SPECIAL REPORT Australia’s Pacific pivot Destiny, duty, denial and desire Graeme Dobell April 2019 About the author Graeme Dobell is a Journalist Fellow of ASPI. A journalist for 47 years, he has been reporting on Australian and international politics, foreign affairs, defence and the Asia–Pacific since 1975. Graeme worked as a reporter for the ABC for 33 years, 25 of them with Radio Australia. About ASPI ASPI’s aim is to promote Australia’s security by contributing fresh ideas to strategic decision‑making, and by helping to inform public discussion of strategic and defence issues. ASPI was established, and is partially funded, by the Australian Government as an independent, non‑partisan policy institute. It is incorporated as a company, and is governed by a Council with broad membership. ASPI’s core values are collegiality, originality & innovation, quality & excellence and independence. 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First published April 2019 Published in Australia by the Australian Strategic Policy Institute ASPI Level 2 40 Macquarie Street Barton ACT 2600 Australia Tel + 61 2 6270 5100 Fax + 61 2 6273 9566 Email [email protected] www.aspi.org.au www.aspistrategist.org.au Facebook.com/ASPI.org @ASPI_org CONTENTS EXECUTIVE SUMMARY 4 POWER: THE STRATEGIC DENIAL INSTINCT AND THE PACIFIC PIVOT 5 Arcadia and the Pacific taxi test 5 Australia’s South Pacific pivot 6 The strategic denial instinct 10 The China challenge 11 PEOPLE: THE PACIFIC FAMILY AND AUSTRALIA’S OFFER OF ECONOMIC AND SECURITY INTEGRATION 16 South Pacific integration with Australia 16 Pacific workers, PACER Plus and kangaroo–kiwi partnership 18 A Pacific community for the Pacific family 22 NOTES 26 ACRONYMS AND ABBREVIATIONS 29 EXECUTIVE SUMMARY Australia is doing a policy pivot to the South Pacific. The headline driving the pivot is the challenge from China. Australia’s deep strategic denial instinct is roused. Our announced ‘step-up’ is aimed at Papua New Guinea (PNG) and the other island members of the Pacific Islands Forum.1 Add to that list Timor-Leste, which faces the same problems as the islands and is part of the island arc that has obsessed Australia since before federation. With the pivot, we’ve made an ambitious offer to the South Pacific—economic and security ‘integration’—to uphold the region by holding it closer. Integration is a confronting idea for the identity and sovereignty of newly independent nations. Prime Minister Scott Morrison has shown political and diplomatic insight by talking about Australia as part of the ‘Pacific family’. The family imagining offers much, not least a lens to widen Australia’s understanding of our destiny, duty and desires in PNG and the islands. New Zealand will be central in setting the ambition for and the limits to integration. Wellington must play the special role it claims for itself in the Pacific. New Zealand knows all the benefits of alliance with Australia and the free movement of goods, services and people. Yet this embrace of the kangaroo has never hurt kiwi identity or sovereignty. New Zealand is proudly itself, while prospering from the kangaroo partnership. The New Zealand experience of partnership with Australia is the positive model for the creation of a Pacific community to serve the Pacific family. To succeed, the pivot must be long-term policy with a broad vision of what Australia and New Zealand offer the South Pacific. The pivot needs two dimensions: power and people. Power is about Australian policy—diplomatic, defence, trade, aid, business, communications and international broadcasting—driven by our strategic denial instinct. The power questions for Australia are about our interests and influence, but also about our values. And that brings us to the Pacific family. The people dimension is about our values meeting the values and needs of the diverse peoples of the South Pacific. Power and people are the two halves of this paper: • Power: the strategic denial instinct and the Pacific pivot • People: the Pacific family and Australia’s offer of economic and security integration. POWER: THE STRATEGIC DENIAL INSTINCT AND THE PACIFIC PIVOT Arcadia and the Pacific taxi test Up in the Arcadia of the political afterlife, some great Oz leaders are sharing an ambrosia sherbet and reflecting on the recurring rhythms of Australia and the South Pacific over nearly 150 years. ‘The old songs are still the best songs’, Alfred Deakin remarks in his usual meditative tone. ‘We gave the South Pacific a special place in the Constitution, and that song is still playing. Remember how before federation it was the Germans and the French we worried about in the islands?’ ‘Now’, barks Billy Hughes, ‘it’s the Chinese! I reckon I could just dust off all those speeches I made about the Japanese threat. And, of course that 1935 book Australia and the war today that got me turfed from cabinet because it was all too true. In this game, you can get punished for being too right, too early …’ John Curtin coughs and leans forward, knowing the need to cut off Billy before he gets into the full flow of his anecdotage. ‘Ah, yes’, Curtin says, ‘the Japanese on the doorstep, the seminal moment in the way we thought about the island arc and about alliance and … Hang on, you blokes, here comes Bert. Careful, or we’ll get another Evatt rant about the bloody Yanks.’ Evatt floats into a chair and harrumphs: ‘Manus! Manus Island. D’ya see we’re going to build a naval base with PNG and the Americans at Manus? Remember how we won that great fight after the war to stop the US Navy hanging on to Manus as a permanent base? I always reckon they just wanted it so they could keep that magnificent house they’d built for Douglas MacArthur. And now, just 70 years later, they’re … Across the clouds wafts the sound of the gong announcing dinner at the Elysium Bistro. Debate is adjourned. Down below in Australia, the heirs of Deakin and Curtin are embracing the grand tradition, worrying about foreign intruders, massaging the Oz strategic denial instinct, and lamenting our policy drift in the South Pacific. Old songs, indeed. To see how deeply Australia reaches into the South Pacific, try the taxi test. Hop into a taxi anywhere in the islands and negotiate to pay the fare in Australian dollars. My random survey over four decades finds that it’s an easy negotiation anywhere in Melanesia and much of Polynesia, especially Tonga and Samoa. The Oz dollar fails the taxi test in the Cook Islands, where the cabs can’t see beyond New Zealand. Interestingly, though, Oz currency is often acceptable in New Zealand taxis. A kiwi cabbie, of course, knows the local rules about exploiting gormless Australians, and so usually seeks to do the exchange at a rate even more outrageous than the banditry at airport currency kiosks. 6 AUstRalia’S PaciFic PIVOT: Destiny, duty, denial and desire In Melanesia, the taxidriver can be relied on to know the going exchange rate to the second decimal. Allowing for commission, tip and rounding up for the whole note, it tends to be a fair exchange. Plus, it breaks the conversational ice. And interviewing taxi experts on current issues of politics, diplomacy and gossip is a standard rule of the travelling hack’s handbook (‘Foreign correspondent’ chapter). In the islands, the coconut wireless tells amazing stories—and the most amazing thing is how often they’re true. My taxi research methodology is slapdash. The survey began merely because I was usually in a hurry, the banks always seemed to be closed, and the exchange rate offered by pubs is as extortionate as at airports. After a while, though, it became part of the fun of the Pacific. The findings follow another hack handbook rule: one incident is an anecdote, two constitute a trend, three similar events are statistical evidence. Turn now to the places where the Oz dollar doesn’t amount to fair exchange for a fare. In Micronesia, the greenback rules—only the US dollar will do. Much closer to Australia, several attempts over the years to do the deal in New Caledonia got a Non, variously bemused, amused or straight contempt delivered with that hauteur the French are so good at.