WELLINGTON, New Zealand, Jan 28, (AP): New Zealand is reconsidering all development funding to the aid-dependent island nation of Kiribati, following a diplomatic snub from the island nation's leader, government officials said. The unusual move to review all finance to Kiribati was prompted by the abrupt cancellation of a planned meeting this month between President Taneti Maamau and New Zealand Foreign Minister Winston Peters, Peters' office told The Associated Press on Monday.

It followed months of growing frustration from Australia and New Zealand - jointly responsible for more than a third of overseas development finance to Kiribati in 2022 - about a lack of engagement with the island nation. Tensions have risen since Kiribati aligned itself with China in 2019 and signed a series of bilateral deals with Beijing.

The bond between Kiribati - population 120,000 - and its near neighbor New Zealand, a country of 5 million people, might not appear the South Pacific's most significant. But the acrimony reflects concern from western powers that their interests in the region are being undermined as China woos Pacific leaders with offers of funding and loans. That has provoked a contest for influence over Kiribati, an atoll nation that is among the world's most imperiled by rising sea levels. Its proximity to Hawaii and its vast exclusive economic zone - the world's 12th largest - have boosted its strategic importance.

Kiribati, one of the world’s most aid-dependent nations, relies heavily on international support, with foreign assistance accounting for 18% of its national income in 2022, according to data from the Lowy Institute, an Australian think tank. About 10% of development finance that year came from New Zealand - which contributed 102 million New Zealand dollars ($58 million) between 2021 and 2024, official figures show.

However, officials in Wellington and Canberra have expressed frustration over a lack of engagement from Tarawa regarding development projects. Frictions escalated when Kiribati suspended all visits from foreign officials in August, citing a need to focus on the government formation process after elections that month. Kiribati switched its allegiance from pro-Taiwan to pro-Beijing in 2019, joining a growing number of Pacific nations to do so. Self-governing Taiwan is claimed by China and since the shift, Beijing has increased aid to Kiribati.