Chapter 10 - Southwest Pacific
We will deepen mutually beneficial cooperation with developing
countries and safeguard the common interests we share with them.[646]
China's engagement with countries in the Southwest Pacific
10.1
China
has formed diplomatic relations with a number of island states in the Southwest
Pacific. Since establishing formal recognition with these various countries, China's
relationships with Pacific Island
nations have generally been characterised by high level visits, economic and
technical cooperation, and generous development assistance.[647]
10.2
China established formal diplomatic ties with Samoa and
Fiji in 1975, Papua New Guinea (PNG) in 1976, the Cook Islands in 1997, Kiribati
in 1980 (ceased 2003), Vanuatu in 1982, the Federated States of Micronesia in
1989, Tonga in 1998 and Nauru in 2002 (ceased 2005). According to the Department
of Foreign Affairs and Trade (DFAT), China
has a stronger diplomatic presence in the South Pacific than any other country.[648] At the time this report was tabled,
six Pacific Island
nations afforded diplomatic recognition to Taiwan.
These are: Kiribati,
Marshall Islands,
Nauru, Palau,
Solomon Islands
and Tuvalu.[649]
10.3
This chapter outlines the nature of China's
political engagement with Pacific Island
nations, particularly in the context of China's
insistence on an adherence to the one-China policy and its contest with Taiwan
for diplomatic recognition across the Pacific region. The committee then
discusses the problems associated with this diplomatic competition, both for
the Pacific Island
nations involved and for Australia,
which is seeking to improve governance in the region through conditional aid.
Visit diplomacy
10.4
High level visits by Pacific
Island leaders to China
are often marked by lavish receptions.[650]
For example, the Prime Minister of the Cook Islands, Dr
Robert Woonton,
stated that he was humbled by the recognition China
afforded him during his visit to China
in 2004. At the time, he stated:
The Cook Islands is the only country on a
state visit to China
at present and Tiannenmen Square has Cook Islands and Chinese
flags flying all around it.
I am speechless at the hospitality extended to everyone in our
delegation, not only in Shanghai,
but also in Jiangsu province and Beijing.
When we arrived at the Great Hall of the People, the prime
minister was welcomed to the Peoples Republic
of China by
Premier Wen, before inspecting a guard of honour and receiving a 19-gun salute.[651]
10.5
Professor Ron
Crocombe, emeritus professor at the
University of the South Pacific, stated on Radio
Australia that:
[China]
wants to be the major influence in the Pacific, there's no doubt about that;
it's aiming to be that in a fairly short time.
It has [been] carefully planned, [there's been] very
strategically placed aid. You'll notice Chinese aid is quite different from
other patterns: China
is heading straight for the jugular.
It goes firstly for trips and favours for the politically
powerful and very lavish receptions that are on a broader scale than most.[652]
10.6
Indeed, Mr Eni Faleomavaega, member of the U.S. House
of Representatives Subcommittee on the Western Hemisphere recalled that the
head of state of one of the island countries with a population less than half a
million people received 'the same treatment that President Nixon got when he
went to China'.[653] According to John
Henderson and Benjamin
Reilly, China's
visit diplomacy:
...provides a lucrative return on a modest investment. It stands
as an example of how skilful diplomacy can enable a state to gain influence
over vast areas through the acquiescence of very few people.[654]
10.7
China's
overseas aid program provides another avenue for China
to strengthen diplomatic ties with the Pacific
Islands.
Development aid
10.8
DFAT told the committee that China
has greatly increased its aid to the Pacific in recent years, with one study suggesting
that Chinese aid could total up to $300 million annually. In August 2004,
Vice-Foreign Minister Zhou Wenzhong pledged that China
would continue to do 'its utmost to provide aid to all island countries that
have diplomatic relations with China'.[655]
10.9
The aid provided to the island countries often goes
toward high profile projects such as the construction of the parliamentary
complex in Vanuatu,
a multi-story government office in Samoa, the new
foreign ministry headquarters in Papua New
Guinea, as well as hotel developments in Tonga
and the provision of a ferry for Kiribati.
China also
built the sports stadium in Fiji
for the 2003 South Pacific Games,[656]
and has made a practice of donating a fleet of VIP cars to the island state
hosting the Pacific Islands Forum.[657]
Aid also takes the form of scholarships for students to study in China,
or the provision of Chinese teachers, sports coaches or medical teams to work
in the islands.
10.10
In 2004, China
granted the Cook Islands $NZ4 million to be used for
various projects. This grant followed a cooperation package for construction of
the Avarua courthouse and Police National Headquarters projects.[658]
10.11
DFAT told the committee that Chinese aid was generally
bilateral and often readily visible:
China's
aid...is overwhelmingly bilateral. Very often if you go to these small countries,
not only in the South Pacific but really anywhere in the world, you will find a
big stadium, for example, which was a gift of the Chinese government. They
often like to provide what we call ‘concrete aid’—that is, buildings and
structures. They have also been very strong in providing medical teams in
smaller underdeveloped countries, and that often goes along with, for example,
a hospital building.[659]
10.12
In contrast to the financial aid Australia
contributes to Pacific nations, China's
aid to these countries is not conditional on them improving standards of governance.
The clear exception to the unconditional nature of Chinese aid is the issue of
adherence to the one-China policy.
China and Taiwan:
competitors in the Southwest Pacific
10.13
China's
stated intention is to provide genuine aid to underdeveloped countries in the Southwest
Pacific, 'in all sincerity and with no political strings attached'. Its aim is
to cultivate friendly relations and cooperation with these countries 'in the
spirit of mutual respect, equality and mutual benefit'.[660] Even though China's
diplomatic and financial support for these small island countries appears to be
unconditional, there is a requirement to adhere to the one-China policy. Indeed,
China will tolerate
no opposition on this issue, openly and unequivocally insisting on adherence to
the one-China policy. Speaking at a Post Pacific Islands Forum,[661] China's
Vice Foreign Minister Mr Yang Jiechi stated:
We do not object [to] economic and cultural exchanges of an
unofficial nature between Taiwan
and countries having diplomatic relations with China.
But, we firmly oppose these countries developing official relations or having
any official exchanges or contacts with Taiwan...we are appreciative and thankful
that the Forum and the Forum members having diplomatic relations with China
have adhered to the one-China position and hope that they will stand on high
alert against the Taiwan authorities' political attempts to advance 'pragmatic
diplomacy' in the South Pacific, create 'two Chinas' or 'one China, one Taiwan'
and sabotage the relations between China and the Forum, and refrain from
developing any official relations with Taiwan.[662]
10.14
Communiqus issued by representatives after official
meetings with Chinese leaders invariably contain an affirmation declaring
adherence to this policy.[663] For
example, during his visit to China,
Dr Woonton
stated that the Cook Islands' government and people will
'unswervingly adhere to the one China
policy and support China's
just stance on the Taiwan
issue.'[664] He explained:
Some people may still be asking what the Chinese will want from
us in return for their assistance, but their only requirement is for the Cook
Islands to recognise China's
legitimate ownership of Taiwan.[665]
10.15
Many with an interest in the Southwest Pacific are in
no doubt that China
and Taiwan are
in a contest to obtain formal recognition from the islands in the region. The
2005 Annual Report to the U.S. Congress on China's
military power noted that China
had intensified its competition with Taiwan
for diplomatic recognition in the developing world. According to the report, the
intention was to undermine Taiwan's
diplomatic support 'among the 26 remaining countries that recognise Taipei'.[666] As discussed earlier, China
employs both diplomatic and commercial influence to encourage other states to
limit their engagement with Taiwan
and to discourage Taiwan
from fostering relations with such countries.
10.16
DFAT also stated that a priority for China's
six embassies in the Pacific is competition from Taiwan
for diplomatic recognition. The department suggested that both China
and Taiwan use economic
assistance as a lever in their competition for diplomatic recognition.[667] The prevailing belief is that China
has been courting island governments with unconditional aid and various perks,
while extending its network of diplomatic missions to thwart countries
switching their allegiance to Taiwan.
10.17
China's
carefully tailored diplomatic policy enables it to invest a relatively small
amount of money in the Southwest Pacific and deny Taiwan
the opportunities to advance its own economic and political agenda in the
region independent of China.
The following section looks more closely at this policy. It deals with a number
of Pacific island countries that have recently been caught up in this power
tussle between China
and Taiwan,
notably Kiribati,
Vanuatu and Nauru.
Kiribati
10.18
China
and Kiribati
established diplomatic relations in June 1980.[668] On 7 November 2003, however, the Kiribati
government announced the establishment of diplomatic relations with Taiwan.
China denounced
the move as an 'open violation' of the principles of the joint communiqu on
establishing diplomatic relations between the two countries and 'a gross
interference in China's
internal affairs'. China
protested strongly to Kiribati
calling on it to abide by the one-China policy.[669] A spokesperson from the Chinese
Foreign Ministry told a press conference:
We call for the Government of Kiribati to analyze the situation
and correct their wrongs so that China-Kiribati relations can continue to
develop on the basis of the Five Principles of Peaceful Coexistence. We are
keeping a close eye on the developments and we will decide how to take [the] next
step accordingly.[670]
10.19
China
also accused Taiwan
of practicing 'an unscrupulous policy of "bribery diplomacy"'.[671] China
suspended diplomatic relations with Kiribati
retaining caretakers, not diplomats, to oversee the previous embassy's premises
and property. Furthermore, it dismantled a satellite tracking station it had
set up in Kiribati
in 1997 as part of its 'monitoring and control network for supporting satellite
and carrier rocket launchings'.[672]
Vanuatu
10.20
More recently, the Prime Minister of Vanuatu, Mr
Serge Vohor, moved
to align his country more closely with Taiwan.
On 3 November 2004, during
a trip to Taiwan,
he signed an agreement to establish full diplomatic ties with Taiwan.
The Joint Communique signed by Taiwan and Vanuatu envisaged closer bilateral
cooperation in areas such as agriculture, aviation, tourism, fishery
aquaculture, education, capacity building, health and the development of small
and medium enterprises. In the international arena, Prime
Minister Vohor:
Committed himself to give Vanuatu's
strong support for Taiwan
to participate in the international organizations including UN, WHO, APEC and
other regional organizations...[673]
10.21
China
immediately contacted the Vanuatuan government for information. On 10 November,
Vanuatu's Council
of Ministers vetoed the decision and upheld the one-China policy. The Chinese
government expressed appreciation about the reversal, stating:
Taiwan
is an inalienable part of Chinese territory, the government of the People's
Republic of China
is the only legitimate government representing the whole China.
This is a universal consensus recognised by over 160 countries including Vanuatu
in the world and all important international organisations including the UN.
The fact has borne out again that the Taiwan
authority's scheme of splitting the motherland has neither popularity nor
future.[674]
10.22
For a while it would appear that some leaders of Vanuatu
entertained the notion that they could reach some arrangement whereby Vanuatu
could secure the support of both countries.[675]
China and Taiwan,
however, became engaged in a diplomatic brawl, accusing each other of underhand
'dollar diplomacy'. According to media reports, there were claims of large
amounts of cash being paid to leaders of the then governing coalition amid
counter claims that political support was being 'bought' with Chinese
donations.[676] Taiwan
categorically denied that it was involved in 'cheque book' diplomacy. One high-ranking
Taiwan
government official stated:
No funds have been given to the Prime Minister or any political
parties, however, we are certain that is not the case with China as they are
desperate to prevent Vanuatu from establishing ties with Taiwan.[677]
10.23
A state of confusion prevailed until the Prime Minister
was ousted in a no-confidence vote on 11 December. A new government favourable
to China was
formed. In February 2005, the new Prime Minister of Vanuatu, Mr
Ham Lini,
visited China
where he gave reassurances that his government supported the one-China policy.[678]
Nauru
10.24
For more than 20 years prior to 2002, Nauru
had had official diplomatic relations with Taiwan.
But in 2002, it decided to switch allegiance to China.
In a joint communiqu announcing the establishment of diplomatic relations with
China, the Republic
of Nauru stated that it recognised
that:
... there is but one China in the world, that the Government of
the People's Republic of China is the sole legal government representing the
whole of China and that Taiwan is an inalienable part of Chinese territory'.[679]
The government of the Republic
of Nauru pledged that it would not
have official relations of any form with Taiwan.[680]
10.25
At the time of Nauru's
change of alliance to China,
Taiwan stated
that China had
revealed its true colours: 'it will even try to intimidate a small island of
the South Pacific Ocean. This move is a serious
challenge to our foreign policy, and a severe provocation to the people of Taiwan'.[681]
10.26
In May 2005, however, Nauru
restored formal diplomatic ties with Taiwan.
In response to a question about whether Nauru
was 'seeking or expecting a pledge of economic aid from Taiwan',
Nauruan President Ludwig Scotty
told reporters that 'these things happen'. He stated further that, 'Everyone
knows in bilateral relations there are mutual benefits that can be achieved'.
He indicated, however, that his country 'might still need financial help from Taiwan
in coming days'. He stated: 'This will come at a later stage, resulting from
further negotiations between our two governments'.[682]
10.27
The government of Taiwan
announced that both countries could look forward to cooperation in various
fields such as culture, education, agriculture, fisheries, tourism, healthcare
as well as aquaculture. It noted that Nauru
was a member of a number of multilateral and regional organisations including
the United Nations, the British Commonwealth, the World
Health Organisation, the Asian Development Bank, the Pacific Islands Forum, the
Food and Agriculture Organization, and the International Olympic Committee. It
indicated that Taiwan
had been assured that:
Nauru
will firmly support Taiwan's
efforts to participate in the United Nations, the World Health Organization and
other international and regional organizations after the reestablishment of
diplomatic ties between the two countries.[683]
China
cut ties with Nauru.
Problems created by the contest between China
and Taiwan in
the Southwest Pacific
10.28
It should be noted that some of the island countries in
the Southwest Pacific are among the smallest and poorest countries in the world
and susceptible to the influence of others willing to use their economic leverage
to serve their own foreign policy objectives. The three countries cited above
are developing countries. Nauru
is the world's smallest independent republic with a total land area of 21 square
kilometres, or about 0.1 times the size of Washington
D.C., and a population of 13,048 people. Kiribati
is a remote country of 33 scattered coral atolls comprising a land mass of 811
square kilometres supporting a population of 103,092 people. Vanuatu
is the largest of the three countries covering 12,200 square kilometres and
with a population of 205,754 people.[684]
Kiribati and Vanuatu
are deemed to be among the least developed countries on the Organisation for
Economic Cooperation and Development (OECD) list of recipients for official
development assistance. Papua New Guinea,
Fiji and the Solomon
Islands have recently experienced internal
political upheavals.[685]
10.29
The Prime Minister of Australia has noted that for many
'fragile tiny states' of the Pacific Islands
'poor governance, crime and corruption pose a real threat to both economic
development and to regional security'.[686]
AusAID has pointed to the difficulties in providing assistance to these
countries that would effectively promote development:
The development process in the Pacific region is particularly
complex and fragile. Also, the poverty profile of this region differs from
those parts of the developing world where there is abject poverty. Few Pacific
islanders can be shown to be without minimum levels of food, shelter or water.
However, as a result of their geographic and climatic disadvantages as well as
generally poor standards of governance, many islanders have very limited
economic development prospects. For some, recent political instability and
internal conflict have eroded even these.[687]
Committee
view
10.30
The small island states of the Southwest Pacific have
much to gain from the development assistance offered by donors such as China
and Taiwan. This
support, however, should be constructive with the primary goal of improving the
welfare of the recipient. Where other considerations take priority, or where
there is inadequate transparency, accountability and probity in the use of
funds, misuse of aid may occur. Corruption is a major concern. Clearly, the
political rivalry between China
and Taiwan in
the Southwest Pacific does not provide an environment conducive for the most
effective use of development assistance. The following section tests this
assumption.
Most immediate problems
10.31
Susan Windybank
argued that the most immediate problem arising from the Pacific Cold War
between Taiwan
and China is
that 'it further destabilises already weak and unstable governments and feeds
the endemic corruption throughout the region'. She cited the case in 1998 when
the then Prime Minister of Papua New Guinea tried to secure 'over $3 billion in
grants, loans and business deals from Taipei—almost half of PNG's GDP at the
time—in return for switching allegiance from China to Taiwan'.[688] Professor Helen Hughes, Senior
Fellow at the Centre for Independent Studies, expressed concern at the extent
of corruption in the region stating that unscrupulous conduct among the
political and bureaucratic elites and their business associates are 'constantly
covered in the Pacific press'. She added, however, that it 'is so common that
even large scandals scarcely merit a day's attention'.[689]
10.32
In her view, 'China
and Taiwan have
added to corruption in the Pacific by competing for recognition (in Kiribati,
Nauru, Vanuatu
and Papua New Guinea)'.[690] For example, accusations were raised
during the 2002 Kiribati
Presidential election campaign that the Chinese were interfering in domestic
affairs by engaging in chequebook diplomacy. China
vigorously denied giving money to political candidates, insisting that funds
were made available for projects intended to benefit the community, such as to
restore a damaged seawall.[691] As
noted earlier, soon after the Prime Minister announced Vanuatu's
recognition of Taiwan
in 2004, accusations of graft and bribery by Taiwan
and China again
surfaced.
10.33
Witnesses before the committee added weight to concerns
expressed by other academics about the detrimental effects of the contest in the
Pacific between China
and Taiwan. Professor
Stuart Harris
from the Research School of Pacific and Asian Studies at the Australian
National University (ANU) told the committee that this form of competition is
very destructive:
The initiative is usually taken by Taiwan,
and although all the politicians in Taiwan
when they are out of office say, ‘This dollar diplomacy is ridiculous,’ the moment
they get in they realise they have to use it. The reason they do that is that
politically it is very popular within Taiwan.
China then
finds that it has to counter it. I think it is a very dangerous situation. We
found this in the Solomons, where governments are totally disoriented—in
fact just about destroyed—by interventions of this kind. You can disorient a government
in the Pacific islands with a very limited amount of money—just a few bribes to
the right people at the top and you have undermined the whole governing system...we
do have to keep the kinds of processes going that we have got. But it does mean
that you are going to be subject to that kind of process all the time that they
are there, and if you leave it will start to take over again.[692]
10.34
Professor James
Cotton of the Australian
Defence Force Academy
agreed with this view:
It seems to me that one of the reasons they [Chinese] are
obsessed with certain Pacific island states is because these states still
recognise the ROC government in Taiwan
as the national government. The fundamental strategy of this particular regime
and its unique fragility in terms of the justification for its continued
existence is the reason it is not prudent to discuss it.[693]
The government in Taiwan
has six Pacific nations that recognise its sovereignty as the government of China.
Three of those fall within the American sphere of interest, you might say, and
I do not really think our role could be very prominent. But certainly in
relation to the Solomon Islands
and Nauru,
where a lot of taxpayers’ money is spent, I would have thought there might be
some way found to ensure that that kind of competition for representation does
not cause those governance problems that you have mentioned. There may be some
package solution that would remove that issue from the agenda.[694]
10.35
The Australian government has previously indicated that
it is opposed to aid being used as a foreign policy tool. In a doorstop
interview on 17 May 2005,
the Foreign Minister stated that:
We...don't like to see an
unseemly competition within the South Pacific between China and Taiwan over recognition. It obviously doesn't
contribute to the stability of the region, so we'd rather not see that.[695]
10.36
The position
was reinforced in evidence before the committee. DFAT stated that Australia
opposes such chequebook diplomacy, because it works against regional countries'
efforts to improve living standards, governance and political stability.[696] DFAT told the committee:
Firstly, we are concerned about incidents of chequebook
diplomacy in the South-West Pacific where, as you know, we have made a very
considerable effort to try to address governance issues. We see chequebook
diplomacy as directly undermining the efforts that we have made over many
years—particularly the efforts that we have intensified in recent times.[697]
Committee
view
10.37
Diplomacy and aid in the Pacific region are
intrinsically linked as the PRC and Taiwan
compete for recognition, often utilising the blunt foreign policy tool of aid
payments. Amongst some Pacific Island
nations, competition between the PRC and Taiwan
for diplomatic recognition has, on occasion, appeared to take on the
characteristics of a bidding war, conducted mainly through bilateral 'aid'
payments. This problem can be exacerbated when the practice of gift giving, an
important aspect of many Pacific Island
cultures, is exploited.[698] Being
relatively poor and tending to lack the appropriate institutional mechanisms to
ensure political and bureaucratic accountability, many Pacific islands are vulnerable
to financial influence and corruption.
10.38
According to the OECD, the main objective of official
development assistance is 'the promotion of economic development and the
welfare of the partner country'.[699] As
noted previously, China's
stated aim in establishing diplomatic relations and providing assistance to
countries in the Southwest Pacific is to provide genuine aid, to cultivate
friendly relations and cooperation. The committee believes, however, that
although China's
stated intention is commendable, its rivalry with Taiwan
in the region creates problems for the islands in the Southwest Pacific.
The effects of China's
growing influence in the Southwest Pacific
10.39
DFAT noted that China
has a strong and growing business presence in the Pacific, supported actively
by its diplomatic missions. Over 3,000 Chinese state owned and private
enterprises have been registered in the Pacific region, with investments of
about $800 million. Increased economic activity has been accompanied by an
increase in ethnic Chinese populations in the Pacific island countries. Professor
Crocombe noted that:
China's newly expanded business interests range from
multi-million dollar mining ventures to tiny restaurants and grocery stores set
up by poor settlers, many of them illegal immigrants whose passports and visas
are bought from corrupt officials.[700]
10.40
Over recent years, a number of articles have appeared
in the media reflecting on China's
interest in the Pacific region, particularly the island states of Melanesia.
While governments have remained largely silent on China's
activities, numerous commentators and academics have raised concerns.[701]
10.41
Some warn that China
is sowing the seeds of future tension in the islands of the Southwest Pacific. As
noted previously, the region consists of small underdeveloped countries
scattered throughout the area, reliant on external aid and facing an uncertain
economic future. Although there is marked variation in the soundness of their
political systems and social cohesion, there is an underlying fragility to many
of these states. A number lack robust institutions and a sound corporate
governance regime. Some are politically unstable and highly susceptible to the
influences of countries willing to provide assistance. Mr
Benjamin Reilly
noted that Polynesian countries such as Samoa have
proved relatively successful post colonial states, but much of Melanesia:
... is plagued by poor state performance, with negative economic
growth, ethnic conflict, weak governance and military coups all signalling the
failure of states to provide basic security and public services to their
citizens. Each of the four independent Melanesian states (Fiji, Papua New
Guinea, Solomon Islands and Vanuatu) have suffered army mutinies in recent
years, Fiji has experienced three coups; and Papua New Guinea has faced armed
conflict in Bougainville and, more recently, the Southern Highlands...The
Australian Strategic Policy Institute has categorised the Solomons as a
'failing state', a term used by the Australian government and academic
commentators.[702]
10.42
Some argued that China
is able to buy influence. By courting and winning the allegiance of these
poorer countries, it garners support for its proposals in the UN and is able
'to shield itself from international criticism' on issues such as political
persecution, religious freedom, the occupation of Tibet
and human rights violations.[703]
10.43
Mr John Henderson
and Mr Benjamin
Reilly agreed with this view but also noted that
the weaknesses of Pacific islands make them attractive strategic resources for China:
Their financial and other problems make the support of Pacific
states cheap for Beijing to buy. At
the same time, their utility as a source of diplomatic recognition
(particularly in the China and Taiwan tussle...), voting blocs in international
forums, fishing and other maritime resources, and as possible sites for port
facilities or even military bases, means that relatively small investments in
these countries can have a major longer-term payoffs for countries such as
China.[704]
10.44
Apart from the destabilising effects of the tussle for
power between China
and Taiwan, Ms
Teufel-Dreyer, Commissioner, U.S.–China
Economic and Security Review Commission, noted that advancing self-interest was
a main driver behind China's
diplomacy, particularly with regard to natural resources. She stated she had:
...heard a lot of complaints in the South Pacific that the
Chinese were exploiting their fishing resources; the Chinese were exploiting
their sandalwood; the Chinese were taking their farms...[705]
10.45
Other questions have been raised about China's
motives for showing an interest in the region. For example, there was
speculation about whether the China Space Telemetry Tracking Station on Tarawa
atoll in Kiribati
was for spying purposes. Ideally located, some defence experts suspected that
the base could be used to monitor U.S.
missile tests or assist a future space warfare effort.[706]
10.46
Although China
acknowledged that some people had queries about the tracking station, it
dismissed any such suggestion, claiming that the station was for peaceful
purposes.[707] It was reported that in
1999 to allay local concerns, Chinese officials opened the station for the
towns-people and members of Parliament to inspect. The Kiribati & Tuvalu
Association newsletter noted that a group of elders was given a guided tour
around the satellite tracking station and concluded that the station was not
used for spying and 'therefore there is no cause for panic!'[708]
Committee
view
10.47
As noted earlier, the region is made up of many small
and underdeveloped islands vulnerable to the influences of larger countries.
Any country engaging with a small Pacific island state should ensure that the
island's needs are a priority and that the island's political and social
stability, its economic development and security and environmental interests
are not compromised by the presence of the country or the activities of its
nationals.
Australia's approach to China's presence in the Southwest Pacific
10.48
In its 2003 report on Australia's
relations with Papua New Guinea
and the island states of the Southwest Pacific, the committee noted the
emergence of aid donors such as China
and Taiwan in
the region. The committee considered that:
Australia
should be concerned about these developments, both in terms of the use of
development assistance as a 'blunt foreign policy tool', as well as for Australia's
position and influence in the region.[709]
10.49
It drew attention to the OECD Development Assistance Committee
(DAC) that promotes international best practice for effective official
development assistance. It should be noted that OECD member states must observe
proscribed definitions of what constitutes official development assistance and
submit to a peer review of each others' development assistance programs.
10.50
During this current inquiry, DFAT stated that Australia
welcomes China’s
constructive engagement in the South Pacific and encourages China
to increase the accountability and transparency of its aid programs. It
informed the committee that:
As part of our ongoing dialogue with the Chinese government, we
encourage China
to increase its accountability and the transparency of its aid program in line
with regional aspirations for economic development and improved governance. We
also exchange information with Taiwanese missions in Pacific island countries
where they are represented, again to encourage them to take a constructive
approach to the delivery of aid. In terms of Pacific island governance, the
answer to your question is yes, we have an ongoing dialogue with all of the Pacific
island governments and we seek to use that dialogue to foster good governance, accountable
government and, as part of that, sensible budget management.
It is difficult to make an assessment of the success of those
efforts. Sometimes we do not find out about activities that have gone on until
after they have happened, but it is certainly an area where we have increased
our engagement with both China,
through our official contact, and Taiwan,
through, as I say, our contact with missions in Pacific island countries where
they are represented.
10.51
One of the OECD guiding principles for the development
efforts of all countries is to establish sustainable development through the
use of mechanisms that 'ensure socially responsible economic development while
protecting the resource base and the environment for the benefit of future
generations'.[710] This principle is
especially pertinent to the countries of the Southwest Pacific and the
committee urges the use of such mechanisms to deliver development assistance
and to prevent the exploitation of developing countries in the region.[711]
Committee view
10.52
The committee remains concerned at the effect that China
and Taiwan's
aid program is having on the countries in the Southwest Pacific. Notwithstanding
the potential benefits that aid can bring to financially struggling Pacific nations,
funds provided to local politicians or government officials without proper
conditions attached can encourage fraudulent behaviour and undermine political
stability. Without appropriate safeguards, aid assistance may not be directed
to where it is most needed; it may find its way into the hands of local
politicians, officials, or other improper beneficiaries. Serious corruption or political
unrest can also occur as rival factions bid for increased untied grants in
return for promises of diplomatic recognition.
10.53
The committee accepts that each country in the Southwest
Pacific has the primary responsibility for its economic and social development
but that countries providing development assistance should ensure that their
aid contributes to sustainable development. As noted above in paragraph 10.48,
the OECD Development Assistance Committee has
formulated guidelines to assist donor countries and the recipients of
development assistance. Adherence to these guidelines would ensure the correct,
proper and most efficient use of such assistance.
The Pacific Islands
Forum
10.54
The Pacific Island Forum (PIF) meets annually and represents
Heads of Government of all the independent and self-governing Pacific
Island countries, Australia
and New Zealand.[712] China
is a dialogue partner to the Post Pacific Islands Forum which meets immediately
after the Forum itself and is conducted at ministerial level.[713]
10.55
Since 1990, China
has sent government representatives to attend the annual dialogue meetings to
strengthen 'the cooperative ties between China
and the Forum and its member countries'. In China's
view, it has at those meetings:
...expounded its policy towards the South Pacific region,
promising to take the principles of 'mutual respect, equality and mutual
benefit, opening to each other, common prosperity and reaching unanimity
through consultation' as the fundamental policy for developing its friendly and
cooperative relations with the Asian-Pacific countries including the South
Pacific countries.[714]
10.56
China
offers financial assistance to the PIF and associated activities. In 1999, the
China–Pacific Islands Forum Secretariat Cooperation Fund was established with a
start-up figure expected to be $US3 million. The funds were to be used in the
bilateral trade, investment, tourism, personnel training and exchanges and
other cooperative projects.[715] In
2003, it pledged to contribute $US100,000 annually to supplement the membership
contributions to the Forum Presiding Offices Conference (FPOC) which represents
the Speakers of Parliament and Congress in the Pacific. In 2004, it donated $US70,000
to support the interim Secretariat of the Forum Presiding Officers Conference
and a further $US30,000 to assist a FPOC delegation to Nauru.[716] It should be noted that Taiwan
also provides assistance. It provided $US820,000 for 33 projects in resource
management, health, institutional strengthening, governance and information
systems. Taiwan
has contributed annually to regional organisations 'to an aggregate of US $3.8
million over the part six years prior to 2004'.[717]
10.57
China,
however, has made its stand on the one-China policy clear to this Forum. In
2000, it urged the Forum to uphold this policy in arranging for the Post Forum
Dialogue for this year and beyond. It requested, inter alia, that:
-
participants from Taiwan should not be allowed
to take part in any activities related to the Forum and Post-Forum Dialogue;
-
forum members having diplomatic relations with
China, the PIF Secretariat and other regional organizations in the South
Pacific should not participate in the dialogue with Taiwan; and
-
the PIF Secretariat should not hold receptions
or any other official activities for participants from Taiwan.
China
'demanded' that the Forum take its position seriously.[718]
10.58
In August 2004, at the same time that Vice Foreign
Minister Zhou Wenzhong was stating publicly China's commitment to provide aid,
he was urging members of the Pacific Island Forum to 'remain highly vigilant to
the political manoeuvres of the Taiwan authorities to split up China and
undermine China's relations with the PIF and countries having diplomatic
relations with China'.[719]
10.59
The committee has highlighted its concern about the
intrusion of a donor country's own political agenda into the affairs of the
island states of the Southwest Pacific. It has noted that such interference may
not be in the best interests of the island states and in some cases may impede
rather than promote development and good government practices.
10.60
Evidence to this inquiry underlines the importance of Australia
remaining an interested and constructive participant in the Pacific Islands
Forum. Professor Tow
was of the view that:
...the best thing that we can do is continue to be an active and
concerned player in the Pacific Forum to the greatest extent possible, because
I think the institutional politics in the Pacific really is one episode of institutional
politics that counts, increasingly. Australia cannot be responsive; we cannot
say, ‘Gee, we’re not going to the Solomons,’ and then do a 180 degree
turnaround a year later and say, ‘Yeah, I guess we actually are going to the
Solomons.’ We need to introduce some good, strong, mid- to long-term strategic
projections for the South Pacific region, taking into account the institutions.[720]
10.61
In its 2003 report on Australia's
relations with Papua New Guinea
and the islands states of the Southwest Pacific, the committee recommended that
the Prime Minister of Australia place the highest priority on attending all
Pacific Forum Meetings[721] The
findings of this current inquiry underline the importance of this
recommendation.
Committee
view
10.62
The committee acknowledges the positive and active role
that China is
taking in the Post Forum Dialogue. Its level of interest and engagement
underscores the need for Australia
to ensure that it remains focused on the activities of the Pacific Islands
Forum and attentive to its goals and aspirations. The committee believes that
it is vital to Australia's
interest for Australia
to continue to take a leadership role in the Forum and to demonstrate to all
its members that Australia
is committed to the ideals of the Forum.
Recommendation 7
10.63
The committee recommends that the Prime Minister of Australia
place the highest priority on attending all Pacific Forum Meetings.
10.64
The committee recommends that the Australian government,
through the Pacific Islands
Forum, encourage members to endorse the OECD principles on official development
assistance.
10.65
The committee recommends that the Australian government,
through the Post Pacific Islands Forum, encourage China to adopt, and adhere to,
the OECD principles on official development assistance for the islands of the Southwest
Pacific.
10.66
The committee recommends that Taiwan should also be
encouraged to adhere to the OECD principles on official development assistance
for the islands of the Southwest Pacific.
10.67
The committee recommends further that Australia
work closely with China
to encourage both countries to enter joint ventures designed to assist the development
of the island states of the Southwest Pacific.
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