New Zealand’s move from ‘reset’ to resilience in its approach to the Pacific is not as significant as first appearances might suggest, but it’s clear the Government has real concerns about the region’s economic future, Sam Sachdeva writes
Analysis: Addressing the NZ Institute of International Affairs on Wednesday, Foreign Affairs Nanaia Mahuta seemed eager to set out another turning point in New Zealand's approach to the Pacific.
"The time is right for Aotearoa New Zealand’s Pacific engagement to move from reset to resilience," she said, more than three years on from the Pacific Reset announced by her predecessor Winston Peters.
But Mahuta’s emphasis on genuine partnership and a Pacific-centric approach as underpinning the shift to resilience is somewhat odd, given they were also at the fore under Peters.
In his early 2018 speech to the Lowy Institute in Sydney, Peters spoke of moving past “the donor/recipient interaction and into genuine, mature political partnerships”, and of working towards “a shared Pacific destiny”.
In fact, resilience was itself one of the four key principles outlined in the Government’s 2019 policy statement on international cooperation, which focused heavily on the Pacific.
While New Zealand’s approach may not be dramatically changing, the international environment has become even more uncertain, with the Great Power competition which motivated Peters' policy further shaken up by Covid-19 – a factor which may have driven Mahuta’s speech as much as anything else.
As she noted, the Government has provided more than $200 million in emergency budget support to Pacific nations since the start of the pandemic, with economies usually reliant on tourism hobbled by the closure of borders and near-total stop to international travel.
“Much of the aid that we put into the Pacific is by way of grant, and I think it's a stark difference between how we see ourselves supporting aspirations of the Pacific and how China does." – Nanaia Mahuta, Minister
With the resumption of business as usual for the tourism sector months if not years away, Mahuta acknowledged the need for some countries to consider greater diversification – a move which would be as much in New Zealand’s interests as their own, given our constitutional obligations to realm countries and moral obligations to others in the event of any collapse.
“A resilience approach requires a different outlook and a different perspective, and new conversations with Pacific nations, and I think there must be an appetite to get there, because we do need some circuit breakers to help Pacific nations get through this next period of challenge, which is economic development, more sustainable pathways and addressing the issues of climate change.”
But such structural change could take some time, and it will require both patience and support from New Zealand and other Pacific partners.
Of course, part of the motivation for building economic resilience is concern about which other nations could step in, and what motives they may have, should Pacific nations need to look for a helping hand.
Mahuta has previously spoken out about China’s approach to loans in the Pacific, and she again raised the concern of indebtedness when responding to a question from Newsroom.
“Much of the aid that we put into the Pacific is by way of grant, and I think it's a stark difference between how we see ourselves supporting aspirations of the Pacific and how China does.
“We hope, or I certainly hope, and there've been other countries from the northern hemisphere have said we think the Pacific is an important place to be supporting aspirations, I would hope that they would see New Zealand's approach as a bit of a model.”
Interestingly, the amount of Chinese money going into the region appears to have actually dropped, with a Lowy Institute report from September finding that its bilateral aid had fallen from US$246m in 2018 to US$169m in 2019 – a 31 percent drop, the largest of the top 10 bilateral donors to the Pacific.
Instability between Pacific nations themselves also remains a concern, with the countdown to the formal withdrawal of Micronesian states from the Pacific Islands Forum past the halfway point after their decision to leave earlier this year.
However, the same report noted China remains among the top four donors for the region, and the concerns about so-called “debt trap diplomacy” will likely endure as the pandemic stretches finances and makes concessionary loans more tempting.
“I'm really concerned that without a concerted effort around building the medium- to long-term resilience of Pacific economies, not only are they vulnerable to climate change, but they're vulnerable to increasing debt levels that will set their people back in some quite catastrophic ways potentially,” Mahuta said.
But China has gone on the offensive over the recently announced Aukus alliance and how it might undermine the Pacific, with a Chinese diplomat raising the spectre of nuclear weapons in the region at an event hosted by Diplosphere earlier this week.
Mahuta offered a straight bat to questions about how Aukus would affect New Zealand’s desires for the Pacific, although she endorsed the views of Asean countries who wanted “to maintain some stability and not see an escalation of assertiveness in the region”.
Instability between Pacific nations themselves also remains a concern, with the countdown to the formal withdrawal of Micronesian states from the Pacific Islands Forum past the halfway point after their decision to leave earlier this year.
Mahuta said there was plenty of effort being made to convince the countries to stay, but no indications yet about whether a change of heart was on the horizon – and with just over three months until the point of no return is reached, the resilience of the wider region could take another hit.
