Comment: Neighbourhood watch

With China and the US playing great power politics in the South Pacific, Australia needs to keep its eyes firmly on the region.

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From the late 1990s and especially in the aftermath of the September 2001 terrorist attacks, the South Pacific was characterised as an ‘arc of instability’, at risk of penetration by terrorists and transnational criminals.

Today, the waters aren’t so choppy. In 2012 the stabilisation mission in Timor-Leste withdrew. In 2013 the small military component of RAMSI will return home, although an Australian policing and governance presence will remain in the medium-term.

In 2012 Papua New Guinea and Timor-Leste held relatively peaceful elections, and both have formed fairly stable governments. The performance of the Solomon Islands and Vanuatu governments has improved. In 2012 the military regime in Fiji confirmed that elections will be held in 2014, and created a commission to draft a new constitution.

With the level of threat and instability in the South Pacific decreasing, it would be tempting for the upcoming Defence white paper to consider shifting Australia’s focus from the region. This would be a mistake. Regardless of recent improvements, the region remains vulnerable.

In particular, there are two key risks which Australia must focus on: strategic competition between China and the US, and the more pressing risk that increasing Chinese activities in the region may intensify existing state weaknesses.

Presently, the South Pacific is marginal to China’s strategic calculations, but China may develop an interest in the South Pacific as part of its ‘island chain’ strategy. China has also sought access to ports and to undertake signals intelligence monitoring, most obviously via the satellite tracking station it built in Kiribati in 1997. US diplomats are reported to think that China wants ‘to demonstrate big-power status in the region’.

The South Pacific’s rich natural resources are also attractive to China, as is the region’s role in competition for diplomatic recognition with Taiwan. In 2009 China pledged aid of US$26.67 million, plus loans of US$183.15 million to the region. In 2010 China encouraged investment and trade to the South Pacific worth US$3.66 billion (a 50 per cent increase from 2009).

At the same time, the US is currently undertaking a pivot, or re-orientation, to the South Pacific in efforts to catch-up with Chinese influence.

The US has a long association with the Micronesian sub-region, which is regarded as the US’ security border, the defence of which is considered vital to maintaining sea lines of communication. Lately however, the US has resumed a more active diplomatic role in the South Pacific. In 2011 it opened the USAID Pacific Island Regional office in Papua New Guinea and increased its aid to an estimated US$300 million. The US also has growing interests in the region’s natural resources.

The unfolding situation has clear strategic implications for Australia.

The possibility that China and the US will compete through the build-up of military forces is low. However, if they did, this could see Australia faced with a difficult and potentially alienating choice very close to home.

The more serious implication arises if China’s aid and other interests (which may increase if it competes with the US), exacerbate the weakness of South Pacific states. Given that Australia is the largest aid donor and has undertaken a number of costly missions to ensure the South Pacific’s stability, it is in Australia’s strategic interest to ensure that the region does not again emerge as an ‘arc of instability’.

The Defence white paper should recognise that the South Pacific may constitute an ‘arc of opportunity’ where Australia can encourage cooperation with China, and between China and the US, to promote stability.

Cooperation could occur first via relatively uncontroversial aid projects and military exercises, build to joint humanitarian and disaster relief operations, and perhaps later to joint military operations.

The South Pacific offers the opportunity to develop these proposals on a relatively small and low-risk scale, so that the lessons learnt and the confidence gained may benefit broader Asia Pacific stability and security.

Dr Joanne Wallis researches and teaches on the South Pacific at the Australian National University’s College of Asia and the Pacific.

This article is edited from a paper in the “Centre of Gravity” series published by the ANU Strategic and Defence Studies Centre.