January 1999

by Michael Field

Some might call it cynical and others admire the pragmatism but when Tonga dumped Taiwan and recognised China multi-millionaire Princess Pilolevu Tuita told her people it was all in the name of God.

Interestingly the major financial beneficiary out of the move is the princess herself whose 60 percent ownership of the satellite company TongaSat has, according to US business magazine Forbes, given her a personal worth of US$25 million

She pushed for the change to enhance the business prospects of the Hong Kong arm of the company which was struggling because her kingdom, out of what proved shifting loyalty and dedicated anti-communism, preferred Taiwan.

Tonga dumped Taipei on November 2, doing it in a most unusual fashion when King Taufa’ahau Tupou IV unveiled a Made in China bronze larger than life replica of himself in the grounds of the palace with China’s Vice Minister of Foreign Affairs, Jiechi Yang, looking on. Directing proceedings was Pilolevu, who is now the effective political power in Tonga now that Baron Vaea has submitted his resignation as prime minister.

The decision was announced by the new Foreign Minister, Prince ‘Ulukalala Lavaka Ata, who at the age of 39 has just got around to finishing university and is being tipped as Vaea’s replacement.

A couple of weeks later the zero-sum diplomatic game continued apace when the Marshall Islands switched from China to Taiwan.

Tonga’s behaviour is strange given its background as Taiwan’s oldest ally in the Pacific.

In February last year the king opened Taiwan’s lavish new T$2.5 million embassy built on Crown Prince Tupouto’a’s land. The Crown Prince, who was the foreign minister then, came up with the design concept and said it should be “something that should last for at least 100 years”.

Taiwan’s Prime Minister Vincent Siew showed up for the king’s birthday in July, seemingly unaware that the princess was already working in Beijing to have the relationship severed.

In 1992 Taiwan Foreign Minister Frederick Chien visited Tonga -- at the same time a pro-democracy convention was going on -- and presented US$1.5 million to build a hall in memory of Queen Salote.

"We will never forget the enormous assistance of the government of the Republic of China," the king replied.

Quiet now is the Speaker, Noble Fusitu’a, who was a high ranking member of the Taiwan funded World Anti-Communist League. They convinced him that the democracy movement in Tonga was made up of "crypto-communists”.

He was strongly anti-Communist.

"The exact definition of communist nobody has ever tried to explain. A communist to you is different to a communist to me. Anybody who tries to move the people against the established order, causing chaos, anarchy, that's the first degree of communism.”

The princess explained her position in the bimonthly Matangi Tonga magazine.

She said her father had given her a mandate to negotiate the switch, saying “it is one of the most courageous decisions that his majesty has made.

It was “the first step for Tonga to become a full member of the United Nations”, an odd statement to make given recognition of China was never a pre-requisite to UN membership.

The princess has now set up in Hong Kong with a Chinese business partner, Fred Wang, trying to sell TongaSat’s satellite slots to China.

“I believe that God invented us to do this work otherwise we could have become just another foreigner knocking on doors in Beijing for years without having a chance to meet the leaders of China,” she told the magazine.

“We are honoured that we became part of his majesty’s vision for Tonga’s future.”

The princess said China would become a destination for Tongan missionaries.

“I look upon this new relationship with China as a means of spreading the Lord’s words to China.

“When China opens its doors to Christian evangelists, Tonga should be right there by the door.”

Then came something of a recognition that money was involved.

“Business -- fine, normalising relationships -- true, but this is hat I have been looking at, because his majesty’s vision is for Tongans to be evangelists, for Tonga to be an evangelist country to spread the word, I truly see this as an opportunity for all good Christians in Tonga.”

She claimed evidence existed that his was already happening with the Chinese saying Grace before meals she was involved in.

She first visited Beijing in 1996, discovering to her apparent surprise that “almost everything in China is either owned and run by the government, or that government is the major shareholder”.

It was through her business contacts with the “China Association for International Friendly Contact” that the big bronze statue of the king was made.

TongaSat was formed after Tonga startled the international satellite market by claiming seven key equatorial satellite slots. Although it did not need the slots itself it has, in partnership with other companies, used Russian satellites to fill the slots.

These days TongaSat has four orbital slots that cover the Asia-Pacific region and China has become a key to the strategy to sell a service.

“We are looking at how we are going to make a trans-Pacific link between Asia and the USA a reality,” she says.

“And that is what we are working on right now, and China is supporting us, because they want to play a role in communicating to the millions of Chinese people in the United States.”

ends

by Michael Field

Tonga's lucrative satellite business controlled by Princess Pilolevu Tuita is causing tensions with the Kingdom's Government.

The Princess has, according to the US business magazine Forbes, made a personal US$25 million from her 60 percent ownership of Tongasat

In an interview with the monthly Matangi Tonga she has revealed tensions with the government and her restructuring of the company with the formation of a Hong Kong holding company.

Tonga, one of the world's poorest states with just 100,000 people, came into the satellite business by chance. Mats Nilson, a senior official of the International Telecommunications Satellite Consortium, went to Tonga for a holiday after the death of his wife. There he came up with a scheme to get around what was a gentlemen's agreement that Intelsat member nations only take up equatorial geostationary orbital slots they actually need.

Tonga, although its own minuscule communications needs were handled by Cable and Wireless, took up Nilson's proposal and a decade ago claimed 16 orbital slot entitlement to be managed by Tongasat. In subsequent negotiations Tongasat reached a deal to use six slots in key positions over Indonesia.

She said Tongasat suffered a "financial setback" for Tongasat through involvement with an Indiana company, Rimsat, which was to have provided satellites for the slots. They also got involved in extensive litigation with Malaysian multi-millionaire Tajudin Ramli. Tongasat has won the latest round.

Pilolevu said in order not to get hurt by the Rimsat and Malaysian affair she has set up Pacific Asia Global Holdings in Hong Kong which she is the major shareholder in. It will be used to attract new customers to Tongasat.

She said it was important to create a sense of security with any partners they can attract.

"If anything happens to signify to our joint venture partners that we have an unsympathetic government, or any kind of instability in government, they are going to go elsewhere, because... it involves a lot of money," she told the magazine.

Pilolevu said the government was getting a good deal out of the operation but declined to reveal how much was being paid.

She dismissed suggestions the government might be trying to nationalise Tongasat because of tensions of the agency agreement between the company and the government.

"We have not breached that agreement and hopefully government will not breach their agreement.

"It has not been an easy partnership with government, and I am sure government will only be too happy to say so."

Copyright: Michael Field