Asian Infrastructure Investment Bank eyes opportunities to help Pacific Islands crack down on illegal fishing; Outreach met with scepticism by veteran Pacific watcher

By Jenée Tibshraeny

The Chinese-founded Asian Infrastructure Investment Bank (AIIB) wants to help Pacific Island nations manage their fisheries.

The multilateral development bank’s president, Jin Liqun, believes the Islands have “limited capacity” to do so on their own, so need the international community’s help.

Speaking at a round table discussion in Auckland attended by interest.co.nz, Jin said, “This is a huge resource that would be sufficient to make these countries very rich, but they have no power to drive away all these illegal fishing boats.

“We can help them...

"Maybe we would work with the New Zealand Government, combining our resources."

Beijing-based Jin went on say, “I think Pacific Island countries still have to develop their institutional capability. That may take a bit of time, but with the support of New Zealand and other members of the international community, we would be able to help them to be more effective.

“These countries do need concessional funding.”

China’s position in the AIIB vs NZ’s

The AIIB has committed US$4.2 billion to financing 24 projects since it started operating in January 2016.

It offers sovereign and non-sovereign loans for projects in energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, and urban development and logistics.

New Zealand is one of the Bank’s founding members, in 2015 committing to investing NZ$125 million in it over five years.

However New Zealand has dedicated a total of US$462 million (NZ$630) to the Bank. The difference between this figure, and the amount already paid can be called upon by the AIIB as required.

Jin confirmed that while New Zealand is technically eligible to receive funding from the Bank, its priority is developing countries.

“I’m sorry we can’t invest in your country, even though I’d love to,” he said.

The AIIB has however provided China with a US$250 million loan for a project aimed at improving air quality in Beijing.

The US$462 million pledged by New Zealand makes up only 0.49% of the total committed by the AIIB’s 84 regional and non-regional members. This means it holds a 0.68% voting stake.

China has committed US$30 billion, so has a 27% voting stake.

Japan and the US aren’t part of the AIIB.

Jin is adamant: “It’s not China’s bank. China has China Development Bank, Exim Bank. The combined overseas assets are now beyond US$500 billion - more than the combined assets of all the multilateral development banks.

“So if it’s supposed to be China’s bank, why should we do it? It doesn’t make any sense. It’s a multilateral institution.”

‘Need and temptation often leads to greater risk’

Deputy Prime Minister and Foreign Affairs Minister Winston Peters wants New Zealand to contribute more to multilaterals working in the Pacific.

He made this intension clear when he revealed New Zealand’s “re-energised Pacific strategy” in a speech delivered at a Lowy Institute event in Sydney on March 1.

Peters didn’t mention the AIIB specifically, but said the World Bank and Asian Development Bank were “vital institutions” that could offer “sustainable investment choices for Pacific nations”.

Overall he said he wanted New Zealand to increase aid payments to the Pacific, further to these falling from 0.30% of Gross National Income in 2008, to 0.25% in 2016.

Nonetheless, his speech had a cautious undertone.

“The Pacific overall has also become an increasingly contested strategic space, no longer neglected by Great Power ambition, and so Pacific Island leaders have more options. This is creating a degree of strategic anxiety,” he said.

While Peters said the Pacific was attracting “an increasing number of external actors and interests”, he didn’t mention China.

“So much is changing in the Pacific and sometimes it is not for the best. Need and temptation often leads to greater risk than prudence would suggest,” he said.

Scepticism from Pacific Island fisheries expert

These risks are ever clear to veteran New Zealand journalist and former press secretary for the Samoan Prime Minister, Michael Field.

Having spent a large part of his career in the South Pacific and covering the Pacific, and written a book on fisheries in the area, ‘The Catch’, Field said he was “completely sceptical” about the AIIB’s interest in the Pacific’s marine resources.

“I find it a really cynical move involving a country that is at the very moment engaged in an extensive plunder of the fisheries resources of the South Pacific.”

He said China’s interest in funding regulation could start by it cutting back on the subsidies it offers Chinese fishing boats.

Further, China should be “cutting back on the number and style of their fishing operation, and they should prove to the Pacific first that they are capable of effective internal regulation before they start wondering around telling other people what to do.

“The Chinese operation in the Pacific so far has been a complete disaster. It’s a matter of great shame to China. Everywhere you look; China is over-fishing and ripping off Pacific countries.”

Field said the existing regulatory system of fisheries in the Pacific was “the best option we’ve got”.

Yet he noted one of the bodies that monitors the Pacific - the Western and Central Pacific Fisheries Commission - was “stymied year after year by nations like China who refuse to cut back on their catches, or refuse to limit their catches”.

You can see the extent of China’s fisheries in the Pacific using this Global Fishing Watch resource.

As for the concessional loans made in the past, Field noted the struggle Pacific Island countries were facing, trying to repay these.

The Australian in January reported Vanuatu was forced to lift its GST-style consumption tax from 12.5% to 15%, largely in an attempt to help service huge concessional loans from China.

Meanwhile Tonga was scrambling to start repaying massive Chinese debts with a five-year amnesty brokered by the International Monetary Fund to expire in coming months.

The Australian also reported the building boom that has taken place across the Pacific is on the back of concessional loans with provisos the borrower nations spend the money building infrastructure using Chinese construction groups.

According to the Lowy Institute, China committed US$1.78 billion in aid to the Pacific between 2006 and 2016, mostly in the form of concessional funding.

AIIB learning from the past

Nonetheless, the AIIB’s Jin said it was important for donors to work with recipient countries to ensure they prioritised funding the right projects.

“So if anything goes wrong, don’t put the blame on the recipient countries, or else you have a problem,” he said.

“As long as donors and recipient countries will learn from lessons [of the past] they certainly will do a better job as we move forward.”

As for the relationship between the AIIB and China’s Belt and Road initiative, Jin acknowledged both were proposed by the Chinese leader Xi Jinping.

Yet he said, “These two are different things. They are not the same, although there is some relationship…

“Belt and Road is a platform, inviting all the interested countries to work together. China does not dominate, China does not dictate, China cannot impose any project in any country. We are all working with sovereign governments.”

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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13 Comments

Small correction, Jenée. The AIIB president's family name is Lin, not Liqun, so he should be referred to as Lin throughout the article.

Edit: Jin, not Lin. My tired eyes failed me!

Thanks JetLiner. I was accidentally referring to Jin Liqun by his first name (Liqun), not his surname (Jin). I have amended the story so that he is referred to as Jin. 

金立群 pronaunce Jin Li Qun.

Family name: Jin (金), means Gold in English and same as Kim in Korean.

Given name: Li Qun (立群), means stand high above many others.

Thanks xingmowang. 

Thank you for the def, & pronunciation. Good to know. Now to run it through a translator to hear the tones.

According to a good friend of mine that is a public figure in the environmental field, most channels for illegal activity lead back to China. Yes something needs to be done, but heck you would have to tread very carefully. Michael Field's cynicism is well founded.

We are so suspicious of China and trusting of the USA that it confuses me.
We blindly send our troops to help USA invade countries and then question the motives of China when they do anything.
My observation is that China wants to be constructive and improve outcomes not just for themselves but for whoever they do business with.
I think its time we ditched our alliance with the USA and look to who we do business with. China is not perfect but they are trying to do good and improve other countries outcomes as well as their own.

I agree with first paragraph but your statement, "they are trying to do good and improve other countries as well", doesn't ring true from what I have seen. Are they trying to improve outcomes in Burma, Laos, Tibet, Vietnam or practically any other country they border? Hardly. They are exploiting them for all they are worth.

Interesting:
http://www.atimes.com/article/myth-neo-imperial-china/
a bit of history is always good too....time for a change....

This is just a propaganda piece as far as I can see. 21st Century China is not 13th Century China. I have been to the border regions of the countries I mentioned above and I have seen how the Chinese government behave first hand. Its not pretty.

Exactly - "what you can see" - sorry about your vision.....

You obviously see balanced reporting, I don't. Pretty straight forward really. That's the beauty of living in a country that isn't a totalitarian state I guess, we can both form different opinions.

I disagree. I think we're realistically cynical about USA but overly trusting of China. We know the USA has been ambitious in its turn at empire, and we've seen the abuses this has involved around the world - and many have been rightly annoyed at their swaying of NZ's politicians. But we're a bit naive in supposing better motivations from China, supposing they have no hegemonic ambitions, that they are not taking their turn at empire.

Meet the new masters, just like the old masters, including the assurances that what is being done is purely for the good of the locals. But without even the philosophical nod to human rights and freedoms that the US's founding fathers provided as something that politicians' behaviour could be compared unfavourably to.

They may not be worse, but I highly doubt they'll be any better.

Countries need to be realistic and protect their sovereignty. We've had more than enough naive and easily-flattered politicians being taken advantage of.