SYDNEY (Reuters) – The Asian Development Bank said on Tuesday it is expanding its presence in the Pacific islands, at a time of competition for influence there, opening seven new country offices and expecting its loans and grants in the region to top $4 billion (£3.04 billion) by 2020.
The pledge from the Japan-led bank comes amidst a vigorous new campaign by the United States and its allies to check China’s rising sway in the region, where it has sought deeper diplomatic ties and emerged as the second-largest donor.
The battle for influence in the sparsely populated Pacific matters because each of the tiny island states has a vote at international forums like the United Nations, and they also control vast swathes of resource-rich ocean.
The ADB said it will open offices in the Cook Islands, Micronesia, Kiribati, the Marshall Islands, Nauru, Palau, and Tuvalu, as well as expand missions in Samoa, the Solomon Islands, Tonga and Vanuatu.
“The new country offices will allow ADB to have more regular contact and substantive communication with government and development partners,” the bank said in a statement.
Its overall assistance to the Pacific, which stands at $2.9 billion, is expected to surpass $4 billion by 2020, it added, with the money destined for economic and social development projects and disaster resilience.
China has likewise pledged to keep lending to a region where it says its aid is supporting sustainable development.
However, it has spent $1.3 billion on concessionary loans and gifts since 2011, stoking concern in the West that several tiny nations could end up overburdened and in debt to Beijing.
Australia in particular, which has long viewed the Pacific as its backyard, has been critical of some Chinese aid projects, and a former foreign minister has warned that the lending could undermine the long-term sovereignty of recipients.
(Reporting by Tom Westbrook; Editing by Michael Perry)