[SCMP Column] Pacific Islands and APEC

October 06, 2018

In just a month’s time, Peter O’Neill’s government in Papua New Guinea will host the biggest diplomatic event of its 43 year life – the meeting of leaders from the 21 Asia Pacific Economic Cooperation (APEC) economies.

Poorest and least developed of all the APEC economies, this elemental country of just 8m people boasts more than 820 distinct languages, and its high-mountain rain forests are still home to dozens of “uncontacted” tribal communities. North of Australia, and making up the eastern end of the string of islands that make up Indonesia, it tapers off into the Pacific Islands and the Pacific’s ring of fire.

The unprecedented challenge of hosting the thousands of regional leaders in its tiny capital, Port Moresby, has obsessed the country’s leaders for the past four years – as it has leaders in Australia, who have provided huge financial support. Cruise ships are being brought in to deal with the chronic shortage of hotel rooms.

One of PNG’s leading “sherpas” responsible for preparing for the year of hosting APEC proudly but nervously showed me four years ago a huge tattoo consuming his right arm: “In God I Trust – APEC PNG 2018”: “Whether we succeed or fail, it will be a year I will never be able to forget,” he commented. Now is his day of reckoning.

To be fair, after nine months of APEC chairmanship, and hundreds of smaller APEC meetings, the PNG has hosted with commendable competence. Given the stresses this year in APEC due to the US’s trade war-mongering, PNG leaders have fought valiantly and well to keep the organisation focused on its missions of trade and investment liberalisation and encouraging regional cooperation.

Tackling the normal APEC challenges of a Leaders meeting – pampering and performing the necessary protocols for the likes of Xi, Putin, Abe and their teams of thousands – would be enough (there is some relief that Trump has opted not to come, leaving responsibilities to Mike Pence and Robert Lighthizer), but a major new challenge has arisen from an entirely unexpected direction: China has called for a meeting of the Pacific Islands Forum on the APEC margins.

Most will never have heard of the Pacific Islands Forum, or PIF as it is known in the acronymic world of APEC. Putting on one side Australia and New Zealand, which account for about 97 per cent of the GDP of the grouping, PIF clusters a further 16 of the tiniest and least noticed economies in the world.

Most will know of Fiji and Samoa and Tonga, if only for the formidable Rugby Sevens teams they send to Hong Kong every spring. But Kiribati? Nauru? Tuvalu? Vanuatu? The Cook Islands? Palau? Tiny Niue has just 1,600 citizens, a GDP last counted in 2003 at US$10m, and might not even exist by the end of the century if global warming continues to lift sea levels.

So why the sudden fuss to hold a PIF meeting? The first, and obvious reason is that if you ignore the “protectorate” powers of Australia and New Zealand, PNG is the “big brother” of the PIF countries. Its US$21bn economy accounts for almost half of the combined US$45bn of the othe 15. PNG’s hosting of APEC provides a rare opportunity to bring to the table the distinct challenges facing these tiny, remote economies dotted across the Pacific.

But then the problems start. For decades, these tiny Pacific dots have been home to a colonial “great game”. As the UK and the US have diplomatically withdrawn (even the US Pacific Fleet rarely strays down among them) so quasi-colonial oversight has been provided by Australia and New Zealand. France remains a presence through New Caledonia and the French Polynesian islands. As upstart China has begun to show interest, distributing aid and other development funding, so some hackles have risen.

In truth, despite the bristling angst among some foreign policy wonks in Australia, China remains a neophyte in the colonial game. Total aid from China – mainly focused on infrastructure-building – amounts to US$1.78bn in the 10 years from 2006 to 2016. That now matches aid from the US and New Zealand, but is a quarter of Australia’s aid disbursements of US$6.8bn. Most of China’s interest has focused on resource-rich PNG, but even then its aid amounts to barely one fifth of aid from Australia.

As a report by the respected Australian think tank the Lowy Institute noted in 2013: “There is little evidence that China is doing anything more than supporting its commercial interests and pursuing South-South cooperation. Even if China has other ambitions, its ability to seriously challenge the dominant role of established powers such as Australia and the US is limited.”

Between 2013 and today, one suspects that the views of defence establishments in Washington or Canberra have become much less sanguine. China’s activity in the not-so-distant South China Sea, and its growing overall military muscle-flexing, have without doubt soured sentiments, but the Lowy Institute’s more measured perspective surely still holds true.

But the main challenges over hosting the PIF lie elsewhere. A total of six of the PIF’s members still today retain formal diplomatic relations with Taiwan – fully one third of the countries worldwide that retain such links. Until a “truce” was called between Beijing and the government of Ma Yingjeou in Taipei in 2008, a rampant chequebook war over diplomatic recognition was being waged that was not being discouraged by the cash-stretched Pacific Islanders.

The recent deterioration in Beijing-Taipei relations seems to have brought an end to that truce. Since 2016, six (mainly Caribbean and Souoth American) countries have switched allegiance to Beijing. There is no sign of the six PIF members loyal to Taipei being persuaded to switch sides – indeed there seems to be a strong anti-China sentiment at present following some crudely bullying diplomacy at meetings in Nauru a month ago – but next month’s Port Moresby meeting seems set for some awkward PIF moments.

At this late stage, it all seems down to my Sherpa friend’s arm tattoo: “In God I trust”.
David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view. Opinions expressed are entirely his own.

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