A political storm is brewing over the repayment of a US$190-million loan from China, originally borrowed to help rebuild the capital after riots in 2006.
The money was also spent on major projects like the renovation of the royal palace, an upgrade of Nukuʻalofa wharf, and loans to local businesses to help them rebuild.
With the loan repayments now due, debate is intensifying over how previous governments handled the funds.
The Lowy Institute has described it as “a millstone around Tonga’s neck”, with the Kingdom’s debt levels ranked among the highest in the world—fourth globally.
“It’s very important to pay off your loan,” said former Tonga Prime Minister Siaosi Sovaleni Hu’akavameiliku.
We don’t want future generations to be burdened by a loan that we took out,” he added.
Tonga, which was hit by a volcanic eruption and tsunami has external debt of US$195m or 35.9 percent of its GDP, of which two-thirds is owed to China’s Export-Import Bank (Exim).
There are concerns about debt repayments to China that are due on a loan used to rebuild its central business district after riots in 2006.
Source: ABC
