Tonga premier to ask China to ‘forgive’ Pacific debts

21 Aug 18

China will be asked to write off debts owed by Pacific island countries as repayments are a huge burden, Tonga’s prime minister has said.

Akalisi Pohiva, the Pacific island state’s premier, said that his country would not be able to pay back its debt to China and that other impoverished countries were also struggling to repay loans from Beijing.

Chinese aid in the Pacific region has increased dramatically in recent years and the country has become the region’s second-largest donor.

Tonga’s debt to China has been estimated to be more than $100m by Australia’s Lowy Institute think-tank.

The prime minister told local media last week that countries would get together to ask the Chinese government to “forgive their debts”.

“To me, that is the only way we can all move forward, if we just can’t pay off our debts,” he added.

Beijing has refused to write off loans in the past but has given Tonga an amnesty on repayments.

Pohiva said: “By September 2018, we anticipate to pay $14m, which cuts away a huge part of our budget.

“If we fail to pay, the Chinese may come and take our assets, which are our buildings. That is why the only option is to sign a submission asking the Chinese government to forgive our debts.”

In a press release from Pohiva’s office the following day, the prime minister added that each island country “has its particular national conditions and different needs for foreign loans” and the governments should independently seek solutions through “bilateral channels”.

The statement added that the loans from China, which were used to rebuild Tonga’s capital after riots in 2006, were “crucial for the kingdom’s economic recovery”.

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