Pacific News Minute: New Statistics: Australia the Biggest Pacific Donor by Far; China Just 8%

Aug 9, 2018

Credit Brodie Miller / Pexels

Big infrastructure projects built with Chinese loans are rising across the Pacific – a new government office building in Tonga and Samoa’s new police academy, for example. But new statistics from an Australian think tank suggest that China’s overall role is smaller than thought.

When world leaders gather in Port Moresby for the APEC Summit later this year, the motorcades will roll along a brand new six-lane highway to a brand new convention center – both built with Chinese money.

According to Australia’s Lowy Institute, those are typical of the big infrastructure projects that China favors. But which add up to just eight percent of international aid to Pacific nations from 2011 to 2016. China’s 1.6 billion dollars is matched by New Zealand, and dwarfed by Australia’s 6.5 billion.

Almost all of Australia and New Zealand’s donations come in the form of grants for education, health and humanitarian projects. While Lowy’s Jonathan Pryke, estimated that 70 percent of Chinese aid comes as low-cost loans.

Repayment on the first of those loans starts to fall due later this year, and Pryke told the Sydney Morning Herald that excessive borrowing has now ended: “The binge is over and the hangover is setting in,” he said, “Except for PNG.’

Flag of Papua New Guinea
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This year, Papua New Guinea negotiated 3.5 billion dollars in loans from China. Money that hasn’t started to flow yet, so it doesn’t show up in the overall statistics.

One more point: while political, economic and military competition rises in the Pacific, aid has been dropping. In 2011, for example, the U.S. contributed 233 million dollars. In 2016, 89 million.