AAP: A new Pacific aid profile shows a downturn in assistance to the region, with development partners offering 18 per cent less in 2022 than the previous year.
After years of indebting Pacific islands with loans, China has revised its aid strategy in the region and is now offering grants with the majority of its development assistance.
The finding is confirmed with the release of the 2024 Pacific Aid Map, produced by Australia’s Lowy Institute.
The map is a comprehensive guide to 37,000 aid projects across the blue continent since 2008, all made public and laid out in a searchable map.
It shows Australia is region’s indispensable partner, giving more than any other country – and often substantially so – every year between 2008 and 2022, the latest year it has plotted out.
Australia averages more than $US1 billion ($A1.5 billion) each year in financing to the region, roughly three times more than the next-largest nation each year.
However, the Pacific has endured an 18 per cent dip in support from 2021 – when Australia and other partners dipped further into the pocket for COVID-era relief.
“This big contraction is coming from the fact that all of those donors got contracted a lot in 2022 actually gave a lot of money in 2020 and 2021 during the pandemic,” Alexandre Dayant, Pacific Aid Map project lead, tells AAP.
Their restraint has seen China rise up the donor rankings.
In 2021, with $US251m of support, China ranked fifth (behind Australia, Japan, New Zealand and the US) among developed nations for its support to the Pacific.
In 2022, with $US256m, it rocketed up the charts to sit second as other nations pared back their spending.
Mr Dayant said an assessment of China’s giving found that in recent years, it came with fewer strings attached.
“Over the years, China has been giving a lot of infrastructure loans to the Pacific and that’s in a way how they could gain influence (and) became a major partner to the region,” he said.
“Many countries have accumulated a huge amount of debt from China. Not only from China, from others too.
“Now, what we find is China has adapted to a new strategy where they’re providing more grants than before … and they’re concentrating on specific countries.”
Two of those countries are Solomon Islands and Kiribati, which switched their diplomatic allegiances from Taiwan to Beijing in 2019.
From no support in previous years, China gave more than $US110 million to Solomon Islands between 2019-2022, and $US64m to Kiribati from 2020-22.
“From that point on, there is a huge amount of aid going to those countries,” Mr Dayant said.
“Not only China is displacing Taiwan, but it’s also expanding the aid program that Taiwan had implemented in the first place.”
China’s switch from loans has continued in recent months, including a $US135m grant to Fiji in May to upgrade Vanua Levu Road – China’s largest one-off grant funding ever in the Pacific.
Mr Dayant said the change in approach was “welcome”.
“China, in a way, shows that it’s becoming a more responsible partner by providing grants to a region that is in dire need of financing,” he said.
“The Pacific is facing many structural issues.
“They’re far away from any kind of international capital markets. They are very small, tiny economies that can’t generate economies of scale.
“(Several Pacific) countries are prone to natural disasters … these economies basically are relying on aid for for development outcomes.”
