Friendship Test For Beijing And The Belt & Road Initiative As Vanuatu Is Laid Waste By Cyclone Harold

Op/Ed by Chris Devonshire-Ellis

The Pacific Ocean island of Vanuatu was leveled by Cyclone Harold on Monday,   flattening buildings, cutting power and stripping trees. The damage wrought by Cyclone Harold is similar to the impact of Cyclone Pam in 2015, which directly impacted half the national population and damaged 90% of buildings in the capital, Port Vila. Vanuatu’s economy is only just recovering. With borders still closed under a state of emergency due to Covid-19, the nation faces immense challenges in rebuilding.

Vanuatu joined China’s Belt & Road Initiative in November 2018, when the Islands Prime Minister Charlot Salwai, stated that “We are an independent country, and we can’t wait for grants to come,” he said, citing the need for projects in hard infrastructure like roads and ports, and also telecommunications, utilities, health and education. Whether through grants or through loans we have to have money to build our infrastructure, we want to invest this money into economic sectors.” he said, adding that funneling money into productive projects would also help it pay back its existing debt and develop the economy.

Vanuatu owes around US$130 million to China, which accounts for roughly half its external debt and represents just over 13 percent of its annual GDP. Salwai subsequently visited Beijing in May last year to discuss Chinese support.

Beijing’s response will undoubtedly be linked to the Belt & Road Initiative, whatever it does. But there are dangers here for China; exactly how it responds will be telling. Does it provide aid, in the form of grants? Does it provide these for humanitarian reasons as a sovereign, no-strings attached gift from one friendly, increasingly  wealthy nation, to a smaller friend in need? Or does it introduce demands for its benevolence?  China had been rumored to be seeking permission to establish a naval military base in Vanuatu, a claim dismissed by both Governments. Will China lend more money to Vanuatu, and if so under what terms? With Vanuatu already in Beijing’s pocket to the tune of US$130 million, how, with its economy and infrastructure largely destroyed, will Vanuatu cope?

This means that every single Ni-Vanuatu of working age owes China roughly three months wages – before the impact of Covid-19 is known and prior to the destruction wrought by Cyclone Harold.

Other Pacific Islands also signed up to China’s Belt & Road Initiative will face similar issues, if not now, then at some time in the future. Cyclones and storms are increasing in both size and regularity in the region. How China behaves during these times will determine whether Beijing had factored in natural disasters as a strategic element in obtaining leverage, or if it wishes to take advantage.

There is precedent – Beijing suspended loan repayments due of US$115 million by Tonga for five years in the wake of Cyclone Gita in 2018.

Yet today, it remains to be seen how Beijing will react – its economy is also feeling the strain of the Covid-19 pandemic. If Beijing looks to take advantage of an ‘Act Of God’ (he seems to be getting increasingly pissed off with humans these days) to what extent will this be? Along with that question lies the inherent credibility of exactly what China means when insisting it will help its friends. It is an issue that will also impact on the extent of Australia and New Zealand’s regional aid and jostling for Pacific leverage.

Natural disasters may be the factor that either prove, or disprove China’s ability to deliver a ”win-win”, respect and leadership, or relegate it to be forever repeating itself as a nation made up of dodgy, low end export manufacturers of suspect morals. A combination of Covid-19 and Cyclones may yet reveal the truth about Beijing’s intentions and China’s Belt & Road Initiative.

Related Reading

• China’s Belt & Road Initiative In The Pacific Islands
• Solomon Islands Recognizes China, Joins Belt And Road Initiative