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Are there consequences for the Pacific from the Ukraine invasion?

By Jeffrey Wall - posted Friday, 4 March 2022

The Russian invasion of Ukraine inevitably raises questions about the stability and security of the South Pacific. In this contribution I want to offer the view there are no direct or immediate consequences for Australia, and more importantly, the Islands of the South Pacific.

My confidence is based on an assessment of China's approach to the South Pacific which differs vastly from that of Russia.

For the last 10 to 15 years China has been pursuing quite deliberate policies in our immediate region. The one certainty to be derived from these policies is that while China seeks to incorporate Taiwan as a fully owned PRC state it has not shown any intentions with regard to the islands of the South Pacific.


Indeed when you look closely at its policies, especially in countries most closely aligned with China, such as Solomon Islands, Vietnam, Tonga and Kiribati, they show no indication of any desire to actually include any of them as PRC "states".

To my mind the reason is quite simple - China's total focus is on pursuing economic relationships which it believe makes these countries subservient to China in ways it wants - such as the establishment of military bases, trade dominance - especially in areas such as forestry and fisheries and the exclusive use of PRC contractors to undertake infrastructure.

Central to Xi's policies are his "Belt and Road" agenda which effectively makes countries that have signed up to it heavily in debt to China - and allows China to effectively determine even key domestic policy priorities.

As far as I can see most South Pacific countries already have Belt and Road debt levels that are unsustainable. It can be argued they include Papua New Guinea where China has focussed in road and electricity infrastructure.

PNG is running annual K6 billion plus deficits, including for the 2002 national budget. It ran up a simlar deficit in 2021 and 2020.

Despite that I have calculated that since the state of 2021 PNG has added at last K6 billlion to its debts to China - principally through PNG Power, which is a basket case even before the debt to China is added!


Its apparent that China is in the box seat to provide the funding - through loans - to enable the ambitious national highways program to proceed. That will cost another K20 billion for the first stages. This project is being pushed hard by the PRC even though its real economic benefits are highly questionable.

When you look beyond PNG, the position in its closest neighbour The Solomon Islands is arguably much more dire.

In the three years since the SI recognised China rather than Taiwan China has put the SI Government heavily into debt and gained an effective 90 per cent control of the construction sector.

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About the Author

Jeffrey Wall CSM CBE is a Brisbane Political Consultant and has served as Advisor to the PNG Foreign Minister, Sir Rabbie Namaliu Prime Minister 1988-1992 and Speaker 1994-1997.

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