30 September 2021, NIICE Commentary 7416
Artyom A. Garin
The leading South Pacific power, Australia, actively supports Indo-Pacific and was one of the first to develop this concept in official documents, also to express its resistance to ambitious China. At the same time, the fact that the Indian and Pacific Oceans are connected into a dual space makes Pacific Island Countries (PIC) more attractive for Australia and its partners, such as Japan, India, and the United States. However, when analyzing the geo-strategic situation of the South Pacific, it is necessary to consider the PICs’ perception of the emerging competition between larger actors.
Indo-Pacific is a unified platform for building a unified strategy. But this is also a challenge. Of course, the PICs is concerned about the expanding power of China, but they are not ready to protect other countries’ national interests to the detriment of their own or to join the group potentially confronting China. Nevertheless, we should be realistic, because the order is still determined by major powers. So, we’ll define prospects and challenges considering the relations of great/middle powers with smaller ones.
In recent years, Australia has made significant progress in a security building. Of course, it has affected the Pacific Island Countries. In 2018, in the Boe Declaration, the PICs recognized a more dynamic geopolitical environment. Thus, national security will play an increasingly important role in the subregion. We can expect more military exercises of the Quad countries, security agreements, or military infrastructure developments in the South Pacific. As a response to the newly established AUKUS, the PICs will probably take a restrained position and rely on the sovereignty of their internal waters. In this case, it should be highlighted that a balanced domestic and foreign policy management of the Prime Minister of Papua New Guinea, Hon. James Marape. Recently he expressed his commitment to maintaining peace and serenity in the subregion. In addition, the PICs’ economies are suffering from the pandemic and the probability of their actions against the main trading and investment partner, China, is extremely small.
The struggle to maintain domestic economic stability is a more immediate problem for PICs’ leaders to solve. The island states can ease the economic issue by trade recovery, including with the Supply Chains Resilience Initiative (SCRI). Because of their large number, PICs are an attractive partner of the new initiative. Moreover, PICs continue to use the traditional method — loans. The growth of the PICs’ external debt in recent years has become one of the most discussed phenomena in the Indo-Pacific. Moreover, the thesis that China’s loans are the potential threat to small island states is spreading faster and faster among experts. However, the issue of “debt traps” is more controversial.
Of course, Beijing is an active creditor in the sub-region, but it is not the main power that plunged South Pacific into the debt abyss. China accounts for no more than 20 percent of the debt of the South Pacific countries, while the bulk of the debt is associated with multilateral development banks and Japan. In addition, among the PICs with high debt risk, we can find supporters of Taiwan who have debt but don’t have access to China’s financing. Anyway, the debt management will take an important place in the policy of PICs. The attention to the conditions for further loans will also increase.
Another pressing problem for PICs is climate change. This issue worries them even more than the issues of defense. Due to the commitment of the current Australian government of Scott Morrison to the US foreign policy, Australia has no choice but to pay more attention to the green agenda. Against this background, humanitarian aid may also take a stronger position in the subregion. Otherwise, Beijing, the third-largest donor in the subregion and one of the world leaders in the field of green energy, will take the leading role in this issue.
The expression of national mood is also becoming a frequent phenomenon in the sub-region. Referendums in New Caledonia attempts to gain independence in Bougainville, which is expected to be at the final stage of negotiations no earlier than 2025-2027. This may turn out to be a winning situation for some major powers and a losing one for others. Fragmentation is also a pressing issue for the Pacific Islands Forum (PIF). The countries of Micronesia have decided to leave the organization but with the growing influence of China in the South Pacific, Australia, New Zealand and the United States will increasingly manifest themselves and Indo-Pacific in the main subregional organization. This will certainly cause a more active discourse about Indo-Pacific and the return of the countries of Micronesia to the PIF. Compared to the countries of Melanesia, they have a greater degree of dependence on their main partner —Washington DC.
In general, with the Indo-Pacific and the competition between China and QUAD, the South Pacific is gaining more geostrategic importance. Australia will continue to resist China’s growing presence, not only by increasing defense funding or aid but also by attracting other QUAD and potential QUAD Plus actors.
China uses tactics similar to the “weiqi” game. Beijing is not going to seize the Pacific Island Countries but from year to year, it strengthens ties with small states surrounding Australia, with its more loyal actors. This is a logical strategy that everyone uses. Of course, the competition of larger powers will help small island states to diversify their ties, but it forces them to adapt to new and more complicated geostrategic realities. The attention to smaller states would be the success for one of the competing parties (QUAD or China) in building a new sub-regional order.
Artyom A. Garin is a Research Assistant at Center of Southeast Asia, Australia and Oceania, Institute of Oriental Studies RAS, Russia.
