the
developing world, an estimated two-thirds of
youth are not fulfilling their potential. Tongans
are hungry for employment opportunities,
illustrated by the fact that over 5,000 Tongans
registered for the work-ready pool within the first
three months of applications opening for the
first intake of the RSE program in New Zealand.
2

For a small island nation like Tonga,
international labour inclusion like RSE can
provide a catalyst for the establishment of
entrepreneurial cluster businesses and shows
promise for addressing unemployment,
underemployment and even work experience
challenges for Tongans.
With significant numbers of working Tongans
generating income internationally, males,
particularly those from rural villages in Tonga,
are remitting tens of millions of dollars per year
with detected remittances measured at 28% of
annual GDP in 2009.
3
RSE is now the largest
source of temporary work for wages outside of
Tonga with 85% of RSE and Australias
Seasonal Worker Program (SWP) workers
coming from the Pacific. Of the 7639 Pacific
RSE and SWP workers in 2013, 2772 were
Tongan.
4
In 2013, 1573 of the total RSE workers
in New Zealand were Tongan.
5

Lora Vaioleti is a member of the inaugural class
of Pacific Security Scholars. A Fulbright Scholar,
she is a New Zealander of Tongan Ancestry.
Security Scholars
Policy Analysis from Next Generation Leaders
Pacific Islands Society | Pacific Security Scholars | September 1, 2014
Yet to be highlighted, and perhaps most
exciting are the opportunistic, cluster-like
businesses being established alongside formal
RSE arrangements. It will be these enterprises
that will offer the greatest opportunity for broad
catalysis of sustainable employment for the
current and future generations of youth in
Tonga. Until now, significant recorded levels of
remittance-sending by Tongans abroad have
made visible the deep set socio-cultural values
of obligation to family. Moving forward, the
financial manifestation of family obligation is
increasingly in the form of opportunistic Kin-
Business. The question is how do Kin-
Businesses operate in association with formal
employment schemes, and how does a
preference for family-centred business growth
add value in context for Tongans seeking
economic opportunity and self-reliance?

This piece draws on talanoa,
6
interviews and
case analysis of growing Tongan Kin-Business
which are currently and effectively exploiting
formal RSE programmes. These have not been
analysed previously, with RSE itself being a
relatively young scheme, and Australias
equivalent, SWP still in its infancy. The Kin-
Businesses highlighted here have been devised
and led by both Tongan men and women, and
are operationally managed in the most part by
women; perhaps naturally so in a matriarchal
society with ongoing loyalties to a traditional
social order. Of note is the unapologetic kin-
bias of these Kin-Businesses, and the clear
contextual value this has provided the Tongan
enterprises in terms of sharing of privileged
knowledge and expertise, trust and network
sharing, and access to investment capital.
7


Case i n Poi nt: Enterpri se V

Enterprise V
8
was established by a Tongan New
Zealander approximately five years ago to
support family members recruited under a RSE
agreement with a tribal-owned (Iwi) horticultural
business, Hort S.
9
From this initial partnership,
pastoral care was recognised as key for the
sustainability of a cyclical temporary worker
scheme involving young Tongan males
uprooted from familiar social systems, rituals
and kin support. Enterprise V emerged directly
out of a need for socially contextual service
provision within a formal employment
arrangement.

Enterprise V have extended their involvement
from the formal RSE scheme to now include the
management of savings bank accounts in New
Zealand for RSE workers wages, the
management of a growing capital lending fund
in Tonga and the granting of small to medium
loans for RSE-related costs including
background checks and visa applications
costing up to $500 per person. Interest on these
loans are between 0 10% annually, based on
the individuals financial situation and capacity
for repayment.

Perhaps central to Enterprise V earnings
however, are the remittance management
services. Workers pay a set fee of $5 per
remittance transaction that provides a transfer
service for payments from New Zealand to
immediate family in Tonga. The value-add
comes with end-to-end recording of each
remitted amount, ongoing measurement of
transfer totals for each family for the length of
the workers RSE placement, monitoring of
progress of family investment and development
projects in Tonga for which RSE remittance is
supporting, and sharing of worker progress,
performance and general state of well-being
providing reassurance for family in Tonga
during up to 7 months of separation.
Remittance is transferred from managers in
New Zealand, then collected in Tonga and
distributed weekly from a family home where
family of the workers are able to meet,
reconnect and discuss progress.

Enterprise V currently have $17,000 in savings
in New Zealand bank accounts and $7000 in
working capital for investment lending in Tonga,
collected from transactional fees from
remittance transfer and monitoring services.
Goods purchased in New Zealand by RSE
workers, and resold in Tonga, including
vehicles and building materials, earn up to
$80,000 for workers families each year. Even
with these numbers, a spokesperson for
Enterprise V states the greatest potential for
financial and human capital amplification will be
Pacific Islands Society | Pacific Security Scholars | September 1, 2014
through additional service provision including
financial and pastoral care services whilst kin
continue to be supported in formal employment
schemes. As the RSE scheme continues to
grow with the visa cap set to increase from
8,000 per year to 9,000 per year, so too do the
opportunities for Kin-Business. Interestingly,
Enterprise V have taken steps this year for
formal registration of the financial service arm of
the organisation through the Reserve Bank of
Tonga, further extending opportunities for
financial empowerment in the coming years.
The potential for continued contextual kin-bias
from a formal financial perspective is yet to be
explored.

Appl i ed Val ues for Human Capi tal
Growth

One of the unique features of Tongan Kin-
Business in comparison to traditional Western
business models, are the value systems of kin-
centricity, reciprocity and social rank which
guide business structure and action. In the
case of Enterprise V, deep family alliances have
proven to assist in the sustainability and
diversification of the venture through actively
drawing on kin networks; aunties, nephews and
cousins contribute skills, professional expertise
and social rank for business growth. Values
born of the Tongan social context are being
successfully transferred over to entrepreneurial
ventures. Trends noted by Naidu and Chand of
family business equity lending in Fiji and Tonga
are also evident in Enterprise V; members of
Enterprise V have ready access to group equity
to support business opportunities and growth.
10

Familial loyalty within the Enterprise reportedly
motivates the growth of business for
developmental outcomes and the betterment of
future generations.
11
Values of kin-centricity in
particular underpinning Kin-Business have led
to the active seeking of leadership opportunities
for younger generations of kin within formal RSE
arrangements, as well as the active seeking of
opportunities for up-skilling and training of the
younger generation within Enterprise V.
12

Organising business around ones family
networks provides strategic value especially for
the younger members of Tongan family involved
in Kin-Business.
Within Enterprise V, older generations of
relatives manage operations at the highest level
within Tonga and between Tonga and New
Zealand. These older generations have the
advantage of acknowledged social rank and
understand how to leverage this rank for
influence within Tongan social circles. From
these higher levels of influence, younger
members of the family lend expertise and skills
borne out of formal education for both strategic
and operational application. Within Enterprise V,
older kin leaders, both male and female, assist
with social cohesion and help emphasise the
relevance of each members obligations and
roles within the family group. To fulfil their own
obligations, these family leaders share
knowledge of contextual leadership with
nominated members of the younger generation
for succession planning. Operationally, loans
and end-to-end remittance transfers, recording
and distribution is managed mainly by older
female members of the family, and younger
family members with higher levels of formal
tertiary education maintain and audit the
Enterprises accountancy records. Family in
New Zealand offer strategic insight, support
and advice depending on their relevant
expertise, training and networked connections.
Future in context

Much like remittance, and unlike foreign aid,
Kin-Business is proving an effective stimulus for
household and community level development.
Business centred on family offers the potential
for economic growth and self-reliance from the
household level, up. Importantly, Kin-Business
not only maintains social harmony but with
growing financial capacity, improved access to
employment opportunities and investment in
family level development projects, offers
promise of enhancing social well-being. There
is yet to be broad empirical evidence gathered
on Kin-Businesses like Enterprise V in Tonga,
including their impact on development.
However a leading expert in RSE, Richard
Bedford, has raised evidence of effective
family-level investment in development projects
as a direct result of kin-biased remittance
sending in Tonga.
13


Pacific Islands Society | Pacific Security Scholars | September 1, 2014
Enterprise V is a prime example of a socially
and financially sustainable enterprise, built on
solid foundations of contextual values that have
proven both robust and translatable. Enterprise
V extended the opportunity inherent in the initial
formal RSE arrangement, and continues to be
successfully managed by a network of family
between New Zealand and Tonga. The promise
lies in the natural synchronicity of family and
entrepreneurship steeped in Tongan social
context, no matter the geographical borders.

The vaka remains, and the spirit of enterprise
lives on for Tongans. External dialogue around
economic development, human security and
self-reliance requires a shift to acknowledge
existing processes, preferences and strengths
in context. Action to further recognise and
enable Tongan Kin-business may be the first
step.

Enterpri se V and Ki n-bi as Leadi ng to
Di versi fi ed Level s of Ki n-Busi ness





Foot not es

1 Worl d Economi c Forum. I nsi ght Report ;
Gl obal Ri sks 2014. Ni nt h Edi t i on.
Ret ri eved f rom:
ht t p: / / www3. wef orum. org/ docs/ WEF_Gl oba
l Ri sks_Report _2014. pdf
2 Gi bson, J. , McKenzi e, D. (2013).
Devel opment t hrough Seasonal Worker
Programs: The Case of New Zeal and' s
RSE Program. Ret ri eved f rom:
ht t p: / / mi crodat a. worl dbank. org/ i ndex. php/
cat al og/ 1976/ downl oad/ 30216
3 Hezel , F, X. (2012). Paci f i c I sl and Nat i ons:
How Vi abl e Are Thei r Economi es? Paci f i c
I sl ands Pol i cy (7). Honol ul u: East -West
Cent er.
4 Bedf ord, R. , Bedf ord, C. (2014). Managed
Seasonal Mi grat i on Schemes For Paci f i c
Workers, 2012-2013 Just A Band-Ai d ?
I naugural St at e of t he Paci f i c Conf erence.
The St at e, Soci et y and Governance of
Mel anesi a programme, Aust ral i an Nat i onal
Uni versi t y, Canberra.
5 Gi bson & McKenzi e, 2013
6 Tal anoa i s a soci o-cul t ural and cont ext ual
f orm of generat i ve communi cat i on. See:
Vai ol et i , T. M. (2006). Tal anoa Research
Met hodol ogy: A Devel opi ng Posi t i on on
Paci f i c Research. Wai kat o Journal of
Educat i on. 12. 21 34. Vai ol et i , T. M.
(2011). Tal anoa, Manul ua and Founga
Ako: f rameworks f or usi ng enduri ng
Tongan educat i onal i deas f or Educat i on i n
Aot earoa/ New Zeal and. Ret ri eved f rom:
ht t p: / / researchcommons. wai kat o. ac. nz/ han
dl e/ 10289/ 5179
7 Dr Ti mot e Vai ol et i , t al anoa, August 2014
8 Not e, name of t he Ent erpri se has been
changed f or t he purposes of
organi sat i onal f i nanci al pri vacy
9 Not e, name of t he hort i cul t ural busi ness
has been changed f or t he purposes of
company pri vacy.
10 Nai du, S. , Chand, A. (2012). A
comparat i ve st udy of t he f i nanci al
probl ems f aced by mi cro, smal l and
medi um ent erpri ses i n t he manuf act uri ng
sect or of Fi j i and Tonga. I nt ernat i onal
Journal of Emergi ng Market s. 7 (3) 245
262.
11 Huni , A. Tal anoa, June 2014, Hami l t on,
New Zeal and
12 Taunahol o, M. Tal anoa. Apri l 2014,
Hami l t on, New Zeal and.
13 Bedf ord & Bedf ord, 2014



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Bedford, R. Talanoa, March 2014, Hamilton, New
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Gibson, J., McKenzie, D. (2013). Development through
Seasonal Worker Programs: The Case of New Zealand's
RSE Program. Retrieved from:
Pacific Islands Society | Pacific Security Scholars | September 1, 2014
Pacific Islands Society
PO Box 632 | Ebensburg, PA 15931 | USA
843.271.6891 ph pacificislandssociety.org web
Domestic Non-Profit Organization
http://microdata.worldbank.org/index.php/catalog/1976/d
ownload/30216
Hezel, F, X. (2012). Pacific Island Nations: How Viable
Are Their Economies? Pacific Islands Policy (7). Honolulu:
East-West Center.
Huni, A. Talanoa, June 2014, Hamilton, New Zealand
Naidu, S., Chand, A. (2012). A comparative study of the
financial problems faced by micro, small and medium
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Taunaholo, M. Talanoa. April 2014, Hamilton, New
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Vaioleti, T. M. (2013). Kahokaho: Ufi from the God/s; its
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Vaioleti, T. M. (2011). Talanoa, Manulua and Founga Ako:
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9
Vaioleti, T. M. Talanoa. August 2014, Hamilton, New
Zealand
World Economic Forum. Insight Report; Global Risks
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_2014.pdf




The views expressed are those of the author.