It was a rapid change of heart.
On Thursday last week, Tonga’s Prime Minister was protesting that his small Pacific Island nation would struggle to pay back the money it owes to China.
- Tonga’s PM said last week Pacific countries should band together in urging China to write off debts
- Now he says Tonga is “exceedingly grateful” for Beijing aid
- Expert says many Pacific countries still have appetite for loans from overseas
But the Prime Minister wasn’t just complaining. He had a plan.
Mr Pohiva wanted to join forces with other Pacific Island nations struggling with the same problem.
And they would use the Pacific Islands Forum (PIF) — the region’s premier diplomatic gathering — as a platform to lobby Beijing for debt relief.
“I think these small countries will eventually come together to find a way out,” he told the ABC.
One day later, everything changed.
At around 6:30pm on Friday (Tonga time), Mr Pohiva’s office issued a press statement announcing the Prime Minster had changed his mind.
“After further reflection, I now believe that the Pacific Islands Forum is not the proper platform to discuss this debt issue,” Mr Pohiva’s statement said.
“Each Pacific Island country has its particular national conditions and different needs for foreign loan, and it’s up to each government to independently seek solutions through bilateral channels.”
The Prime Minister also said the loans from China — used to rebuild Tonga’s capital after riots in 2006 — were “crucial for the Kingdom’s economic recovery and maintenance of social stability”.
Tonga was “exceedingly grateful” for development aid from Beijing and the two countries would continue to discuss solutions for repayment through “friendly consultation”.
The about-face was as absolute as it was sudden. And it left a lot of questions unanswered.
Why the change of heart? Did China complain, or threaten consequences? Or did something else prompt the Prime Minister’s startling retraction?
A week is a long time in politics
Mr Pohiva has long complained that his nation will struggle to repay the $160 million it borrowed from China’s Export-Import Bank.
But it seems he first widely canvassed his contentious plan to draw PIF into the controversy during a meeting of Pacific Island Foreign Ministers on August 10 in Samoa.
The ABC has been told Mr Pohiva didn’t raise the proposal during formal proceedings, but he did lobby several ministers about the issue on the meeting’s sidelines.
Mr Pohiva laid out his strategy in an interview with the Samoa Observer, published on August 14.
He told the Observer that Pacific leaders should sign a “submission … asking the Chinese Government to forgive their debts”.
Beijing might be more willing to listen to the pleas of countries like Tonga, he said, if leaders at PIF in Nauru in next month issued a joint statement calling on China to show lenience.
The story was quickly picked up by other media outlets — including the South China Morning Post and Radio New Zealand.
The ABC interviewed Mr Pohiva on August 16, and he was adamant that Pacific Island countries should work together to press China to back down on repayments.
“China has to take into consideration all the countries that have loans,” he said.
The suggestion was contentious because it revived a fraught debate about China’s strategic ambitions in an increasingly contested region.
Australia remains the largest donor to the Pacific by a wide margin, but it’s become increasingly anxious about the amount of Chinese debt taken on by some Pacific nations, and the leverage this gives to officials in Beijing.
Minister for International Development Concetta Fierravanti-Wells has been a public critic of China’s approach.
On August 16, Senator Fierravanti-Wells told the ABC that Mr Pohiva’s suggestion had merit — and agreed Pacific leaders should discuss the issue in Nauru.
“I think it is important that it is discussed because it is a vitally important issue to so many countries in the Pacific,” she said.
But the Prime Minister would back down less than 24 hours later.
So, who picked up the phone — or made a visit to Mr Pohiva’s office — to force his hand?
The mystery deepens
Mr Pohiva’s office has not given an explanation about what happened — and the ABC’s attempts to reach the Chinese embassy in Tonga have not been successful.
The ABC has been told that China did raise objections to the Tongan Prime Minister’s plan, and made a complaint.
But the nature of that complaint — and its force and magnitude — are not clear.
Of course, Beijing’s loan gives it enormous leverage over Tonga.
Dr Graeme Smith from the Australian National University said it was plausible that China may have used that leverage to force Mr Pohiva to back down.
But he said it is also possible that other Pacific nations heavied Mr Pohiva because they wanted to avoid PIF being consumed by a messy debate about China.
“The other possibility is that other members of PIF told him to pull his head in,” he said.
“Tonga is a player in PIF, but there are larger players — one of whom [Papua New Guinea] is about to host APEC.”
A lonely crusade
Even if Mr Pohiva had stuck to his guns, he may have faced an uphill struggle to push the issue to centre stage at PIF.
Tonga is not the only Pacific country which may have borrowed too heavily from China.
Samoa has also borrowed substantial sums, and experts say Papua New Guinea is becoming increasingly reliant on Chinese debt as well.
But the problem is not universal.
Vanuatu has borrowed plenty of money from Beijing, but recent analysis suggests its financial position has improved substantially.
Dr Smith said many Pacific Island nations were in a much better financial position than Tonga and still have an appetite for loans from overseas.
Many of those countries would have nothing to gain — and plenty to lose — by picking a fight with China.
“I don’t think you’ve got a sufficient quorum of countries under debt distress — it strikes me as unlikely that it would get up,” Dr Smith said.
“Things look very different, depending where you are in the Pacific.”
Of course, that doesn’t make Tonga’s position any less excruciating.
“They have some reason to feel hard done by,” Dr Smith said.
“The Chinese contractor at the centre of this loan gave assurances privately to Tongan Government officials not to worry, that down the line this debt would be forgiven.”
Dr Smith said his research shows this is a common pattern in the Pacific.
“This is part of the pitch when a loan is being sold at the beginning. And it’s disingenuous,” Dr Smith said.
“China does forgive loans, but only zero interest loans. It has almost no record of forgiving concessional loans.”
So even if Pacific leaders don’t breathe a word about debt and China when they sit down for formal meetings — there might be plenty of chatter in the corridors just outside the room.
By Stephen Dziedzic