Solomon Islands leader says he skipped Biden summit to avoid 'lecture'
HEGEMONIC HUBRIS AVOIDED
Reuters
Wed, September 27, 2023
78th UNGA General Debate at UN HQ in New York
SYDNEY (Reuters) - Solomon Islands Prime Minister Manesseh Sogavare said he skipped a Pacific Islands leaders summit at the White House this week to avoid a "lecture" and because he had more pressing issues at home.
Sogavare, who has built close ties with China, held a press conference on Wednesday after arriving back in Solomon Islands from the United States, where he spoke at the United Nations but did not join other Pacific Island Forum leaders in Washington for a two-day summit.
U.S. President Joe Biden met the Pacific island leaders for a second White House summit in just over a year on Monday, part of a charm offensive aimed at curbing inroads by China into a region Washington considers strategically crucial.
Sogavare said he attended the first summit last year and "nothing came out of it".
"They lecture you about how good they are", he said, according to a video of the press conference published by Solomon Islands media company Tavuli News on Wednesday evening.
A Biden Administration official said on Sunday they were "disappointed" Sogavare would not attend.
Sogavare said he returned because there were 10 weeks left of parliament at home in Solomon Islands, which was more important.
Papua New Guinea Prime Minister James Marape said in a statement on Wednesday the summit had seen the U.S. make a significant pledge for infrastructure investment, and the meeting was a "significant step towards making the Pacific more secure and prosperous".
Biden pledged to work with Congress to provide $200 million more in funding for projects in the region aimed at mitigating the effects of climate change, spurring economic growth, countering illegal fishing and improving public health.
At the United Nations General Assembly in New York, Sogavare had praised China's development cooperation as "less restrictive".
(Reporting by Kirsty Needham; Editing by Anil D'Silva)
South China Morning Post
Wed, September 27, 2023
Solomon Islands has joined the China-backed Asian Infrastructure Investment Bank (AIIB) days after its leader snubbed an invitation to meet US President Joe Biden at a Pacific summit.
Solomon Islands joins the bank alongside the Central American nation of El Salvador, which deepened its relationship with Beijing a few years after switching ties from Taipei.
Tanzania, another key Beijing ally and where China has vast interests, has also been admitted as a prospective member.
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The new admissions to the AIIB push the total number of countries that have joined to 109. While most are in Asia, the bank also has members outside the region, such as Britain, France and dozens of African countries, including Algeria, Ethiopia, Rwanda and Egypt.
The AIIB's board of governors approved the applications during the bank's eighth annual meeting in the Egyptian city of Sharm el-Sheikh on Tuesday - its first in-person annual gathering since 2019.
AIIB president and board chairman Jin Liqun said the members now "collectively account for 81 per cent of the world's population and 65 per cent of global gross domestic product".
"The addition of El Salvador, Solomon Islands and Tanzania strengthens the AIIB community and supports our collective mission to finance infrastructure for tomorrow," Jin said.
"Together, we will work on priority projects within our clearly defined thematic priorities to drive long-term sustainable growth."
The three prospective members will officially join the AIIB once they complete required domestic processes and deposit the first capital instalment with the bank.
"Our journey began with 57 founding members," AIIB vice-president and corporate secretary Ludger Schuknecht said.
He said the growth in membership to 109 showed "that many believe in our mission to achieve sustainable infrastructure development and economic growth, as well as our commitment to actively support infrastructure projects that contribute to climate change mitigation, adaptation and resilience".
China holds a 30 per cent stake in the bank, which started operating in 2016 as the brainchild of Chinese President Xi Jinping. It was billed as Asia's answer to the World Bank to provide infrastructure finance for its members.
China had expressed frustration at its lack of influence at the World Bank, which is dominated by the United States. The Asian Development Bank is dominated by Japan and the US.
But in June Bob Pickard, a Canadian citizen who resigned as global head of the AIIB's communications, claimed the Beijing-headquartered lender was infiltrated by the Communist Party.
Following the allegations, Canada said it would "immediately halt all government-led activity" with the AIIB.
The bank said Pickard's comments were "baseless and disappointing" while Beijing, through its foreign ministry, said the bank had "acted as a truly international, rule-based and high-standard institution".
David Shinn, a China expert and professor at George Washington University's Elliott School of International Affairs, said the three newest members hoped to obtain some of the infrastructure financing offered by the AIIB, which had a wide membership of countries representing various political persuasions.
"There is no significant downside to joining and the motivation is probably more practical than geopolitical," Shinn said.
President and chairman Jin Liqun addresses the opening of the eighth annual meeting of the AIIB in Egypt on Monday. Photo: Xinhua alt=President and chairman Jin Liqun addresses the opening of the eighth annual meeting of the AIIB in Egypt on Monday. Photo: Xinhua>
However, Aly-Khan Satchu, a geoeconomic analyst, said Solomon Islands had decisively pivoted towards the East, with Honiara recently describing development cooperation with China as "less restrictive, more responsive and aligned to our national needs".
"Solomon Islands has made the geoeconomic calculation that a singular alignment with China at this time will have potentially an outsize pay-off, versus trying to balance the US and China, or pivoting towards the US. That signal is an overarching one and interesting for that," Satchu said.
Solomon Islands' Prime Minister Manasseh Sogavare signalled that shift when he declined to attend the Pacific nations summit at the White House on Monday and Tuesday. Before the snub, he praised China for its development model in his speech at the UN General Assembly last week.
The Solomons' top export to China is timber but it also sells products such as processed fruit and nuts and in return buys mostly iron products from China.
Last year, China signed a security deal with Solomon Islands allowing Sogavare to request China's police and military officers, if required, to protect "Chinese personnel and major projects" in the Pacific nation.
The decision has raised concern in the US and Australia about Beijing's growing interests in the region, where Washington is also making inroads.
In July, Sogavare accused the US of interfering in the Pacific nation's "internal affairs" after Washington raised concerns about Honiara signing a security deal with Beijing.
In Central America, El Salvador, under President Nayib Bukele, has been thumbing its nose at Western financial architecture and probably feels the AIIB will be more receptive to its development needs, according to Satchu.
And Tanzania sought to straddle both sides - the US and China, with whom it has a long-standing relationship - but appeared to be seeking the potential for options.
"What all three countries affirm is China's meaningful pull effect, and that a security partnership [which remains the US' main offering] is one dimensional versus China's more multidimensional offering," Satchu added.
Cumulatively, the AIIB has financed more than 200 projects worth US$44 billion since 2016. It is positioning itself as the key financier of climate-related projects, promising in its newly launched climate action plan to allocate at least half of its annual financing approvals to climate finance.
Sultan Al Jaber, president designate for the UN's coming climate change conference, welcomed the AIIB's pledge on Tuesday, saying "it is a crucial step in the right direction and is in line with the objectives of our COP28 presidency".
"Bigger and better development banks, working together, are critical for closing the financing gap, especially when it comes to adaptation and operationalising the loss and damage fund," Al Jaber said.
However, a report released by civil society groups on Tuesday said that in seven years the AIIB was yet to accept a single complaint from people adversely affected by its investments.
The study released by Recourse, Inclusive Development International and Accountability Counsel, said nearly half of all AIIB projects were found to be ineligible for the accountability mechanism. Of 219 projects funded by the end of June, 46 per cent (101 projects) were not eligible for consideration.
Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.
China-backed AIIB unveils US$50 billion loan plan for climate action
South China Morning Post
Tue, September 26, 2023
The China-backed Asian Infrastructure Investment Bank (AIIB) is positioning itself as a key financier of climate-related projects, with the unveiling of plans to triple its climate financing over the next seven years.
The multilateral lender - set up as an alternative to the World Bank in 2016 - aims to increase allocation for climate-related funding to at least US$7 billion annually by 2030, roughly a three-fold increase from last year's US$2.6 billion.
Cumulatively, the AIIB says it will advance US$50 billion for climate change mitigation and adaptation by the end of this decade, mobilising capital to support its members' efforts to fight the consequences of global warming.
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The Climate Action Plan (CAP) was released on the sidelines of the bank's board of governors' meeting in the Egyptian city of Sharm el-Sheikh on Monday - its first in-person annual gathering since 2019.
AIIB president Jin Liqun said the plan "outlines our ambition to bring capital, capacity and convening power to help our members in their efforts to address climate change", adding that it "builds on what is already a significant area of focus for our bank".
According to Jin, the CAP will build on the AIIB's 2020 pledge to stop bankrolling coal-powered projects and instead ramp up its investments in environmentally friendly schemes.
The Beijing-based bank - which is 30 per cent owned by the state - had fulfilled its promise to align all new financing with the Paris Agreement, the 2015 international treaty on climate change, he said.
Jin said the AIIB had also met its goal for annual climate financing to account for 50 per cent or more of its total approvals by 2025, with climate financing accounting for 56 per cent last year.
Since the bank was established in 2016, US$11.75 billion of its total financing approvals of US$25.25 billion have gone to climate projects, with US$8.29 billion dedicated to mitigation and the rest for adaptation.
Jin said the AIIB had financed 107 projects with climate components amid an ever-growing need to support members as they grappled with ever more frequent natural disasters, such as the recent tragedies in Morocco and Libya.
He told the meeting that the AIIB was working with other multilateral lenders, such as the World Bank, to co-finance some of the projects.
"The AIIB is working closely with our sister institutions to strengthen the family bonds that bind all multilateral development banks [MDBs] together," Jin said.
A recently announced joint financing arrangement with the World Bank for a US$1 billion guarantee over a selection of sovereign portfolios "is one such example of our quick and collaborative effort to strengthen the performance of the MDB system".
"We are also proud of our co-financing record as the largest co-financing partner of both the World Bank and the Asian Development Bank, along with our close co-financing partnerships with the European Bank for Reconstruction and Development and the European Investment Bank," Jin said.
The meeting also heard that three weeks earlier the AIIB had achieved early completion of its 2023 funding programme with the issuance of a US$2 billion three-year global bond.
With US$4.8 billion in orders, the bond recorded the largest order book for any bond issued by the AIIB since its inception, Jin said.
In May, the bank also placed Asia's first adaptation bond for US$321 million and is working with international asset managers to develop climate change investment frameworks.
At the opening of the meeting, Egyptian President Abdel Fattah al-Sisi urged the AIIB and other lenders to help emerging economies, especially in Africa, address the challenging global economic conditions caused by Covid-19 and the Russian war in Ukraine.
The banks "need to provide more low-cost financing", especially in light of the current financial and economic circumstances, he said.
Al-Sisi's plea comes at a time when some African countries have fallen into debt distress, exacerbated by the coronavirus pandemic, along with disruptions to global supply chains and food security.
In 2020, Zambia became the first African country to default on some of its debts during the pandemic, finally striking a precedent-setting deal with China and other foreign creditors in May, after 28 months of negotiation.
Lusaka's US$6.3 billion in loans - of which US$4.1 billion is owed to China - was restructured through the G20 Common Framework, with Beijing, Zambia's largest lender, providing the deepest level of debt relief among the bilateral creditors. Chad and Ethiopia also applied for debt relief under the same scheme.
Egypt, a founding member of the AIIB, has received US$1.3 billion in infrastructure funding, including US$300 million for water management and US$210 million to finance renewable energy.
The bank funded Egypt's Benban Solar Park power station, its first energy project investment outside Asia.
In July, the AIIB agreed to advance US$280 million for a new metro line in Alexandria. Egypt is a key destination for foreign direct investment, especially from China, whose companies have made vast investments in the Suez Canal Economic Zone.
The AIIB has also financed projects in Rwanda, advancing US$200 million through its Crisis Recovery Facility in 2021 for broadband access and an on-lending facility to support small and medium-sized enterprises.
In Ivory Coast, the AIIB recently signed a loan deal worth US$200 million for connectivity and rural infrastructure. The government of Ivory Coast and the World Bank are co-financing the project.
The AIIB, which has 106 members, has channelled US$44.6 billion to 233 projects in 35 countries, mostly in Asia, including India, Indonesia, as well as Oman, and China's own air quality improvement and coal replacement project.
According to the AIIB's action plan, the fight against climate change will be won or lost in Asia, which it described as an engine of global economic growth facing heightened vulnerability to climate hazards.
The bank pointed out that the region contributes more than half of global greenhouse gas emissions. Asia's effectiveness in addressing its unique climate challenges was of "paramount importance" to the sustainability of societies worldwide, it said.
The AIIB has vowed not to finance coal or projects related to the fossil fuel and has excluded oil sector investments, with limited exceptions to ensure basic energy access in remote island communities and hard-to-reach areas.
"The AIIB will only selectively finance natural gas projects that are transitional in nature [and] based on stringent criteria."
Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.
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