The island of Niue, perched on a coral atoll in the south Pacific, is home to fewer than 2,000 people.
Although self-governing, the island is not fully independent and has a free association with New Zealand, which provides around $14m a year in aid and handles the bulk of the island’s foreign affairs, as well as providing its defence.
Premier Toke Talagi said Niue had managed to pay off up to US$4m of debt and had “no interest” in borrowing again, especially from big powers such as China that had offered the country “huge sums that other Pacific islands find too tempting to resist”.
“We are trying to live within our means using the island’s natural resources such as tourism, bananas and exporting water,” Talagi told the Guardian.
On 1 December the pension for Niueans would rise from US$250 a fortnight to US$272, Talagi said — an increase of just under 9%.
The government was also aiming to increase public servants’ wages in the next three to five years, to reach 80% of New Zealand rates.