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Chinese influence drives Australia's multi-billion-dollar pivot to the Pacific
PACIFIC BEAT BY PACIFIC AFFAIRS REPORTER
STEPHEN DZIEDZICABOUT 3 HOURS AGO
PHOTO
Chinese Foreign Minister Wang Yi with Papua New Guinea's Foreign Minister Rimbink Pato last month.
ABC NEWS
Yesterday Scott Morrison unveiled his pivot to the Pacific.
Key points:
- A $2 billion infrastructure bank for Pacific nations is the centrepiece of the plan
- Until now, Australia has largely funnelled aid into health, education and governance projects
- Pacific leaders welcomed the announcement but want Australia to focus more on climate
The plan was ambitious, and the list of promises was long.
Australia will open five new diplomatic missions in the Pacific.
The Government will also ramp up military cooperation, with more Navy deployments in the region and a permanent Defence Force team tasked with training their counterparts in the Pacific.
Most important of all, the Prime Minister announced Australia will also get into the infrastructure game in the Pacific, plunging billions of dollars into projects across the region through grants and soft loans.
It's a seismic shift in Pacific policy that will reverberate through the region for decades.
But what's driving this announcement? What are the pitfalls?
And why is Australia suddenly so intent on
boosting its influence in a region the Prime Minister called "our patch"?
PHOTO Pacific nations complain that too much Australian aid money is funnelled to well-paid Western consultants.
ABC NEWS: IAN CUTMOREWhy are we suddenly so worried about the Pacific?
Because we are anxious about losing friends and influence.
For a long time Australia was in a very comfortable position in the Pacific.
Lowy Institute Pacific Aid Map
Aid is an important resource for the Pacific Islands region, but public information is often lacking. The Lowy Institute Pacific Aid Map is designed to enhance aid effectiveness.
A close ally and the world's sole superpower, the United States, ruled the waves.
And all the major players in the region — the US, New Zealand, France — were friends and partners.
Our relationship with the Pacific was defined by aid. How much should we give? What could we do to lift living standards?
The Pacific was a place we felt had to help, but it commanded little attention at the highest levels of government.
Jonathan Pryke from the Lowy Institute says most Australian politicians regarded the Pacific as a strategic backwater — and largely ignored it.
"Geopolitics in the Pacific had been pretty benign since World War II, so were able to operate with a degree of benign neglect," he says.
But about a decade ago, that began to change.
In around 2006, China entered the fray. It started to offer Pacific nations large amounts of money and build up its political influence across the region.
And now the Pacific is slowly morphing from a calm expanse of water dominated by Western interests into a choppy ocean churned by global headwinds.
So, is this all about China?
Yes. This is largely all about China.
While several nations have ramped up their engagement in the Pacific since 2000, Beijing has built diplomatic and financial muscle in the region with surprising speed.
"The one clear motivator behind all this is China. We are now seeing China's presence on the ground in the Pacific really clearly," Mr Pryke says.
"They're on the ground everywhere in the region. And policy makershave finally taken note."
It's easy to exaggerate Beijing's influence — after all,
a recent Lowy Institute analysis showed that Australia still gives vastly more aid to the Pacific than any other nation, including China.
But China has won friends by plunging money into flagship infrastructure projects — bridges, ports, stadiums and government buildings — which many Pacific governments want.
That's allowed Beijing to build capital across the region for comparatively little outlay.
"This has been in the works for decades. All the infrastructure projects they've committed to have finally come to fruition," Mr Pryke says.
And Australia is paying attention.
Some defence and intelligence analysts worry that China is engaged in "debt-trap diplomacy", accusing Beijing of searching for assets in the Pacific that could be converted to military bases.
China fiercely contests those claims.
And some experts are deeply sceptical that Chinese lending presents a big problem.
But the fundamental issue is that China's aims are opaque to Australia.
And Mr Pryke says that uncertainty is driving many decisions in Canberra right now.
"We are by no means convinced that strategic interests are aligned with our own. That's a profound paradigm shift to what we had in the past," he says.
So what are we actually going to do?
Right now, Australian aid is largely funnelled into projects to promote health, education and governance across the Pacific.
We've poured plenty of money into multilateral institutions that provide infrastructure, but we've mostly shied away from bricks and mortar.
Which country gives the most aid to the Pacific?
The answer might surprise you, writes Stephen Dziedzic.
Mr Morrison has made it clear that will change.
Australia will create a $2 billion infrastructure bank for new projects across the region. Pacific island nations will be able to draw on the bank to get discounted loans for ports, roads, telecommunications infrastructure.
This is a fundamental shift in Australia's Pacific aid policy.
It's being partly driven by Pacific leaders. They complain that too much Australian aid money is funnelled to well-paid Western consultants.
And they say China is quicker to hand over money for projects that
they want.
Australia has typically left infrastructure building in the region to multilateral institutions like the Asian Development Bank.
If we want to run our own infrastructure bank with a more strategic focus then we'll need to quickly develop the expertise to run it effectively.
And some Pacific nations cannot afford to borrow more to fund infrastructure, because they're already loaded down with debt.
VIDEO 8:41Australia's Pacific push to counter China
THE WORLD
"There's clearly been an infrastructure binge. The reality is now that many Pacific island countries aren't in a position to take on much more," Mr Pryke says.
"It seems like we have come a little bit late to the party."
What do Pacific leaders think?
It's early days, but so far Pacific leaders have welcomed Scott Morrison's announcement.
The Deputy Prime Minister of Cook Islands, Mark Brown, told the ABC that Australia's new fund would provide "viable alternatives to what Pacific countries have been turning towards over the last years to non-traditional development partners".
"So for us to be able to have the choice with the increased presence of both Australia and New Zealand in the Pacific can only be good for the Pacific countries," he said.
Papua New Guinea's Deputy Prime Minister Charles Abel says his nation is also happy to see Australia's attention focused on the Pacific.
"Our general view [is] that Australia also needs to step up — they need to maintain their presence and influence in the region as well," he said.
Still, there's a catch.
Mr Morrison didn't mention climate change in his speech yesterday.
But Pacific leaders have made it clear they see it as the greatest threat to their prosperity and security, and they're frustrated that Australia hasn't done more to curb its carbon emissions.
PHOTO Pacific nations are among those that have the most to lose from climate change.
SUPPLIED: DARREN JAMES
Mark Brown says the Cook Islands would like see climate change issues "more accurately clarified" by Australia.
"For us the climate change issues are significant, they're at the front and centre of any development initiative in the Pacific island countries," he said
"So we welcome engaging more with Australia to see what further commitment Australia will provide, not just in the infrastructure fund but also in their contributions towards the effects of climate change."
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