Tonga has asked Beijing to restructure its large bilateral debt load, the government said yesterday, as the COVID-19 pandemic upends the region’s tourism revenue and an onerous Chinese loan repayment schedule looms.
Tonga is one of the biggest Chinese debtors in the South Pacific, with its financial reliance dating back to loans taken more than a decade ago to rebuild its capital, Nuku’alofa, after riots.
The economy, largely dependent on external aid and remittances from Tongans living abroad, has since taken out additional loans.
Tonga is due to make small principal repayments to the Export-Import Bank of China (EXIM) this financial year before the schedule ramps up in 2023-2024, when it will need to set aside about 15 percent of revenue to service external debts.
“Government is putting in place a strategy to prepare for future payment of these EXIM loans while noting that it has further requested a restructure of both loans,” the government said in a budget statement.
The government did not respond to questions.
Two sources with knowledge of its financial position told reporters that it had asked for the debt to be canceled, but had yet to receive a response from Beijing.
The Chinese Ministry of Foreign in Beijing did not immediately respond to a request for comment.
Tonga has previously got reprieves on the timing of principal repayments, although the debt has remained outstanding.
Its total external debt stands at US$186 million, with almost two-thirds owed to China, the budget statement shows.
The US and its Western allies worry that China is using debt to secure influence over strategically located Pacific islands, claims that Beijing has repeatedly denied.
In February, the IMF said that despite recent prudent management, Tonga’s risk of external debt distress was high due to borrowing.
With no confirmed coronavirus infections, Tonga has been easing internal controls, although travel restrictions around the world have devastated the tourism industry in the Pacific.
“Most money coming into Tonga at the moment is through remittance,” said Simana Kami, owner of the Oholei Beach Resort, adding that most of his customers arrived on cruise ships or via international flights.
“Those without relatives earning an income overseas are suffering,” he told reporters by telephone. “We are open, but not at break even. It’s sad, we are an empty paradise.”
China has possibly committed “genocide” in its treatment of Uighurs and other minority Muslims in its western region of Xinjiang, the US Congressional-Executive Commission on China said in a report on Thursday. The bipartisan commission said that new evidence had last year emerged that “crimes against humanity — and possibly genocide — are occurring” in Xinjiang. It also accused China of harassing Uighurs in the US. China has been widely condemned for setting up complexes in Xinjiang that it describes as “vocational training centers” to stamp out extremism and give people new skills, which others have called concentration camps. The UN says that
A racing pigeon has survived an extraordinary 13,000km Pacific Ocean crossing from the US to find a new home in Australia. Now authorities consider the bird a quarantine risk and plan to kill it. Kevin Celli-Bird yesterday said he discovered that the exhausted bird that arrived in his Melbourne backyard on Dec. 26 last year had disappeared from a race in the US state of Oregon on Oct. 29. Experts suspect the pigeon that Celli-Bird has named Joe — after US president-elect Joe Biden — hitched a ride on a cargo ship to cross the Pacific. Joe’s feat has attracted the attention
The Polish Supreme Court on Friday quashed a lower court’s green light for the extradition of a businessman to China for alleged fraud, a charge he has denied, saying that he is being targeted for supporting Falun Gong. Polish authorities took Chinese-born Swedish citizen Li Zhihui, now 53, into custody in 2019 on an international warrant issued by China for alleged non-payment in a business deal, Krzysztof Kitajgrodzki, his Polish lawyer, told reporters. Following the Supreme Court ruling, the case would return to a lower appellate court for review. Kitajgrodzki told reporters that it was still not a given that his client
DELIVERING HOPE: The Japanese PM pledged to push ahead with plans to stage the Games, despite polls showing about 80% think they will not or should not happen Japanese Prime Minister Yoshihide Suga yesterday vowed to get the COVID-19 pandemic under control and hold the already postponed Olympic Games this summer with ample protection. In a speech opening a new session of parliament, Suga said that his government would revise laws to make disease prevention measures enforceable with penalties and compensation. Early in the pandemic, Japan was able to keep its caseload manageable with nonbinding requests for businesses to close or operate with social distancing, and for people to stay at home, but recent weeks have seen several highs in new cases per day, in part blamed on eased attitudes