The Pacific islands constitute a hotly contested space. China is rapidly building its presence in the region. Its aid program is used as a vehicle to spread its interests.
The same aid, focusing on loan-based infrastructure, is placing countries in traps of unpayable debt. Trade ties are becoming stronger, and there have even been rumours China is looking at establishing military bases a mere 2000km off Australia’s east coast.
Analysts, sensing a trend, cite Djibouti and Sri Lanka, where China has respectively established a permanent military presence and taken ownership of critical infrastructure it financed.
This narrative, however, is counter-productive for Australia’s relationships in the region, and is all too dismissive of the Pacific islands’ ability to manage their own affairs. While China’s presence has arguably been disruptive, this overstates China’s place in the Pacific, and dramatically understates Australia’s. It is time for some deep breaths, and a more nuanced understanding of geopolitics in the Pacific. While foreign aid is only one aspect of diplomatic and geostrategic relations, for many nations it remains a critical component of interactions with Pacific island states.
The Lowy Institute Pacific aid map, released today, reveals that despite China’s emergence as a significant player, it accounted for only 8 per cent of total aid to the Pacific between 2011 and 2016. The largest donor, Australia, provided 45 per cent of all aid.
By almost every metric, Australia remains the primary partner for the Pacific. Along with New Zealand, Australia is the primary aid partner, trade partner and tourism source. We are, after all, part of the region. Aid has remained a constant in our relationship with the Pacific. We invested more than $US6 billion (roughly 3 per cent of regional GDP) in almost 5000 projects in the region between 2011 and 2016.
This serves Australia’s national interest by helping the region address acute development challenges associated with size and remoteness. Rather than focus on one sector, such as infrastructure, Australia works across the board.
But Australia’s aid program is not without flaws. By working everywhere, our presence is not always keenly felt. We compensate for this by reminding the region of what we do and often fall into the trap of behaving like a benevolent “big brother”.
And while aid to the Pacific makes up one third of our aid program, we have made it more difficult to do aid well, with a series of budget cuts to the overall program, combined with a disruptive restructuring of governance. Our aid is often not responsive to the requests of our Pacific partners.
Enter China. In this context, it is easy to see the appeal in the Pacific of a new partner with little baggage, offering aid with few apparent strings attached.
If there is one benefit to China’s engagement in the region, beyond the direct benefit its aid provides, it is to force Australia and New Zealand to lift their game. We enjoy being partners of choice to the Pacific, but for most of the past 70 years we have maintained that position largely by default. Now the Pacific has options.
Fortunately, Australia and New Zealand are not sitting idle. Both nations have shifted gears.. Both are bringing more money to the table. But as fellow Pacific nations, we need to spend more time thinking about how to make what we give work far better. We are giving more facetime to Pacific leaders but need to do better at listening.
We are letting in Pacific seasonal workers but need to make it easier for Pacific islanders to enter Australia generally. And, most critically, we need to start behaving like we are a part of this region, not just responsible for it.
We have taken a step in the right direction with our relationship. But it will take more than one step to maintain our primacy.