USD1 billion loan for Pacific

China has announced a USD1 billion loan to Pacific island countries at the just concluded China-Pacific Economic Development and Cooperation Forum to support major infrastructure projects in the region. Since the announcement, reactions on social networks such as Vanuatu-based YUMI TOKTOK STRET have raised some pertinent questions relating to increasing national debts— and whether island states can afford them. Pacific Institute of Public Policy highlighted these in its latest paper (pdf) “Unsure Refuge” — pointing to Samoa and Tonga as examples of countries teetering on the brink of “debt distress” because of their own national debts. Interestingly, the subject was not discussed at the meeting. China also used the opportunity to announce (among a host of other announcements) it would fund up to 2000 scholarships for Pacific islanders. Samoa, Papua New Guinea, Vanuatu, the Cook Islands, Tonga, Niue and Fiji were all represented at the Forum.