The East-West Center: The New Battle for the Pacific

October 3, 2013

 How the West is Losing the South Pacific to China, the UAE, and Just About Everyone Else 


Dr. Satu Limaye: Director, East-West Center, Washington, DC


Cleo Paskal: Associate Fellow, Energy, Environment and Resources, Chatham House, London

The South-Pacific region is home to 14 different countries and yet, despite the vast ethnic and cultural diversity throughout the area, the U.S. and other Western powers primarily only deal directly with Australia and New Zealand. For much of recent history the West has relied on these two countries to monitor the region, keep tabs on the smaller Pacific Islands and, represent U.S. interests in the area. This relationship has served the U.S. well in the past. However, as markets in East Asia and the Middle East continue to modernize and gain international strength, the U.S. is finding itself fighting to maintain its influence in the South-Pacific region. Emerging economic powers, such as China and the UAE, have begun exerting influence in the region, making connections with Pacific Island leaders and business elites, forming international councils, and exercising soft power. The question that the East-West Center’s guest speaker, Ms.Paskal, hoped to answer is why the sudden interest in these geographically small countries; what do China and other emerging powers see in the region that the U.S. is seemingly unaware of?

Ms.Paskal’s presentation largely used Tonga, a country with a population of approximately 100,000 people, as an example of drastic change in the region, as it has recently gained a large amount of attention from China and the UAE. China has invested heavily in developing Tonga’s infrastructure and come to control 90% of the retail sector; Chinese officials now maintain very close ties with Tonga’s royal family, and, according to Ms.Paskal, the Chinese government recently gifted each member of Tonga’s parliament with a new computer. The UAE has similarly committed economically to the country; when New Zealand suddenly withdrew its funding for a renewable energy summit to be held in Tonga the UAE was quick to fill the void and provide the necessary funds. Ms.Paskal argued that these investments, though at a glance seemingly insignificant, were calculated maneuvers by the two countries to bolster their own economic and diplomatic strengths. Economically the Island countries of the South Pacific are not particularly rich in resources, with the exception of New Guinea, but they do sit at the center of increasingly important trade routes that connect the developing East Asian markets to Australia, South America, and the U.S. The amount of economic trade that passes through the region already exceeds five trillion dollars annually. The amount of goods that flow through the territory of tiny Kiribati is as large as India’s annual economy These routes will only become more valuable as markets continue to develop and China is setting itself up to have significant influence in the region and the future global economy.

Ms.Paskal went on to assert that the significance of the Pacific Islands is not just economic but that they can also carry diplomatic strength when unified. The UAE recently tapped this potential to further assert itself in the global energy market. As tropical islands, Ms.Paskal pointed out that the Pacific Islands have the potential to gain a lot from renewable energies, particularly solar energy, and so when Germany proposed the International Renewable Energy Agency (IRENA) they naturally included the Island countries in the initial body, along with the UAE. One would assume that, as the founders of IRENA, Germany would host the agency headquarters. However, this was not the case. After courting the numerous Pacific Island countries the UAE managed to secure enough votes to have the agency stationed in Abu Dhabi and thus further strengthen their position in the global energy market. This strategy, of uniting smaller and seemingly less significant countries, is the antithesis of U.S. strategy in the South Pacific. Through it the UAE managed to out maneuver Germany on the global stage.

Ms.Paskal concluded that the diplomatic success of the UAE and the economic influence China is developing are clear indicators that the U.S. needs to rethink how it conducts diplomacy in the region. The past strategy of ruling through size alone with Australia and New Zealand is not likely to succeed in a world that is becoming increasingly interconnected. In the Pacific countries like the UAE and China, which are not part of the region, can exercise influence, share resources, and unify the smaller countries. The U.S. must be willing to interact more directly with these smaller countries by opening up trade, increasing educational exchange, and reopening direct flights. Ms.Paskal pointed out that Tong and other Pacific Island countries are largely religious, Christian, and family oriented societies; this makes them unlikely allies with China, which has repeatedly denounced religion and curbs family growth through its policies. The U.S. can tap in to the region’s growing potential but it must change its policies quickly in order to do so. We cannot continue to forge policies based on size and strength alone, we must look to further establish new diplomatic connections. Ms. Paskal ended by stating that the Western perceptions, that countries like Tonga are located at the “edge of the world” are outdated. These small countries are becoming central to new and routes of trade and communication, and it is imperative that the U.S. makes it self present there.

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03. October 2013 by Will Houstoun
Categories: Economics, Energy, South-Pacific | Leave a comment

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