Thursday, 25 October 2012

A disturbing return of chequebook diplomacy to the Pacific

The United States president Barack Obama is pushing what could be the biggest agreement his administration has carried forward.

The Trans Pacific Partnership, while not a significant enlargement of America’s trading relationships, would bring together many Pacific nations under a free-trade zone in much the same way as the North American Free Trade Agreement (NAFTA).

Currently only four nations are considered members and original signatories: New Zealand, Brunei, Chile, and Singapore. However, economically large countries such as Australia, the United States, Mexico, Peru, and others are negotiating for entry.
While the agreement itself has attracted a healthy level of controversy, the geopolitical realities of the 21st Century will keep such an agreement in the spotlight. The Pacific is becoming a diplomatic battleground as chequebooks are being produced by the likes of China, Russia, and the United States.

The United States announced earlier this year that its primary focus will ‘pivot’ towards the East and onto the Pacific. With access to both the Atlantic and Pacific oceans, whoever dominates North America will always have an interest in the Pacific region. This is why the world’s largest economy never really left the Pacific even while Washington’s focus obsessively fixated for much of the past decade with the other East, the Middle East.

U.S. Secretary of State Hillary Clinton reinforced her leader’s new vision for the future by scheduling an unprecedented visit to the Pacific Islands Forum (PIF) in the Cook Islands, the country that recently succeeded New Zealand as Chair of the PIF, before attending the larger Asia-Pacific Economic Co-operation (APEC) held in Vladivostok, Russia.

Although the United States is the second largest donor to the many Pacific islands behind Australia, the U.S. has promised to increase their aid. Mrs Clinton’s attendance at these summits and U.S. President Barack Obama’s invigoration of the Trans Pacific Partnership (TPP) are exemplary of America’s heightened dove-like presence in the Pacific.

There is some logic to Washington’s change in tack. The South China Sea is the world’s busiest energy highway; crude oil almost literally flows from the Middle East into the fast-growing economies of Asia. Close to 50 percent of all ocean tonnage passes through the South China Sea and it is in Washington’s interest to assure those markets continue to receive their goods.

These days, mentioning China as a comparison to Washington’s movements in the Pacific is almost cliché. Yet according to the Australian think-tank the Lowy Institute, in 2009, China gave close to US$183 million to the Pacific region south of the equator in what are termed “soft loans”.

This number includes an increase in aid to Fiji, the once dreamy holiday nation that Australia and New Zealand politically maligned after the 2006 coup. Chinese influence in the Pacific is just as inevitable as American interest. Geopolitically, Beijing’s protection of sea routes and trading partners is crucial for its economy.

Today the majority of China’s trading partners are in Asia and South America. Expanding from the claustrophobic Yellow Sea is imperative if Beijing wishes to continue their meteoric rise into the 2020s.
China is doing business with tiny also-ran Pacific nations to shore up support as a race for influence in the Pacific increases at pace.

There is little Australia and New Zealand could do about China’s growing influence in the Pacific. Without the economic heft of Beijing, Canberra and Wellington will simply have to get used to the idea that China is here to stay. China needs the Pacific Islands less than they need China, but the reciprocal benefits for Beijing are high enough to continue economic assistance.

New Zealand Prime Minister John Key, speaking at the Pacific Islands Forum in July, emphasised the ability of the Pacific nations to speak together as one on the world stage. Mr Key said this “gives the Pacific family a much stronger voice in global affairs”.

Mr Key’s words speak not only to the objectively rising geographic importance of the Pacific region; they also highlight how this relevance is being chased by more than one major world power. Washington’s pivot to the Pacific has been mimicked by both Russia and China as each attempt to secure access and influence over the world’s largest ocean.

Mr Key has driven a strong warming in relations between Washington and Wellington during his tenure. And while it is tempting to view these relations as countering a rising China, there are more players in the Pacific than Beijing.

Russia is returning to chequebook diplomacy in a similar way to the United States and China. Its recent targets are South of the equator in the Pacific. Although Moscow has joined the vote-buying game relatively late, it has earnestly sought to close the gap.

Russia is flush with cash mainly due to high energy market prices and is turning up the heat on small Pacific island nations. Alone each island lacks any political weight but the Pacific Islands Forum carries 16 votes in the United Nations, a very attractive prize for any nation wishing to make moves on the world stage.

The historic dynamics between Taiwan and China is a good example of the current diplomatic machinations that Russia is attempting in the Pacific. Both nations tried to outbid each other in a bidding war to buy recognition from smaller countries around the Pacific.

The breakaway Georgian states of South Ossetia and Abkhazia were recognised by the tiny nations of both Nauru and Tuvalu in 2009 and 2011 respectively. For their kind diplomatic relations, the two nations received massive financial assistance packages of millions of dollars.

Buying the support of sovereign nations benefits the Kremlin even though the two countries are close to bottom of the world’s most populous countries. Such purchasing of political support is expected to escalate as the strongman Russian President Vladimir Putin’s third term moves into gear.

Yet Moscow still has a long way to go if it wishes to counter Washington and Beijing’s already healthy lead in the Pacific. Russia was only invited to the recent Pacific Islands Forum in the Cook Islands as an “attending” country, rather than a “dialogue partner”. Treating it as a snub, Russia declined attendance altogether.

Yet Russia’s interests in securing votes from small Pacific nations for its own border headaches undermines the ability of the PIF to speak with a unified voice as New Zealand Prime Minster John Key emphasises as the Forum’s strong point.

This is especially true when it comes to elucidating concerns to the world around marine reserves and the growing threat of climate change. Ultimately the members of the Pacific Islands Forum, including New Zealand, are caught up in an international race for our support by much larger countries.

Perhaps the tiny Pacific islands are shrewdly playing off one power against another to leverage maximum gains. So far it has been easy to sell diplomacy for funds. When the only real resource you have is your vote, it makes sense to sell it for whatever price you can get.

But there are bigger stakes for these small, vulnerable nations. Wise heads must prevail regarding who these nations do deals with and when. Short term gains for any of the three major players in the Pacific could undermine long term, healthier partnerships. Chequebook diplomacy can be detrimental by destabilising governance and instilling corruption and arbitrary policies.

New Zealand’s example of tightening relations with the United States might not be useful for each small Pacific country, but it always pays to think about where aid money is coming from. Wellington would be well served to encourage their Pacific neighbours to move off the dangerous path of selling their support too cheaply.

No comments: