The Global Flea Market: Migration,Remittances and the Informal Economy in Tonga

Some common assumptions about the form and use of migrants' remittances in the South Pacific are examined and questioned in the light of information from a micro-economic study of one group of remittance recipients in the flea market of Nuku'alofa, the capital of the Kingdom of Tonga. The findings of this study suggest that economic analysis and policy recommendations based on the existing macro-economic data on recorded remittances and other economic aggregates should be treated with caution. The unrecorded inflows of remittances in kind and the associated spread of the domestic informal sector have had some important implications for the functioning of Tonga's economy. There is some evidence to suggest that the growth of informal, international trade is fostering other significant changes in the domestic economy. The functioning of remittance-dependent economies such as Tonga is much more complex than existing economic analysis suggests, and involves substantial investment – not just consumption – with the emergence of entrepreneurs and the manipulation of dependence, rather than merely passive receipt of cash and expenditure focused on consumption.