The Wet and Dry of Australia's Step-Up Policy

Tennyson Dearing | Pacific Fellow

Pacific aid has traditionally come from Australia and other Western development partners, but for much of the last decade, China has enjoyed an expanding sphere of influence driven by its own diplomatic and economic engagement. In 2017, Australia outlined a significant new foreign policy priority in its Pacific ‘Step-Up’, a move aimed at winning and retaining its Pacific Islands network, and widely perceived as responding to China’s greater influence. But since its birth, the Step-Up has been both ‘wet’ and ‘dry’.


That is, with reference to two liberal ideologies of old, the Step-Up has made both formidable commitments in the name of social responsibility and, well, the opposite. These are two sides of the same problematic coin. Given the shifting geopolitical landscape and Pacific Island states’ unique development challenges, Australia would do well to engage more productively in the future.


Australia’s Step-Up has taken place against the backdrop of China’s ‘South-South cooperation’ policy. Far from a great leap south, this might better be described as an assertive sprawl, yet one with broad implications for regional stability. While Beijing insists that its Pacific interest is the same friendly hand extended to other developing countries, and not a vote for geostrategy, many have warned of the strategic consequences of China ‘forcing itself’ into the Pacific.

Regional engagement and support have taken on new significance since the economic devastation of the pandemic threatened a ‘lost decade’ and February’s Pacific Islands Forum split signalled a fracturing of Pacific regionalism. If Australia is to ensure regional stability, its Pacific policy must take one step up and not two steps back.


The Wet

Australia’s Pacific reorientation is propped up by $1.4 billion in development assistance in 2019-20 (including a well-timed $440 million loan to PNG) and a welcome $2 billion infrastructure financing facility. Australia also outmanoeuvred Huawei to win the Coral Sea Cable System project, and in response to the COVID-19 crisis, established a $305 million budget support fund and pledged to supply its neighbours with ‘full immunisation coverage’.


Together with its humanitarian and economic contributions, Australia extended its diplomatic presence to every member state of the Pacific Islands Forum and increased its ministerial visits to record numbers. These efforts are complemented by Australia’s negotiation of the Boe Declaration, which established an expanded concept of regional security, a landmark defence deal with Fiji, and the new Pacific Maritime Security Program.


Importantly, these commitments have generally been made under the guise of social responsibility. But the problem with noblesse oblige is that it easily overlooks the needs and agency of those it intends to help. Perhaps unsurprisingly then, Australia’s aid program has been subject to charges of paternalism, fuelling concerns that Australia still doesn’t know how to successfully participate in the Pacific community.


Rather than aid being of a shared agenda, Australian diplomats are often perceived as dismissive of Pacific Island expertise and quick to impose solutions ‘hopelessly mismatched to needs on the ground’. This is made painfully clear by Australia’s engagement on climate change, the region’s most significant issue. Despite Pacific leaders’ protests at Australia’s perceived inaction, and even despite diplomatic snubs, Canberra remains staunch that dollars and cents will band-aid the situation.


The Dry

On the other, drier side of the coin, the Step-Up is peppered with long held suspicions that Canberra’s attention waxes and wanes with its geopolitical interests. While the Step-Up is usually described in permanent terms, it might well be another high point in a cycle of ‘Pacific forgetfulness’.


Even now, Australia’s domestic policies are often at odds with its Pacific policy. In 2020, for example, Australia quietly abolished its Office of Development Effectiveness and the Independent Evaluation Committee in favour of budget savings. The bodies were charged with monitoring the outcomes of Australia’s $4 billion aid program. While their closure gives DFAT more flexibility in its decision-making, it also diminishes the government’s ability to ensure that aid is effective and sustainable.


Notwithstanding, as Jonathan Pryke rightly observed, ‘Australia has built up an amount of goodwill by not forgetting about the Pacific in a time of crisis’, while China has been largely ‘missing in action’. Yet it should also be remembered that the COVID-free Pacific Island nations were conspicuously left out of Trans-Tasman travel bubble negotiations last year. The states’ inclusion would have lent credibility to Canberra’s talk of a ‘Pacific Family’, and by the same the token, their exclusion says just as much.


Charting the Course

The Step-Up is generally well aligned with Australia’s ambition to shape the strategic environment and counter China’s influence, and Australia is still the Pacific’s largest development partner. That said, the uncomfortable reality is that Australia isn’t taking the leadership role it could or should take to ensure regional stability.


Instead of a balance between ‘wet and ‘dry’, or paternalism and episodic neglect, Australia needs deliberate, targeted measures that promote trust and mutual respect. Australia must engage with states as a regional partner, while noting the fine line between influence and interference.


Australia’s Step-Up is a step in the right direction, but there’s much to be done to ensure that Australia remains the Pacific Island states’ partner of choice.


Tennyson Dearing is the Pacific Fellow for Young Australians in International Affairs

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