ELIZA BERLAGE. Our flailing aid created a Pacific problem.

The report by Fairfax’s David Wroe of a potential Chinese military presence on Vanuatu sent alarm bells ringing for many. Prime Minister Malcolm Turnbull said a Chinese military base in the region would be ‘of great concern’ and Australian diplomats met with Vanuatu officials last week to find out more details.

Wroe’s story was dismissed by multiple Chinese sources and Vanuatu Foreign Minister Ralph Regenvanu said ‘No-one in the Vanuatu Government has ever talked about a Chinese military base in Vanuatu of any sort.’ Subsequent reports suggest it’s more likely to be a space facility with military implications.

Regardless of the veracity of the story, we know that countries like China and India have been using soft power to expand their influence in the region at a time when Australia’s foreign aid is at a historic low.

This week Minister for International Development and the Pacific Concetta Fierravanti-Wells defended attacks by the Labor party about Australia leaving Pacific nations vulnerable to Beijing’s influence, arguing 80 per cent don’t support increasing foreign aid spending. But shouldn’t our strong economic status rouse us to play a leadership role in the region? And it wouldn’t harm politicians to bolster this notion to voters.

Australia has drastically decreased its donor generosity over the years with successive governments using foreign aid cuts to gain budget savings. Recent OECD figures show Australia has fallen behind for the third year in a row from 17th to 19th and our current donor rate of 0.23 per cent of Gross National Income means we lag badly behind the median aid donor (which gives 0.29 per cent).

China and India are rising global powers — thanks to a burgeoning middle class, huge export markets and military might — so why wouldn’t they take the Western retreat from the Pacific as an invitation to dance? But their support comes with a crippling debt levels and the potential for a favour to be called in down the line.

Professor Clive Hamilton, who warned of this kind of grab for power in his controversial book Silent Invasion, told the Conversation that even he was shocked at how quickly it seems to have eventuated. He argues the west’s failing commitment has ‘made it easy in the Pacific for the people’s republic to move in and gain influence because we have neglected what is after all our strategic backyard’.

“There’s no such thing as a free lunch — any form of aid comes with an expectation that the recipient is friendly to the donor’s national interest. It’s the extent to which this friendship may be tested that raises eyebrows about China.”

While serious conversations are needed about interference in any democracy or society, Tseen Khoo says in light of the ‘yellow peril’ taint in Australia’s history sensationalist tone and language that highlights the ‘Chineseness’ of the threat may only inflame tensions.

The Australian Agency for International Development (AusAID) was founded under the Whitlam government in 1974, to provide policy advice and implement overseas aid policy. But in 2013 the government integrated the work of AusAID into the Department of Foreign Affairs and trade (DFAT). Mention the disbanded department among senior public servants and they’ll ask if you mean ‘WasAID’.

Former DFAT secretary Peter Varghese had a tough message at the time of the merge: it would ‘be a model with a bias towards integration rather than running aid policy and aid programs separate but sort of co-located’. Interestingly, in the years surrounding the scuttling, AusAID procurement was opened to international firms and aid was untied from the least developed countries.

When Alexander Downer introduced the 2006 White paper on aid he stated the objective of our program was: ‘to assist developing countries to reduce poverty and achieve sustainable development, in line with Australia’s national interest’. However the subsequent changes linking resource allocation to performance criteria set up a Hunger Games-style system where countries competed for aid funds. This strategy, coupled with an appetite for stories about the dangers of foreign influence, have led critics like Dan McGarry to arguethat while Canberra decides ‘Beijing listens’ and provides.

Australia’s aid commitment has pivoted from engaging at a local level to fund infrastructure development, to a more holistic approach of developing programs to promote long-term economic growth and improved targets for health and education levels. On paper this is a responsible and sustainable shift. Fierravanti-Wells describes the funding of new roads, wharves, airports and stadiums as financing useless ‘white-elephants’, and Wroe refers to it as ‘sexy’ aid. But for the peoples of developing nations these projects are necessary for their stability and prosperity.

Lowy Institute data shows China has diplomatic relations with eight Pacific island countries — the Cook Islands, Federated States of Micronesia, Fiji, Niue, Papua New Guinea, Samoa, Tonga, and Vanuatu. These nations have racked substantial debts in the hundreds of millions — or according to some sources, even billions — of dollars.

While Australian aid programs use concessional loans, which typically have below market interest rates, and development grants, which require no repayment, the Chinese government is reluctant to release information about the size of loans and repayments. But there’s no such thing as a free lunch — any form of aid comes with an expectation that the recipient is friendly to the donor’s national interest. However it’s the extent to which this friendship may be tested that raises eyebrows about China.

Public servants say a level of cultural cringe between DFAT and the merged AusAID is still relatively strong. To the outsider, the more obvious tension is the change in mission and rhetoric of Australian aid from reducing poverty and inequality to promoting self-sufficiency. On one hand, this seems an appropriate response to criticism of colonialist meddling by those seeking to impose Western structures on other nations, but on the other hand, it is problematic in that it implements market-led solutions and democratic goals on fundamentally different countries.

With the budget released in a few weeks it will be interesting to see if concerns about China’s growing influence in the Pacific are factored in to the announcements. But if recent history is any predictor we’re more likely to see fears channeled into more regulations that dog whistle about Chinese investment in Australia than changing priorities in aid commitment.

This article was first published in Eureka Street on the 18th of April, 2018. 

Eliza Berlage is a Canberra based journalist and podcast producer with a background in sociology. She currently works in the Parliament House press gallery as a researcher for The Conversation’s chief political correspondent Michelle Grattan.

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Michael Flynn

The next federal budget will give some news on funding for aid in our region. We need to look closely so prisons on Manus and Nauru are not in the “aid” basket for the locals. We need to build links with local partners in each country so our spend meets agreed needs. We can expect local elites will often have Australian university qualifications. We could work harder to ask them what we should do next and also involve those in the new Columbo plan initiative. We could start in PNG with conflict resolution before kinetic force. If we ever get… Read more »

WAYNE McGOUGH

I thought we learned our lesson not to ignore the Pacific when we refused to help Fiji in the 1970’s so they picked up the phone to China and Soviet Union about air rights and port rights. We supplied the money. I suggested to my local member they should have a Pacific map in the cabinet room [ as well as open the doors to look at the War Memorial ] and look at the network of ocean they control which blocks our direct and air routes to North America.. Then watch the classic Peter Sellers film where a small… Read more »

tasi timor

‘for the peoples of developing nations these projects are necessary for their stability and prosperity’

Yes, we may think so. But some of those developing countries in the Pacific, including some ‘Melanesian’ countries, have in the past preferred to survive as rent seekers rather than pursue development. Chinese Belt and Road infrastructure development type offers may not be as enticing to rent seeking Pacific elites as some fear and may even be seen as a threat.

Nevil Kingston-Brown

This article seems to have suffered from some copy/paste mistakes. Some parts are duplicated and others out of order.

Scott MacWilliam

Ms Berlage omits perhaps the most important factor in Australian government relations with South Pacific governments, which is indigenous nationalism. It is often forgtotten that upon Independence in PNG, (Sir) Michael Somare specifically advocated closer ties with China so as to get advice from a country with a large rural population and to distance PNG from Australia. Forty years later, a student whom I taught at ANU and who is now a powerful ni-Vanuatu told how Australians did not understand nationalist aspirations. While appreciative of Australian aid which allowed him to study in Canberra, he said `First and foremost I… Read more »