Friday, September 7, 2018

South Pacific Waking to China’s ‘Debt-Trap’ Diplomacy

Borrow Money from a Dragon. Get Smoked.

Asia Times
September 7, 2018 3:50 PM (UTC+8)

The first round of bills are coming due for China’s Belt and Road Initiative (BRI) recipients in the South Pacific – and few can pay.

Squeezed by the costs of frequent natural disasters, crumbling infrastructure and low economic growth, the Pacific Islands are a natural fit for China’s US$1 trillion BRI global infrastructure-building ambitions.

Even small loans go a long way in countries like Tonga, Vanuatu and Papua New Guinea, but the ability to repay or negotiate refinancing is testing Pacific governments who must now make politically unpopular decisions to service the debts.

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