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Vanuatu: waving, not drowdling The Australian on Monday released an essay entitled "Pacific Nation drown in China Debts". There is evidence that a large number of recent "White Elephant" project are becoming an untenable strain for the states of the Asian islands. Though this contains a core of truths, it is not true to say that the issue of these states is that they "drown in debt".

Vanuatu is at least not about total indebtedness - at least not yet. Vanuatu's latest IMF survey of debts assesses credit risks as "moderate". Compared to other countries, the level of indebtedness is small. Vanuatu's immediate concern is the money flows. In just a few month, new ventures and new credits were launched with alarmingly high speed.

In a few years, Vanuatu had added several hundred million US dollar to the third party wreck. Vanuatu's indebtedness was moderate at just over 20% of GDP in 2013. However, by 2020 there will be a significant increase in the payment of debts in Vanuatu. Ministry of Finance and Finance has occupied a loan manager and given it a seat at the political desk.

At the end of 2017, the Council of Ministers decided to increase the value-added taxpayer's contribution by 12%. Value added taxpayers' receipts are expected to be about 20% above average by 2020. Moreover, the disputed Vanuatu pass sale programmes have become the biggest sources of tax-free income, with annual amounts in the double-digit million range.

Debts aren't the issue some folks have. Over the past few years, Vanuatu has either begun or finished the full refurbishment of two large quay complexes and about half a dozen smaller ones, two main highways, the repair of another 100 km stretch of road that has been destroyed by cyclones, the repair and modernisation of three aerodromes, a new meeting center, a sporting complex that recently hosts the 2017 Pacific Mini-Games, the full refurbishment of the junior high schools and an overall metropolitan area that has changed the city.

Privately-financed projects are also underway to build a completely new airport, a new 400-room hotel and a huge new sub-division outside the city, known as the "Emerald City", for people in China who are looking for peace, quiet, recreation and a stay in the tropical regions. In Vanuatu's government's view, there will be enough economic expansion soon to fulfill its spiral obligations to pay its debts, but this is not guaranteed.

Twenty-five percent interest rates, a 10-year reprieve and a 40-year payback schedule are characteristic of the US$70 million Japanese-funded Fort Vila Shipyard prospect. On the other hand, a similar shipyard in the north harbour of Luganville, financed by China EXIM Bank and constructed by the Shanghai Construction Group, costs about 15 million dollars more, has an interest of 2%, a redemption-free time of 5 years and a payback time of 20 years.

Even more serious, concern about the type of bollards that have been erected at the Luganville shipyard has resulted in the cancellation of tens of visits on the part of liner shipping companies, resulting in tense hats for billions of US dollar in opportunistic expenses and the city' s plan to become a tourist centre in the north. An effort is being made to alleviate the issue and address security issues.

Not only is it imprecise, it also disavows the actions of the Pacific island countries themselves. If there is no vote in this debate, these countries will certainly have even more unsuccessful infrastructural ventures in the not-too-be.

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