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17.07.2020 Author: Sofia Pale

Australia is Reclaiming Oceania


Over the past decade, China has almost defeated Australia in the competitive struggle for spheres of influence in Oceania, getting the small island states that are scattered across the tremendous space in the Pacific Ocean hooked on a yuan-denominated “needle of loans”. Consequently, a region that is extremely important for Australia has almost turned into a foothold for China’s military presence. Vanuatu, Fiji, and Papua New Guinea, geographically close to the Australian continent, in 2018 took a serious look at the possibility of their areas accommodating Chinese military bases.

Owing to these circumstances, the main objective for Scott Morrison, the Prime Minister of Australia who came to power in 2018, is to restore the formerly close ties with its Oceanic neighbors, most of whom were under Australia’s rule fifty years ago, and were completely dependent upon Canberra’s volition.

The role played by Australia after its subject territories gained their sovereignty has remained pivotal right up until the middle of the 2000s: the foreign policy adopted by these island states was subordinate to the line taken by Australian leadership, whose representatives participated yearly in the Pacific Islands Forum, the main regional organization in Oceania, which has 16 participating countries today.

However, over the past few years the trade and economic initiatives put forth by China, the largest of which is the One Belt One Road initiative and includes Fiji, Papua New Guinea, and Vanuatu, has disrupted Australia’s seemingly unshakable dominance in Oceania. And Canberra, under the leadership of Morrison, was forced to first lay out a considerable amount in the form of grants and loans for infrastructure projects (2.18 billion dollars), which exceeded Chinese investments in the region, to try to force the island countries spinning out of its control to once again submit to the influence of their historical partner.

One important step taken by Morrison was making visits to Oceania in 2019: for the first time in history, the Australian Prime Minister visited Fiji (with a population of 900,000 people) and Vanuatu (300,000 people), which had been the most active in cooperating with China and, therefore, owed much to Beijing (specifically, Vanuatu owed 50% of its total foreign debt to China), and signed a number of economic and other partnership agreements with them to try to reduce Beijing’s influence. As far as Papua New Guinea is concerned, even though the scope of Australian economic assistance to this country is the largest in the world, exerting impact on its relations with China by increasing subsidies turned out to be difficult. A country with a population of 8 million (exceeding the 5 million in New Zealand), led by the new Prime Minister James Marape, has chosen a tactic of “friends to all and enemies to none”, which means the desire to accept investments from any partners, whether they be Chinese, Australians, or anyone else, but not giving preference to any of them (it should be noted that Papua New Guinea’s debt to China is 23.7% of its foreign debt). Nonetheless, Papua New Guinea decided not to breach any previous agreements with Canberra on modernization work for the Lombrum Naval Base on Manus Island, which were reached even before Morrison came to power.

“Re-exploring” Oceania in 2018-2020, the Australian Prime Minister was the most successful in building relations with the Solomon Islands, a state with a population of 650,000, which China extends loans to despite its diplomatic recognition of Taiwan (which also uses “checkbook diplomacy” in conducting its relations with this island nation). And, from 2003-2017 in the Solomon Islands, Australia deployed its 7,000-strong RAMSI (Regional Assistance Mission to Solomon Islands) mission, which consisted of military personnel and police from countries in Oceania and was designed to disarm local militants and contain ethnopolitical conflict in the country (at the invitation of its own leadership). The main achievement for Scott Morrison was that in 2020, Manasseh Sogavare, the Prime Minister of the Solomon Islands, finally ratified the free trade agreement PACER Plus (Pacific Agreement on Closer Economic Relations Plus), which was put forth by Canberra back in 2017. As a bonus, they signed an agreement about migrant workers, which allows residents in the island state to work legally in Australia and New Zealand.

Negotiations on PACER Plus began more than ten years ago, and it was only in June 2017 in Nuku’alofa (the capital of Tonga) that 9 participants, together with Australia and New Zealand, signed the agreement: those with a high foreign debt owed to China (Samoa, Tonga, Kiribati), a medium-sized debt (Vanuatu, Solomon Islands) and low debt (Nauru, Tuvalu, the Cook Islands, Niue). However, as of 2020, only Samoa, Tonga, and Kiribati had ratified it (besides the Solomon Islands, Australia, and New Zealand), while in the Parliament of Vanuatu, for example, opposition to ratifying the agreement is mounting. Papua New Guinea and Fiji, some of the most populous and economically strong countries in Oceania, did not even start to join PACER Plus. Both island states, which have a fairly developed domestic manufacturing industry by the standards in the region, refused to sign the agreement due to the negative impact it will most likely have on local industry, as well as on the ability of leaders throughout Oceania to regulate foreign investment flows. According to jokes made by experts, without the leading countries in Oceania the agreement “PACER Plus” agreement looks more like “PACER Minus”. However, it is anticipated that in the coming months the remaining participants will ratify the agreement.

It is also advantageous for Australia to cooperate with the Solomon Islands because, in the time frame from 2021-2023, this state will join the UN Economic and Social Council (ECOSOC), where it will represent the interests of developing island states in Oceania across a wide range of issues, including climate change and sustainable development.

The economically lethal COVID-19 pandemic turned out to have a beneficial side for strengthening Australia’s relations with the Solomon Islands: despite the absence of any cases of infection, a four-month state of emergency was introduced in the Solomon Islands at the end of March 2020 (that was the third one in its history – the first was introduced in 1999 owing to the outbreak of civil war, and the second was in 2014 against the backdrop of devastating floods). As a result, humanitarian and economic assistance was channeled to the Solomon Islands from quite a few Western countries and international organizations. Australia provided over 8 million dollars, and New Zealand sent over 1 million, while China’s financial assistance amounted to only 300,000 dollars, although that was accompanied by substantial shipments of personal protective equipment and testing systems to help identify COVID-19.

In conclusion, this author would like to note that so far the year 2020 has been successful not only for Australian Prime Minister Scott Morrison, who is cobbling back together countries in Oceania and returning them to Australia’s sphere of influence to ensure his country’s strategic security, but also for the many South Pacific island states that have managed to skillfully use the “big games” being played to reap considerable benefits for themselves.

Sofia Pale, PhD in History, Researcher at the Center for Southeast Asia, Australia and Oceania at the Institute of Oriental Studies, Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.

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