China is using it’s wealth to buy influence in our near neighbour, the Cook Islands.
From Cook Islands News
21 December: Government has decided to take China up on its $9.3 million ‘soft‘ loan offer to cover the construction of the indoor sports complex and mini games facilities.
The low interest long term loan was offered by the People’s Republic of China last month when a visiting delegation informed government that using grant funds already available would delay the construction of the complex.
Government has been under pressure from sports officials to have the complex built in time for the 2009 Pacific Mini Games.
The ministry of finance has recently had the job of minimising the estimated cost of the complex as well as looking at funding alternatives to the Chinese loan.
Finance treasury operations manager Priscilla Maruariki confirmed that financial secretary Sholan Ivaiti had met with the local banks to discuss loan options.
Maruariki says Ivaiti had relayed the fact that getting favourable interest rates from these banks was very unlikely.
It is understood the interest rates available would not have come close to the 2 percent interest offered by China.
Maruariki says while it is cheaper to borrow from China in terms of interest, there is a risk associated with the loan being in foreign currency. The soft loan will be in United States dollars.
Hat Tip Poneke’s Blog