Tonga's economy is characterized by a large nonmonetary sector and a heavy dependence on remittances from the half of the country's population that lives abroad, chiefly in Australia, New Zealand, and the United States. Much of the monetary sector of the economy is dominated, if not owned, by the royal family and nobles. This is particularly true of the telecommunications and satellite services. Much of small business, particularly retailing on Tongatapu, is now dominated by recent Chinese immigrants who arrived under a cash-for-passports scheme that ended in 1998.
The manufacturing sector consists of handicrafts and a few other very smallscale industries, all of which contribute only about 3% of GDP. Commercial business activities also are inconspicuous and, to a large extent, are dominated by the same large trading companies found throughout the South Pacific. In September 1974, the country's first commercial trading bank, the Bank of Tonga, opened.
Rural Tongans rely on plantation and subsistence agriculture. Coconuts, vanilla beans, and bananas are the major cash crops. The processing of coconuts into copra and desiccated coconut is the only significant industry. Pigs and poultry are the major types of livestock. Horses are kept for draft purposes, primarily by farmers working their api. More cattle are being raised, and beef imports are declining.
Tonga, officially the Kingdom of Tonga (Tongan: Puleʻanga Fakatuʻi ʻo Tonga), is a sovereign state and an archipelago in the South Pacific Ocean, comprising 176 islands scattered over 700,000 square kilometres (270,000 sq mi) of ocean in the South Pacific. Fifty-two of the islands are inhabited.
The Kingdom stretches over a distance of about 800 kilometres (500 mi) in a north-south line located at about a third of the distance from New Zealand to Hawaii.
Tonga also became known as the Friendly Islands because of the friendly reception accorded to Captain James Cook on his first visit there in 1773. He happened to arrive at the time of the ʻinasi festival, the yearly donation of the first fruits to the Tuʻi Tonga, the islands' paramount chief, and received an invitation to the festivities. According to the writer William Mariner, in reality the chiefs had wanted to kill Cook during the gathering, but could not agree on a plan.
Tonga is also the only island nation in the region to have avoided formal colonisation. In 2010, Tonga took a decisive step towards becoming a fully functioning constitutional monarchy after legislative reforms paved the way for its first ever fully representative elections which resulted in the election of Noble Sialeʻataongo Tuʻivakanō as its first democratically elected Prime Minister.