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Loans, aid, investments… The Pacific Islands more courted than ever

The Pacific islands have received record aid from regional powers during the coronavirus pandemic, amid a battle for influence between Beijing and the West. Details from our partner Outremers360°.

According to the annual survey by the Lowy Institute in Sydney, to be published on Monday, economic aid to the Pacific Islands increased by 47% in 2020 compared to the previous year to 4.2 billion. million, a record roughly equivalent to Fiji’s gross domestic product. “There has been a massive increase in loans”, which make up the bulk of aid, one of the institute’s researchers, Alexandre Dayant, told AFP.

Islands in the region, which rely on tourism and trade, have suffered from the closure of their borders, with their economies shrinking by 6.4% in 2020, twice the global average, according to figures from the International Monetary Fund. The Asian Development Bank, led by Japan and the United States, has dramatically increased its aid.

China’s spending in the Pacific, on the other hand, fell in 2020 despite Beijing’s continued efforts to strengthen its presence there with high-profile infrastructure projects. “Fewer and fewer countries are signing Chinese loans in the Pacific, with the exception of Papua New Guinea and Vanuatu,” says Alexandre Dayant. But two countries that severed diplomatic ties with Taiwan in 2019 have received Chinese funding.

“China is investing quite heavily in the Solomon Islands and Kiribati,” says Alexandre Dayant. Beijing’s relationship with the Solomon Islands has deepened significantly since 2020, with Prime Minister Manasseh Sogavare seeking closer ties with China. The Chinese funds were “directly transferred to a fund that acts as a slush fund that MPs use for their constituencies”, assures Alexandre Dayant.

The country signed a security pact with Beijing this year, raising concerns among Westerners who fear it will pave the way for a military presence in the region. However, the Solomon Islands refused. At the end of September, the United States announced a new aid fund of 810 million dollars for the islands of the South Pacific, where it wants to increase its diplomatic presence.



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