Country Report

Tonga

September 2007

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Tonga 1

Contents

Tonga

2 Summary

3 Political structure

4 Economic structure 4 Annual indicators 5 Quarterly indicators

6 Outlook for 2008-09

7 The political scene

9 Economic policy

11 The domestic economy

12 Foreign trade and payments

List of figures

5 Tonga: consumer prices 5 Tonga: foreign trade 7 Tonga: gross domestic product 7 Tonga: consumer price inflation

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Tonga September 2007 Summary

Outlook for 2008-09 The government has moved to calm the frustration felt by many at its failure to implement political reform more quickly by establishing the new tripartite reform committee. The prime minister, Feleti Sevele, has suggested that it will only be after the March 2008 general election that any reforms are implemented. The Ministry of Finance has recently been more upbeat about the state of the economy following the November 2006 riots. However, the repercussions are still being felt in terms of decreased tourism, lack of investor confidence and the collapse of significant business deals. Tonga’s accession to the World Trade Organisation (WTO) on July 27th will result in a drop in trade tariffs, which will see revenues from imports and exports fall sharply.

The political scene Tonga’s Legislative Assembly convened on May 31st for the first time since the riots of November 2006. Pressure for political reform!the cause of the rioting! has forced the issue to the top of the government’s agenda and a new parliamentary reform committee, the Parliamentary Tripartite Committee for Political Reform, has been formed. Five members of parliament are accused of sedition in relation to their alleged involvement in the November 2006 riots, and their cases have been referred to the Supreme Court. The state of emergency imposed by the government in response to the riots was extended by another 30 days, for an unprecedented eighth time, in mid-July.

Economic policy Ton ga "s WTO accession will see the government’s largest source of revenue! import tariffs!cut sharply. Critics point to the major shortfall in public funding that this will inevitably produce, despite the implementation of a 15% consumption tax. The government recently signed a draft agreement with the Asian Development Bank to secure a loan of up to US$12.4m to improve infrastructure in the capital, Nuku’alofa.

The domestic economy The government claims the November 2006 riots directly affected the operations of numerous businesses, amounting to an estimated US$55.7m in losses. The Business Recovery Facility has been set up to assist affected enterprises. In June the government announced that it will buy back the country"s electricity firm, Shoreline.

Foreign trade and payments Australian officials suggested recently that the reconstruction process is taking longer than might be expected and offered to add a further A$5m (US$4.4m) to the Business Development Fund. Editors: Hilary Ewing (editor); Gerard Walsh (consulting editor) Editorial closing date: August 24th 2007 All queries: Tel: (44.20) 7576 8000 E-mail: [email protected] Next report: Full schedule on www.eiu.com/schedule

Country Report September 2007 www.eiu.com © The Economist Intelligence Unit Limited 2007 Tonga 3

Political structure

Official name Kingdom of Tonga

Form of state Constitutional monarchy, with the monarch retaining significant power

The executive The king appoints a cabinet, led by a prime minister. Ministers are appointed by the king to serve at his pleasure or until they are allowed to resign. After the March 2005 general election, two of the nine elected nobles" representatives and two of the nine elected people"s representatives were offered cabinet appointments for the first time

Head of state King Siaosi Tupou V (who is to be crowned in August 2008)

National legislature Unicameral Legislative Assembly with limited powers, comprising the speaker, the cabinet (appointed by the king), nine nobles chosen by the 33 nobles of Tonga, and nine representatives elected by all Tongans aged 21 and over; three of the representatives are elected from Tonga"tapu, one each from Niuatoputatu and Niuafa"ou, two from Ha"apai and two from Vava"u; the nobles are chosen to represent similar areas

Legal system Modelled on the English system, with the Privy Council, consisting of the cabinet presided over by the king, sitting as the Court of Appeal

National elections March 16th-17th 2005; the next election is due in March 2008

Main political organisation Tonga Human Rights and Democracy Movement (HRDM, formerly the People"s Party)

Prime minister, minister for disaster relief, & responsible for the department of communication Feleti Sevele

Deputy prime minister, minister for health Viliami Tangi

Key ministers Agriculture, forestry, fisheries & food Feleti Sevele (temporary) Education, women's affairs & culture Tevita Hala Palefau Finance Siosiua "Utoikamanu Fo reign affai rs & de fen ce Tu "a Taumoepeau Justice & attorney-general "Alisi Taumoepeau Labour, commerce & industry Lisiate "Akolo Lands, survey & natural resources Honourable Tuita Police, prisons & fire services Siaosi Taimani "Aho Public enterprises Afu"alo Matoto To u r i s m Fineasi Funaki Training, employment, youth & sport Honourable Tu"ivakano Transport Paul Karalus Works Honourable Nuku

Governor of Ha'apai Honourable Malupo

Acting Governor of Vava'u T"ua Taumoepeau

Governor of the National Reserve Bank Siosi Cocker Mafi

Country Report September 2007 www.eiu.com © The Economist Intelligence Unit Limited 2007 4 Tonga

Economic structure

Annual indicators 2002a 2003a 2004a 2005b 2006b GDP at current prices (T$ m)cd 327.0 366.5 389.9 422.7 478.5 Real GDP growth (av; %)cd 9.6 3.1 1.1 -2.2 3.2 Consumer price inflation (av; %)e 10.3 11.6 11.0 8.3 6.4 Population ('000)c 99.8 100.1 100.4 100.8 101.1 Exports fob (US$ m)cd 17.8 17.6 13.9 16.1 15.2 Imports cif (US$ m)cd 61.4 74.3 82.9 105.7 117.8 Current-account balance (US$ m)cd 7.2 -4.9 7.7 -5.8 -18.5 Reserves excl gold (US$ m)e 25.2 39.7 52.2 46.9 48.0 Total external debt (US$ m)c 73.5 86.7 88.7 84.1 n/a Debt-service ratio, paid (%)c 2.5 n/a n/a n/a n/a Exchange rate (av; T$:US$)e 2.20 2.15 1.97 1.94 2.03 a Actual. b Economist Intelligence Unit estimates. c Asian Development Bank. d Fiscal year ending June 30th. e IMF, International Financial Statistics.

Main origins of gross domestic product 2006ab % of total Agriculture 25.9 Mining 0.4 Manufacturing 3.2 Electricity, gas & water 2.5 Construction 7.8 Trade 15.4 Transport & communications 5.5 Finance 12.9 Public administration 19.4

Principal exports fob 2005bc T$ m Principal imports cif 2005bc T$ m Fish 10.9 Food, animals, beverages & tobacco 61.9 Squash 8.1 Fuels, minerals & chemicals 61.6 Vanilla 1.1 Machinery & transport equipment 44.3

Main destinations of exports 2006a % of total Main origins of imports 2006a % of total US 41.0 Fiji 29.0 Japan 30.8 New Zealand 27.9 New Zealand 8.5 Australia 7.6 Fiji 3.9 US 8.3 Australia 2.6 China 3.0 a Asian Development Bank. b Fiscal year (ending June 30th). c National Reserve Bank of Tonga.

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Quarterly indicators 2004 2005 2006 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr Prices Consumer prices (2000=100) 154.8 158.7 156.9 160.4 165.6 168.5 168.0 172.0 Consumer prices (% change, year on year) 10.3 10.5 8.2 7.7 7.0 6.2 7.1 7.2 Financial indicators Exchange rate T$:US$ (av) 1.954 1.905 1.935 1.951 2.005 2.053 2.027 2.017 Exchange rate T$:US$ (end-period) 1.912 1.913 1.934 1.974 2.060 2.046 2.060 2.014 Deposit rate (av; %) 5.78 5.81 5.93 5.93 5.93 6.01 6.77 6.77 Lending rate (av; %) 11.62 11.31 11.35 11.42 11.45 11.53 12.14 12.14 M1 (end-period; T$ '000) 71,846 68,291 68,729 61,192 72,708 58,240 55,702 64,588 M1 (% change, year on year) 15.7 31.1 4.4 -4.2 1.2 -14.7 -19.0 5.5 M2 (end-period; T$ '000) 195,716 189,808 200,092 217,274 221,577 216,978 228,897 248,133 M2 (% change, year on year) 13.2 14.2 12.0 19.8 13.2 14.3 14.4 14.2 Foreign trade (T$ '000) Exports foba 16,813 2,865 2,873 2,777 11,243 n/a n/a n/a Imports fob -65,008 -54,455 -56,180 -54,139 -69,842 n/a n/a n/a Trade balance -48,195 -51,590 -53,307 -51,362 -51,362 n/a n/a n/a Foreign reserves (US$ m) Reserves excl gold (end-period) 55.26 50.12 47.46 49.08 46.86 42.06 46.14 48.13 a Includes re-exports. Source: IMF, International Financial Statistics.

Tonga: consumer prices Tonga: foreign trade (% change, year on year) (T$ '000)

9.0 Exports (a) Imports Trade balance 20,000

8.0 10,000

0 7.0 -10,000

-20,000 6.0 -30,000

5.0 -40,000

-50,000 4.0 -60,000

-70,000 3.0 Q2 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2005 06 2005 06 07 (a) Includes re-exports. Source: IMF, International Financial Statistics. Source: IMF, International Financial Statistics.

Country Report September 2007 www.eiu.com © The Economist Intelligence Unit Limited 2007 6 Tonga

Outlook for 2008-09

Refo rms are u nl ikely b efore The government has moved to calm the frustration felt by many at its failure to

the next general election implement political reform more quickly by establishing the new tripartite reform committee. The matter of reform has been addressed and discussed for a number of years now, but since the appointment of Feleti Sevele as prime minister!the first commoner to fill the role!little else has taken place to move the structure of parliament towards increased popular representation. A survey on a website run by the Ministry of Finance asks respondents to choose between three reform agendas that have been considered over the past year (they can also opt for the development of a new plan), which highlights the continuing lack of consensus on the issue. Although campaigners are calling for immediate change, the prime minister has suggested that it will only be after the March 2008 general election that any reforms are implemented. Crown Prince Tuipelehake’s death in 2006, which came just as his lengthy consultations with Tongan citizens on the subject of reform were concluding, was undoubtedly a huge blow for the reform process. As chairman of the National People’s Reform Committee, he was able to form a unique connection between the monarchy, government and the electorate. The inclusion of pro-democracy politicians Clive Edwards, "Akilisi Pohiva and "Uliti Uata in the tripartite committee was a bold but probably wise decision by the government!had they been excluded from the process, the risk of further civil disturbance would have been extremely high. However, given both that a state of emergency is still in place preventing large gatherings and that all three men are facing sedition charges in the Supreme Court, the strength of their position has been undermined. Perhaps the most significant development in the second half of 2007 will be the outcomes of the three men"s trials, as these will have considerable political implications. If the men are acquitted, the government will have time on its side to prolong the reform process further, and the tripartite committee will still be able to function effectively instead of being either rendered politically imbalanced or disbanded. If they are convicted, the government may well have further civil unrest to deal with, and may also find itself the target of international condemnation (at least from Australia and New Zealand) for abusing its power in order to silence political opponents.

Repercussions from the riots are The Ministry of Finance has recently been more upbeat about the state of the

still hurting the economy economy, following the November 2006 riots. Foreign reserves are holding up, and small and medium-sized businesses have shown more resilience than was expected in the immediate aftermath of the disturbance. On a larger scale, the repercussions are still being felt in terms of decreased tourism, lack of investor confidence, and the collapse of significant business deals, such as the proposed purchase of a power-generating firm, Shoreline Power, by Northpower of New Zealand. The destruction during the riots of Northpower’s offices in the capital, Nuku’alofa, led to the company withdrawing from the deal, which is now forcing the Tongan government to make the purchase instead, at considerable expense.

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WTO membership may hurt Tonga’s accession to the World Trade Organisation on July 27th will have come government revenues as a surprise to some, as it will entail a significant reduction in the government"s revenue, at least in the short term. The drop in trade tariffs required by the deal will see the government’s revenues from imports and exports fall sharply. The government has spent over a year implementing the necessary adjustments and clearly believes that the net effect of membership will be beneficial. However, increasingly liberalised, and therefore competitive, global trade poses threats as well as opportunities for many small and underdeveloped nations, including Tonga. How successfully Tonga adapts to benefit from the new trading environment, perhaps by forming trade partnerships with other Pacific islands or its larger Asian neighbours, will be crucial to its future economic health.

Tonga: gross domestic product Tonga: consumer price inflation (% change, year on year) (av; %)

Tonga(a) Asia excl Japan Tonga Asia excl Japan 10.0 12.0

8.0 10.0 6.0 8.0 4.0 6.0 2.0 4.0 0.0

-2.0 2.0

-4.0 0.0 06 03 04 05 03 04 05 2002 2002 (a) Fiscal years ending Jun 30th of year indicated.

The political scene

Political reform is moving King Siaosi Tupou V opened Tonga’s 107th session of the Legislative Assembly

fo rward on May 31st, the first time that it has convened since the riots of November 2006 forced an early closure. Pressure for political reform in Tonga!the cause of the unrest!has forced the government into and just over five weeks into the new session, the formation of a new parliamentary reform committee was announced. Known as the Parliamentary Tripartite Committee for Political Reform, it is made up of three members each of the nobility (Lord Luani, Lord Tuipelehake and Lord Tuilakepa), the government (Villiami Tangi, Alisi Taumoepeau and Lord Tuivakano) and the commoners elected to parliament, known as People’s Representatives ("Akilisi Pohiva, "Uliti Uata and Clive Edwards). However, the current committee is jeopardised by the fact that all three People’s Representatives are awaiting trial on sedition charges relating to the riots. The committee was originally given just over three weeks to submit recommendations for political reform, a deadline that has since been extended to the beginning of September. The chairman of the committee, Lord Luani, pointed out that one could not expect Tonga’s 131-year old political system to change within three and one-half weeks, describing the process as a "very long

walk". The prime minister, Feleti Sevele, went further in suggesting that it would be impossible to implement reforms prior to the scheduled 2008 general election. Nonetheless, at the beginning of August the committee submitted an interim report outlining a number of proposed changes. A number of political models are being considered by the committee, including that proposed by the late Crown Prince Tuipelehake, who chaired the National Committee for Political Reform, a body charges with making recommendations for reform, following extensive consultation with the Tongan people. Six main issues have been identified in the interim report of the tripartite committee, including the composition of the Legislative Assembly, the frequency of general elections, the starting date for political reform, the division of constituencies, the voting system and the number of cabinet ministers. The report recommends that general elections be held every four to five years, rather than at the current three-year interval, in order to give politicians time to fulfil their policy programmes. It also proposes that the Assembly should comprise 17 elected People’s Representatives, rather than the nine who currently sit, and nine nobles. The Assembly members would then jointly elect the prime minister who would in turn have the right, subject to approval from the king, to appoint a cabinet.

Five pro-democracy politicians Five members of parliament, who are all leading pro-democracy activists, are face sedi ti on charges standing trial at the Supreme Court on charges of unlawful assembly and sedition in relation to the November 2006 riots. The accused are "Akilisi Pohiva, Clive Edwards, "Uliti Uala, Isileli Pulu and Lepolo Taunisila, all of whom have pleaded not guilty. They are accused of inciting the November riots, and attempting to pressure the prime minister and his cabinet to commit to immediate reform on November 16th in exchange for calling a halt to the rioting taking place in the capital. The Supreme Court is not entirely independent from the Cabinet and the Privy Council, but Tonga’s justice system does allow for the selection of a judge from New Zealand, which would reduce the risk of political bias. The five accused men made their first appearance at the Supreme Court on July 18th, but it is estimated that the trial could take up to three months to conclude.

The government is accused of The state of emergency imposed by the government in response to last year’s stifling calls for democracy riots was extended by another 30 days for an unprecedented eighth time in mid-July. Following an amendment in May, the restrictions only apply to the island of Tongatapu. The government maintains that the continued extension of the ruling is a necessary precaution for the protection of the people, but it is looking increasingly like a self-preservation tactic to prevent anti-government forces from being able to meet in groups. There has also recently been some dispute over press freedom, with the Tonga Broadcasting Commission claiming that it has been prevented from covering parliamentary sessions since June 15th. The government initially denied this, although the attorney-general, Alisi Taumoepeau, subsequently conceded that the ban had been approved by the Assembly owing to concerns over "unbalanced reporting" and fears that the media would "inflame the current situation".

A New Zealand member of parliament (MP), Keith Locke, has criticised his country’s foreign minister, Winston Peters, for failing to meet Tongan pro- democracy MPs during a recent visit. Mr Locke said that his government had to take a bigger role in accelerating the implementation of political reform in Tonga. Criticism has also come from a non-governmental organisation in Tonga, the Community Paralegal Taskforce, which claims that over 40% of the population have suffered some kind of physical abuse by security forces since the riots of November 2006. Of those arrested, 77% allegedly suffered abuse. The group called for Australia and New Zealand to take action against Tonga in the same way that they have pressured neighbouring Fiji over human

rights abuses.

A new law makes renewing An amendment endorsed by parliament in June will allow thousands of

citizenship simpler Tongans living overseas to renew their citizenship. The legislation allows for dual citizenship, and will mainly affect those who have had to give up their right to Tongan citizenship through marriage or as a result of being born outside of Tonga. The Nationality (Amendment) Act extends Tongan nationality to any person born overseas to a Tongan mother or father, any naturalised person and any non-Tongan who marries a Tongan, should they wish to take Tongan citizenship.

Tongan troops will deploy The US ambassador to Tonga, Larry Dinger, announced in early July that he in Iraq expected a second deployment of Tongan troops to leave for Iraq in August. Tonga’s first mission to Iraq took place in July 2004, when 55 Royal Tongan Marines assisted forces in Al-Anbar province. The minister of foreign affairs and defence, Taumoepeau Tupou, stated that the troops will deploy on August 18th. Tonga’s defence service is about 450-strong.

Tonga's police force will raise The High Commissioners of Australia and New Zealand have presented

its standards Mr Sevele with a draft report containing recommendations to improve the functioning of Tonga’s police force. Mr Sevele first mentioned the need for assistance to Australia’s foreign minister in 2005, following which a group comprising three Australians, three New Zealanders and one Tongan carried out a two-week assessment in early 2007. The High Commissioners of Australia and New Zealand expressed their countries’ willingness to raise the standards of Tonga’s police force and said that they would look forward to comments from the kingdom"s government.

Economic policy

Tonga joi n s th e W TO unde r Tonga has finally ratified its World Trade Organisation (WTO) accession package

the "worst ever" terms after deferring its decision for almost two years since the terms were drawn up. The kingdom became the 151st country to join the organisation on July 27th after finalising the accession process 30 days earlier. The deal will see the government’s largest source of revenue, import tariffs, cut sharply, at least in the short term. Tonga is required to cap all industrial and agricultural tariffs at 15-20%, with no exceptions made for alcohol or tobacco. This reportedly makes

the island"s bound tariffs the lowest in the world, with the exception of Armenia. Critics of the agreement point to the major public funding shortfall that this will lead to, despite the implementation of a 15% consumption tax that is intended to offset revenue losses. When the terms of Tonga’s accession were leaked to the media in 2005, a UK-based development agency, Oxfam, described them as the worst-ever offered to a country, and warned that the government stood to lose up to two-thirds of its trade tax revenue. However, the government rejects criticisms of the accession terms it negotiated, both arguing that the benefits of WTO membership will greatly outweigh the costs and citing the case of Samoa, where government revenues reportedly increased after import tariffs were cut, owing to greater compliance. The government has been amending its import tariff scheme for the past year in order to ensure that it meets WTO requirements. Since the end of July, Tonga has also been obliged to eliminate all industrial subsidy schemes prohibited under WTO terms. Following Tonga’s accession to the WTO, a group of top public- and private- sector executives conducted a three-day meeting aimed at formulating a new export strategy to enhance the country’s competitiveness in an increasingly exposed trade environment. The Special Advisory Services Division of the Commonwealth Secretariat, which is actively involved in assisting smaller states in their response to the challenges of globalisation, was present at the meeting. Along similar lines, two Tongan representatives attended the recent African-Caribbean-Pacific Group meeting in Port Vila, Vanuatu, where the pressures of trade liberalisation were discussed. Items on the agenda included ongoing negotiations for an economic partnership agreement with the EU and the Pacific Agreement on Closer Economic Relations with Australia and New Zealand. Also discussed was the more delicate matter of trade relationships with China and Taiwan, which divides the Pacific Islands into two halves. A director of the Pacific Islands Forum said that the body has made initial contact with China with a view to advancing the bilateral relationships it has with eight Pacific Island nations (the Cook Islands, Micronesia, Fiji, Niue, Papua New Guinea, Samoa, Tonga and Vanuatu).

An ADB loan is secured for The finance minister, Siosiua "Utoikamanu, recently signed a draft agreement to

infrastructure improvement secure a loan from the Asian Development Bank (ADB) of up to T$25m (US$12.4m) to improve infrastructure in the capital, Nuku’alofa. The loan process is due to be finalised towards the end of September. Around 14km of roads will be improved, many of which run through low-income areas that are badly affected in the rainy season as a result of poor drainage systems. Nuku’alofa’s flood-channel and drainage system is in effect defunct, causing major sanitation problems when rainfall is heavy. Eight groundwater wells are to be fitted with monitoring systems that will alert the authorities should local water become contaminated. The loan will be subject to strict measures set out by the ADB requiring the establishment of a project management unit to oversee all administrative and operational tasks.

The domestic economy

The November 2006 riots have According to surveys by the Ministry of Labour, Commerce and Industry, the hurt tourism and business civil disorder of November 16th 2006 directly affected the operations of 153 businesses, and indirectly affected a further 107, amounting to an estimated T$112m (US$55.7m) in losses. With the assistance of aid packages from New Zealand and Australia, the government has set up the Business Recovery Facility (BRF) to assist with the rebuilding of operations of affected enterprises. In the aftermath of the riots, the economy saw knock-on effects in the tourism and transport and communications sectors as a result of the sharp fall in the numbers of people travelling to the country. However, the Ministry of Finance recently reported that the ability of businesses to regroup and begin trading so soon after the riots is paying dividends in the form of increased business activity. Companies have dramatically increased marketing and promotional activities in order to entice customers and some have been motivated to expand and to offer new product lines altogether. The turnover of larger enterprises has not recovered as quickly, and the Ministry of Finance recently pointed to the relative health of foreign reserves as being a temporarily crucial bolster for the economy. Inflation increased to 5.7% year on year in June, up from 5.2% in May.

The government is set to buy A New Zealand energy firm, Northpower, signed a preliminary agreement to

back Shoreline purchase Tonga’s electricity company, Shoreline, at the end of October 2006, but after the November 2006 riots, which saw the company’s headquarters razed, Northpower pulled out of the deal. (The deal would in fact have involved the government buying back the power generation facilities from Shoreline and then selling the distribution rights to Northpower.) On June 29th the finance minister, Siosiua "Utoikamanu, announced that the government would be buying back the Shoreline facilities and setting up a commission to manage and operate them. There has been speculation that T$40m-60m of a T$118m loan from China will go towards financing the deal. Shoreline is currently owned by two Indian businessmen, Soane and Sefo Ramanlal, along with king Siaosi Tupou V.

The price of electricity has The Tonga Electric Power Board (TEPB) announced in July that the price of

increased electricity would rise by 6.8 seniti (3.4 US cents) per kWh from July onwards. The 11% increase is the second price rise in ten months, and is allegedly being implemented in order to offset a 17% increase in the cost of diesel fuel that was registered in July. Diesel prices rose because of the premature termination of Shoreline’s contract with a global oil company, BP, in anticipation of a Northpower takeover, leaving the control of the price of BP’s diesel supplies in the hands of the Competent Authority of the Ministry of Labour, Commerce and Industry. However, on August 2nd the authority announced reduced retail prices for benzene, diesel and kerosene. Although the drop in price was hailed as good news for vehicle owners, there has so far been no word from TEPB on the effect this might have on the cost of electricity.

Foreign trade and payments

Development aid is pouring in Despite upbeat press releases from the Ministry of Finance regarding the

from Tonga's neighbours recovery of the economy, following last year’s riots, the Australian foreign minister, Alexander Downer, has suggested recently that the reconstruction process is taking longer than might be expected and offered to add a further A$5m (US$4.4m) to the Business Development Fund, which currently stands at A$2.6m. The foreign minister skirted around the delicate question of political reform, but confirmed Australia’s support for Tonga’s economic rebuilding, saying that more funds could be made available if necessary. The proposed soft loan from China of US$118m is yet to be given final approval, largely because its acceptance is disputed by those who feel that the country is being "bought" by its large Asian neighbour. Japan has provided Tonga with T$730,000 (US$363,000) to be spent on the development of various educational facilities and the improvement of the water supply to a rural village. Japan’s Grant Assistance for Grassroots Human Security Projects programme provided total funding of T$1.73m (US$856,000) to projects in Tonga in 2006, in line with its Overseas Development Assistance policy of promoting development at the most basic of levels.