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 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.

A small but growing construction sector is developing in response to the inflow of aid monies and remittances from Tongans abroad.

One hope is seen in fisheries; tests have shown that sufficient skipjack tuna pass through Tongan waters to support a fishing industry.

Coconut trees past their prime bearing years also provide a potential source of lumber.

The tourist industry is relatively undeveloped; however, the government recognizes that tourism can play a major role in economic development, and efforts are being made to increase this source of revenue.

The country remains dependent on sizable external aid and remittances to offset its trade deficit.