Aid shouldn’t leave Pacific Islands saddled with debt – USA

The refurbished Levuka Market Bridge that is now open to members of the public. Picture: SUPPLIED

PORT MORESBY – The United States says infrastructure development aid projects in the Pacific region should not leave island countries saddled with debt.

The US Deputy Assistant Secretary for Australia, New Zealand and the Pacific Islands voiced concern about Chinese soft loans to Pacific countries.

Matthew J. Matthews said the US urged China to adhere to the development approach of the World Bank and Asian Development Bank (ADB) in the Pacific.

According to  Matthews, it was essential for the long term economic prospects of Pacific Islands that infrastructure and development assistance projects are free and fair.

“Projects, regardless of the donor, should be transparent,” he said.

“They should [have] high standards and high impact and follow international rules and norms that are designed to ensure that projects in the region provide economic sustainability and the ability of borrowers to repay loans in a timely fashion and generate greater economic potential for the countries in question,” Matthews said.

“Clearly, China has dramatically increased its funding into the region. A lot of lending.

“We want to make sure that that lending takes place in a way that’s constructive and that helps grow the economies in the Pacific Islands, makes them healthier, make them more prosperous,” Matthews said.

“If they can follow that kind of pathway, great… if they look at the approach of Australia and New Zealand, the United States, Japan, other traditional donors in the region that have been working you know over the longer term to improve economic outcomes in the Pacific, I think will be a good place.

“But they really need to step up and meet international standards,” he said.