Tonga Country Report
Tonga has been sporadically disturbed by political and social conflict concerning its democratisation process. In August 2017, King Tupou dissolved parliament, scheduling an early election for 16 November 2017. The dissolution of Prime Minister 'Akilisi Pōhiva's government signifies resistance from the monarchy to Tonga's democratic transition. The main risk facing the country is increased policy uncertainty. Probable delays to the ratification of the pro-business policies of the Pōhiva government, including the PACER Plus trade agreement, could undermine Tonga's position as the most business-friendly of the Pacific Islands. The upcoming election has also increased protest risks, with small pro-democracy rallies likely around the event. A repeat of the violence and arson thataffected about 80% of the capital Nuku'alofa's central business district in pro-democracy riots in 2006 is unlikely.
Tonga's operational environment is attractive to potential investors, but faces challenges because of the country's size and location. The government encourages foreign investment, and has gone to great lengths to improve legislation. Some of Tonga's infrastructure is in good condition, including its transportation system. However, most businesses use generators to mitigate an unreliable power supply, and about 20% of the country lacks electricity. Tonga became a prospective member of the Asian Infrastructure Investment Bank in June 2017, suggesting the possibility of new infrastructure developments in the country.
There is a low risk of terrorism in Tonga as of 2017.