Damage Control: PM’s outbursts damaging to Tonga
By ALFRED TUIKORO TORA (Associate Editor)
SUVA, Fiji – August 27, 2018: 5.06pm (Nuku’alofa Times): Prime Minister Akilisi Pohiva is causing more damage to Tonga’s international relationship with China and regional partnership with fellow Forum countries following his media outbursts in regards to Chinese loans recently.
He is forcing his own team at the PM’s Office in Nuku’alofa to retract his statements – with the damage already done.
His initial interview with the Samoa Observer in Samoa two weeks ago was picked up by the regional and international media, who highlighted the PM’s call for regional countries to band together and ask China to write off loans and debts the countries have.
PM Pohiva called on Pacific Island leaders to band together and press China to write off their debts, saying his small nation is suffering “serious” debt distress.
Several Pacific nations have taken on large loans from China, as well as from multilateral institutions.
Last month the Government confirmed it would start to pay back two loans worth around $160 million from China’s Export Import Bank.
PM Pohiva told the ABC the repayments would put pressure on his small country.
“It has become a serious issue. We have debt distress,” he said.
But Mr Pohiva said Tonga wasn’t the only Pacific Island nation which owed substantial amounts to China — and the region should collectively urge Beijing to waive repayments.
“It is no longer an individual issue for countries to consider. It has become now an issue for all countries who have loans from China,” he said.
“I think these small countries will eventually come together to find a way out.”
Pacific leaders will meet in Nauru next month for the Pacific Islands Forum (PIF) — and Mr Pohiva said he wanted to use the Forum to tackle the issue.
While there had been plenty of internal back and forth within Pacific nations over debt, raising the topic at PIF would represent a significant escalation.
“China will not make a decision on individual requests,” he said. “China has to take into consideration all the countries that have loans.”
Mr Pohiva first publicly raised the prospect of PIF discussing debt in an interview with the Samoa Observer, after a meeting of Pacific foreign ministers.
He said it was too early to predict if other nations would agree to discuss Chinese debt at PIF. “But some of these countries have already thought about it, and there have already been discussions by these countries outside formal meetings,” the Prime Minister said.
But in their comments to the ABC, Beijing maintained it “always pays high attention to sustainability” when dealing with Pacific countries.
“We will try our best … China’s aid is always sincere and unselfish,” the Chinese Foreign Ministry said in statement.
“[It has] won appreciation from the governments and the people from South Pacific Islands.”
The Ministry added that before granting loans, China conducts “strict economic and technical evaluation, that fully considers the sustainability of those benefit countries and their ability of paying the debts back”.
Pacific leaders say no to Pohiva’s call
At least two regional countries have disagreed with PM Pohiva’s call.
The Cook Islands finance minister says his country does not agree with Tonga’s call for China to forgive all Pacific debt.
Mark Brown, said while he was sympathetic towards Tonga’s plight, there have been no regional discussions in the lead-up to next months Pacific Islands Forum summit.
Mr Brown told the Cook Islands News that his sentiments were similar to those of Samoa’s prime minister, who also rejected Tonga’s idea.
Mr Brown suggested it would be in Tonga’s interest to try and restructure its debt position with help from the World Bank or the Asian Development Bank.
Samoa’s prime minister has also rejected the call.
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.
“A loan is granted with minor interest yet in five years’ time a request is put in to write it off. That is embarrassing.”
On 20th August, the Prime Minister’s Office there in Nuku’alofa, through political adviser Lopeti Senituli, were forced to retract on what PM Pohiva said in Samoa.
A statement released from King George Palace building said “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.
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