Pivoting to the Pacific

Over the past year, there’s been a frenzy of public interest—in Australia and beyond—in the Pacific region. The concern has, of course, been focused on China’s growing activities in the Pacific islands. All of the sudden, it has become a hotly contested geopolitical space. Conventional partners are reacting. Australia is ‘stepping up’. New Zealand is ‘resetting’. The UK is opening new diplomatic posts in the region. France wants to ‘pivot’ back to the region. The US is taking a more active interest.

Close watchers of the Pacific are scratching their heads asking, why now? The growing presence of China in the Pacific has been well documented for some time, and indeed the roots of Chinese engagement in many parts of the region date back generations. Michael Powles was writing about it in 2007. Graeme Smith was talking about China in the Pacific in 2011. Books have been written and a number of PhDs have been completed on the subject. In 2015, the Lowy Institute released its map of Chinese aid in the Pacific, which received significant attention for being the first to quantify the size and reach of China’s aid program in the region.

For whatever reason, the pin has clearly dropped in the past year.

Before China’s engagement in the Pacific, geopolitics in the region had been relatively benign—a point the 2013 PNG defence white paper acknowledged, and Greg Colton examines in his recent Lowy Institute paper. Thanks to China, the Pacific has been empowered with options beyond its traditional partners of Australia, Japan, New Zealand and the United States. In response to this, along with upping their own games, Australia and New Zealand are actively recruiting ‘traditional’ partners to get back into the game. But what would a ‘Pacific pivot’ from more ‘like-minded’ or ‘traditional’ partners look like?

Since China has used its aid program as a vehicle to spread into the region, we’ll focus on the role of development assistance. This is only one part, and in many cases a minor one, of broader diplomatic and geostrategic relations. But, for many donors, the aid relationship remains a critical component of interaction with Pacific island nations.

Over the past 18 months, we have also been developing a tool—the Lowy Institute Pacific Aid Map, launched today—that will make analysis of foreign assistance in the Pacific far more comprehensive. The map is an interactive, multi-faceted platform that contains data on close to 13,000 projects in 14 Pacific countries from 62 donors (new and old) from 2011 onwards. With the primary objective of enhancing aid effectiveness in the Pacific by improving coordination, alignment and accountability of foreign aid, it is the most comprehensive data-collection effort of aid in the Pacific that has ever been undertaken.

The Pacific Aid Map also illustrates how far these partners will have to go to increase their presence on the ground.

View site in full screen

Top donors to the Pacific islands region, 2011–2016

 Aid funding (US$ billion)Share of total aid (%)Rank
Australia6.0945.681
New Zealand1.209.002
China1.057.873
United States1.037.754
Japan0.866.455
European Union0.654.916
France0.120.9111
United Kingdom0.020.1326

Source: Lowy Institute Pacific Aid Map

Let’s start with the United States. The US has a long and turbulent history with the North Pacific. The Federated States of Micronesia, Marshall Islands and Palau all maintain a compact of free association with the US. Between 2011 and 2016, more than 85% of US aid to the region has gone to these three countries. The compact is up for renegotiation in 2023, and Palau (already under pressure from China) hasn’t received compact funding for seven years.

There are also problems brewing in US territories in the region, notably Saipan. The US should look to reaffirm its role in the north Pacific and engage in more targeted action further south, such as enhancing its diplomatic footprint, supporting regional organisations, providing more scholarship support, and involving Pacific partners in more joint military operations.

France has a very strong presence in the region, but only in its territories of French Polynesia, New Caledonia, and Wallis and Futuna. More than 500,000 French citizens call the Pacific home. The territories benefit from annual domestic transfers from Paris to the tune of US$3–3.5 billion, almost double the total aid budget for the rest of the region. Close to 2,000 troops are permanently stationed in New Caledonia, and they actively police their vast exclusive economic zones in the East Pacific.

In the ‘Anglo-Pacific’ (or sovereign Pacific), however, the footprint of France is hardly noticed. France didn’t participate in the Bougainville or Solomon Islands interventions. While France has the third largest diplomatic network in the world, it maintains only three posts in the Pacific. France has taken steps in recent years to engage more in the region, most notably working with French Polynesia and New Caledonia on their accession to full membership of the Pacific Islands Forum in 2016. Despite this, the Pacific Aid Map shows that aid from both France and the EU has been in decline since 2011. France should focus on reversing this trend and continuing to crack out of its territorial shell in the Pacific.

The UK has perhaps the longest way to go, with marginal development and diplomatic footprints. Leaving the EU (now far from certain) does present an opportunity as the UK looks to reassert itself bilaterally and reassign aid resources. Former foreign secretary Boris Johnson saw the Commonwealth, a dated community of 53 current and former UK colonies, as a vehicle for reengagement. While 20% of Commonwealth countries are in the Pacific, it remains to be seen whether this ambition will be realised without Johnson at the helm. New diplomatic posts are welcome, but they will be a sideshow if concerted aid dollars don’t come in behind them.

None of this is to say that these countries shouldn’t look to take a more active role in the Pacific, or that Australia and New Zealand shouldn’t be actively courting them. The Pacific faces critical development challenges. Overall aid is on the decline. France, the UK and the US may also bring new ideas and relationships along with their money that could be of benefit of the Pacific. Just don’t expect a Pacific pivot to drastically shift the dial on our new and competitive status quo.