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USD$100b proposed loan surprises China officials in Solomon Islands
7:16 pm GMT+12, 24/02/2020, Solomon Islands

The proposed US$100 billion loan deal between the Solomon Island Government (SIG) and a confidential Chinese donor through broker Terry Wong has shocked Chinese officials in Honiara.
 
The loan deal hit the local media headlines last week after the responsible Minister for Finance come out publically to explain the leaked documents.
 
Just five months after the Solomon Islands switched its diplomatic relations to China and severed ties with Taiwan a loan proposal was in the pipeline.
 
According to the official letter obtained by this paper that Kuma wrote, Wong would receive a proposed 11% fee if the US$100 billion loan is secured.
 
Speaking to Solomon Star over the weekend the Chinese official in Honiara said they were not aware of such a deal.
 
Asked if they discussed such deals with the Minister of Finance and the government the official said they never discussed anything related to a loan.
 
“I mean this is ridiculous and for a small economy like your country seeking such a huge loan that will pose a great economic disaster for your country,” the official told this paper.
 
The Chinese official in Honiara said that they have tried to establish any connection that might lead them to who is Wong but could not find any connection.
 
“We have to contact our Embassy in Port Moresby to find out if we can trace the Chinese broker,” the official said.
 
Kuma was able to play down the proposed loan dealing which he stated that his ministry was assessing Wong's proposal.
 
It was understood that the Solomon Islands is a US$1 billion economy trying to borrowUS$100billion.
 
Local economists and the general public are calling on the government to be more responsible when dealing with such matters. 
 
The Opposition Group is also concerned about the latest move.
 
Meanwhile, the leader of the Independent Group has appealed to the government to raise its level of integrity in managing the country’s economy. 
 
The call was made in light of the on-going US$100 billion loan saga.
 
Robertson Galokale stated that there is a clear decline in the integrity of Government. 
 
“This is lately manifested in the manner in which it has conducted negotiations on a massive loan proposal through the Ministry of Finance and an unknown private individual,” Galokale stated.
 
Whether by error, neglect, or choosing to engage in reckless risk-taking, this is an in-excusable misbehavior that has many adverse insinuations on the country’s economy and future”, Galokale continued. 
 
“In the context of business negotiations, the outcome of which should be to help build better relationships, deliver lasting, quality solutions and help to avoid future problems or conflicts. These fundamental qualities seem to be absent in the latest move by the Government,” Galokale added.
 
“In addition, the fact that the Government of China has publicly distanced itself from the loan proposal should be clear message that we are engaging with the wrong people. 
 
This latest move may well undermine all the good efforts to strengthen bilateral relationships with China and erode public and international trust in the Government”, the Leader of the Independent Group stated.
 
Galokale further said there will be considerable costs for the Government should it continue to pursue this loan deal. Already there is significant reputational damage and excessive potential risks involved.
 
Galokale went on to mention that there has been a raft of genuine public concerns raised on the issue including questions on the ability of the country to sustain such a huge loan that could easily entrap the country in debt which is an unacceptable outcome.
 
“While the country needs financial capital to develop and exploit its natural resources, it does not need to hasten its demise on such risky deals. Further to that the increasing impact of the Covid-19 virus on the Chinese and global economy would not allow such a loan to be discussed at this point in time”, Galokale pointed out.
 
“Therefore the Government must immediately put a halt on any further loan negotiations with Terry Wong and his organisation,” Galokale concluded.

SOURCE: SOLOMON STAR/PACNEWS


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