China - cosying up to Tonga, but why? [1]
Wednesday, June 11, 2008 - 15:43. Updated on Tuesday, September 10, 2013 - 18:44.
By Fergus Hanson
Of all the Pacific Islands Forum members, China only gives aid to the eight countries that recognise it. Of those countries Tonga is one of the largest recipients of Chinese aid pledges in both overall and per capita terms. That is interesting because Tonga has one of the smallest populations of the eight countries and has few resources of interest to China.
The findings of a study released today at the Lowy Institute, an Australian-based foreign policy think-tank, suggest over the last three years China's aid pledges to the Pacific have grown exponentially. A reasonable estimate of its annual aid pledges is between $US 100 million and $US 150 million.
Tonga has been a major focus of Chinese aid pledges and in 2007 secured a $US 57.8 million concessional loan to help with the reconstruction of Nuku'alofa, that will likely be dispersed over several years. Looking at China's aid pledges to the region over a three-year period (2005-2007) suggest China pledged the second largest amounts of aid to Tonga (it only pledged more aid to Fiji). In per capita terms, Tonga received the highest aid pledges after the Cook Islands and Niue (both of which have very small populations, which distort the per capita figures).
So why is China so interested in Tonga? China does very little trade with Tonga, compared with other Pacific countries (it does much more with some Pacific countries that recognize Taiwan, such as Solomon Islands). Tonga's fishing zone is also not particularly large compared to other countries in the region. Instead, China's interest in Tonga seems to stem from a fear it may switch back to recognising Taiwan. It is less than 10 years ago that Tonga decided to recognise China instead of Taiwan. And with the perceived closeness of the Tonga leadership to Taiwan, China would see a risk that it may be tempted to switch back.
Does this all matter? After all, at least on paper, China is offering Tonga substantial aid flows. The short answer is yes. While China has emerged as a major donor, there are problems with the way it manages its aid program. Its aid - which is primarily directed at infrastructure - isn't always targeted at the most critical needs. It can be poorly designed for Pacific conditions. And it is built using Chinese contractors, labourers and materials, reducing flow on benefits to local economies and employment opportunities.
The secrecy with which China delivers its aid (it refuses to publish figures on the amount it gives) undermines accountability and impedes effective coordination with other donors. It also breeds suspicion about China's motives and can harm regional stability.
China needs to do a lot more to improve the transparency of its aid giving. It would be simple for China to release figures (like other donors already do) on the projects it funds. It would also be straight-forward for the Tongan government to publish the details of the aid it receives from all donors, including China. That would improve accountability and allow other donors to coordinate their development assistance more effectively. Tongans should expect that from their own government as a minimum.
(Fergus Hanson is a Research Associate at the Lowy Institute, a foreign policy think-tank based in Sydney).