Australia Seeks Security With Pacific Union
Scotsman.com

August 17, 2003
MARK CHIPPERFIELD IN SYDNEY

AN AUDACIOUS plan to fashion a European Union-style trading bloc in the Pacific is being pursued by Australia in a bid to shore up the failing economies of islands in the region.

Under the proposals, which are being discussed by South Pacific leaders at a meeting in Auckland, 16 nations would adopt a single currency and co-ordinate policing, transport, education, health and economic planning.

Australia and New Zealand, the region’s two most prosperous nations, would be expected to play a leading role in establishing the new organisation and funding its operation.

The new union would unite them with populous, resource-rich countries such as Papua New Guinea and micro-states like Tuvalu, Niue and the Marshall Islands.

Australia, in particular, fears that an ‘arc of instability’ of near bankrupt states stretching from Papua New Guinea to Western Samoa could have damaging knock-on effects on its economy and also prove a fertile breeding ground for terrorists.

The idea of a pan-Pacific trading block is contained in a foreign affairs report prepared by an Australian parliamentary committee, which has been largely endorsed by Australian Prime Minister John Howard.

Among the committee’s recommendations are the creation of a common labour market and the adoption of a common currency "based on the Australian dollar".

"Many of the countries suffer the problems that arise in small nations with micro-economies," the report says.

"To obtain sustainable economic growth, reform needs to be pursued across the region."

Howard has been treading carefully around the issue but his stance has still incensed some Pacific leaders, who fear the creation of a trading bloc controlled by Australia and believe the plan smacks of neo-colonialism.

"It would be a very sad day if Australia tried to bully the island nations," said Noel Levi, departing secretary of the Pacific Islands Forum.

"We hope to look at all these initiatives and try to extract from them what is best for the Pacific."

Even New Zealand, which is supporting Australia in its current peacekeeping mission in the Solomon Islands and shares its concern about regional security, is reluctant to endorse an European Union-style trading bloc in the Pacific.

Although the New Zealand business community and a growing number of government advisers support monetary union with Australia, prime minister Helen Clark believes dropping the NZ dollar would be political suicide.

Howard’s stated aim of creating a union of the eight smallest Pacific nations - Kiribati, Nauru, Niue, Palau, the Marshall Islands, Tonga, Tuvalu and the Federated States of Micronesia - is seen as a first step towards the larger bloc.

However, even this is proving hugely controversial with many reluctant to cede power to a centralised Pacific body.

Speaking ahead of the Pacific Islands Forum, Howard said it was clear that independence had not delivered any benefits to the people of these tiny Pacific nations, quite the reverse.

"With the greatest goodwill in the world, many of these countries are too small to be viable in the normal understanding of that expression," he said. "We really have to develop an approach that I could loosely call ‘pooled regional governance’."

Other regional bodies look set to appear, with Australia saying it will pay for a new police academy on Fiji that would train recruits from across the region, apart from New Zealand and Australia.

The Pacific already has a regional university (the University of the South Pacific in Suva) and several countries already use the Australian dollar or New Zealand dollar.

How other supra-national organisations will be funded has not been disclosed, although Australia’s new-found interest in Pacific affairs has been spurred on by intelligence warnings that bankrupt or "failed" island nations could be used by terrorists from South-east Asia or the Middle East.

This is a sensitive issue for the Australian government as 88 of its citizens were killed in last October’s bombing in Bali.

International agencies have already clamped down on a raft of illegal activities in the region, including money-laundering, drug-running, arms smuggling and the sale of passports.

In May this year, Tonga was forced to close its international shipping registry after a vessel flying its flag was intercepted carrying terrorist munitions off the coast of Israel.

When an Australian-led peacekeeping force was dispatched to the war-torn Solomon Islands last month, the only criticism from opposition politicians was that Canberra should have acted sooner.

Outside Australia, political leaders are nervous and view the peacekeepers’ deployment as a worrying precedent.

Vinci Clodumar, a former finance minister from Nauru, said it was feared Australia would take advantage of its financial clout on the forum, rather than working as part of a general consensus. "They are now taking a tougher position," he said. "I hope they are not trying to upset the Pacific way of doing things."

Only the prime minister of Fiji, Laisenia Qarase, has publicly endorsed the Australian proposal for closer economic co-operation; although his comments were fairly muted.

While Howard claims that Australia is merely trying to be a good neighbour - and guarantee that its aid budget $A500m (£207m) is being well spent - others question Canberra’s long-term aims.

Steven Ratuva, a visiting fellow at the Australian National University, believes that the creation of a regional authority would result in many island issues being overlooked.

"In the Pacific, a lot of the national problems are best solved internally," he said. "The over-reliance on regional solutions would undermine local potential for creativity and innovation in favour of the security and governance interests of others."

Judging by the reaction so far, it seems unlikely that delegates attending this weekend’s Pacific Islands Forum will adopt any of the new Australian proposals.

For the past 32 years, the post of secretary-general of the Pacific Islands Forum has been held by a Pacific islander. But Howard’s attempt to install an Australian diplomat, Greg Unwin, made clear that he is keen to see his country take more of a lead in the area.