Foreign minister Nanaia Mahuta has sounded the alarm about debt levels in Pacific countries, amid geopolitical tensions and the unrest sweeping through Sri Lanka.
In an interview on Q+A with Jack Tame, Mahuta said she was concerned about the way Pacific development has been funded, drawing a contrast between New Zealand's approach and other countries.
“You'll be aware that the way New Zealand funds is largely by grant funding. We would like to see the opportunity of development partners to look towards greater coordination of its efforts,” said Mahuta.
“I'd say there's a level of indebtedness that sits across the whole of the Pacific to financial institutions, including the way in which China has funded into certain countries.”
The minister described it as a “key area of vulnerability that should be addressed, and we need to find different ways to work together on the challenges that sit within the Pacific.”
Her comments came after a week of turmoil for the South Asian nation of Sri Lanka, which has been suffering a crippling economic crisis partially caused by high levels of foreign debt.
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“We're all really mindful that the point at which Sri Lanka has reached its political unrest because of economic vulnerability is something we should be concerned about, and is something that can be considered in relation to the level of economic vulnerability across the Pacific,” said Mahuta.
Mahuta returned this weekend from the Pacific Island Forum, which was rocked by the sudden withdrawal of Kiribati.
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The growing diplomatic presence of China was a topic of much discussion at the forum, along with questions of development, climate change, and security.
Mahuta said there had been assurances from Solomon Islands PM Manasseh Sogavare that a recent agreement signed with China would not result in the militarisation of the capital Honiara.
She also talked up the defence and security relationships New Zealand currently has with countries in the region, while hinting that New Zealand’s capabilities could be increased.
“In terms of maritime surveillance, there's a lot of conversation in relation to fishing within the region, how more could be done, and an integrated approach towards maritime surveillance because of illegal, unreported fishing activities,” said Mahuta.
“It could mean drones. It could also mean extra maritime support, as well as aviation support as well.”
