It has been four years since the volcanic eruption caused devastation to the Pacific island nation of Tonga, and Tonga is still struggling to improve its infrastructure. Media reports say the large-scale loans owed to China are continuing to squeeze the country's reconstruction efforts.
On January 15, 2022, a massive volcanic eruption and tsunami in Tonga caused catastrophic destruction, demolishing hundreds of houses, submerging roads with floodwaters; a large quantity of volcanic ash covered Tonga’s islands, leaving most water systems undrinkable.
According to Agence France-Presse, Tonga’s Prime Minister Lord Fakafanua stated last month that most government reconstruction projects have been completed but also acknowledged that there are still “some finishing touches” yet to be done.
It is reported that the damage left by the tsunami is still clearly visible in some parts of Tonga.
It is reported that the damage left by the tsunami is still clearly visible in some parts of Tonga.
On the west coast beach of Tongatapu Island in Tonga, remnants of houses and shops destroyed by tidal waves are still scattered everywhere. Although Fakafanua is committed to addressing these issues, he told AFP that the government has stopped taking on new loans.
Budget documents show that Tonga still owes the Export-Import Bank of China 67.36 million US dollars (316.59 million ringgit) in loans. This loan was originally used to rebuild the central business district of Tonga’s capital, Nuku'alofa, after the 2006 riots.
This loan was taken out in 2008, with an initial amount of 55 million US dollars; after interest accumulation, the debt total has surpassed 100 million US dollars by 2024.
Budget documents show that Tonga still owes the Export-Import Bank of China 67.36 million US dollars (316.59 million ringgit) in loans. This loan was originally used to rebuild the central business district of Tonga’s capital, Nuku'alofa, after the 2006 riots.
This loan was taken out in 2008, with an initial amount of 55 million US dollars; after interest accumulation, the debt total has surpassed 100 million US dollars by 2024.
The Tongan government has pledged to clear the debt by 2030. In the fiscal year ending June 2025, Tonga will have repaid 17.7 million US dollars to China, accounting for most of the total annual debt repayment of 29.4 million US dollars.
For this small island nation, such repayments account for a significant proportion of government spending, while its annual infrastructure budget is only 10.1 million US dollars.