Australia warns, debt service in PICs including SI could be doubled by 2025


Australia warns that debt service in the Pacific could be doubled by 2025 compared to 2019. 

Statistics obtained from the Ministry of National Planning and Development Coordination (MNPDC) shows that Australia’s official development assistance to Solomon Islands in 2021 stands at an estimated SBD17,756,151,367 billion.

Speaking to SIBC News via zoom, Australia’s Minister for International Development and the Pacific, Hon Pat Conroy said the covid-19 pandemic has forced many Pacific Island Countries (PICs) to increase their borrowing.

Australia’s Minister for Defence Industry and International-Development and the Pacific Hon Pat Conroy

Mr Conroy said Australia’s support is to make sure there are tangible developments in PICs. 

We are interested in supporting a prosperous pacific and that means the pacific budgets are affordable and where governments of the pacific can invest in their people we’re acutely aware many of the pacific countries had to borrow money to get through the covid-19 pandemic that means budget in the pacific are under extreme pressure.”

He said Australia is very aware of the debt burden facing PICs and is looking at ways to reduce it. 

Around AUD170 million dollars committed to Solomon Islands under Australia’s development assistance budget.

Solomon Islands is currently Australia’s second biggest recipient of development aid in the pacific region and third biggest in the world. 

Hon Conroy explained many of their development aid are carried out in grant form. 

That development through grants is very important because grants don’t need to be paid back, importantly the Australia infrastructure finance facility for the pacific which funds infrastructure, we provide loans through that but most importantly grants.”     

The Australian government has announced an AUD1.9 billion for its Overseas Development Assistance under its budget.

An additional AUD900 million is added specifically to the region.

China’s growing influence and aid support in the pacific region could challenge Australia’s position as the biggest donor partner.

MNPDC stated last year if China’s infrastructure development support were captured in their report, this could drastically change the ranking of aid donors to the country. 

PRC’s data presented to the Ministry only covers the 2020 and 2021 cash grants for constituency support and Covid-19 response support. 

The Ministry reported that it does not receive program data projections from PRC which are currently under the discretion of the Office of the Prime Minister and Cabinet.  


By Sharon Nanau


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