The South Pacific Small Island States: an Increasing Vulnerability

  As a rising geopolitical competition embraces the South Pacific, the small island states (hereafter – Pacific island countries, PICs) are presented with thorny problems. Joining the Belt and Road Initiative, they obviously benefit from cooperation with the PRC, in addition to assistance from Australia, as well as from global and regional donor organizations. At the same time, a risk of being trapped by China-US competition can increase a vulnerability of those states. 
  Located across a vast geographic area, the PICs states are divided into three groups: Micronesia, Melanesia and Polynesia. According to experts’ assessments, the groups are the US’, Australia’s and New Zealand’s spheres of influence respectively.  The islands are very small, mutual trade, investment and technological exchanges are virtually absent. Instead, they are oriented toward cooperation with Australia and New Zealand and, since recently, with China. 
  Although those countries have traditionally been in the spotlight of neighboring (Australia, New Zealand) and extra-regional (the US, France) states, at present they are grabbing more attention. The reasons are numerous. The maritime areas across those islands contain vast biological and mineral resources. For context, according to the estimates made by mineralogists, French New Caledonia “has more than 25% of the world\'s nickel resources and about 40% of the world\'s oxidized nickel ores”. Due to extended Exclusive Economic Zones around those tiny islands, commercial fishing is economically advantageous.  The SLOCs through that maritime area are strategically important, as those waters connect South Pacific with North and South America. In the latter regard, potential benefits of establishing military and support bases to monitor those waterways and eventually shape the strategic milieu in the South Pacific and beyond are of special importance. 
  In retrospect, the PICs occupied a relatively low place in the priorities of big powers. During and after the Cold War, the region was under the supervision of the ANZUS Treaty and the intelligence alliance Five Eyes, which provided the region with more or less clear rules of conduct. At present, those states have to deal with growing challenges. 
  First, the aftereffects of the Sino-American rivalry is a case in point. The US-led project Indo-Pacific region, the Quadrilateral Security Dialogue (Quad) and the trilateral security pact AUKUS (Australia, the United Kingdom, the United States) have brought a high degree of politicization in the regional processes. As the PICs cannot dissociate themselves from those contradictions, the expected overall impact on them will be negative. This scenario will further worsen if those countries are involved in various “collaborative mechanisms” to the advantage of the Quad members, as some experts offer. 
  This factor is all the more timely since the PICs are encountering growing contradictions with China. The latter implements long-term plans with regarding those countries. Although at present China focuses upon developing civilian infrastructure, it may well be used for military purposes. This is amply exemplified by the case of Sri Lanka and sparks concerns among the PICs.  
  Further complicating the situation for them, both regional and extra-regional powers cannot adapt to the on-going global trends. As the Russian researchers Fyodor A. Lukyanov and Ivan A. Safranchuk argue, the present-day international competition involves many spheres and lacks symmetry, while the world actors have to deal with mainly a broad international context rather than their direct competitors. A confluence of multi-dimensional factors complicates “win-win”, “lose-lose” and “zero-sum” types of competition that were typical a short time ago. As a result, none of big powers can formulate, let alone to implement, a clear a coherent policy, to the disadvantage of the PICs that definitely need stable and predictable international milieu.   
  Second, multilateral cooperation in South Pacific is going through a major crisis, which is exemplified by the developments around the Pacific Islands Forum.  Established in August 1971 (as the South Pacific Forum), it was renamed as the PIF in 1999. The Forum consists of eighteen members: sovereign states, as well as French overseas territories French Polynesia and New Caledonia. While the Forum has notable achievements from both substantial and institutional perspective, in February 2021 it encountered the biggest challenge in its history, dubbed by some experts as “Micronexit”. The PIF chairmanship is rotational, and, according to the established practice, the representatives of Micronesia, Melanesia and Polynesia take this position in turn. While the Micronesian states expected support for their candidate (Ambassador Gerald Zackios, a former Minister of Foreign Affairs of Republic of Marshall Islands), the vote was in favor Henry Puna (a former Prime Minister of Cook Islands). This was taken painfully by the Micronesian states, as their candidate had not been elected in both 2003 and 2014. As a result, the Federated States of Micronesia, Palau, Kiribati, Nauru and the Republic of Marshall Islands announced their intention to exit the Forum. 
  Apart from the reputational damage, the substantial implications are negative from both external and internal perspective. Externally, now the PIF cannot speak from all the South Pacific states in international organizations, for instance, in the UN. Internally, sub-regional venues like the Melanesian Spearhead Group, the Micronesian Presidents’ Summit and the Polynesian Leaders Group may strengthen their positions, up to obtaining an official status within the PIF. Arguably, this will produce a dissociating rather than a consolidating effect on the region, to the PIF disadvantage. 
  Third, the Pacific Agreement on Closer Economic Relations Plus (the PACER Plus) gives the PICs more reasons for concern than for optimism. The negotiations on the PACER Plus started in 2009, and the agreement was signed in April 2017. The PACER Plus is a trade agreement that moves beyond the trade agenda (as “Plus” accounts for development and aid aspects with the financial support accounting for 25.5 Australian $). It entered into force on 13 December, 2020.  
  Undoubtedly, the agreement brings the PICs plenty of advantages. To start, it has a high symbolic value, as it came into force amid the COVID-19 pandemic. More to the point, four PACER Plus participants ratified the Agreement after the pandemic had started. Owing to facilitation measures outlined in the Agreement, the time and costs of trade will be reduced. As a result, trade in services is likely to intensify, which is especially important due to a high percentage of services in the GDP of those countries. New opportunities will appear to stimulate the movement of professionals in sectors related to infrastructure projects, education and public health. A kind of “APEC-style visa card” can eventually be developed. A sustainable publishing of regulations and other trade-related documents will increase transparency in this sector. On the whole, the agreement offers its participants many interesting possibilities. 
  Regrettably for the PICs, the PACER Plus disadvantages outweigh its benefits. The asymmetry in possibilities matters, as Australia and New Zealand cannot be compared with other PACER Plus participants. More to the point, the PICs cannot protect their industries in competition with Australia and New Zealand. In its time, it was the key factor behind the decision of Fiji and Papua New Guinea not to join this format. The free investment regime established by the PACER Plus adds to the grievances of the PICs cooperation with vis-à-vis Australia and New Zealand. 
  Although the PACER Plus format gives all its members new opportunities, Australia and New Zealand have expanded their instruments to penetrate the PICs economies, while the latter seem to have obtained relatively few additional benefits. This is hardly surprising given their remoteness from other markets, traditionally strong ties with Australia and New Zealand states and heavy dependence upon their assistance.  
  The afore-discussed challenges have been aggravated by the COVID-19 pandemic. The geographic remoteness of those states, a loss of tourists as a principal source of revenue and a fragile infrastructure of their healthcare systems have been behind their belated ineffective response. 
  In sum, the overall vulnerability of the PICs is growing. In the years to come, the room for their international maneuver will be getting narrow, which makes their overall development prospects highly uncertain.