We are all going to be thinking more about China for the rest of our lives, for better or for worse. Apart from trade we were most recently startled by the notion that China may be about to build a military base in Vanuatu. Fairfax announced that China eyes Vanuatu military base in plan with global ramifications. A day later we had Chinese military base in Pacific would be of ‘great concern’, Turnbull tells Vanuatu. Followed rapidly by denials by China and Vanuatu, both of which were a bit cranky over the suggestion.
However, China is building a cruise ship terminal near a new international airport it is funding, together with a new official residence for Prime Minister Charlot Salwai as well as other government buildings. Then there was a 1000-seat convention centre, a major sports stadium, and a $14 million school that will be reportedly the biggest education facility in the South Pacific. Early last year, Beijing donated 14 military vehicles to Vanuatu.
Vanuatu is becoming vulnerable to the “debt-trap strategy” that has left a number of countries swimming in debt, where:
- the Centre for Global Development (CGD), an international think tank, suggests its program has already left eight countries swimming in debt: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan and Tajikistan.
Vanuatu, population 270,000 owes around $440 million in foreign debt, nearly half of it to China.
- China has set a pattern in the Indian Ocean whereby it builds infrastructure paid for by concessional Chinese loans which the local government cannot repay. When the government defaults, China enacts a “debt-equity swap” and takes over the asset.
The country then becomes a client state.
Shadow Minister for Defence Richard Marles told Patricia Karvelas that Australia must show more leadership in the Pacific, warning about complacency and our priorities. We badly need to spend more. Early in 2017 The Conversation published a factcheck that found the LNP government had cut foreign aid by about a third, and in per capita terms we contributed twice as much as now in the Menzies era when we were half as rich.
This is what our wealth looks like:
We’ve been doing handsomely according to that, but our record on aid could scarcely be worse:
One of the richest countries in the OECD, but so far away from international benchmarks, what we do does not even amount to a token effort. As pretenders we can’t complain if our Pacific neighbours look elsewhere.
The New Daily looks at the strategic implications.
- National security expert Professor Rory Medcalf wrote on Tuesday that one possible explanation was “a presence that could support [and protect] contentious resource-exploitation activities … such as intensive fishing and seabed mining”.
Vanuatu could also be used to provide a base from which to train the military forces of small Pacific nations “as it extends influence over them”, wrote Professor Medcalf, who heads the National Security College at the Australian National University.
Dr Graham said whatever China was up to in Vanuatu and the Pacific region more generally, the reported plans signalled a huge shift in the dynamics in the region.
“If there’s a penny that has dropped here it is that this is no longer the Australian backyard that it was in the ’80s or ’90s … like many other regions where the hold on power is up for grabs.”
Of course we should have seen this coming. Now if we don’t like it, we’ll have to learn to put up with it. Jawboning from a position of weakness is likely to make matters worse.
Realistically, though, this map from Bloomberg shows that the strategy is probably more about surrounding India and breaking the US web of power. We have limited relevance, apart from a source of raw materials and food.