While most of the world continues to hold its breath and await the next move against Bin Laden and Afghanistan’s Taleban leadership, the people of a small Pacific island have something else on their mind.
It is not the danger of global warming and rising sea levels that is worrying them, though Tonga is no more immune than other Pacific island states to this danger. What is of real concern is that Tonga has just been robbed of the equivalent of fully half of the government’s annual budget. The figure involved, $37 million may be relatively small by the standards of most states, but to the Tongans it is a fortune. In the 1980s, Tonga hit upon the bright idea of selling citizenship to a select group of foreigners who might be in need of a new passport. The scheme was aimed very much at wealthy Chinese in Hong Kong and Macao, who feared for their future when Beijing took over the old British and Portuguese colonies. The Tongans did not expect very many of their new citizens to actually move to the Pacific, but by imposing certain fiscal obligations, they hoped that over and above the initial purchase of citizenship, the state would be able to set up a regular income for an economy which has little to earn foreign currency, except copra and other coconut products, a few bananas and tourism.
The scheme worked quite well and as a result some $30 million was gathered in. Though some money went initially into the government’s budget, it was agreed that the bulk of the funds should be held offshore, to be used as an emergency reserve and to be invested for future generations. On the face of it, this was a wise decision, since immediate use of the citizenship revenues could have overheated the Tongan economy.
But then something unaccountable happened. The mandate for the management of the funds was won by a US businessman Jesse Bogdonoff. Bogdonoff was anything but a hands-off money manager. He made a point of visiting his clients in Tonga. He created an overwhelmingly good impression with the government, particularly in royal circles. He apparently demonstrated how well he was managing the funds. As an honor and a mark of the respect with which Bogdonoff was held by Tongans, the monarch actually appointed the American as his court jester. Because of this ringing endorsement, other leading Tongans are believed to have invested part of their wealth with Bogdonoff.
But the story of Tonga’s jester has turned out to be anything but funny. Bogdonoff has disappeared and so have the funds with which he was entrusted. Including earnings on investments, the total missing could be over $40 million.
Some commentators have already blamed the Tongans for naivete. They clearly could have put some elementary regular checks in place on Bogdonoff and the Tongan money he had. But in such a serious and unforgiving world today, the Tongans’ naivete actually has an enviable charm. The Tongan authorities made some awful mistakes but the open-hearted and friendly way that they treated the treacherous stranger in their midst, should surely not be seen as fundamentally wrong. If more people were as generous with their trust as the people of Tonga, the world would be a far, far nicer place.
