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China increased financial assistance to the Solomon Islands and Kiribati, its newest diplomatic partners in the Pacific, even as it cut overall support for the region in 2020, research by the Lowy Institute found.
Total development finance from the world’s second-largest economy fell to $187.9 million in 2020 from $205.4 million the previous year, according to the Pacific Aid Map released by the Australian think tank on Monday. It’s the lowest level of support since 2008, with preliminary data suggesting the decline continued into 2021.
However, the Solomons and Kiribati — both of which abandoned diplomatic ties with Taiwan in September 2019 — received “sizeable new financing†from China in 2020, according to Project Director Alexandre Dayant. China provided $14.4 million to the Solomons and $21.1 million to Kiribati that year, and a further $53.5 million in total in 2021. Before 2019, its contributions to the two nations were negligible.
At the same time, the two Pacific nations lost support from Taiwan and while both gained increased investment in 2020 by the diplomatic switch to China, in the case of Kiribati, Beijing’s level of funding in 2021 was less than the amount Taipei had provided in 2019, according to the data from Lowy.
Global Support
Overall, global aid to the Pacific rose to a record of more than $3.3 billion in 2020, as the Covid-19 pandemic wreaked havoc across the region and beyond. Donors including Australia and the Asian Development Bank made significant contributions, the Lowy Institute said.
“The record level of development finance reached in 2020 was primarily driven by a large increase in new loans to the Pacific, while total grant funding remained stagnant,†Dayant said.
—Bloomberg