Former Timor Leste president Jose Ramos-Horta says small Pacific nations are more interested in using Chinese loans and grants to plug budget holes than “regional power games”.
The "emasculation" in Australian aid and the amount of money flowing to expensive consultants has forced Pacific nations to accept grants and loans from China, according to the former president of Timor Leste.
In an exclusive interview with SBS News, Nobel peace laureate Jose Ramos-Horta blasted wastage in the Australian aid system, while warning smaller countries in the Pacific region would develop closer ties with China if it helped them plug budgetary shortfalls.
“They are not interested in playing the big power regional power games, Australia vs China or vice versa,” he said.
“They're interested in their own development. They're interested in the wellbeing of their people. And whoever can offer them better conditions, they will take it.”
Mr Ramos-Horta said he was “surprised” by the level of concern about Chinese influence in his own nation.
"We are surprised that the Australians are talking about growing Chinese influence in Timor Leste, when in Timor Leste everyone is worried about the incredible Chinese expansion in Australia,” he said.
He said Chinese investment in his country was limited to three buildings and about $50 million in loans.
The Timorese government had purchased patrol boats from China too, but Mr Ramos-Horta said they did not work properly and were a bad investment.
Australian aid not reaching the ground
Australia will spend an estimated $91.8 million on development aid to Timor Leste this financial year, according to budget figures.
But Mr Ramos-Horta slammed “endless studies” and “junkets” that hoovered up the money, alleging very little money was reaching projects on the ground.
“It is an absolute nonsense, misleading, for countries like Australia or the Europeans or Japan to say that the so-called development assistance that they provide to countries like Timor Leste is our exclusive responsibility to manage,” he said.
“There is an Australian bureaucracy that is paid out of this money. There are studies after studies that are paid out of this money. Trips, evaluations. They pay out a lot to the consultants.”
Only one country offering easy money
Unlike Timor Leste, which takes Australian aid for specific development projects, some island nations in the Pacific depended on Australia to make up the difference in annual budgets, Mr Ramos-Horta said.
“If they're not able to [get enough from Australia] they go where they can to obtain either grants or soft loans. And that, today, is China.”
“No other major power in the world – not even the Europeans – are doing that. The European Union remains committed to the Pacific islands … but they alone cannot do much because they are very far away.”
He said Australia had an obligation to step up as a “regional power in the neighbourhood”.
He said the Morrison government should increase its spending and put a cap on the percentage of money that was paid to Australian consultants.
Mr Ramos-Horta sat down with SBS News in Sydney ahead of a keynote address at the Australian Council for International Development.