Australia's Pacific direction beyond the Step Up

Henry Heritage | Pacific Fellow

Over the last three decades, Australia has reoriented its foreign policy approach towards the neighbouring Pacific region. Through trade, overseas aid and development programs, this key progression in Australian foreign policy has been instigated both as a response to foreign influence as well as recognition for the comprehensive value of the region for Australian national interests.


In 2016, Australia’s reprioritisation of the Pacific manifested in the “Pacific Step-up” (PSU)– a commitment to further engage in the Pacific region and enhance bilateral relationships. This action was established to compete with the increased strategic engagement of China in the Pacific. Although the PSU is the right course, Australia’s comprehensive approach to the Pacific is still proving inadequate. The global acknowledgement for the significance of the Pacific, exhibited in the growing presence and influence of foreign states in the region threatens to leave Australia as a token partner to its Pacific neighbours; squandering any gains made through its recent refocus towards the region.


The Situation

The emergence of COVID-19 and the disastrous consequences for the developed world, let alone developing and emerging countries, proved that 2020 would mark an unfamiliar chapter for global development. At this critical juncture, Australia’s engagement with the Pacific remains more important than ever, particularly with rising tech hubs such as Fiji and Papua New Guinea (PNG). Both states, which account for nearly 80 per cent of the Pacific’s GDP, have experienced major economic setbacks due to the impact on their tourism industries and critical export losses despite relatively low rates of COVID-19 transmission.


The Australian Government has responded to this by diverting $100 million from aid funds towards direct recovery in the Pacific, including $20.5 million and $10.5 million to PNG and Fiji respectively. Initially, there may be little to criticise about Australia’s response. However, monetary aid will only prove so much in the deepening of Pacific relations. It is implausible to suggest that Australia can compete with the economic capacity of the other engaging countries. This is demonstrated in the comparison of Australia’s recorded US $13.6 billion in FDI outflows compared to China’s US $143 billion in 2018. As a result, targeted foreign policy and comprehensive, meaningful partnerships must be initiated to overcome the lack of comparative economic weight of Australia.


Australia’s inability to negotiate agreeable trade terms and maintain Fiji and PNG as partners in the Pacific Agreement on Closer Economic Relations Plus signified a landmark shortcoming in Australian-Pacific relations and potential future trade. More recently, not including various COVID-free Pacific nations in initial considerations of a “trans-Tasman bubble” not only further impairs these countries dwindling tourism sectors, but also indicates that Australia is still not effectively addressing the importance of symbolic actions in strengthening Pacific Partnerships and supporting their economies.


The Future

Looking forward, the critical nature of increased Pacific partnership and regional development has become evident as a mandatory strategy for Australia. In 2020, Australia should build upon the development initiatives announced under the PSU like the Australian Infrastructure Financing Facility for the Pacific and the Coral Sea Cable, and commit further purposeful engagement in the Pacific by targeting key political developments in the region. This should include addressing items such as Bougainville’s independence and the negotiations between Solomon Islands and China.


An improved contemporary approach to enhancing Pacific relations must equally prioritise establishing partnerships with responding to national political developments in the region. Targeting political developments is a strategy that China has historically capitalised on in the Pacific, and it may be an opportunity for Australia to pursue a similar objective, albeit as a partner. A key relevant case to this is the shifting internal allegiance of Kiribati.


The small island nation made international headlines in 2019 when the governing Tobwaan Kiribati Party (TKP) sustained a significant switch in diplomatic relations favouring China after historically recognising Taiwan. After a series of internal fallouts within the TKP, the party lost its majority in parliamentary elections in April this year. Despite this, instigator of the China realignment, President Taneti Maamau, was reelected for a second term in June, signifying the endurance of Kiribati’s new allegiance to China.


Australia should be proactive and look to improve secure bilateral ties with Kiribati. This must be done through proving to be a purposeful regional ally by not just providing aid and assistance, but also through strategic, meaningful policy that responds to political developments. Climate change is a critical, central political issue to the susceptible Pacific nation, and leading firm regional policy and council in this area would assist in enriching constructuve bilateral relations. This would also compensate for the inability to appeal to Kiribati through large economic initiatives like China has with its Belt and Road Initiative.


Ultimately, Australia cannot progress in the Pacific solely through conventional partnerships. Australia must utilise its crucial geopolitical status in the Pacific to prove itself as a principal ally whose Pacific-orientated foreign policy can better assist the region. It is important to remember that a prosperous and productive Pacific is complimentary to Australia’s interests. Inversely for China, the Pacific is being targeted for development in order to assemble a valuable network of foreign states for spreading its global influence. The PSU is the right response, but it must be elevated through targeted, meaningful strategies, which prioritise equal partnership and aim for increased Australian involvement.


Henry Heritage is the Pacific Fellow for Young Australians in International Affairs.

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