Australia announces substantial aid boost for the Pacific

By: Stephen Wright

Australia will increase its aid to the Pacific by more than half a billion U.S. dollars over four years, Foreign Minister Penny Wong said Friday, as the country steps up efforts to keep influence in a region that has increasingly turned to China for development assistance.

The aid will help Pacific island nations respond to climate change, reduce pressure on government budgets and support aviation links in the region, Wong said in a speech at the Pacific Way conference, held in Papeete, the capital of French Polynesia.

The boost to Pacific development assistance forms the largest part of an increase to Australia’s foreign aid spending that will be further detailed in the Australian government’s annual budget due on Tuesday.

It follows a period last decade when Australia’s foreign aid dwindled due to budget cuts under the conservative Liberal party, which was in government from 2013 to 2022. During this time, Canberra’s relationship with Pacific island countries soured.

“Without these investments, others will continue to fill the vacuum, and Australia will continue to lose ground,” as it did under previous governments, Wong said, according to Australian broadcaster ABC.

She said Australian foreign aid would be increased by 1.4 billion Australian dollars (U.S. $877 million) over four years, with 900 million Australian dollars of that allocated to the Pacific.

Australia’s last annual budget, for its fiscal year ended June, had allocated 3.73 billion (U.S. $2.3 billion) to foreign aid.

Wong said Australia would also increase its infrastructure finance fund for the Pacific from 3.5 billion to 4.0 billion (U.S. $2.5 billion) and lend on favorable terms to Pacific island countries.

“We recognize that as a major lender in the region, we have a responsibility to ensure that Australia is a partner that won’t impose unsustainable debt burdens,” Wong said.

Over the past two decades, Beijing has amassed substantial goodwill with economically lagging Pacific island countries by building infrastructure and providing other assistance on easier terms than countries such as Australia.

China’s security pact with the Solomon Islands, signed in April, amplified concerns in the United States and Australia that Beijing aims for a military presence in the region. China’s government also has been providing training to Solomon Islands police.

ABC reported Friday that Australia’s increased aid would include funds for Australian police stationed in the Solomon Islands following riots there last November.

Last month, the United States promised more than U.S. $800 million in assistance over a decade as it tries to rebuild relationships with Pacific island countries after a period of neglect.

Australia is also trying to repair its relationship with the Pacific. Wong became Australia’s foreign minister in May after the center-left Australian Labor Party won national elections.

Since then, she has visited 12 Pacific island nations and territories, which was “an expression of the priority that the new Australian government attaches to this region,” she said Friday.

She also reiterated her support for regional organizations such as the Pacific Islands Forum, which has been challenged by tensions with Micronesian member countries over the forum’s leadership and Kiribati’s departure as a member.

Working through the forum ensures each member country’s sovereignty is respected and that “the responsibility for Pacific security remains in the hands of the Pacific,” Wong said.

Canberra’s increase in aid comes a day after Australia and Fiji signed a Status of Forces agreement, which allows the presence of one country’s forces in another. (KB/RFA)