17 Aug 2018

Tonga PM goes cold on collective push over Chinese loans

5:43 pm on 17 August 2018

The prime minister of Tonga says it is probably not the right time for Pacific countries to collectively push China to convert loans they owe into aid grants.

Tonga Prime Minister, 'Akilisi Pohiva

Tonga Prime Minister, 'Akilisi Pohiva Photo: RNZ Pacific / Koro Vaka'uta

'Akilisi Pohiva was speaking after he made suggestions last weekend that the Pacific push for China to forgive the debts that have accrued in several Pacific countries.

Tonga itself is this year starting to repay a huge loan granted by China for the rebuilding of Nuku'alofa after a riot 12 years ago.

Mr Pohiva said it was not appropriate at the moment for all the countries to make an appeal together.

He said they were all likely to have different bilateral relationships with China.

"I cannot say on behalf of Fiji and Samoa for example. That is only an idea, but for me to make it as a regional issue, or collective issue for all the Pacific Islands who have loans, it may not be wise at this point in time to do it."

'Akilisi Pohiva said his government has not formally asked China to turn the Nuku'alofa loan into a grant, but the previous administration had unsuccessfully requested this in 2013.

Subsequent to this interview on Friday 17th August the Tonga Government sent out the following press release:

Further to his separate interviews published by the Samoa Observer, Reuters-NZ, and ABC Radio, which were subsequently picked up by other media outlets, the Prime Minister, Hon Samuela 'Akilisi Pohiva would like to make a further statement of clarification:

1. Tonga-China relations cover various areas of development cooperation, and concessional loans and development assistance are an important part of that partnership. After the riots in 2006, the Tongan government had sought help for reconstruction from many countries and the People's Republic of China was the only country that was willing to provide concessional loan on a large scale, which turned out to be crucial for the Kingdom's economic recovery and maintenance of social stability.

2. Over the years, China has been aiding Tonga in different forms including grants for infrastructure, construction of roads, schools, convention center, government buildings, as well as technical cooperation, material in-kind assistance and cash grants. All such development aid has greatly facilitated Tonga's development in various aspects and helped improve the livelihood of the Tongan people, for which the Tongan government and people are exceedingly grateful.

3. Regarding my reported comments, after further reflection, I now believe that the Pacific Islands Forum is not the proper platform to discuss this debt issue. Each Pacific Island country has its particular national conditions and different needs for foreign loan, and it's up to each government to independently seek solutions through bilateral channels.

4. I also wish to clarify that China has never claimed to collect the debts or take the assets from Tonga in any way, and the governments of Tonga and China have maintained contacts regarding the repayment of the concessional loans. Our two sides will continue to engage with each other for proper solutions through friendly consultation.

5. This year marks the 20th anniversary of the establishment of diplomatic ties between Tonga and China. The Tonga government attaches great importance to its relations with the People's Republic of China, and is ready to work together with the Chinese side to further carry out the consensus reached by our two Heads of State and further push forward our Strategic Partnership, so that we will bring more benefits to our two peoples.