3 Dec 2013

Tonga opposition backs push for China to turn huge loan to grant

10:27 pm on 3 December 2013

Both the government and opposition in Tonga are hoping China will convert a huge loan into a grant to help ease economic pressure on the country.

China loaned Tonga about 50 million US dollars for the rebuilding of Nuku'alofa and repayments were to start in September but China agreed to a deferment.

Because of the poor state of its economy, Tonga would struggle to make the payments and the government has been in discussions with China in the hope that the loan can be turned to a grant.

The opposition's finance spokesperson, Sunia Fili, says they agree with this approach because it will allow additional foreign borrowing, which he says is needed.

"The World Bank and also the ADB they did advise that Tonga is in a debt crisis. The current government it is their policy, a no loan policy, so we depend mostly on international aid. So we wish that we could be out of that debt crisis line, so that we can take another loan."