Revisiting Tonga’s China Loan Controversy: Time to Set the Record Straight
In recent weeks, Tonga has once again found itself caught in a whirlwind of political speculation over the long-standing Chinese concessional loan—originally secured to help rebuild central Nuku‘alofa after the 2006 riots. The loan, valued at approximately $119 million, funded key infrastructure projects and business rehabilitation in the wake of the destruction. But instead of focusing on the outcomes and how Tonga can move forward, some have chosen to revive half-truths and misleading narratives for political mileage. As someone directly involved in investigating the original controversy surrounding the loan, I feel compelled to set the record straight.
In 2010, I had the opportunity to work alongside academic Dr. Teena Brown Pulu in a formal investigation that sought to answer a specific question: Were funds from the China loan misused or missing? At the time, such allegations were politically motivated and widely circulated in the media. They were used to cast suspicion over those involved in managing the loan and supervising the capital’s reconstruction. Dr. Brown Pulu and I were among those unfairly targeted. We were accused not only of being complicit in supposed irregularities, but of protecting those who allegedly benefited from the misuse.
What followed was a thorough and painful process. For two and a half years, we defended the integrity of the process, working with official records and testimonies. The government poured additional resources into re-investigating claims that had no real evidence. In the end, our findings were validated: no money had gone missing. The funds were used in accordance with the loan agreement, and the supposed scandal was revealed to be politically charged, designed to discredit individuals rather than to uncover the truth. We were vindicated—but not without cost.
Today, the China loan has returned to the spotlight. This time, the conversation has shifted to the decision made by the former Sovaleni government to write off 25% of the loan principal owed by four private sector businesses. Critics have voiced concern, with the current Minister for Public Enterprises, Hon. Piveni Piukala, publicly questioning the basis of the decision. His argument, which has been amplified by media outlets, suggests that the write-off was done without transparency and may have been unjustified.
However, such critiques fail to consider the full context. In a recent interview with ABC Radio Australia, former Prime Minister Hon. Siaosi Sovaleni addressed the issue clearly. The businesses in question had failed to repay their loans for nearly a decade. Their reason? The buildings constructed with the loaned funds had major structural defects—defects that were never repaired by the contractors. Understandably, these businesses argued that they should not be required to repay loans on buildings that were substandard and unfit for full use.
The Sovaleni government made a pragmatic decision to break the deadlock. Rather than pursue costly legal disputes or allow the situation to fester unresolved for another decade, they negotiated a 25% reduction in principal. In return, the businesses agreed to assume responsibility for rectifying the defects and immediately paid back the remaining $5 million. This solution not only resolved a long-standing financial impasse but also secured repayments that had been stalled for years.
The reality is simple: the government acted in good faith to protect the public interest. It chose resolution over confrontation and recovery over stagnation. Yet because this action was not properly communicated to the public—and because of the ever-present pull of politics—the story has been twisted into something it is not.
The Sovaleni government went a step further and negotiated a repayment plan with the Chinese government to clear the national debt by 2030. This move was driven by a desire to avoid leaving the burden of debt on the shoulders of future generations. In his own words, Hon. Sovaleni made it clear that honouring Tonga’s international commitments was a matter of national responsibility.
Despite this, public debate remains fixated on the partial write-off. Minister Piukala has raised the alarm that “the people will have to pay” the loan. This is not untrue—ultimately, all national debt is paid through public funds. But this fact cannot be used to justify politicizing or mischaracterizing an effort that brought resolution and financial accountability to a complex issue.
As someone who has been through the fire of political accusations and investigations on this very matter, I urge our leaders and commentators to approach this topic with more care. Tonga deserves better than recycled suspicions and political point-scoring. We need honest discussions based on facts—not innuendo—and we must recognize that governing often requires making difficult, practical decisions to move the country forward.
The Chinese loan is not a simple issue, but it is one that has been weaponized too often for political purposes. The record must be corrected: no funds were stolen. The former government’s write-off was negotiated to fix long-standing problems. And the repayment strategy in place today is part of a broader vision to stabilize our financial future.
The bigger issue now is not just the loan, but the quality of governance and public discourse in our nation. We must stop repeating history by turning development challenges into political weapons. Our people deserve truth, transparency, and leadership with the courage to act in the national interest—even if it is unpopular in the short term.
Let us move forward not with suspicion, but with solutions. And let us never forget that truth will always outlive propaganda.
By Melino Maka
Tonga Independent News
