Pacific Islands demand debt relief as COVID-19 hits economies
CANBERRA, July 15 (Reuters) – Pacific island countries will seek debt relief from their creditors as the spread of COVID-19 leaves some governments struggling to provide basic and essential services, the Minister for Finance of Tuvalu, Seve Paeniu.
Paeniu said the COVID-19 crisis has decimated dominant tourism industries in some Pacific countries, and a meeting with creditors will be sought for financial assistance. Some countries in the region were facing enormous tensions amid rampant borrowing.
“If the majority of the debt can be forgiven, that would be the first preference for the forum countries,” Paeniu told reporters at a virtual press conference after the meeting of economy ministers at the Islands Forum. Peaceful.
The Asian Development Bank (AfDB) said earlier this year that more than one million people in the region could fall into extreme poverty due to COVID-19.
The Pacific Islands – which control vast swathes of resource-rich oceans – have been inundated with loan offers from Western countries and China as both sides fight for influence in the region.
The United States has criticized China for lending to poorer countries for infrastructure projects that risk burdening them with unsustainable debt. China rejects the criticism.
To counter this, Australia set up a AUD 3 billion ($ 2.2 billion) fund in 2018 to provide Pacific island countries with cheap grants and loans to build infrastructure.
($ 1 = AU $ 1.3365)
Reporting by Colin Packham; Editing by Kim Coghill