While Canberra is reportedly negotiating with Papua New Guinea for a joint naval facility on Manus Island, Australia could greatly expand investment in its island neighbours by creating a Pacific infrastructure development bank.
Reports of negotiations over the Manus Island Lombrum Naval Base as a joint facility with PNG come as senior defence analysts confirm that the greatest strategic challenge for Australia comes from Beijing’s expanding presence in the South Pacific.
Australia had originally operated the Lombrum base from the 1950s until PNG’s independence in 1975, and helped in upgrading the facility in the 1990s. A joint facility will give Australia a forward base 2,000 kilometres from Darwin and 1,600 kilometres north of Cairns.
It will also allow for the operation of four new Guardian-class patrol boats that Australia is providing to PNG. Australia is providing 21 such boats to 12 Pacific states and to Timor Leste.
The reported negotiations, begun by former Prime Minister Turnbull with his PNG counterpart Peter O’Neill, come after Beijing expressed interest in redeveloping four PNG ports: at Wewak, Vanimo, Kikori and Manus Island.
Similarly, Australia has offered to fund the $136 million undersea telecommunications cable between the Solomon Islands, PNG and Australia. The Chinese company Huawei had proposed building the infrastructure.
Australia has also moved to block Beijing being involved in the upgrade of Fiji’s Black Rock military camp in Nadi, which is intended to be a regional training hub for South Pacific defence forces.
In 2019, Australia plans to establish a Pacific Security College to provide high-level training and policy development and to enhance high-level networks across the region.
Beijing is rolling out its Silk Road project to extend China’s trade and political influence across Asia, Africa and the Pacific (see News Weekly, July 28, 2018).
As part of this project, Beijing has established an Asia Infrastructure Investment Bank (AIIB), with a focus on infrastructure investment across Asia to Egypt. Given that Canberra has committed $US738 million to the bank, making Australia the sixth largest stakeholder, it is worth examining the range of approved projects Beijing’s AIIB has undertaken since its inception in 2016.
Indonesia: Dams and water projects; regional slum upgrades; an Indonesian infrastructure development fund.
Turkey: A major gas-storage project.
India: An Indian investment and infrastructure fund; Bangalore Metro rail project; an electrical transmission expansion project in southern India; a rural roads upgrade project; Andra Pradesh power project.
Bangladesh: A power-generation project; natural gas infrastructure; an electricity distribution project.
Oman: A broadband infrastructure project.
Philippines: A flood mitigation project.
Egypt: A solar energy project.
Tajikistan: A hydropower rehabilitation project; a border road improvement project.
Georgia: A bypass road project.
Azerbaijan: A natural-gas pipeline project.
Oman: A commercial port project.
Pakistan: A hydropower extension project; a national motorway project.
China: An air-quality improvement project in Beijing.
While the population of Asia is far greater than the 10.4 million in the South Pacific states (here including the 8.1 million people of PNG), the South Pacific island states cover 15 per cent of the earth’s surface that forms Australia’s vital trade routes to Japan, east Asia and across to the Americas.
Furthermore, the Lowy Institute’s Pacific Islands program director, Jonathan Pryke, says that leaders of the South Pacific states prefer to work with Australia rather than Beijing.
According to The Australian (September 22, 2018), Australia’s defence spending in the South Pacific will amount to $120 million this year, two and a half times what the Coalition government spent in 2013. This does not include the cost of the 21 Guardian-class patrol boats being supplied to our neighbours.
Australian’s development aid to the region is expected to be $261.3 million in 2018–19. Since Australia has already committed to supporting Beijing’s Asia Infrastructure Investment Bank, it is pertinent to ask: why doesn’t Australia create its own Pacific infrastructure investment bank to expand investment in PNG and among our Pacific island neighbours?
Beijing has begun to show what such a bank can provide in terms of major investments across Asia and the Middle East, so there is no reason Australia can’t give a similar lead in the Pacific. It would be a “win-win” for both Australia and our regional neighbours.
Such a bank could help build regional economies, expand employment and create a more self-reliant regional economic community that is aligned with Australia and do so without heavy reliance on Australian taxpayers.
As the United States pushes for Europe and its allies elsewhere in the world to become more strategically self-reliant, and as Beijing asserts greater power in the Pacific region, Australia can no longer regard U.S. defence cover as sufficient for protection of its borders. A development bank committed to developing our regional neighbours will be important to secure Australia’s strategic future.
Patrick J. Byrne is national president of the National Civic Council.
