The real issue with foreign debt
Re: Defending China’s aid
It is not China’s aid per se which matters, but rather, the type of aid Samoa receives.
We all know that Samoa is a poor country and relies heavily on development assistance to fund its economic growth. Samoa receives aid from a variety of donors one of which is China.
If aid from China is in the form of untied grants that do not have to be repaid, then I, for one, would be ecstatic to keep receiving handouts from that country.
If the aid however is tied or in the form of loans which have to be repaid, with interest, then Samoa needs to be vigilant. All I hear and read in this newspaper is Chinese loans which need repaying in the future and my fear is that Samoa may not be in a position to repay these loans. What then?
It is easy for the P.M. to be flippant and says that Samoa is ok so long as it is able to meet the interest repayments on these loans.
What about the capital?
Sounds like my house loan that is taking forever to repay and I am only repaying the interest. My kids will have to continue to pay the loan long after I have gone to meet the man up there (or is it down here).
It is a similar scenario for the whole country and that is why I am concerned about these loans from China.
At some point, unless we keep sucking up to the Chinese government, these loans need to be recalled and repaid. What happens then?
Sounds like the story of my friend who lived in a flashy house that was heavily mortgaged to the bank.
One day he couldn’t make the repayments. This state of affairs continued for a while until the bank lost patience and decided to repossess the house which it sold to recover its moneys.
My friend went back to living in the faleo’o but he loved to tell his kids and friends about the fancy house he used to live in.
Perhaps that is what my kids can look forward to in this country - lovely memories of what Samoa used to be like until some other country repossessed it.