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.”
‘IN A DIFFERENT PLACE’: The envoy first visited Shanghai, where he attended a Chinese basketball playoff match, and is to meet top officials in Beijing tomorrow US Secretary of State Antony Blinken yesterday arrived in China on his second visit in a year as the US ramps up pressure on its rival over its support for Russia while also seeking to manage tensions with Beijing. The US diplomat tomorrow is to meet China’s top brass in Beijing, where he is also expected to plead for restraint as Taiwan inaugurates president-elect William Lai (賴清德), and to raise US concerns on Chinese trade practices. However, Blinken is also seeking to stabilize ties, with tensions between the world’s two largest economies easing since his previous visit in June last year. At the
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese
RIVER TRAGEDY: Local fishers and residents helped rescue people after the vessel capsized, while motorbike taxis evacuated some of the injured At least 58 people going to a funeral died after their overloaded river boat capsized in the Central African Republic’s (CAR) capital, Bangui, the head of civil protection said on Saturday. “We were able to extract 58 lifeless bodies,” Thomas Djimasse told Radio Guira. “We don’t know the total number of people who are underwater. According to witnesses and videos on social media, the wooden boat was carrying more than 300 people — some standing and others perched on wooden structures — when it sank on the Mpoko River on Friday. The vessel was heading to the funeral of a village chief in