A special US$848,968 Japanese Non-Project Grant Aid to Tonga was signed in Neiafu, Vava'u, last Wednesday, February 14.

The grant, the first of its kind to be given by Japan to Tonga is "targeted to provide opportunities to the Kingdom for more efficient development through its structural adjustments, including budgetary reform," according to a press statement from the Japanese Embassy, Suva, Fiji.

The formality of giving the grant and its acceptance by the Tongan government was formalised with the signing and the exchanging of notes between the Japanese Ambassador to Tonga, HE Mr Masashi Namekawain and Tonga's Minister for Foreign Affairs, who is also the Acting Minister of Defence, and the Acting Governor of Vava'u, the Hon. Tu'a Taumoepeau Tupou at his office in Neiafu.

This new Japanese Non-Project Grant Aid also introduce a new procedure on how it is spent. Ms Reiko Konosu from the Japanese Embassy, Suva said that first, the grant will be deposited in a bank in Japan, then the Japanese government will appoint an agent to administer the fund.

The Tongan government can use this fund to purchase products but first the two government must agree on the products to be purchased and where it is going to be purchased from.

Reiko said that by making this grant available to Tonga it will save Tonga from spending its foreign reserve to buy imported goods, and indirectly it should reduce its budget deficit.

The Japanese aid to Tonga traditionally, since 1993 has been under the Japan's Grant Assistance for Grassroots Human Security Projects program, GGP. From 1993 to 2005 US$5,110,889 has been spent on 167 projects through out Tonga. The two areas that GGP has been focusing on were water supplies and primary school buildings for villages.

During 2006 12 projects were implemented under the GGP to the tune of US$926,771.