By NICK PERRY Associated Press
NUKU’ALOFA, Tonga — The days unfold at a leisurely pace in Tonga, a South Pacific archipelago with no traffic lights or fast-food chains. Snuffling pigs roam dusty roads that wind through villages dotted with churches.
Yet even in this far-flung island kingdom there are signs that a battle for power and influence is heating up among much larger nations — and Tonga may end up paying the price.
In the capital, Nuku’alofa, government officials work in a shiny new office block — an $11 million gift from China that is rivaled in grandeur only by China’s imposing new embassy complex.
Dozens of Tongan bureaucrats take all-expenses-paid training trips to Beijing each year, and China has laid out millions of dollars to bring 107 Tongan athletes and coaches to a training camp in China’s Sichuan province ahead of this month’s Pacific Games in Samoa.
“The best facilities. The gym, the track, and a lot of equipment we don’t have here in Tonga,” said Tevita Fauonuku, the country’s head athletic coach. “The accommodation: lovely, beautiful. And the meals. Not only that, but China gave each and everyone some money. A per diem.”
China also offered low-interest loans after pro-democracy rioters destroyed much of downtown Nuku’alofa in 2006, and analysts say those loans could prove Tonga’s undoing. The country of 106,000 people owes some $108 million to China’s Export-Import bank, equivalent to about 25% of GDP.
The U.S. ambassador to Australia, Arthur Culvahouse Jr., calls China’s lending in the Pacific “payday loan diplomacy.”
“The money looks attractive and easy upfront, but you better read the fine print,” he said.
China’s ambassador to Tonga, Wang Baodong, said China was the only country willing to step up to help Tonga during its time of need.
Graeme Smith, a specialist in Chinese investment in the Pacific, is not convinced China tried to trap Tonga in debt, saying its own financial mismanagement is as much to blame.
Nonetheless, he said it’s worrying that the nation of 171 islands, already vulnerable to costly natural disasters, has little ability to repay.
China has poured about $1.5 billion in aid and low-interest loans into the South Pacific since 2011, putting it behind only Australia, according to an analysis by Australian think-tank the Lowy Institute. And that figure rises to over $6 billion when future commitments are included.
China’s use of loans and aid to gain influence in developing nations worldwide is nothing new, as illustrated by Chinese-financed projects from Africa to Latin America and the Asian subcontinent.