China pays into Solomons fund as part of diplomatic switch

Jonathan Barrett
·1-min read

By Jonathan Barrett

SYDNEY (Reuters) - China is donating $11.3 million in rural development funds to the Solomon Islands, according to budget documents released on Tuesday, fulfilling a pledge it made to the Pacific nation to help it transition away from its previous alliance with Taiwan.

China and Taiwan have fought a tug-of-war for diplomatic recognition in the Pacific for decades, which escalated in 2019 when two island countries, the Solomons and Kiribati, both switched diplomatic ties to Beijing.

As part of the negotiations to induce a switch, China pledged to pay into a controversial development fund that is disbursed to the 50 members of the Solomons' parliament to use in their constituencies.

While the amount is relatively small, it's a significant budget item for a small nation of less than 700,000 people.

Reuters reported at the time of the negotiations that Beijing said it would pay into the fund even though it usually preferred "grants, concessionary loans and sometimes gifts".

Taiwan was contributing about $8.5 million to the fund each year before the diplomatic switch in Sept. 2019.

Anti-graft agency Transparency Solomon Islands has previously criticised the fund for wide-spread misuse.

China's donated funds should be used to purchase goods for local businesses, according to the 2021 budget documents.

A portion of the Chinese funds must be spent on water and sanitation projects.

The Solomons, an archipelago where fierce fighting occurred during World War Two, was tightly aligned with the United States and its regional allies, including Australia, before bolstering ties with China during the diplomatic switch.

Solomons Prime Minister Manasseh Sogavare said on Tuesday that China had donated 50,000 doses of the Sinopharm COVID-19 vaccine.

(Reporting by Jonathan Barrett; Editing by Simon Cameron-Moore)