Apr 16, 2021 Last Updated 9:08 PM, Apr 13, 2021

THERE are many suitors currently wooing the Pacific islands. Australia is “stepping up” and New Zealand “resetting” its relationship. China comes bearing gifts, India wants to be an Indo-Pacific player, while US officials are reading Twitter to work out their policy towards the “Pacific theatre.” The European Union, however, is everywhere. The EU is promoting the strategic interests of its largest member states and seeking a new relationship with Pacific island countries through a “post-Cotonou” treaty.

For the last 20 years, the Cotonou Agreement has governed relations between the EU and the African, Caribbean and Pacific Group (ACP). Now the EU is seeking a strengthened political and economic partnership and enhanced cooperation in multilateral fora. The proposed post-Cotonou deal, however, poses potential pitfalls for island governments and communities.

Since the 1970s, relations between the 28-member EU and 79 former European colonies have been governed by a series of treaties. The Lomé Convention (1975-2000) opened the way for subsidised trade between the EU and some Forum member states, including fish exports from Papua New Guinea and sugar from Fiji. The Cotonou Agreement (2000-2020) was extended to cover aid, trade, human rights and political dialogue, with
the EU pledging to sign Economic Partnership Agreements (EPA) with six regions around the world.

Last October, the EU and ACP launched formal negotiations to find a successor to the Cotonou Agreement, which ends in February 2020. In February, Apia hosted an EU-ACP High Level Dialogue, attended by the ACP Chief Negotiator Robert Dussey and EU Chief Negotiator Neven Mimica.

The proposed post-Cotonou framework includes a foundation agreement and three separate regional protocols for Africa, the Caribbean and Pacific. Last June, Pacific members of the ACP Group (PACP) met again to discuss the proposed Pacific-EU protocol. The outcomes document of this meeting records that Pacific governments recognise “the post-Cotonou Agreement will set the direction of the partnership between the Pacific and the EU for the next twenty years.”

Samoa and Papua New Guinea are the two Pacific leads in ACP ambassadoriallevel negotiations, with Samoa Prime Minister Tuilaepa Sailele Malielegaoi noting: “In the formative years of the EU-Pacific partnership, the consultations were mainly focused on aid related matters and in particular implementation issues, which were seen as a perennial problem added to by procedural complexities. In recent times and in the context of the Cotonou Agreement, trade and the political dimension of the relationship have been added, with trade domination of the discussions.”

Nearly two decades ago, the Cotonou Agreement was due to be signed in Suva in June 2000. However, the Speight coup of May 2000 put paid to that, and the African nation of Benin hosted the signing ceremony. Now, the ACP Council of Ministers has unanimously agreed the new agreement should be signed in Samoa next June.

Will the signing proceed on schedule? Negotiations are still underway, but there are significant differences over trade, migration, labour mobility and co-operation mechanisms. Here are a number of roadblocks on the path to a post-Cotonou deal….

1) Finalising a deal on schedule
Speaking in Brussels in May, Secretary General of the ACP Patrick Ignatius Gomes expressed concern that a final text will not be ready for signature by the 79 ACP states in February 2020 – the date when the 20-year Cotonou Agreement ends. Dr. Gomes said there is a need to adopt transitional measures until a new agreement enters into force, if negotiations continue past February. At their June 2019 meeting, Pacific leaders endorsed the need to prepare a transitional agreement, recognising “The post-Cotonou negotiations (PCN) and Regional Protocol negotiations timetable is extremely ambitious.”

Throughout the whole 20-year period of the Cotonou Treaty, the EU and Pacific Islands Forum failed to finalise a comprehensive regional Economic Partnership Agreement (EPA) for the Pacific. The tortured negotiations over the regional EPA left a sour taste in the mouth of Pacific negotiators.

Are we heading for the same problem again, with the EU prioritising Africa over the Small Island Developing States in the Caribbean and Pacific? With outstanding differences over key issues like trade, migration and labour mobility, there’s a long way to go before the finalisation of a new treaty. There are still two of six areas in the framework agreement where EU and ACP negotiators cannot agree: ‘Inclusive and Sustainable Economic Development’, and ‘Migration and Mobility.’ 

Unless the EU addresses regional concerns, lengthy negotiations for a post-Cotonou deal seem like a fair bet!

2) A new framework for co-operation
The notorious bureaucracy and complexity of EU aid delivery has long been an area of disagreement with Pacific governments, especially smaller island states. But now the EU is seeking to change its aid budgeting and delivery. In a post-Cotonou world, there are signs that the EU wants to shift away from the European Development Fund (EDF), which has been a crucial mechanism for both regional and national-level funding to the Pacific.

The EU is also debating new multilateral frameworks for political co-operation. Currently, the EU is a Dialogue Partner within the Pacific Islands Forum, alongside individual EU members (Germany, France, United Kingdom, Italy and Spain). Would a new EU-ACP structure sideline the Forum Dialogue, where the Pacific talks directly to all 18 Dialogue Partners at one time?

3) Boris Johnston and the dis-United Kingdom
The Australian and NZ governments are promoting the United Kingdom’s return to the region, dubbed “Pacific Uplift”, as a crucial contribution to the containment of China. But Westminster is in chaos with debate over Brexit, the likely ascendance of Boris Johnston as Prime Minister and anger in Scotland over the planned withdrawal from the EU. It’s not yet clear what Britain will contribute to the Pacific if Brexit is ever finalised.

As this uncertainty extends, the ACP Group have expressed deep concern that a revised EU-UK trade deal will adversely affect access for ACP exporters to both markets. Will the EU and Britain prioritise the interests of Pacific exporters like Fiji and Papua New Guinea in their negotiations for the Brexit withdrawal from the EU? Don’t hold your breath!

4) A French gateway to Europe?
Brussels sees the EU’s network of Overseas Countries and Territories (OCT) – ongoing French and British colonies – as a crucial asset in the post-Cotonou deal. But what does this mean for Pacific island countries’ commitment to decolonisation for New Caledonia and French Polynesia? The United Kingdom retains its colonial presence in the region with Pitcairn, a major bulwark against Chinese expansionism. In contrast, France asserts sovereignty over 7 million square kilometres of Exclusive Economic Zone (EEZ), through its control of New Caledonia, French Polynesia, Wallis and Futuna and Clipperton Atoll.

To its EU partners, France presents the Pacific dependencies as a gateway for European engagement with the region. In turn, Paris tells the Forum that its Pacific dependencies provide an opening into Europe. In an interview with Islands Business at the Apia Forum, French Polynesian President Edouard Fritch said: “Many countries see New Caledonia and French Polynesia as a pathway to France and to Europe, for Europe is present here in the Pacific.”

However, it is not clear how the membership of French Polynesia and New Caledonia in the EU’s OCT network provides a mechanism for independent island nations to engage with Europe. Why should sovereign states channel their bilateral and multilateral relations with EU member countries through the EU OCT Group, alongside the confetti of empire like Pitcairn, St Helena and the Falklands/Malvinas?

5) Following the lead from Paris?
France continues to control key legal and political powers over its Pacific dependencies, including security, military affairs and key aspects of foreign relations (such as the right to sign treaties like the Paris Agreement on Climate Change). For this reason, the full membership of New Caledonia and French Polynesia in the Forum amplifies the capacity of the French Republic to intervene in current debates about EU relations.

When it comes to the crunch, will local governments in Noumea, Papeete and Mata Utu back their island neighbours in the looming deal with the EU? Or will France demand that its three Pacific dependencies fall into line with French policies within the EU?

Already, French strategic interests are coming to the fore in the Blue Pacific agenda. Just look at the ongoing battle between France and Vanuatu over control of Matthew and Hunter Islands, or the recent court ruling in Paris that rare earths found in French Polynesia’s EEZ are “strategic metals” and therefore come under the control of Paris, not Papeete.

6) Control over resources
In 2014, France’s then Overseas Minister George Pau-Langevin stressed the importance of French control of the vast Pacific EEZ in the 21st Century: “As well as traditional economic activities (fisheries and aquaculture, maritime transport), other activities can take place in the same domain: renewable offshore energy, offshore exploration for hydrocarbons, deep water sea bed mineral resources, blue biotechnologies and more.”

However as a colonial power, France’s control of marine resources breaches long-standing decolonisation resolutions of the United Nations, which affirm that “any administering power that deprives the colonial people of Non Self-Governing Territories of the exercise of their legitimate rights over their natural resources... violates the solemn obligations it has assumed under the Charter of the United Nations.”

The EU has been a key mechanism for France and the United Kingdom to advance their regional influence. In a post-Cotonou world, EU member states are looking to extend their own strategic interests in the oceans, focussing on fisheries, bio-prospecting and deep-sea mining, through major funding for Pacific regional organisations. For example, the EU has funded the SPC program to develop model legislation for Pacific countries to
govern deep sea mining.

In 2017, Sweden co-hosted the first global summit on the Oceans alongside Fiji. Now Sweden has contributed €10 million (US$11.2 million) to the €45 million (US$50.5 million) Pacific-European Union Marine Partnership (PEUMP) program, with the EU contributing the remaining €35 million (US$39 million) for SPC, FFA, USP and SPREP. This four-year initiative focuses on areas such as the reduction of illegal, unreported and unregulated fishing (IUU) fishing and “trade-related negotiations to remove fisheries subsidies.”

7) Involving civil society
The Cotonou Partnership Agreement (CPA) required wide participation of both states and non-state actors (NSAs). In the Pacific, this meant a diverse range of actors such as customary chiefs, local councils, media, trade unions, local community groups and the private sector.

With the rush to complete a post-Cotonou agreement, will this diverse range of actors be properly consulted by Forum island governments? Will there be wellresourced and timely national consultations to guide negotiators, or will the final text be completed behind closed doors at regional level?

United States of the Pacific

  • Apr 16, 2021
  • Published in June

THE derivation of the ‘United States of the Pacific’, (USoP), an optional conceptual supra-state construct for the 48-year old Pacific Islands Forum (PIF) is reminiscent of the Lae Rebellion of 1965. The rebellion marked the break-away by five Pacific Island Countries (PICs) from the South Pacific Commission (SPC, now rebranded as the Secretariat of the Pacific Community) and the creation of the South Pacific Forum in 1971. The brief for the new regional structure is the now-familiar lament of PIC leaders for greater commitment to addressing climate change. The USoP may evoke grandiosity. But as a prospective regional architectural structure, it is not unprecedented; and its time may have come.

It is a rebellion of sorts. Tuvalu Prime Minister Enele Sopoaga is not a happy camper. He takes serious exception to the suggestion by former Australian Prime Minister Kevin Rudd that Pacific islanders of Tuvalu, Kiribati and Nauru swap Australian citizenship for maritime resources owned by them. Rudd reckons that this would be a long-term solution, in any case, for the three PICs that are likely to go under with rising sea levels.

Since such a suggestion requires these PICs to surrender their respective sovereignty through involuntary constitutional changes, Sopoaga castigates the suggestion as being neo-colonialist and ‘imperial thinking.’ In Sopoaga’s mind, this suggestion is a ‘red herring’ that does not even pretend to solve the problem at hand.

Furthermore, the ire of the good PM is heightened after he notes that such a demeaning suggestion is coming from Australia after the signing of the Boe Declaration in 2018 by PIF Leaders in which climate change is reaffirmed as the “the single greatest threat to the livelihoods, security and wellbeing of the peoples of the Pacific and our commitment to progress the implementation of the Paris Agreement.”

Sopoaga’s resentment is particularly piqued by the fact that Australia had “exported $66 billion in coal last year, making it (its) most valuable traded commodity.” This is not in the true spirit of the Boe Declaration, he feels. ABC reported his statement: “The more (Australia fails to be) serious about cutting coal and exporting this for money, the more problematic the issue of global warning and the more we have to adapt.”

It was in this context when Sopoaga proposed: “the establishment of a Pacific supra-state, along the lines of the European Union (EU), that is based on cooperation and integration, perhaps into some form of United States of the Pacific.” This supra-state will comprise ‘small Pacific Island nations’ and its raison d’être is “to amplify their concerns about climate change on the global stage.”

Reflecting the Lae Rebellion, Sopoaga’s strategic move is to break from the configuration that constitutes the PIF currently to that of the USoP.

The specific architecture of the USoP is a matter of conjecture. It is clear however that it would be a forum of only PICs. What is unclear is whether it is intended as a form of regionalism or federalism or some other variants of the latter.

However, the references to the new entity being ‘based on cooperation and integration’ and exhibiting aspects of the EU, are hints strongly suggesting regionalism and not federalism or any of its variants.

It can be taken therefore that USoP would be an only-PICs/PSIDS forum. This is reminiscent of course of the 1971 SPF that started off as a two-caucus configuration – one for the five PICs and the other for Australia and New Zealand (ANZ). That configuration was determined after the five PICs opted to include ANZ in their new break-away forum. But the two-caucus approach became a single caucus approach in 1972. Australia, interestingly, was the force behind the merger of the two caucuses.

That was then. The direction the current altercation is taking appears to be single-mindedly on formation of a PICs/PSIDSonly forum. And that is essentially on basis of its intended raison d’être. Climate change, caused by global warming, is an existential threat for PICs. Sopoaga’s castigation of Australia’s undermining of the Boe Declaration, but specifically on its coal policy, echoes the concerns of other PICs Leaders. Sopoaga leads from the forefront because of the existentiality of the threat on his low-lying atoll country. Tuvalu is one of the three atoll states in the Pacific seriously impacted by rising sea levels. And on a global level, one of the four.

Questions of a USoP’s rationality and justification are valid considerations. But this has to be viewed from the perspective of existentiality of the threat. In such context, any strategy that promises relief and an escape from a certain devastation, is a strategy worth considering. There is nothing untoward about this. Humans are hard-wired to always seek preservation and self-improvements; and conservation is very much a part of that. Any physicist or futurist will tell you that.

Consideration of sustainability comes next. How can a USoP be made sustainable? How can USoP be effectively resourced? This is an obvious challenge for the PICs/PSIDs. The solution must lie in the collective’s imagination. It is therefore the collective’s responsibility to elevate its imagination to unprecedented heights to seek relevant solutions. If global powers are queuing up to be counted in the Pacific, the largest ocean on Planet Earth, if they are always seeking PSIDS’ support at the UN to get the numbers that secure mandatory majority of backers, then USoP should not be lacking prospective offers of assistance.

From the perspective of good governance and strategic autonomy, USoP has to be sustainably and innovatively funded. This is its quid pro quo.

If, for historical sentimentality and/or propriety, the linkage with ANZ is to be preserved, then this too can be addressed. Possible solutions are within our grasp. Clearly, however, any solution must preserve the PICs/PSIDS-only forum configuration. The idea of a two-caucus approach was tried in 1971, each caucus having its own meeting and then coming together for a joint meeting, then adopting a joint communique as a result.

This two-caucus approach worked recently during the negotiations on PACER Plus. PICs negotiators planned out their trade strategy separately and then they negotiated with their counterparts from Australia and New Zealand.

If the preference is for a more formalised configuration, then we can learn from that existing relationship between the EU and the Pacific members of the African Caribbean and Pacific Group of states (PACPs). PACPs are members of the ACP Group. But under the existing Cotonou Agreement, EU has a direct structural link with the PACPs. The EU has its regional indicative programme with PIF/PIFS and national indicative programmes
with individual PACPs.

In my chapter: ‘Towards a New Regional Diplomacy Architecture’, published in ‘The New Pacific Diplomacy’, edited by Greg Fry and Sandra Tarte, 2015, ANU Press, I provided an architectural configuration that captures such a relationship with Australia and New Zealand. The same configuration can be expanded to link with other global powers wanting to partner with PICs/PSIDS.

Sopoaga’s USoP emerged from the concern about the existentiality of global warming/climate change in PICs and how best this can be addressed by them. It may have come about from disillusionment with PIF member Australia. It does demonstrate however the strength of feeling when an existential threat does not receive the commitment it deserves.

The author is a former Fijian ambassador and Foreign Minister and runs his own consultancy company in Suva, Fiji.

Aligning to Blue Pacific

THE alignment of Step Up, Australia’s foreign policy direction in the Pacific and its New Zealand equivalent, Pacific Reset, was acknowledged by both Prime Ministers Jacinda Ardern and Scott Morrison at their annual meeting in Auckland on 22 February 2019. The foreign policies align at various levels. For the most critical of all alignments in support of the Pacific Islands Forum’s Blue Pacific, New Zealand’s Reset is leading the way. Australia’s Step Up needs to do just that, or a second stumble will frustrate its good intentions.

Paragraph 18 of the Prime Ministers’ Joint Statement affirms this ‘strong alignment’. This represents a lateral alignment. However, the foreign policy directions are also aligned vertically to their respective national security policy statements. Australia’s Step Up is aligned to ‘The Foreign Policy White Paper’, while New Zealand’s Pacific Reset is aligned to the ‘Strategic Defence Policy Statement 2018’.

Further alignment, essentially the two policies’ raison d’ȇtre, is represented by their orientation to support the countries, territories and institutions of the Pacific, home of the two developed countries.

Pacific Reset’s approach is premised on five principles, namely: (i) To demonstrate a depth of understanding of the Pacific shaped by academic, community, civil society, and private sector expertise that exists in NZ; (ii) To exhibit friendship, including honesty, empathy, trust and respect. This means staying in frequent touch at a political level and having frank and open conversation when necessary; (iii) To strive for solutions of mutual
benefit when developing domestic and foreign policy with impacts on the Pacific. For example, pension portability, criminal deportations, climate change, labour mobility and health and education policy; (iv) To achieve collective ambition with Pacific partners and external actors on a shared understanding of what Pacific Island Countries and NZ are trying to achieve together; and (v) To seek sustainability by focusing on the region’s long-term goals, to play NZ’s part in promoting greater autonomy and resilience among NZ’s Pacific friends through improved economic and social achievement.

Australia’s Step Up is a commitment to a range of measures to strengthen the country’s engagement to support a more resilient region, including: (i) stronger partnership for economic growth – e.g. supporting infrastructure, labour mobility, PACER Plus; (ii) stronger partnership for security – e.g. Pacific Security College, The Pacific Fusion Centre and a range of defence, cyber, maritime, health security services; and (iii) stronger relationships between people, ranging from training, church, sports, travel, research and friendship initiatives.

The vertical alignments of the two countries’ foreign policy direction to their respective defence policy statements speak forcefully of an additional alignment. The prominence of security considerations brought on by how best to counter threats, especially that represented by China’s concerted advance into the Pacific, populated both security statements. 

Such a scenario brings both foreign policy statements aligned with those of the Indo-Pacific, which is a geostrategic construct of the Quadrilateral (Quad) countries. This has been imposed onto the whole of the Pacific Ocean, reaching across Asia, the Indian sub-continent, Indian Ocean and right up to the eastern coastline of the African continent. Australia is one of the four architects of the Indo-Pacific. The others are US, Japan and India.

Australia and New Zealand have had consultations on, inter alia, Indo-Pacific. Additionally, the Joint Statement referred to above certainly has language reminiscent of the values and principles of Indo-Pacific. Australia’s alignment to Indo-Pacific is thus by design. That of New Zealand, being supportive, can be said to be by association.

Indo-Pacific is an enigma. Promotional releases by its architects, especially Australia and US, are riddled with contradictions. Professor Rory Medcalf, Head of the Australian National University (ANU) National Security College, for example, said last May that “an Indo-Pacific policy is not, by definition, inherently anti-China.” However, subsequent Australian statements continued their anti-China sentiments. So much so that China’s Ministry of Foreign Affairs spokesman Lu Kang had to ask “Australia to drop (its) ‘Cold War attitude.’

Even NZ has been in on the act. The Fiji Times reported last October that “Japan and NZ will work more closely on Pacific issues to make progress in the region amidst China’s influence in the area.” 

To date, there have not been any formal consultations with either the Pacific Islands Forum Leaders or the PIF Secretariat’s Secretary General on Indo-Pacific, as far as I know. Both the former Chair of PIF, Samoan Prime Minister Sailele Tuilaepa Malielegaoi, and Secretary General Dame Meg Taylor, especially the latter, have indicated the lack of any consultation in their recent public engagements. Australia, who should be spearheading such a consultation being a PIF member, has been particularly lax. However, it has not been lax when consulting other metropolitan countries, remote from our shores, like the UK and France on this very subject. 

The other Quad members are all PIF dialogue partners. None, however, has brought up the issue during any of the dialogue sessions. Japan, however, took the opportunity of its 2018 PALM summit, last May, to inform PIC Leaders. Note that this was only for information, not for consultation. 

Solomon Islands academic Dr. Tarcisius Kabutaulaka, lamented, firstly, “the portrayal of PICs as having no agency in the relations that they forge.” Secondly, “the treatment of PICs as pawns in the power play-off between the larger countries.” 

Under its Blue Pacific narrative, PIF is not twiddling its thumbs and letting opportunities pass by. Indo-Pacific has raised a level of urgency in the region and PIF’s Blue Pacific narrative is responding by creating its own coping mechanisms.

Dame Meg Taylor spoke recently at ANU of how the Pacific can maintain and strengthen its own strategic autonomy in the context of Indo-Pacific. This requires that the Pacific’s own “priorities are neither undermined through the breaking of our Pacific solidarity, nor appropriated by the narratives of others not of our region.”

Last February, when Dame Meg spoke at the University of the South Pacific in Port Vila she advanced “The China Alternative: Changing Regional Order in the Pacific Islands.” Essentially, she advocated the framing of such an alternative in the context of the Blue Pacific in order to secure future viability, prosperity and wellbeing. Further, she stressed PIF’s stance on being ‘Friends to All’.

The scenarios invoked by Dame Meg above provide the environment in which both NZ’s Pacific Reset and Australia’s Step Up are aligning to the Blue Pacific narrative.

In the first scenario, note that the muchtouted Pacific solidarity is beginning to break at the seams through Australia’s continued reluctance to consult on Indo-Pacific. Dr. Tess Newton Cain, having analysed the inner working of Australia’s Step Up, has already posed the prospect of it heading for a ‘stumble’. A second stumble is beckoning if Australia continues its faux pas.

The second scenario above requires a ‘pro-China’ stance. If this nomenclature proves too polemical, then consider it as ‘pro-Blue Pacific’, in the name of PIF’s strategic autonomy approach. 

Of the two regional neighbours, NZ is showing the way forward here. NZ has already signed onto China’s Belt and Road Initiative, one of the nine PIF members who have signed. As it turns out, NZ meets much of the requirements of its Pacific Reset’s five principles by signing.

Pacific Reset has firmly stepped up to the challenge.


  • The author is a former Fijian ambassador and Foreign Minister and runs his own consultancy company in Suva, Fiji.

 

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IN a recent whirlwind visit to Samoa and Fiji, ADB President, Takehiko Nakao signed several important agreements, including one that scaled up the status of the Samoa office from an extended mission to a country office. He also met dignitaries, held media conferences in both capitals, visited ADB projects outside of Apia and visited Denarau and Natadola along Fiji’s Coral Coast, the sites of the ADB Board of Governors’ 52nd Annual Meeting in the first week of May later this year.

Nakao’s visit came in the aftermath of the various announcements of packages of (mainly infrastructure) funding from Australia. It was thus an excellent reminder to all concerned that when it comes to infrastructure funding and more, ADB has a long-proven record in the Pacific. The bank has been operating for more than half a century and is not likely to be giving up its prominent regional role to any Johnny-come-lately.

Nakao’s visit was strategic in its timing. Strategic in that the visit was aimed at consolidating ADB’s long-term position as a regional development bank that has ably proven its existence and services. The visits to Samoa and Fiji achieved their respective aims of re-enforcing the bank’s long-term aim.

The scaling up of the Apia office from an extended mission to a country office is indicative of what ADB is proposing to do with three other extended missions in Solomon Islands, Tonga and Vanuatu. Such upgrades reflect the volume and complexity of ADB’s lending businesses in those countries. For Samoa in particular, the up-scaling of its office has a symbolic significance: of all the 13 Pacific Island Countries ADB members, Samoa is the only foundation member with effect from 1966.

Fiji’s first ever hosting of an ADB Governors’ Annual Meeting in early May this year will be a historical first for Fiji, an ADB member since 1970. But it will also be strategic from ADB’s perspective. It is underpinning ADB’s geostrategic focus for the future to the Pacific Ocean that has been brought to greater prominence by the declaration of an over-arching Indo-Pacific by the Quad members, including Australia. Such prominence is of unprecedented interest in that the Pacific Islands Forum has responded with its Blue Pacific narrative to drive its ‘strategic autonomy’, its geostrategy in the context of a larger political construct that has totally encircled the region and beyond.

Once scaled up, the Samoa country office will bring the total of all country offices in the region to eleven. These will supplement the ADB operations carried out by the resident mission in Papua New Guinea, by the Pacific sub-regional office in Fiji and by the Pacific Liaison and Coordination office in Australia. 

The media release for Nakao’s visit gave an insight of what ADB has in prospect for the immediate future. “Across the Pacific region, ADB is significantly scaling up financing to help developing member countries achieve sustainable economic and social development, while strengthening climate and disaster resilience. The volume of ADB active projects in the Pacific has doubled every five years since 2005 and exceeded $3 billion as of the end of 2018. The volume of active ADB’s projects in the Pacific is expected to surpass $4 billion by 2020.” 

With that expansionary scenario, expectations of each member country will be consequently heightened and increased engagement with the Bank will ensue. If the ADB-Fiji partnership for immediate financing is any indication, it can be expected that for each member country, the volume and types of financing will increase, and sectorial coverage will widen, including lending to the private sector. Furthermore, all investment requirements for climate change and disaster-resilient infrastructure assets will be an essential element for any country member entitlement. 

In such a situation, especially in the context of increased infrastructure funding from other sources, ADB’s strategic approach would, by necessity, tend toward increased concessionality. As it is, ADB is already in that business. It presupposes more. The bank’s Asian Development Fund already offers concessional loans and grants and technical assistance to lower-income developing member countries. Further, it enjoys the capacity to convert concessional loans to grants should economic and financial conditions demand such conversion. Samoa has already benefited from such concession in January 2018 following a series of environmental disasters that struck that country.

The quintessence of Nakao’s visit was what was left unsaid, but it raised serious questions about the coherence of our regional approach in the context of the Indo-Pacific, especially the various funding proposals that have emerged in the name of this imposed political construct.

Australia, one of the architects of Indo-Pacific, joined Japan and USA at the APEC meeting in Port Moresby last November to announce their ‘Trilateral Partnership for Infrastructure Investment for the Indo-Pacific.’ Prime Minister Morrison did clarify that financing from this source is essentially loans that are bankable. India, a fellow Quad member, was left out of the Trilateral Partnership.

Not long after that, Prime Minister Morrison announced a further A$3 billion (US$2.12 billion) Pacific Infrastructure Bank, comprising A$2 billion financial facility: Infrastructure Financing Facility for the Pacific (AIFFP) - for loans and grants for transport, telecommunications, energy and water projects. The balance of A$1 billion will be disbursed through the Export Finance Corporation (EFIC), to encourage more Australian firms to invest in the Pacific.

This funding is aimed at countering China’s influence in the southwest Pacific, and there’s the rub!

Statements from both Australia and USA are mixed: anti-China sentiments as against those infused with a veil of friendly rivalry, competition, ‘partnership rather than confrontation.’ The inconsistencies are particularly worrisome. On balance, when these statements are viewed against specific actions to counter China, there are reasons for pessimism about the prospects of Indo-Pacific.

Nakao’s interest would have been piqued by the paradoxes relating to Indo-Pacific and how an ADB member country was faring in the cross-fire that has ensued.

China joined the ADB in 1986. It created its own Asian Infrastructure Investment Bank (AIIB) in January 2016. Prior to that in 2013, China initiated its Belt and Road Initiative (BRI). To date, nine Pacific Islands Forum members have signed onto the BRI. The latest report from the Cook Islands, one of the signatory-PIF members, revealed a statement in a “US intelligence report accusing China of currying favour with Pacific countries through bribery and infrastructure investments.” The Cook Islands Deputy Prime Minister, Mark Brown, reaffirmed the utility of its BRI projects and underscored that these projects were not able to be financed by traditional development partners.

President Nakao is back in Manila. His unsaid message remains loud and clear, the ADB is the region’s top development bank. It can accommodate all our needs, notwithstanding those funds created specifically for climate change activities and for which ADB will mobilis e co-financing. There is no need for more. For the Indo-Pacific, ADB remains relevant. It remains committed to the region and stands ready to work with all its 15 Forum members in the execution of the region’s Blue Pacific narrative that seeks strategic autonomy in the context of a region that is becoming complex and geopolitically-charged.

FIVE countries and one region are going to the polls this year to get a fresh and new mandate from their electorate, and while this will no doubt provide interesting results, the trend to watch though in 2019 may be something beyond the result that comes out of the ballot box. How China pushes its influence through its much touted Belt and Road Initiative through and over the islands of Oceania is predicted to be the development that will keep analysts and commentators busy over the coming months.

Ramification of the paradigm shift in the world’s geopolitics has been felt in some parts of the Pacific very early in 2019. The region’s first woman leader of an independent state in the Pacific, President Hilda Hein of the Marshall Islands narrowly survived a confidence motion against her in her island’s legislature and she accused China for influencing her opponents to introduce the motion. The country she leads is one of the five that will be holding general elections during the year, and for someone who came into power by default, her bid to win another new term from the electorate will be closely followed.

January also saw a whirlwind tour of Vanuatu and Fiji by Australia’s Prime Minister Scott Morrison. He stayed away from last year’s Pacific Islands Forum Leaders summit in Nauru, so the decision to do island hopping intrigued not a few observers of regional politics. The disquiet about China’s growing influence in the islands, and its championing of its Belt and Road Initiative with millions of Yuan of aid no doubt was one of the factors that prompted the visit.

News that Vanuatu had entered into a $130m aid agreement with China during the summit President Xi Jinping held with Pacific Island leaders at the margins of the Asia Pacific Economic Council meeting that Papua New Guinea hosted last November no doubt triggered alarm bells in Canberra. Fiji on the other hand had indicated its willingness to partner with Australia, not Beijing in the development of its military training base near Nadi International Airport, on the west coast of the country’s main island.

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