Cook Islands use of NZ money to repay Chinese loan faces opposition
Updated
The Cook Islands opposition wants a full public inquiry into a massive loan from China after Deputy Prime Minister Sir Terepai Maoate said he hoped New Zealand would help it pay back a $NZ50 million dollar Chinese loan towards work on roads and waterworks. The statement has met with opposition inside and outside the country.
Presenter Bruce Hill
Speakers: Cook Islands Deputy Prime Minister Sir Terepai Maoate, Opposition Cook islands Party spokesman on Finance and Economics Norman George, Cook Islands Chamber of Commerce President Steve Anderson, Former New Zealand Associate Minister of Foriegn Affairs Matt Robson
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HILL: Sir Terepai Maoate says the agreement with the Chinese is a good one, because they've agreed that half the work on the projects the money will pay for will go to local companies, while Chinese labour and material will be used for the rest. But it's his response to a question about how the Government will be able to pay back the loan that's prompted concern.
MAOATE: We hope New Zealand will be at our aid to assist us with this.
HILL: The opposition Cook Islands Party spokesman on Finance and Economics, Norman George, is not impressed with that idea.
GEORGE: That is absolutely absurd, it is the stupidest thing that I have ever heard a politician make in my 25 years as a member of parliament in the Cook Islands. I just cannot believe it. This man is talking about Disneyland.
HILL: What do you think the reaction to this will be in Wellington?
GEORGE : Ha, ha, if I was Wellington, I would make a quick call to say what the heck are you doing? The New Zealand taxpayers, the people of New Zealand will be absolutely up in arms about it. I am surprised he didn't call President Obama in America to help pay it off as well.
HILL: Can the Cook Islands pay that amount of money back?
GEORGE: With 20 years to pay it off at two per cent, every Cook Islander will owe a debt of approxiamately $5,000 each for each year over the next 20 years. Dr Maoate is in his mid 70s, he's obviously not expecting to participate in paying this loan off and this is of course is politically motivated. They want to buy the next general election which is next year and to flash this 50 million plus 20 million grants. You are looking at 70. Now they are going to use this to buy the election results. This is an election bribe. You probably convinced the not so smart people, but the business people, the Opposition are reeking with fear about this huge amount of debt.
HILL; New Zealand Foreign Minister, Murray McCully, was not available for comment. But a former associate minister of foreign affairs with special responsibility for aid, Matt Robson of the Progressive Alliance Party, says the Cook Islands deputy Prime Minister's hope that New Zealand will help repay the Chinese loan is misplaced.
ROBSON: I think Dr Maoate has forgotten the terms of New Zealand aid. It's clearly very specific what it is used for. There is an agreement between the Governments as when money is given, what it will be spent on, and it is specifically designed, not just for the Cook Islands but everywhere, so Governments don't get their hands on it to use it for non-aid purposes. China has got the right to seek influence through aid or other means, whatever they like and the sovereign Government can accept those terms. But if they do, they cannot to use an analogy, sort of have one lover and then run off to another lover and say you will pay the bills. So I think he is in for quite a surprise if he does try to get New Zealand aid specifically targeted for good governance, poverty reduction, in fact good governance is a thing to point to, because this would not be good governance. This would be mm almost a corrupt practice.
HILL; And Cook Islands Chamber of Commerce president, Steve Anderson is also sceptical about the Government's plans to use New Zealand money to pay back the loan.
ANDERSON: I think it's most unlikely that New Zealand would even consider paying off a loan to the Chinese and the Chamber of Commerce does not believe the Government should be entering into the loan in the first place. The loan is much larger than anything that we can hope to repay and in any event is not borrowing money, but is having Chinese contractors coming here and do work which should in fact be done by our local businesses, the local contracting companies are crying out for work at the moment. They need the business and it would be good for the economy if it was done by local contractors.
HILL: Well, this attitude has not endeared you to the deputy Prime Minister. He's come out an criticised you and I understand taken out a full page ad in the local newspaper criticising the chamber for saying this?
ANDERSON: Indeed, he has, and we have obviously touched a nerve, but we stand by what we said and the support from the private sector and from numerous sections of the community has been overwhelming. There are any number of people ready to leave the Cook Islands permanently and take up jobs in New Zealand, because they don't have the opportunities here and we believe this $50 million loan and the big tickets major projects of this sort are driving people away.
