The Lowy Institute has been commissioned by the Department of Foreign Affairs and Trade to implement the activity Mapping Foreign Assistance in the Pacific. This project will collect, collate, and analyze data on foreign assistance provided to the Pacific Islands region, and display this data in a visually appealing, user-friendly, intuitive online format. This project builds off of the proof of concept established by the Chinese Aid in the Pacific map launched by the Institute in 2015.
The data will be presented in map form, at a regional, country, and project level. It will cover the 14 Pacific Islands Forum member countries. It will include all foreign assistance provided by more than 30 countries and agencies/funds, both traditional and non-traditional, for the period 2011 to 2017 inclusive.
This Interactive provides country-specific modelling of Covid-19 vaccination rates for each Pacific Island Country, using data available to October 2021. The Interactive employs a range of static data, detailed in the Methodology, to generate for the first time a robust model for each of the Pacific Island Countries (PICs).
Mapping China’s opaque aid program in the Pacific Islands was more complicated and time-consuming than I had anticipated. I made peace with this fact when I found myself building a makeshift 270-degree visual cocoon out of every electronic device in my apartment so that I could cross-check the various colour-drenched excel spreadsheets feeding into the Lowy Institute’s updated Chinese aid in the Pacific map.
Earlier this month, the Lowy Institute’s Melanesia program launched a major update to the Institute’s flagship research mapping project on Chinese Aid in the Pacific. The map now contains a decade of Chinese government aid activities in the Pacific Islands region, making it a valuable resource for anyone working on and interested in the region's shiftinggeopoliticallandscape. Kudos to the map’s original architect, Dr Phillippa Brant, who set incredibly high standards for the project and left big shoes to fill. Here's how we did it.
A Chinese-language researcher was hired to help crawl through Chinese Government budget documents, embassy pages and media articles. With the odd exception, Chinese translations helpedconfirm what we already knew and provided another source to underpin project classifications. Pacific Government budget documents were a necessary input to extract information for large projects, particularly those which have received little media attention. However, these figures were often optimistic estimates and weren’t always a reflection of what was (or wasn’t) occurring on the ground.
More than 660 sources fed into the updated map, but thousands more potential sources were searched and discounted along the way.
I encountered the usual combination of obstacles when trying to map even the smallest of grants: incorrect figures cited by the media, overlapping projects and announcements, missing budget documents and confusion about the true origin of the funds. Hours could be spent on research, only to discover that while a particular grant may have been publicly handed over by the Chinese embassy, the funds actually originated from a Chinese community association, a businessassociation (see 'Olympus donation') or a provincialgovernment.
Other reported flows of funds, including an A$99,500 ‘One China’ grant to Vanuatu and an A$332,500 donation to Fiji (to compensate for the cost of President Xi Jinping’s 2014 state visit) were tracked but considered outside the scope of development assistance.
Follow the trail of money online (especially via Facebook)
There is no substitute for in-field research. But when the budget doesn’t allow for hundreds of site visits across dozens of islands and when many official websites haven’t been updated in years (and are often coated in malware), social media becomes invaluable.
Thanks to continuedmobilebroadbandgrowth, Facebook is now a vital source of information for understanding political and social developments in the Pacific Islands region. Public profiles, discussion groups, images and videos posted on the platform provide a window into how capital cities, rural towns and even local debates are impacted and shaped by China’s development assistance and expanding engagement. Analysing images and extracting metadata from Facebook (ie. dates, locations, media type) often provided crucial missing pieces and final confirmation that a project has indeed entered the construction phase.
There are plenty of Chinese aid projects (potentially) around the corner
It is worth noting what is not on the map. There are a lot of projects we researched but could not include for a variety of reasons. Some seem to have permanently stalled. Others have been announced but haven’t actually started. For example, Samoa has lined up funding for a police and overseas peacekeeping facility, a US$50 million China Exim Bank loan is in the pipeline to upgrade Dili’s drainage system in Timor-Leste (although there are setbacks), and maintenance repairs are planned for China-constructed buildings in the Cook Islands.
Another project in the works is PNG’s proposed National Broadband Network (NBN) which is majority funded by a $US59 million China EximBank loan. Huawei signed on to be the NBN technology partner in 2013 and Prime Minister O’Neill touted the project back in 2014. But since then information has been scant and with little concrete proof the project has begun, it was decided to omit it from the map.
Project run-off: Who else is settling into the region?
One of the interesting parts of working on a project like this, especially one with a heavy online component, is keeping an eye on what else and who else pops up on the fringes. Like China, most of the region’s newer and re-emerging partners are concentrating their resources in PNG and Fiji.
As previously covered by The Interpreter earlier in the year, Fiji has been on the receiving end of $A11.5 million worth of military ‘donations’ from Russia. This relationship is one to watch. It's hard to imagine Fiji-Russia relations taking off, but newly established bilateral mechanisms offer plenty of opportunities for the security-heavy relationship to expand.
Israel, via its Ministry of Foreign Affairs and its development agency, has started providing aid to PNG and the Marshall Islands in the form of humanitarian assistance and professional training support. In a strange development, Israel also provides defence and intelligencesupport to PNG. Taiwan’s overseas development program is small but continues to have a surprisingly broad presence in the region, including in Pacific Island states that recognise China. It was surprising to find a fair bit of activity in Bougainville, where Taiwan has funded IT centres and computers, donated solar panels and provided agriculture training.
One of the most interesting developments is India’s increased aid engagement in the region, particularly in PNG. A string of rare high-level visits culminated in an announcement this year that the Indian Government, through the Exim Bank of India, offered and signed a US$100 million credit line with PNG for infrastructure financing and HIV/AIDs medication. Also in the pipeline in PNG is a 'centre of excellence' for information and technology. Earlier in the year India provided assistance when Cyclone Winston devastated Fiji and has offered to help the Fjiian Government (as has China) with a proposed new naval base and officer training.
China Exim Bank funding and money laundering
While social media content helped flesh out details of new Chinese aid projects, a lack of visible media and social media coverage also prompted questions, particularly when sizeable amounts of development money were budgeted and allegedly being spent.
For example, it’s hard to tell whether PNG’s 'distance education network community college' — which is being funded with a US$35 million EximBank loan — ever eventuated. The mysterious project was recently caught up in a high-profile money laundering case in Singapore after authorities detected suspicious transactions that led to the bank account of former PNG Prime Minister Michael Somare (of which he denies knowledge). PNG Government budget documents report the project funds are currently in a trust managed by law firm Young & Williams Lawyers (who were the subject of 2015 investigations by SBS and Fairfax).
This development, which may unravel further and is gathering steam across PNG's online discussion forums, should spook Chinese Government officials working in the region. An opaque aid program is already a tough sell in the Pacific Islands where mistrust, misinformation, frustrations and resentment about China's regional intentions abound.
Foreign aid programs are important tools of soft power and therefore linkages between aid and corruption, whether concrete, alleged or completely unfounded, equates to terrible PR for any donor. This is particularly true for China, which is already undergoing its own anti-corruption crackdown and dealing with domestic debates that charity should begin at home. PNG, a country marred by its own corruption issues, is wasting no time in lining up more Chinese concessional loans. The Chinese Government needs to make sure it steers well clear of any future allegations of corruption. Providing greater transparency around development assistance is the crucial first step.
Today the Lowy Institute’s Melanesia program launches a major update to the Institute’s flagship research mapping project on Chinese Aid in the Pacific.* The map now contains a decade of Chinese government aid activities in the Pacific Islands region, making it a valuable resource for anyone working on and interested in the region's shiftinggeopoliticallandscape.
This latest update includes 48 new projects that commenced over the last 18 months. It also includes updates to 18 previously mapped projects. These new projects amount to $US297 million (or $A392.7 million) to eight countries in the South Pacific plus Timor-Leste (it does not include six countries that recognise Taiwan). This bring China's total aid spend in the region to $US1.78 billion, spread across 218 projects, since 2006.
The origins of this project go back to Fergus Hanson’s 2005-09 series of papers on China in the Pacific: New Banker in Town and Jenny Hayward-Jones’s work on Pacific geo-strategic competition. In 2015 former Lowy researcher Dr Philippa Brant, with a strengthened data collection process, a rigorous methodology, and research funding from the Australian government,built an online map to visualise 2006-14 Chinese aid activities (in US dollars) on this interactive map.
There has been substantial movement across this now-updated map, and the data, painstakingly collected and debated, speaks for itself. The Chinese government has overtaken New Zealand and Japan (foreshadowed here) and is also on the verge of overtaking the United States in terms of total aid delivered to the region since 2006. This means China will soon be the second largest aid donor, behind Australia, to the Pacific Islands. This isn’t a surprising finding. In fact, if you take out Micronesia where the bulk of US development funds flow, the US aid footprint across Melanesia and Polynesia – where most of the region’s population live – is surprisingly small.
The updated map draws on over 660 multi-language sources including public budget documents, media articles, tender contracts, community newsletters, Facebook posts, YouTube videos and tweets. The 48 new projects range dramatically in size and scope. They include small grants of goods and services such as new indoor rowing machines gifted to Samoa, a red electric guitarto Fiji and a collection of water supply systems built for small towns in Tonga.
While the data speaks for itself, it doesn’t speak to the western constructed system of international development assistance, which has long dictated how countries have traditionally delivered and reported their foreign aid. This is why comparisons with other donors, including OECD DAC donors Australia, the US, Japan, NZ and the EU, are tricky. Non DAC donors present in the region including China, Taiwan and India don’t report regional aid data in a systematic way that is available to the public. Importantly, many of China's large development projects in the region are actually loans with terms that are not made publicly available. So while China's aid program continues to rapidly expand in the Pacific Islands, users of the map should keep in mind that China provides aid in three main forms (i) grants; (ii) interest-free loans administered through state finances (i.e. Ministry of Commerce) and (iii) concessional loans administered through China EximBank (usually 2-3% interest rates). And it's these concessional loans, that must be paid back by recipient governments, that are boosting the size of China's aid program.
While comparisons may be difficult, the Lowy Institute’s Chinese aid map displays a decade of cumulative development flows so we can track clear and emerging trends. For example, China remains the largest donor in Fiji and is on track to overtake Australia and become the largest donor to both Samoa and Tonga. China is also the second largest donor to the Cook Islands (behind NZ) and the third largest donor to the Federated States of Micronesia (behind the US and Japan).
China may be elbowing DAC donors out of the way across the region, but the Australia Government remains - by far - the dominant donor in PNG. Unless there are further cuts to the Australian aid program, it’s hard to see that changing any time soon. However, this updated map also shows that the overwhelming majority of new Chinese development funds coming online are in fact flowing to Papua New Guinea. PNG’s absorption of such a dominant share of China’s regional aid distribution was among the more surprising findings. The bulk of Chinese aid funds to PNG take the form of concessional loans to build large infrastructure projects, many of which have been mooted for years but often delayed.
Traditional partners, including Japan and the US, have been losing ground to China in the Pacific Islands for a decade. Foreign aid is, of course, only one measure of global engagement and influence. But in the Pacific Islands region, where most countries don’t have a strong and sustainable economic base, and not all public funds eventuate or are spent in line with public expectations, aid engagement plays an outsized role in bilateral relationships.
Beyond the obvious intended (and much debated) benefits of development assistance, a diverse and flexible aid program like China’s gives politicians and Chinese contractors a ‘go-to-place’ to voice, successfully and unsuccessfully, their latest aid wishes. Providing this platform and playing this role in the region hasworkedoutwell for the Chinese government, which is just doing what all governments do – engaging internationally to promote its own interests. But those interests don't always benefit Pacific partners - debt distress, local business frustration, poor aid management, aid quality complaints and high-levelcorruption are some of the issues that have arisen from China's style of foreign aid delivery in the Pacific.
As China’s aid program increasingly rivals Australia’s in size and scope, a key issue for the government will be gaining a better understanding of the totality of China’s engagement with the region; much of the dynamic and ever-expanding China-Pacific relationship remains incredibly opaque, and hence, poorly understood. Prime Minister Turnbull's attendance at this week's China-funded Pacific Islands Forum Leaders meeting in Micronesia provides the perfect opportunity to articulate and reinforce Australia's longstanding and deep commitment to our nearest neighbours. It should also give pause to think more about the future of Australia's role in the region.
* Danielle Cave is a contractor for the Lowy Institute on this project. Please contact JPryke@lowyinstitute.orgif you have feedback or data to share on Chinese aid activities in the Pacific Islands.
Mapping Chinese aid in the Pacific, an interactive map launched by the Lowy Institute today, is the first comprehensive survey of Chinese-funded aid projects in the Pacific Islands region.
Lowy Institute Research Associate Dr Philippa Brant drew on over 500 sources including budgets, tender documents, government statements as well as interviews and site visits to create this map. It is the first time this data has been systemically collected, verified, analysed and mapped for Chinese aid projects from 2006 onwards. Users can search via country, year and sector, as well as compare Chinese aid with other aid donors in the region.
Key findings include:
Since 2006, China has provided US$1.4 billion in foreign aid to Pacific Island countries.
China is on track to overtake Japan as the third largest donor in the region. But at a regional level, Australia is and will remain the most significant external actor.
In some countries however, Chinese aid amounts are rivaling that of traditional partners.
I was in Fiji last week to get an update on Chinese assistance to the country, as part of a larger project I'm doing mapping Chinese aid activities in the Pacific islands, to be launched in early 2015.
Navua Hospital, built with Chinese aid assistance, Fiji. (Author photo)
Fiji is becoming popular again in the post-election environment.
Chinese President Xi Jinping is scheduled to visit Fiji after his trip to Australia for the G20 next month (we should expect some announcements, as is common in Chinese high-level visits, though apparently nothing too big in terms of aid is on the cards). Australian Foreign Minister Julie Bishop is dropping by this week, and the Asian Development Bank, World Bank and Japanese are all developing new programs (with new loan financing) for Fiji. Prime Minister Bainimarama will attend the Seventh Pacific Islands Leaders Meeting in Japan next year, his first time in eight years.
With all that international attention, suddenly Chinese assistance might not look so appealing. My trip revealed two main insights about the challenges confronting Chinese aid in Fiji.
1. Chinese aid is not as quick or efficient as assumed
It is frequently said that developing-country leaders like Chinese aid because it is quick and efficient. I've said this myself too. While this is sometimes the case, it is actually far from a universal truth.
I was surprised to see a number of projects that had been agreed to when I was last in Fiji, five years ago, still underway or only recently completed.
Two low-cost housing projects in Suva are funded through China Eximbank loans that were signed in 2010. But these loans came from the regional concessional loan package announced back in April 2006 at the 1st China-Pacific Island Countries Economic Development and Cooperation Forum in Nadi. Construction started in early 2011 and the projects have only just been completed. In fact the project was halted due to a dispute over building standards and subsequent cost blowout. It took a plea by Prime Minister Bainimarama during a visit to Beijing, and the Chinese Embassy stepping in with some grant funding, to resolve the dispute and get the project completed.
Similarly, the Somosomo mini-hydro project on the island of Taveuni was originally discussed with China in 2005. A Chinese team did a survey in 2010. The Chinese contractor, Hunan Engineering Construction Group, signed the contract in September 2013 and started work in July this year. The grant-funded dam is scheduled for completion in September 2015. This is some ten years after the project was first proposed and five years after the first Chinese site survey.
The efficiency of Chinese assistance is usually used as an explanatory factor by developing countries as to why they sometimes take on Chinese aid over 'traditional donor' support, which can be encumbered with complicated processes. But clearly it isn't just a matter of China pledging a loan and a project being built a couple of years later.
2. It all comes down to design
We've heard numerous stories of inappropriate or unsustainable Chinese aid projects. Time and again it seems problems stem from issues around design. A Chinese company will implement a project according to a design usually done by a separate Chinese company. As the Chinese aid system currently stands, it is difficult to negotiate changes to the design down the track.
The new Navua hospital (pictured above) is a case in point. According to the Chinese, the design for the hospital was approved by the Fijian Government. Chinese aid is managed through the Prime Minister's Office (PMO) in Fiji and it appears the Ministry of Health had no involvement at the design stage.
As a result, when the hospital was handed over to Fiji in July, health officials discovered a number of design features that weren't ideal. Toilets are too small and frequently get blocked, tiles on the kitchen floor are too slippery, basins are too shallow to clean medical instruments, and telephone connections are in strange places. The ramps connecting the two wards are steeper than the usual standard. This has led to the hospital manager instructing staff not to transfer patients on trolleys. Instead they must use an ambulance to move people between wards less than 20m apart.
The Health Ministry is happy with the workmanship and professionalism of the Chinese contractor, Yanjian Group. But it will now have to resolve some of these design issues at its own cost. This might have been avoided had the PMO involved them.
It can be a challenge working within the Chinese aid system. As I've outlined previously, much depends on strong government processes around project negotiation and implementation. In Fiji's case, it seems there could be better involvement of line ministries, particularly at the design stage.
But it is important to note that despite these challenges, Chinese assistance in Fiji is supporting some priority areas such as health care, rural infrastructure and housing. And I drove along some very smooth Chinese-built roads. Going forward, the Chinese embassy is keen to use its grant aid to support projects that have a positive impact on the people of Fiji, including in climate change and renewable energy.
The Fiji Government hasn't yet put in its wish list for projects to be funded through the new US$1 billion regional concessional loan facility announced at last year's 2nd China-Pacific Island Countries Economic Development and Cooperation Forum in Guangzhou. It is smartly waiting to see what's on offer from the other agencies that are now re-engaging. The Asian Development Bank and World Bank loans have lower interest rates than China, and allow for local contractors and consultants.
The PMO needs to be more proactive with project design, insist documents are provided in English and consult with its own experts before signing contracts. This will help ensure projects built with Chinese aid are appropriate and therefore well received. It is a good sign that the Chinese embassy has recognised the problems with its project design processes.
Given some of the challenges with Chinese projects and the very tied nature of its aid program, coupled with the fact that more options are now available, we may see the newly-elected Fijian Government prioritise loan assistance from other partners ahead of China in the next year.
The Chinese Government is frequently criticised for not being transparent about its aid program. As I mentioned in my quick summary yesterday, there's not a lot of specific data in the Chinese aid white paper. But we can make a few comparisons — on geographical spread, type of aid, and income level of recipient country.
China's aid system is complex, involving numerous government departments and actors. Sharing of information between the Ministry of Commerce (which manages grants and interest-free loans) and China Eximbank (which provides concessional loans) is not great.
There's some suggestion that the total aid figure is 'multiples higher than the government announces', but on my calculations the US$14.41 billion number for 2010-2012 cited in the White Paper is more or less accurate. Moreover, the statements in the White Paper that in recent years China's foreign assistance 'has kept growing' and that it will it 'continue to increase the input in foreign assistance' doesn't look like a Chinese Government that is trying to hide the true size of its program. We can't demand China publish more data and then turn around and dismiss it.
But back to the comparisons. The first white paper provided cumulative data up to 2009. It's not entirely clear, but this likely covers the period 1950-2009. The second white paper gives us data from 2010-2012. The charts below indicate the percentage of total aid for the given period.
Geographical distribution: the takeaway here is that more than 50% of China's total aid goes to Africa; Asia and Latin America have consequently fallen slightly.
Distribution according to income level of recipient: in recent years China has highlighted its support for least developed countries (LDCs). The trend here indicates this rhetoric is matched with aid dollars.
Type of aid: the Chinese Government is phasing out interest-free loans. They were a feature in the 1980s and early 90s before Eximbank was formed and most of these tend to be converted into grants eventually anyway. This is reflected in the trend: Chinese aid is essentially now 50% concessional loans and 50% grants.
Unfortunately, we can't directly compare the forms of aid across the two white papers, as the second has more categories than the first. But the main takeaway is that China's aid program has diversified away from a focus on economic infrastructure and industry to include more emphasis on social and public infrastructure, donations, and training.
Source: data from 2011 and 2014 white papers; Xinhua
First, it is an overview of China's foreign assistance from 2010-2012, rather than a forward-looking strategy. But this is an improvement on the first paper, which was an overview of the entire aid program across its 60-year history.
Over the 2010-12 three-year period, the White Paper says China provided US$14.41 billion of aid in three forms:
121 countries, including 51 in Africa, 30 in Asia, 19 in Latin America & the Caribbean, 12 in Europe and 9 in Oceania.
There's an interesting new addition to the list of basic principles underpinning China's provision of assistance: 'keeping promise'. The others are more familiar, and rather repetitive: mutual respect, equality, mutual benefits, and win-win.
The White Paper focuses on two key themes: 'helping improve people's livelihood' and 'promoting economic and social development'. It is interesting to see what is prioritised under these broad headings.
Under the first theme, the White Paper states that 'one of the important objectives of China's foreign assistance is to support developing countries to reduce poverty and improve the livelihood of their peoples' (Australian aid watchers will note there's no explicit mention of 'national interest').
Also under the first theme, China focuses on agricultural development, improving the level of education, improvement of medical and health services, building public welfare facilities, and humanitarian aid. While we still don't have any specific country data, there are some good examples and cumulative figures for each of these sectors. For example, between 2010-12 China completed agricultural demonstration centres in 17 countries, constructed 80 medical centres and undertook 29 well-drilling and water-supply projects.
The second priority, promoting economic and social development, is more interesting. The White Paper emphasises improving infrastructure, strengthening capacity building, promoting trade development, and strengthening environmental protection. There are some notable overlaps with the Australian Government's (and others') focus on 'economic diplomacy'. Examples include promoting exports to China through offering zero tariff treatment to least-developed countries.
Finally, the White Paper devotes significant attention to regional and international cooperation. We discover that in 2010-12 China contributed a total of US$285 million to multilateral organisations, including the UN, the World Bank, IMF and Global Fund to Fight AIDS, Tuberculosis and Malaria. As I mentioned in a post earlier this week, most of China's aid is distributed bilaterally. New Zealand will be pleased that its 'world-first' trilateral cooperation project with China in the Cook Islands got a mention (Australia's pilot cooperation with China in PNG didn't).
The final paragraph offers a hint of where the aid program is heading.
China will continue to increase the input in foreign assistance, further optimize assistance structure, highlight key aspects, innovate assistance means, raise the efficiency of capital utilization, effectively help recipient countries improve their people's well-being and enhance their capability of independent development. China is willing to work with the international community to share opportunities, meet challenges, strive to realize the world's dream of lasting peace and common prosperity, and make greater contribution to the development of mankind.
In short, the White Paper is heavy on cumulative detail and light on country specifics, but it is a definite improvement on the broad overview of the first White Paper. The stated priorities offer an insight into how China conceptualises its aid program.
China's foreign aid program is now the sixth largest in the world. Only the UK, US, Germany, France and Japan provided more last year.
This is according to a new paper from the JICA Research Institute estimating China's foreign aid program from 2001 to 2013. Their calculations put China's total official development assistance (ODA) at US$7.1 billion in 2013. (China's aid budget is growing rapidly, so this fits with the US$6.4 billion figure reported in China Daily in April 2013.)
For the first time, we have a well-informed estimate that includes bilateral aid, multilateral aid, concessional loans, and aid that sits outside the main budget (like scholarships administered by the Ministry of Education). As China-Africa expert Deborah Brautigam has said, 'lead author Naohiro Kitano and his colleague Yukinori Harada have done a superb job. The methodology is carefully worked out and fully explicated.'
The paper highlights some interesting facts:
Most Chinese aid is provided bilaterally. Only 15% is given as multilateral aid.
Concessional loans, provided by China Eximbank, now make up nearly half of the total aid.
There are more than 40 departments involved in some way.
Given the lack of transparency in China's aid program, much is still (educated) guesswork. This new paper won't be perfect. But it is the best we've seen to date.
In fact, Japanese researchers and practitioners are at the forefront of work on understanding Chinese aid. This makes sense, as many Japanese officials have experience delivering aid to China (Japan was the largest donor to China in the 1980s), and there are many similarities between the Chinese and Japanese aid systems. A Study of China's Foreign Aid: An Asian Perspective, a 2013 study edited by Yasutami Shimomura and Hideo Ohashi, covers the history, principles, and implications of Chinese aid. But the real value of this collection is the information it provides about the mechanisms, tools, and institutions involved in the aid program. Since much of China's aid system is still a 'black box', and misperceptions are still rife, research like this is important. I'd encourage anyone interested in China's 'go global' policy, the links between Chinese aid and investment, or the role of China Eximbank and Chinese companies, to dip into it.