China must not write off Pacific island debts, says Samoan leader

Tuilaepa Sailele Malielegaoi argues it would be embarrassing and jeopardise future borrowing, after Tonga’s prime minister calls for loans to be forgiven

PUBLISHED : Monday, 20 August, 2018, 10:55am
UPDATED : Monday, 20 August, 2018, 12:50pm

Samoa’s prime minister has rejected a call for Pacific island nations to ask China to write off debts from loans granted under Beijing’s foreign aid programme in the region.

Tuilaepa Sailele Malielegaoi said asking for aid loans to be forgiven painted an “unfaithful picture” of the recipient nation.

Malielegaoi likened it to someone requesting assistance and receiving milk, then later coming back and asking for the entire cow.

“The bigger countries [will] become reluctant to give loans with minor interests because this is what will happen,” the Samoa Observer quoted him as saying in remarks published on Monday.

Tonga Prime Minister asks China to write off Pacific islands’ debt

“A loan is granted with minor interest yet in five years’ time a request is put in to write it off. That is embarrassing.”

He was responding to a suggestion from his Tongan counterpart Akalisi Pohiva that Pacific island nations band together and ask Beijing to collectively forgive their debt.

Chinese aid in the Pacific has ballooned in recent years with much of the funds coming in the form of loans from Beijing’s state-run Exim Bank.

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Pohiva raised concerns that small developing nations would struggle to repay the debt and could face asset seizure by Beijing.

He initially suggested they address the issue at next month’s Pacific Islands Forum in Nauru but later backtracked, issuing a statement praising the help China has given to his country.

Australia and New Zealand had raised concerns recently about China’s growing influence in the Pacific, ramping up their own aid efforts in response.