Comments

Hi Mark - good question - no it doesn't - though according to 2017 IMF Article IV - total government debt (which is what the figures are based on - data taken from the MTFS 2018-2022) - were projected to be 27 053 million Kina, unfunded super liabilities were 2 311 million Kina, and SOE borrowing was 390 million Kina - of which there is no data I've found on how much is owed to China - though if you added both liabilities in to the graph it is likely you would get a smaller % of debt out of the total owed to China as all the super liabilities are domestic - so wouldn't change the story much.

Hi Sheldon - thanks for the comment. However, commentary from the Lowy Institute suggests that we have likely seen the peak in Chinese lending to the Pacific (except for PNG) - https://www.smh.com.au/politics/federal/china-makes-inroads-on-pacific-aid-but-australia-remains-the-stalwart-study-finds-20180808-p4zw8b.html As Matt commented below - we don't make any analysis of project quality, or other geopolitical issues - though we do hope what we have done contributes to the broader discussion.

I couldn't agree me with your assessment and the need for tactful diplomacy from our PM to negotiate for a greater ROI from hosting the APEC.

It seems authors are making assumptions and far-reaching conclusions based on methodologies and data that are quite limited in scope. Authors say Pacific is 'not drowning in Chinese debt'. They should have added 'for now'. Also, are we only concerned about the 'now'? Good analysis should predict future trends. Data 'strongly suggests that the “debt-trap diplomacy” argument is without foundation'. So nothing to see? Nothing too worry about? No danger of current situation changing for the worse? So many unanswered questions.

Thank you for the clarification Matt. So much research, so little time! As we know, debt is not static. The situation can change- for better or worse - in a blink, so hard to pass definite judgements/firm conclusions. China in the Pacific is a complex, multi-faceted, evolving phenomena not easy to keep abreast of, or fully comprehend. Your research is helping understand the puzzle better. I look forward to more.

Hi Shailendra, Thanks as always for your comments. In this blog, we're solely focused on aggregate debt and the portion owed to China. We don't consider other questions, admittedly also important, such as: the quality of projects for which loans are made (an issue in the Malaysian case, and also in some projects in the Pacific), and the related issue of corruption and impacts on governance. I agree a comparative study would be interesting. Also interesting would be a debt analysis in which PIC debt is contextualised as part of the global trend, which has also (as a result of low interest rates) seen other developing countries increasing their debt. Thanks again. matt

This is an excellent and long-overdue piece. Thanks Matt and Rohan for putting the debt figures together. Data quality is a perennial problem in the Pacific, but this article allows others to build on the figures provided. I would also like to see rates of return on public investment by source, and issue that requires disaggregated data. Any help on this would be greatly appreciated.

Vanuatu Daily Post also posted a similar story - http://dailypost.vu/business/the-debt-trap-myth/article_54428acb-4e7e-5e51-8f3d-8b06586821a4.html But they also pointed to the citizenship and passport sale scheme for Asia, I assume China. I just found out that Vanuatu citizenship and passport is more attractive as they offer visa free to the EU - http://nomadcapitalist.com/2015/07/15/how-to-get-second-residency-citizenship-in-vanuatu/?fbclid=IwAR2zOJkHHKyuie4VoR6jJ-yZovg8ni4h3hXegKbbS5Aoa_LfE-OuMT51l_Q

Does PNG debt include SOE borrowings and other off-balance-sheet debt?

Solid, well-researched, thoughtful piece by colleagues Matt and Fox, although not all the details are always in the data/numbers alone and media reports should not be pooh-poohed out of hand. Moreover, should the Pacific be studied in isolation, or in comparison with other countries/regions to to provide a more complete picture? Hot the heels of the Dornan-Fox report a news item from the South Morning China Post about the Maldives' Chinese experience: The Maldives owed Chinese government US$3 billion, not US$1.5 billion as widely estimated. Nearly all the deals secret, at inflated prices, potentially corrupt. Is corruption a variable in the Pacific and was it/should it be considered in drawing conclusions? In the Maldives case, the liabilities are greater than initially believed and will soon outpace the islands’ ability to pay. Any future lessons here? If all above board with Chinese loans, why did Malaysia cancel two projects worth US$22 billion? Why is Pakistan trying to delay or revisit some projects worth US$60 billion? Are these developments relevant to the Pacific or not? What can we learn from them? Should they be part of any review on the subject to provide broader conclusions? For example, is it relevant to the Pacific that Sri Lanka, after failing to renegotiate loan payments, ceded a port to China under a 99-year lease? <a href="https://www.scmp.com/news/asia/south-asia/article/2172236/new-maldives-government-begin-untangling-secret-building-deals" rel="nofollow">The full news item is here</a>. Is it media speculation or are we lulled in a false sense of security?

'Debt-trap claims unfounded. Pacific NOT drowning in Chinese debt'. Question is consequence of continued borrowing at current/accelerated rate. Any long-term financial risks or not? Should we look at Pacific in isolation? Do Sri Lanka, Africa hold any lessons for us or not?

Over the years since my assignment I’ve continued to work remotely for my host organisation on an as-needs basis because my experience on the ground with them and my knowledge of the programs means I can deliver what they need quickly. So the volunteer program can and does work, just not for everyone and not all of the time. Maybe all the organisations involved need to go back and really look at the value they place on their ICMs and work out how to gain and retain the best people for the role. Because finding someone who can fulfill all of those responsibilities is tough. The top ICMs should be recognised and rewarded for their commitment not only to the volunteer program but also to the development landscape in the countries where they work.