Regional powers poured record amounts of cash into the Pacific Islands during the coronavirus pandemic to help them weather the economic fallout as competition for influence heats up between China and the West.

An annual study released by Australia's Lowy Institute on Monday showed financial assistance to the Pacific Islands rose 47 percent in 2020 versus the year before.

Lead researcher Alexandre Dayant told AFP that "there was a massive increase in loans". Total financing soared to $4.2 billion -- the highest figure on record and roughly equivalent to Fiji's gross domestic product.

Much of the spending splurge was driven by crisis as tourism and trade-dependent islands across the region suffered with countries closing their borders to keep out the virus.

"The Pacific was facing massive, massive support needs, they were facing massive economic contraction," Dayant said.

Collectively, the Pacific Island economies shrank 6.4 percent in 2020, twice as much as the world average, according to figures from the International Monetary Fund.

The Asian Development Bank, which is led by Japan and the United States, was among institutions dramatically increasing assistance.

Much of the help came in the form of direct loans, easing short-term fiscal pressures, but potentially storing up problems for down the track.

- 'Slush fund' -

However, China's spending in the Pacific actually fell in 2020 despite Beijing stepping up efforts to boost ties over the past decade with high-profile infrastructure projects.

"Fewer and fewer countries are signing Chinese loans in the Pacific, only Papua New Guinea and Vanuatu have signed new loans," said Dayant.

But two Pacific nations that broke diplomatic ties with Taiwan in 2019 in favour of Beijing received a boost in Chinese funding.

"China is investing quite a lot in the Solomon Islands and the same thing in Kiribati," Dayant said.

Beijing's relations with the Solomons have deepened considerably since 2020, with Prime Minister Manasseh Sogavare increasingly looking to China as a partner.

The Chinese are "transferring funds directly to the Solomon Islands Constituency Development Fund, which is a slush fund that members of parliament use for their constituencies", Dayant added.

Critics have suggested this money was effectively used to buy the support of key politicians. Sogavare this year signed a landmark pact with Beijing that could allow Chinese security forces to deploy to the Solomon Islands.

Related Links
Water News - Science, Technology and Politics

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

Scientists warn of a rare third-year La Nina
Beijing, China (SPX) Oct 20, 2022
El Nino-Southern Oscillation (ENSO) is an irregular periodic variation in winds and sea surface temperatures over the tropical eastern Pacific Ocean that affects the climate of much of the tropics and subtropics. This natural phenomenon is important to study because of the socioeconomic impacts it can have on matters such as food security, agricultural production, human health and water resources, to name but a few. With its strong preference to peak during boreal winter and rapidly decay in sprin ... read more