This blog is an edited version of the full blog, which can be found here: https://www.undp.org/pacific/blog/pacific-reform-journey

In the Asia-Pacific region, where a single cyclone can wipe out a third of a country’s economy, how governments manage money is a matter of survival. Public Financial Management (PFM) is what ensures that schools reopen after storms, hospitals keep running, and communities can rebuild stronger. So even though reading about PFM reform journeys may not be everyone’s cup of tea, it is the backbone of how governments plan, allocate and spend resources to deliver services and respond to challenges like climate change. This blog explores how Fiji and Tonga are reforming their national systems to translate climate ambition into lasting action for their people.

As COP30 approaches, there will be many discussions about how to unlock climate finance for Small Island Developing States. Much of the advice will sound familiar — the need to prepare projects that are ready for funding or calls for new and “innovative” financing solutions. Yet behind these headlines, Pacific finance ministries are steadily reforming the national systems that ultimately determine whether climate finance can be used effectively.

The barriers are well known: Pacific governments must navigate a maze of requirements set by different funding agencies before they can access climate finance. Meanwhile, disasters do not wait. Cyclone Winston in Fiji (2016) and Cyclone Gita in Tonga (2018) caused damages equivalent to 31% and 38% of GDP respectively — losses that diverted resources away from resilience-building and other national priorities.

Our experience as government officials and UNDP underscore that reforms cannot rely on quick fixes or buzzwords. Strong PFM foundations, built in the right sequence, are essential. The national budget is the government’s primary tool for implementing any policy. Therefore, strengthening evidence-based budgeting ensures resources are directed where they can most effectively reduce climate risks.

In 2024, Tonga used the Forum Economic Ministers Meeting (FEMM) to call for stronger coordination of PFM reform support across the region. We applaud the economic ministers who have endorsed the proposed approach for the finalization of a PFM Regional Coordination Mechanism as part of the FEMM 2025 outcomes. Strengthened coordination of reforms, led by governments themselves, can put countries in a stronger position to adopt sustainable finance practices such as climate budgeting. 

Too often, discussions about the Pacific focus on  ‘weak PFM systems’, without acknowledging the unique circumstances of PICs.  Placing governments in the driver’s seat, rather than measuring them solely against global benchmarks, is vital to ensure reforms are realistic and sustainable.   

What also matters is highlighting progress and lessons learned. At the Inclusive Climate Finance Dialogue, organized by the UNDP Climate Finance Network and UNCDF with support from the UK FCDO and Sweden Sida, we shared our Talanoa-based approach to PFM reforms, which reflects the Pacific's emphasis on inclusive and participatory processes for dialogue. In the Kingdom of Tonga, the creation of an interministerial Technical Working Group has improved coordination between finance and climate ministries, leading to climate priorities being systematically included in national budget processes for the first time. This alignment ensures that climate mainstreaming is not a parallel track, but part of the core financial system.

Similarly, in Fiji, a new Budget Classification Structure (BCS), introduces dedicated categories for climate change and gender, allowing the government to more precisely track spending on resilience and decarbonization. This has already enabled the Ministry of Finance to identify gaps in climate-related spending and improve transparency in budget reporting. Together with Fiji’s pioneering issuance of a sovereign green bond in 2017, these reforms put the country among a small but growing group of states embedding sustainability into their financial systems. 

Our experience highlights the importance of flexibility in reform design to suit each country’s context. In climate budget reforms, Fiji prioritized systems change, while Tonga focused on institutional coordination. With limited human resources, Pacific governments depend on development partners to provide financial support and technical expertise, but reforms succeed only when countries themselves set priorities and drive the agenda.This principle of government-led reform is also at the core of UNDP’s support in the Pacific, where assistance is designed to complement national priorities rather than prescribe them.

This blog has been written by: 

• Shayla Rani, Assistant Manager, Ministry of Finance, Fiji.

• Ravneeth Dewan, Principal Climate Finance Officer, Ministry of Environment and Climate Change, Fiji. 

• Sione Tokai, Principal Economist, Ministry of Finance Tonga.

• Malvina Singh, Risk-informed Development Finance Specialist, UNDP Gov4Res.