- Language: English
- Published: January 2013
- Region: Global, United States
Country Report Tonga
- Published: November 2013
- Region: Tonga
- 17 Pages
- The Economist Intelligence Unit
The Chinese government announced a loan facility and other assistance to Pacific Island nations at the second China‑Pacific Island Countries Economic Development and Co-operation Forum on November 7th. Those attending the forum, which was held in Guangzhou, China, included representatives of the governments of Samoa, Papua New Guinea (PNG), Fiji, Vanuatu, Tonga, the Cook Islands, Niue and the Federated States of Micronesia. These countries all reaffirmed their commitment to the host's One China policy at the meeting; the Solomon Islands, which recognises Taiwan, was a notable absentee.
Under the loan programme, finance of up to US$1bn will be made available on concessional terms to fund major infrastructure and "public welfare" projects in these countries. There are no further details about the loan terms or the kind of projects that will be eligible, which raises concerns about the ultimate cost of such loans and the nature of the projects that they will be used to finance. There is an unfortunate trend among Pacific Island nations of soft loans being used to pay for projects of dubious benefit to their populations and major infrastructure works being undertaken with little regard for the long-term operating and maintenance costs involved. Moreover, many of the countries that attended the forum are already heavily indebted and struggling to make repayments on existing loans, and are therefore in no position to take on additional debt. In some corners, a discussion of debt forgiveness, rather than further soft loans, would have been more desirable.
In addition to the offer of concessional loans, China announced other initiatives aimed at promoting economic and social development in the Pacific. These include scholarships for 2,000 Pacific Island students over the next four years and training for technical professionals; new medical facilities (including personnel and equipment); green energy products and projects to help to promote sustainable development; and the creation of early-warning systems for extreme weather events, to which the region is highly susceptible. China also agreed to eliminate tariffs on 95% of exports from the least-developed countries in the region, assist in the promotion of tourism to the Chinese market and negotiate bilateral civil-aviation agreements to help to boost direct air links with China. SHOW LESS READ MORE >
Country Report Tonga
China entices the Pacific, and Tonga benefits further
Island kingdom, middle kingdom