Dr Angela Clare, Foreign Affairs, Defence
and Security
Key issue
Pacific Island countries face formidable development challenges, including providing employment, infrastructure and services to their young populations, addressing the disruptive effects of climate change, and managing increasing geostrategic competition.
The recent China- Solomon Islands security agreement raised alarm in Australia and the US, but it also highlighted the governance and security challenges faced by Pacific Island countries.
Foreign policy experts argue that a ‘business as usual’ approach is no longer enough if Australia wishes to forestall future security agreements between China and Pacific Island countries. Australia needs to build trust and offer meaningful solutions to the region’s development priorities if it is to achieve greater convergence around the security threats facing the region.
Key challenges for Pacific
Island countries
The Pacific is a geographically and culturally
diverse region with immense natural resources. But its small and dispersed
populations, narrow-based economies and vulnerability to natural disasters
present formidable constraints
to development. Economic growth to provide social services, infrastructure
and employment to young populations, addressing the threat of climate change
and building human resource capacity are among the most pressing priorities for
Pacific Island countries. At the same time, increasing geopolitical competition
is presenting new security risks and adding to the region’s governance
challenges.
With at least half the population aged under 23,
the region’s ‘youth bulge’ is expected to have a major
impact on the region’s development in the coming decades. The main
challenges associated with this trend – strongest in the Melanesian states of Papua
New Guinea (PNG), Solomon Islands and Vanuatu – include increased unemployment and poverty, poorer education outcomes, rising
pressure on already fragile social services, increased chronic health problems and higher risk of
social unrest.
Tensions over land in
urban areas is becoming more common as people move from rural to urban areas,
while in PNG, the loss of customary land is seen as the
most likely issue to provoke
disputes.
The Pacific region also has
some of the world’s highest rates of violence against women and girls – about twice the global average. The region has some of the lowest rates of women in parliament and economic opportunities for women remain limited.
Increasing geostrategic rivalry has been a
destabilising force over the last decade. China’s growing engagement in the Pacific
has seen an influx
of new international partners and increased access to much-needed finance
for Pacific Island countries. It has also coincided with the rise of a
more assertive ‘Blue Pacific’ diplomacy by Pacific Island states. But Pacific
leaders acknowledge that geostrategic competition is exacerbating
the region’s vulnerabilities: growing transnational
crime, including illegal fishing, is increasing competition for resources, corruption has increased the complexity of security challenges facing the region, and urgent
development needs increase opportunities for foreign influence.
Most
Pacific Island countries were successful in preventing the entry of COVID-19 over
the first year of the pandemic, but outbreaks occurred across the region in
2021, the largest in French Polynesia, Fiji, New Caledonia and PNG. Several
countries have suffered marked slowdowns in economic activity as a result of
COVID-19 related restrictions, particularly those that are heavily dependent on
tourism, such as Fiji, Vanuatu and Samoa. The pandemic brought labour
mobility to a halt, shrank economic activity, cut jobs and reduced working
hours for overseas migrant workers. COVID-19 is likely to leave the Pacific on
a development path some 9%
lower than pre-pandemic levels, the Lowy Institute estimates.
Climate change compounds these challenges. The International
Monetary Fund has estimated that Pacific Island countries need 6–9%
of GDP each year for 10 years to climate-proof their infrastructure and
increase coastal protection. Their access to international climate finance has
fallen well short of this level, however. In 2017 the Asian Development Bank
estimated that Pacific countries required infrastructure
investments of US$3.1 billion per year to 2030 to meet their needs. With a
growing gap in their capacity to address these
issues, the Pacific is expected to remain one of the world’s most aid-dependent regions.
Australia-Pacific
relations
As the largest regional power, Australia has long
considered itself to have a leadership
role in advancing the prospects of its Pacific Island neighbours. Australia is the region’s biggest
development partner by a large margin, providing an estimated $5.37 billion in aid to Pacific Island countries over the last 3 financial years. With
New Zealand and the US, Australia is also one of the
region’s primary security partners. It has been the major donor for the region’s
COVID-19 response, providing $804
million in additional aid and over 2.5 million
vaccine doses to 8 countries since
the start of the pandemic. Australia has also been at
the fore of natural
disaster relief efforts, most recently in response
to Tonga’s devastating January
2022 volcanic eruption.
Maintaining – and where necessary, restoring – its
position as the region’s ‘partner
of choice’ and preventing an external power from gaining a strategic foothold in
the region has been critical to Australia’s interests in the Pacific since the
Second World War.
Australia has responded to China’s growing
influence in the region through its Pacific Step-up, which has sought
to better support the region’s priorities through a number of new security and
development initiatives. Australia’s major investments since 2018 include the
$3 billion Australian infrastructure financing facility for the Pacific, the labour mobility scheme, the Pacific Security College, new people-to
people initiatives and increased diplomatic posts in the region. Australia is promoting
trade links with Pacific Island countries through the Pacific
Agreement on Closer Economic Relations Plus (PACER Plus).
Australia’s defence ties, including its long-standing programs between the Australian Defence Force (ADF)
and Pacific militaries, are regarded as its strongest
institutional ties in the region. The Pacific Maritime Security program – a
key element of this cooperation – helps Pacific
countries protect their maritime resources and gives Australia a valuable
strategic presence in the region.
Some of Australia’s other key strategic initiatives in the region include its commitments to redevelop the
PNG- Australia- US Lombrum
naval base on PNG’s Manus Island; fund
an undersea internet cable linking PNG, Solomon
Islands and Australia; and co-fund Telstra’s purchase
of regional telecom company Digicel, whose
headquarters are in PNG.
The announcement of a
new security agreement between China and Solomon Islands, signed in March 2022,
raised alarm in Australian and US security circles, who fear that it may lead
to a Chinese military base in the Pacific and ‘substantially
alter the balance of power in the Indo-Pacific’.
Incoming Foreign Minister Penny Wong visited the
Pacific shortly after the new Albanese Labor Government was sworn in, committing
to deepen Australia’s engagement in areas such as
climate change, defence, maritime cooperation and labour mobility.
For many foreign policy
experts, the new China-Solomons security pact shows that a rethink
of Australia’s policy settings in the region is
needed. While the Pacific step-up sought to advance the integration of Pacific
countries into the Australian and New Zealand economies and security
institutions – 'essential
to the long-term stability and economic prospects of the Pacific’, according to the 2017 Foreign policy white paper – it has not gone far enough.
Some have argued that Australia will need to go
beyond a ‘business-as-usual’ approach if it is to
forestall further security agreements between China and the Pacific Island
countries. Given the ‘sheer
scale’ of China’s economy and the opportunities it offers to Pacific Island countries, Australia should not try to outspend China but
offer ‘genuine
partnerships’ that address the needs and aspirations of Pacific
Island countries.
Among the proposals advanced are increased
investments in defence and development assistance, meaningful action on climate change and
deeper regional
economic integration, including increased
opportunities for Pacific Islanders to gain employment and permanent residency
in Australia.
The need to build greater
trust, mutual understanding and respect in Australia’s Pacific relationships is a widely shared view. Australia has often
been criticised for its tendency to take an overly ‘securitised’ and at times heavy-handed approach in the region, and Pacific experts have long warned
against the corrosive effect of failing to engage with the region’s own security
priorities. Australia’s refusal to endorse stronger action on climate change is seen to have been particularly damaging to its relations in the region, fuelling the perception that its primary interest
was competing with China, rather than in promoting the interests of Pacific
states themselves.
The region’s international partners need to treat
Pacific nations as equals in their conversations
about security and China’s role in the region, according to New Zealand analyst
Anne-Marie Brady. Few Pacific Island countries ‘would welcome dependency on
China, or the Pacific turning into a Sinocentric order’, she argues, but if
partners fail to treat the region’s leaders as equals, they add to the risk
that some in the region ‘conflate concern about the real dangers of [China’s]
political interference and grey-zone activities – when expressed by “Western”
actors – with neo-colonialism’.
Others have argued that the China- Solomon Islands
security deal underlines the need for Australia to develop a more nuanced
understanding of the security risks facing the region. Interpreting the security
agreement as Australia’s failure to maintain primacy in the Pacific ‘overlooks
the complex ways in which power is exercised in the region’. Providing aid, infrastructure and
finance does not necessarily translate into diplomatic influence, and Australia
needs to recognise the ‘complex webs of authority and influence’ that
operate at the sub-national and national levels.
A number of commentators have made the point that Australia
cannot achieve its security goals alone. Australia needs to develop
a shared view of the risks China presents to the region and engage Pacific Island countries more strongly with that threat.
It could do this by working with other partners
and Pacific Island countries to institutionalise security dialogues and build the understanding and trust
needed to address ‘potentially sensitive issues’ and ‘provide a platform for
Pacific voices and perspectives’. It could also build partnerships with countries outside its traditional security
partners, such as South Korea, to pursue ‘a
less securitised form of diplomacy’ and ‘grow the ecosystem of aid, investment,
and trade in the region’.
Australia’s relations with the Pacific have strong
foundations, and Australia may
yet be able to work with Solomon Islands to prevent
the security pact from destabilising the region, according to former head of
the Regional Assistance Mission to Solomon Islands (RAMSI), Nick
Warner. This will require ‘skilful diplomacy’, he
argues: more aid, seasonal workers or defence force training in Australia is
the ‘easy part’; what is needed instead is ‘patience,
trust, quiet communication and building relationships’.
China in the Pacific
While China has had commercial interests in the
Pacific for hundreds of years, its engagement in the region has increased
significantly since 2006. China now has
considerable economic
and business interests in the Pacific, including
fisheries, timber, mining, energy and port
access. By 2021, China had signed Belt
and Road Initiative (BRI) cooperation agreements with all 10 Pacific Island countries with which it has established diplomatic
relations.
For Pacific Island countries, access to finance, infrastructure spending and trade
have been among the main benefits of China’s engagement. While Australia remains
the largest trading partner with the Pacific at 18%
of total merchandise trade (p. 15), the value of China’s 2-way trade with
Pacific Island countries increased
3-fold between 2008 and 2018 (p. 103), with its share of total
Pacific Island country exports rising from 6% to 20% over this period. China
is the largest importer of the region’s natural resources, importing resources worth US$3.3 billion in 2019. In 2019, PNG
alone exported US$2.3 billion worth of oil, metals and minerals to China.
China’s direct
investment in Pacific Island countries rose by 400% between 2013 and 2018, from US$900 million to US$4.5 billion. This compares to Australia’s total investments in the Pacific of
A$18.5 billion in 2018, according
to Department of Foreign Affairs and Trade estimates (p.10). Vanuatu, Samoa and Tonga
are among China’s
most significant debtors, while PNG has high levels of
‘hidden’ Chinese debt, according to the US-based AidData.
China’s
aid and lending to the Pacific has declined since 2018, however, falling by
31% from US$246 million in 2018 to US$169 million in 2019 – its lowest levels
since 2012, according to Lowy Institute analysis. This decline suggests that
Pacific countries may have less capacity to take on new loans or are more wary
of the ‘mixed track record’ of Chinese loans, the authors suggest. It may also be
that ‘Chinese
aid has served its purpose’:
Chinese loans have been used as a vehicle to
get State-Owned Enterprises into the region. These SOEs have now put down deep
roots and are competing in commercial activity across the board. According to
China’s investment
statistics, Chinese construction activity in the region was US$958
million in 2017, almost six times greater than its foreign aid activities.
These companies are still building China’s presence and influence in the region
without needing direct government support in the form of loans.
China’s strategic interests in the region include
garnering diplomatic support for its foreign policies, particularly its ‘One
China’ policy. Four Pacific Island countries – the Marshall Islands, Nauru,
Palau and Tuvalu – continue to maintain diplomatic relations with Taiwan, while
Solomon Islands and Kiribati switched
their recognition from Taipei to Beijing in 2019. In
2021, when the human rights situation in Xinjiang was raised
at the 47th UNHRC session by Canada,
Kiribati, PNG, Solomon Islands and Tonga were part of a coalition
of 69 countries that supported China’s position. Both PNG and Vanuatu have expressed positions on the South China Sea disputes that
closely align with those of China, and have moved against journalists critical
of the Chinese Government.
At the same time, China has met with some pushback
from Pacific Island countries, and the country has
particularly struggled
to build influence in PNG, the largest country in the region. China’s engagement in the region
has been criticised for its potential debt entrapment, the quality
of the projects it is financing, and for exerting pressure
on local media and compromising
political processes, including elite capture. China’s involvement
with illegal fishing has been seen as a threat
to the region’s revenue sources and food security.
The prospect
of China gaining sufficient economic leverage over Pacific nations to allow China’s military access to strategic defence
infrastructure such as ports and airstrips is a major concern to both the Australian and US governments. China is
reported to have tried
to gain access to militarily significant airfields and ports in Kiribati, Vanuatu and French Polynesia, and has established
military cooperation with Fiji, PNG and Tonga.
Analysts suggest that the recent China-Solomon
Islands security pact was likely driven by the Chinese Government’s aim to deepen
security cooperation with Pacific Island countries and protect its overseas interests, as well as the growing
rivalry with the US and its allies in the region. For
its part, China has strongly denied it has any intention of building a military
base in Solomon Islands, and argues that the agreement ‘is
based on Solomon Islands’ needs and requirements’.
The Chinese Foreign Minister visited 8 Pacific Island
countries in May 2022 and held online meetings with several more to seek
support for 2 new economic and security deals
incorporating trade and investment, public health, policing, cybersecurity,
maritime surveillance and disaster response. The proposals – which analysts
claim would dramatically
increase China’s integration with the region – have
so far failed to gain agreement.
China-Solomon Islands
security agreement – background
The new security agreement came
as no surprise to Pacific observers, who note that
it reflects China’s growing
diplomatic and economic ties with Solomon Islands
and its strategic
ambitions in the region. Two-way trade with China
makes up around 46% of Solomon Islands’ total trade. China’s recent engagement
includes a number of high-profile investments, including the construction of 7 stadiums
for the South Pacific Games to be held in Honiara
in 2023.
Solomon Islands’ Prime Minister Manasseh Sogavare has strongly denied that the agreement will lead to a
military base, confirming
that ‘Australia remains our partner of choice, and
we will not do anything to undermine Australia’s national security’. He described the security agreement as ‘necessary for countering the “hard internal threats” facing his
country’, arguing that his country’s existing security agreement with Australia has proven ‘inadequate’ following last
November’s anti-government protests in the capital, which targeted Chinese
businesses.
The November
2021 unrest in Honiara was triggered when protesters
– largely from Malaita province – marched on parliament and demanded Prime
Minister Sogavare step down. Malaita’s grievances have been linked to the
national government’s 2019 decision to switch diplomatic allegiance from Taiwan
to China, and to long-standing tensions between national
and local government. China and Taiwan had
waged a contest over diplomatic recognition in Solomon Islands for a number of
decades, with both countries accused of engaging in ‘chequebook diplomacy’.
Following the outbreak of violence in November
2021, Australia sent
Australian Federal Police and ADF personnel to
Honiara in response to a request from the Solomon Islands Government, the first
time it had sent personnel to the country under the 2017
security agreement between the 2 countries.
But the unrest goes well beyond ‘a pro-
versus anti-China issue’, analysts argue, and
highlights the
economic divide between regions and allegations of corruption in the central government’s dealings with China. Malaita is the
most heavily-populated island in Solomon Islands, but its development has lagged behind
that of Guadalcanal, where the capital Honiara is
located. Economic issues are believed to have driven
the internal conflict in Solomon Islands from 1998 to
2003, known as ‘The Tensions’.
Malaitan Premier Suidani’s decision to maintain
ties with Taiwan despite the central government’s switch to China in 2019 was
‘readily embraced’ by Malaita’s decades-old secessionist movement, according to
Pacific analyst, Mihai
Sora. China promised $730
million in financial aid to the Solomon Islands
Government following the switch, while Malaita province continued
to receive support from Taiwan. In October 2020 the
US allocated US$25 million in aid directly
to the Malaitan provincial government – 50 times what the province received in
the preceding year from donors – in what has been seen as part
of US-China strategic competition in the region.
The solutions are complex and long-term. Solomon
Islands needs economic development to provide employment, infrastructure and
services to its young population and a stronger
sense of national identity to foster social cohesion, Pacific observers argue.
But in a country characterised by high
levels of corruption and a clientelist
system of politics, these reforms will not be easy to achieve.
Regional integration
Some of the more ambitious ideas for resetting
Australia’s relations with the region involve deeper economic regional integration,
including through increased labour mobility and migration opportunities, which
proponents argue have the potential to provide long-term
solutions to the Pacific’s development challenges.
Labour mobility programs have long been identified
as areas of particular benefit to the
region. While concerns have been raised about the
exploitation of workers under Australia’s labour
mobility schemes, they have offered Pacific workers opportunities to gain
skills, earn income and support their communities at home through remittances.
The incoming Labor Government has
pledged to strengthen cooperation across all areas of Australia’s engagement
in the Pacific, promising a $525 million increase in development assistance
over 4 years and new initiatives in defence and maritime security, media and climate
change. Labor also flagged several reforms to the Pacific Australia Labour
Mobility (PALM) scheme, including helping to meet upfront travel costs for
Pacific workers, allowing participants to bring family members to live and work
in Australia, and establishing a 4-year Agriculture Visa.
Notably, Labor has proposed establishing a Pacific
window in Australia’s permanent migration program, the new Pacific
Engagement Visa. Modelled on New Zealand’s Pacific
Access Resident visa, the scheme will provide an initial 3,000 visas for
those able to find employment in Australia, opening opportunities for permanent
residency denied under temporary labour programs. In all, the proposals
represent a significant step-up in Australia’s approach to Pacific labour
mobility, according to the ANU’s
Stephen Howes.
One group of researchers has put the case for an incoming Australian Government to go
further in this area, proposing a ‘New Regional Compact’ that shifts the focus from temporary
and short-term labour mobility programs to long-term policies that emphasise
skills development. The compact would be
designed to increase access for those Pacific
countries with lower levels of labour mobility – including PNG, Solomon Islands
and Vanuatu – and include pathways to permanent residency and assistance to
‘support Pacific human capital development’.
Michael
Shoebridge from the Australian Strategic Policy Institute argues that Australia should open its economy
and labour market to South Pacific people, along the lines of Australia and New
Zealand’s Closer
Economic Relations Trade Agreement and visa-free work and
travel framework. Such a deal ‘will matter much more than any amount of aid
money and any amount of rapidly built large infrastructure and debt from our
friends in Beijing’, he suggests.
Academic John Blaxland has argued that Australia
should offer a
compact of association with the smaller South Pacific countries, akin to
the treaty arrangements the US maintains with Palau, the Marshall Islands and
the Federated States of Micronesia, and the associated status which Niue and
the Cook Islands have with New Zealand. The compact would allow for shared
governance of administrative territories, including policing and defence, and
provide opportunities for permanent residency in Australia.
Blaxland’s was one of a number of proposals for greater
economic integration considered by the Joint
Standing Committee on Foreign Affairs, Defence and Trade in its inquiry into Strengthening
Australia’s relationships in the Pacific (March 2022). The committee
acknowledged ‘the sensitivities’ around proposals for a compact of association
– specifically in regard to the issue of Pacific sovereignty – but noted that such
an approach could offer significant benefits to both Australia and Pacific Island
countries, particularly those most vulnerable to population displacement risks
due to climate change (p. 80). The committee recommended Australia ‘start
dialogue’ with Pacific Island countries and ‘evaluate bold ideas for longer
term Pacific region “deep integration”’ (pp. 100–101).
The inquiry
was one of 4 the committee conducted into Australia’s relations with the
Pacific in 2021–22, which also included the Inquiry
into Australia’s Defence relationships in the Pacific (April 2021), Deepening
relations with the Pacific nations through trade (September 2021) and the Inquiry
into the human rights of women and girls in the Pacific (November 2021).
The reports’ recommendations were wide ranging and
included calls for Australia to deepen defence and security relations with
Pacific Island countries; increase support for COVID-19 recovery; boost trade, economic
support and investment in infrastructure; strengthen people-to-people links,
including through sport, churches, media and education; establish greater
Australian media presence in the region; and advance the status of women and
girls across Australia’s engagement.
They also recommended building on existing labour
mobility schemes to improve Pacific workers’ welfare and promote skills
transfer, remittance income, and creating pathways to permanent residency and
migration intake.
The Australian Parliament plays an important role in
supporting parliaments in the Pacific through forums such as the Inter-Parliamentary Union (IPU) and the Asia Pacific Parliamentary Forum (APPF), and through parliamentary capacity-building programs,
twinning arrangements and delegation visits. The IPU
and the APPF hold regular conferences to bring together parliamentarians from across
the region to discuss key issues facing democracies and promote integrity in
government and parliaments.
Labor has pledged to reinstate
bipartisan Parliamentary Pacific visits as part of its commitment to strengthening Australia’s relations with the
region, noting that ‘Bipartisan visits were undertaken by the Turnbull
Government and former Foreign Minister Bishop, but have
not been continued by the Morrison Government’.
Further reading
Pacific Islands Forum (PIF) Secretariat, Action Plan to Implement the Boe Declaration on Regional Security, (Suva: PIF Secretariat, 2019).
Pamela Thomas and Meg Keen (eds), ‘Perspectives on Pacific Security: Future Currents’, Development Bulletin 82, (February 2021).
Geoffrey Wade, Solomon Islands and China, FlagPost (blog), Parliamentary Library, 16 December 2021.
Romeo Arahan et al., Pacific Island Countries in the Era of COVID-19: Macroeconomic Impacts and Job Prospects, (World Bank Group, December 2020).
Stewart Firth, Instability in the Pacific Islands: a Status Report, (Sydney: Lowy Institute, 4 June 2018).
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