World Bank Governor's Statement No. 7 - October 17, 2025 - 'Aisake Valu Eke on Tonga's economic and climate finance challenges

Jul 19, 2026

World Bank Governor’s Statement No. 7 dated October 17, 2025 presents Tonga’s Governor’s assessment of the 2025 global economic conditions and their effects on small island developing states. It highlights uneven pandemic recovery, fiscal strain from inflation and rising public debt, and the escalating climate emergency. Particular focus is placed on obstacles to accessing climate finance for adaptation, mitigation, and loss and damage, including complex funding mechanisms and the neglect of community-scale initiatives. The statement also outlines Tonga’s resilience measures and migration-related economic dynamics.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages7

Reading Time18 min

Opening and context

Tonga’s economic performance within 2025 global challenges

Climate crisis and financing gaps for SIDS

Barriers to climate finance access

Need for inclusive community-based funding

Financing loss and damage

Tonga’s resilience and development priorities

Stabilization measures and sector vulnerabilities

Migration, remittances, and workforce development

Public Disclosure Authorized Public Disclosure Authorized World Bank Governor's Statement No. 7 October 17, 2025 Statement by the Hon. 'AISAKE VALU EKE, Governor of the IBRD for TONGA Statement by the Hon. 'Aisake Valu Eke, Governor of the IBRD for Tonga Mr. Chairman, Mr. President of the World Bank Group, Madame Managing Director of the International Monetary Fund, Fellow Governors, Distinguished delegates, Ladies and Gentlemen. It is a privilege and an honour to address this distinguished gathering today as the Governor of Tonga, on behalf of His Majesty Government and people of the Kingdom of Tonga, at this prestigious World Bank and IMF Annual Meeting in 2025. Today, as we gather to discuss the pressing economic conditions that challenge our world, I would like to take a moment to reflect on the performance of the Tongan economy in this context, as well as the vital role that the World Bank and IMF play in supporting our development objectives and addressing challenges that we face. As we navigate the complexities of 2025, the global economy faces compounded challenges. Geopolitical tensions, economic and trade policy shifts, the aftermath of the COVID-19 pandemic, persistent price volatility, and climate change are creating an uncertain landscape that affects every nation, particularly small island developing states (SIDS) like Tonga. The recovery from the pandemic continues to be uneven. While some economies have rebounded robustly, many others, especially those reliant on tourism and external trade, still grapple with the lingering effects of disrupted supply chains and reduced demand. Inflation has tightened the fiscal space for many governments, leading to heightened costs for basic goods and services and unsustainable increase in public debts which in turn impacts the most vulnerable members of society. As we all know, small island states are at the frontline of the climate crisis, experiencing the most severe impacts despite having contributed the least to greenhouse gas emissions. From rising sea levels that threaten our very existence to increasing frequency and intensity of natural disasters, the reality is that climate change is not a distant threat; it is an ongoing emergency that requires immediate and comprehensive action. In the discussions on the future of our global economy, I would like to draw your attention to a pressing issue that weighs heavily on the shoulders of small island developing states (SIDS) like Tonga—the challenges we face in accessing climate finance for adaptation, mitigation, and addressing loss and damage. In Tonga, we have made significant strides toward climate resilience, focusing on adaptation projects that protect our communities and ecosystems. We have initiated programs that enhance the sustainability of our fisheries, safeguard our freshwater resources, and improve infrastructure to withstand natural disasters. However, these efforts are continuously undermined by the significant barriers we face in accessing climate finance. One of the most pressing challenges is the complexity of existing funding mechanisms. SIDS often find themselves navigating a labyrinth of applications, guidelines, and government-level approvals that can be overwhelming, especially for small administrations like ours that may have limited resources and expertise. The result is a frustrating misalignment between urgent needs on the ground and the cumbersome processes of obtaining necessary funds. Moreover, many climate finance mechanisms prioritize large infrastructure projects, often overlooking smaller-scale, community-based initiatives that are crucial for our survival. There is a genuine need for a more inclusive approach to funding that not only addresses the scale of projects but also recognizes the value of grassroots efforts that build resilience at the community level. Another significant challenge is the issue of financing for loss and damage. Small island

FAQs

What global economic pressures does the statement describe for 2025?

It describes compounded challenges including geopolitical tensions, shifts in economic and trade policies, the lingering effects of COVID-19 on supply chains and demand, persistent price volatility, inflation-driven fiscal tightening, and rising public debt pressures.

Why does the statement emphasize difficulties accessing climate finance for Tonga?

It points to complex application guidelines and approvals that overwhelm small administrations, creating a mismatch between urgent on-the-ground needs and burdensome funding processes.

What does the statement say about funding loss and damage for small island states?

It argues that loss and damage is often sidelined compared with adaptation and mitigation, and calls for creating and operationalizing financing mechanisms specifically designed to address these losses and support affected populations’ recovery and rebuilding.

Jul 19, 2026

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