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.”
LIFE GOES ON: After a strict lockdown that left millions on the brink of starvation, Indians embrace work to avoid starvation and get ready for several major festivals India is on course to top the world in COVID-19 cases, but from Maharashtra’s whirring factories to Kolkata’s thronging markets, people are back at work — and eager to forget the pandemic for festival season. After a strict lockdown in March that left millions on the brink of starvation, the government and people of the world’s second-most populous country decided life must go on. Sonali Dange, for instance, has two young daughters and an elderly mother-in-law to look after. She was hospitalized this year in excruciating pain after catching the novel coronavirus. However, after the lockdown exhausted the family’s savings, the 29-year-old had
A COVID-19 outbreak among hundreds of Russian and Ukrainian fishers flown to New Zealand to bolster its struggling deep-sea fishing industry has prompted that country’s largest daily increase in infections in months, authorities said yesterday. More than 230 fishers were flown in from Moscow last week, with 18 of the crew members then testing positive for COVID-19 while in quarantine, New Zealand Director-General of Health Ashley Bloomfield said. The Pacific nation has almost eliminated local transmission of the virus, but regularly records small numbers of new cases in returned travelers. The fishing cluster pushed the daily tally of new infections to 25,
From monitoring vital signs to filtering filthy air and even translating speech into other languages, the COVID-19-fueled boom in mask-wearing has spawned an unusual range of high-tech face coverings. As masks become the norm worldwide, tech companies and researchers are rolling out weird and wonderful models to guard against infection and cash in on a growing trend. One of the wackiest comes from Japan, where start-up Donut Robotics has created a face covering that helps users adhere to social distancing and also acts as a translator. The “C-Face” mask works by transmitting a wearer’s speech to a smartphone via an app, and allows
JAPAN Deer-edible bags invented The deer that roam Nara no longer face discomfort — or far worse — after local firms developed a safe alternative to the plastic packaging discarded by tourists that often ended up in the animals’ stomachs. Last year, several of the 1,300 deer that wander around the ancient capital’s central park were found dead after swallowing plastic bags and food wrappers. Firms collaborated to develop bags that pass safely through the animals’ complex digestive system. The bags are made with recycled pulp from milk cartons and rice bran, one of the main ingredients of the shika senbei savory
RSS