The immediate response to the volcanic eruption in Tonga has been hampered by damaged communication lines, thick ashfall, and concern over Covid-19. Another problem looms for the coming rebuild: Debts owed to China.

The volcanic eruption has come at a particularly perilous time for the country, and for the Pacific.

Tonga has been battered by a series of cyclones in recent years, and the Covid-19 pandemic has spelled ruin for economic growth and development throughout the Pacific. This comes in the broader context of climate change and a growing power struggle between the world’s major powers for influence in the region.

“We’re looking at our lost decade in the Pacific, of economic shocks post-Covid, which is making responding to a disaster like this so much more complicated,” said Josie Pagani, director of the Council for International Development.

"You've got that on the one hand, and then on the other hand you're having to deal with the sort of political battlefield, where you're trying to work out who do we take money from?”

 

New Zealand officials have in recent years grown more concerned about strategic competition – or competition between powerful nations such as China, the United States, United Kingdom, and the EU – in the Pacific.

Already this week, China’s Red Cross Society offered US$100,000 (NZ$148,000) to the disaster response, an amount matched by the US shortly afterward.

Both New Zealand and Australia have promised $1m each for the recovery, and on Thursday the World Bank provided US$8m (NZ$12m) to Tonga.

But some analysts worry that big powers might try to seize on this disaster to buy influence in Tonga.

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“There are concerns that actors who may be seeking to secure influence in countries which have been affected by a natural disaster, may seek to use those opportunities to do so, to deepen influence through various different means,” said Dr Anna Powles​, a Pacific security studies expert at Massey University.

Of particular concern to the Government, and a feature of Foreign Minister Nanaia Mahuta’s recent policy speeches, has been loans provided to Pacific nations – primarily by China.

“When we talk about Chinese debt traps in the Pacific, Tonga is frequently one of the examples given for that. Tonga owes almost two-thirds of its debt to China's [Export-Import] Bank. There’s a high degree of debt vulnerability,” Powles said.

“Tonga also has longstanding relations with China diplomatically, and also there’s close ties between the royal family and China as well.”

In 2006, China offered Tonga a US$100m loan to rebuild the capital, Nuku’alofa, after rioting.

The debt burden has not been lifted: facing the economic hardships of the pandemic, Tonga in 2020 asked China for its debt to be forgiven. The country faced setting aside 15 per cent of its annual revenue to pay external debts exceeding US$186m, Reuters reported.

In times like this, humanitarian disaster, the expectation I certainly have of our people here in New Zealand that we'll do that. What other countries do is up to them, but I'd like to think that we're the example.

Two-thirds of the debt – about US$108m – was to China, amounting to a quarter of Tonga’s gross domestic product. China granted Tonga a reprieve until 2024, but the Pacific Island nation would still have to repay the debt by the same deadline.

In the wake of this latest disaster, Powles said Tonga would be very aware of the “optics” of the assistance it receives.

The New Zealand Government, which has recently outlined a new “Pacific Resilience” focus for its foreign service, needed to look towards long-term assistance for the country, such as rebuilding food security.

“Tonga ranks really high on the vulnerability index ... Since [Cyclone] Gita, Tonga has been in a recovery cycle with natural disasters ... You never quite get out of that cycle of recovering, responding, rebuilding, so you're always in a kind of cycle,” she said.

Pagani said New Zealand needed to work alongside China and Western countries in the immediate response, and then support the country to understand the risks of taking on further debt to “strengthen them to be able to play the political game”.

Development must be led by Tongans if it is to build resilience and community, she said.

“Part of the problem is that donors like China will come in places like Solomon [Islands] and, yes, they'll fund infrastructure projects, and they'll listen to what it is that locals want. But they won't necessarily create jobs using local workers,” Pagani said.

“And then you get problems like young people rioting on the streets in the Solomon Islands, because they don't have any jobs, and they don't have any incomes.”

Defence Minister Peeni Henare, speaking for the Government on New Zealand’s response to the disaster in Tonga on Thursday, said it would take an international effort to rebuild Tonga.

“Our plan is to be there, first, and to be the responsible partner that we always claim to be in the Pacific,” Henare said.

“Let's focus on the relief effort first, before we start looking towards what it will take longer term to rebuild Tonga.”

Asked about this view on whether funds should be provided to Tonga without conditions, Henare said: “In times like this, humanitarian disaster, the expectation I certainly have of our people here in New Zealand that we'll do that. What other countries do is up to them, but I'd like to think that we're the example.”