America needs a new strategy for Pacific Island Countries
If the United States truly wants a free and open Indo-Pacific region, the Pacific Island Countries (PICs) must be a greater part of the United States Indo-Pacific strategy.
The PICs region consists of 15 island states with a population of 2.7 million people. It covers an area larger than the continent of Africa, spans 15 percent of the world’s surface, and is home to rich cultures, natural resources, and biodiversity. There are a number of major players involved in the region: New Zealand, Australia, Taiwan, and Japan; but China is now a major influence as well.
In the last decade, China took significant steps to increase its presence across developing regions and as a global player. As a part of its expansionist strategy, China made dramatic inroads in the PICs. In 2019, Kiribati and the Solomon Islands severed their relationships with Taiwan to establish diplomatic relations with Beijing. China extended its Belt and Road Initiative (BRI) projects to the PICs, while reports indicate Chinese companies have started unsustainable logging, mining, and fishing operations. Though no one knows China’s ultimate goals in the region, China’s encroachment could eventually lead to a military base in Vanuatu or Tonga.
The U.S. and its Indo-Pacific allies should be concerned about China’s growing influence. The area is of immense geostrategic importance. The PICs region covers a vast surface area of exclusive economic zones (EEZ), important maritime routes, key telecommunications cables, and valuable resources.
Chinese activities could infringe on U.S. trade, internet access, telecommunications policy, and environmental projects. Environmentally, China has a poor record in developing countries. Resource-rich countries like Papua New Guinea, which is a trove of gold, copper, and natural gas, are vulnerable to unregulated and illegal resource exploitation that severely damage their islands’ biodiversity and ecosystems. Economically, states like Tonga, Samoa, and Vanuatu could be at significant risk of unsustainable debt from China’s BRI projects. Samoa already owes Beijing USD $386.5 million, or 40 percent of its debt. And on governance, several PICs have a persistent trend of corruption, bribery, and nepotism. A few islands are teetering democracies, including Fiji and Papua New Guinea. If PICs open their borders to Chinese aid and influence, there is a worry that some of these countries could experience democratic backsliding or turn to autocracy.
The PICs face two major threats: the economy and the environment. Many of these countries are reliant on tourism and were impacted severely by the COVID-19 pandemic. The economies of the region contracted by an average of 6 percent in 2020. Meanwhile, climate change threatens the existence of low-lying islands. Tuvalu, Kiribati, and the Marshall Islands are already experiencing the effects of sea level rise on their agriculture and drinking water. Some governments have begun making plans to evacuate populations in a few decades if the islands are submerged by rising sea levels.
To engage with the Pacific Islands, the U.S. should focus on addressing the threat of climate change, opening economic opportunities, and further integrating the region with the United States and its Indo-Pacific partners. To do so, the Biden administration can take the following steps to engage in a better regional strategy.
First, President Biden should appoint a special envoy responsible for the region. The envoy would have ambassadorial rank but does not need to be confirmed by a grid-locked Senate. The special envoy would represent the U.S. on a roving basis across the Pacific Islands with the purpose of strengthening the U.S. presence in the region. The role may be modeled after Peter R. Rosenblatt, who was appointed by President Jimmy Carter to “conduct negotiations on the future political status of the Trust Territory of the Pacific Islands.” Rosenblatt played a major role in negotiating the Compact of Free Association, which created a partnership with the Federated States of Micronesia, the Marshall Islands, and Palau to provide operating rights in the territories in exchange for U.S. foreign assistance and defense protection.
Second, under the Trump administration, Secretary of State Mike Pompeo started negotiations to renew the Compact of Free Association with the Federated States of Micronesia, the Marshall Islands, and Palau. The deal would give the U.S. access to surrounding airspace and waters in exchange for financial aid until the end of 2023 if renewed. A U.S. special envoy could help finalize the compacts and further expand access to other states across the Pacific Island region. The United States could consider incorporating PICs like Nauru and Kiribati into the Compact and extending the agreement past 2023.
Third, outside the Compact states, the United States has had a limited development presence in the region. Australia and New Zealand provide the majority of development assistance to the PICs alongside the World Bank and Asian Development Bank. According to the Lowy Institute, in 2018, Australia sent $921 million bilaterally to PICs, followed by New Zealand ($265 million) and China ($241 million). The United States should grow its presence, but it must do so strategically by playing to its comparative advantages and aligning with its partners.
The U.S. is frequently tempted to allocate funding to all sectors and countries; in this region it should instead prioritize what will likely be a limited budget.
Australia and New Zealand are strong partners of the Pacific Island region, because of their close proximity and large amounts of investment in those states. Australia already has several infrastructure, governance, and anti-corruption projects, established diplomatic relations, and consistent foreign aid. USAID and its development finance partners should supplement Australian initiatives and address the major environmental and economic concerns of the PICs. One suggestion is to help PICs cultivate an environmentally sustainable value-added economy with climate-smart forestry, ocean products, and tourism.
The Biden administration has already opened dialogue with various Pacific Island states, but the process needs to accelerate.
China’s increased presence and the dire economic and environmental threat of many of these islands means now is the time for more engaged partnerships. The Pacific Islands will be the key to a stronger Indo-Pacific strategy for the United States.
Daniel F. Runde is a senior vice president and William A. Schreyer chair in Global Analysis at the Center for Strategic and International Studies. He previously worked for the U.S. Agency for International Development, the World Bank Group, and in investment banking, with experience in Africa, Asia, Europe, Latin America, and the Middle East.
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