The recent USD100 billion-dollar deal exposed in the media is a classic debt trap in the making, according to Peter Kenilorea Jr, deputy Leader of the Opposition.
Kenilorea made this statement in response to the recent revelations of the Minister of Finance Harry Kuma entering negotiations with a Beijing agent for the enormous loan of USD100 billion.
“When this government decided to switch to China, many of us warned of the dangers of the debt trap. But pro-China supporters said we were making this up and repeating Western propaganda.
“But the proof is in front of us in black and white,” he went on to say.
“The classic sign of a debt trap is convincing a desperate country into taking on too much debt for it to handle. And when the borrower defaults, the provider of the money has control over the government. This is exactly what we have in front of us today.”
Kenilorea went on to point out that according to the documents themselves, it is clear that Solomon Islands would lose more than USD2 billion dollars a year instead of paying back the debt.
“The safest investment option that is presented in this proposal will not even meet half of the interest payments for this loan. We will fail immediately.
“This is a deal that any responsible minister of Finance would have seen through in a second. This is a deal that is designed to lock the Solomon Islands into unbelievable levels of debt and trap us immediately,” he said.
Kenilorea also made it clear that this is a Chinese debt trap.
“Last September, this government switched ties to China and according to these letters by November, there is already a debt trap offer from Beijing. Let’s not be fooled by this name Terry Wong.
“This is a Chinese national operating out of Beijing, offering money that can only be backed by the Chinese government. It is a scam coming from Beijing and aimed at trapping the Solomon Islands”.
Kenilorea further stated that the recent explanation by the government that SIG cannot accept loan funding that is not affordable does not add up.
“If this is the case, why it is still assessing the proposal months later? And why did the minister agree in principle to pay the 11% commission to Terry Wong?
“This loan is clearly unaffordable, why is the government still assessing it months after it was first proposed,” he said.
Kenilorea called on all responsible leaders to recognise that the Solomon Islands is already being pushed into the debt trap by a desperate government and this is a clear result of the decision to switch ties last year.