Australia’s Pacific step-up must help counter poverty

Australia has good reason to be deeply concerned about the vulnerability of Solomon Islands to Chinese influence. The archipelago, site of the decisive Battle of Guadalcanal in 1942 and 1943 won by the US and allies including Australia against Japan, is strategically located. It also has deepwater harbours ideal for naval bases. Despite receiving hundreds of millions of dollars a year in foreign aid from Australia, the Pacific Islands nation of 650,000 people has been unable to prevent a handful of its children living in the rubbish tip of Honiara, the nation’s capital. That incompetence also is reflected in the willingness of Solomon Islands Treasurer Harry Kuma to consider a $US100bn loan, with a $US11bn fee, late last year from “unspecified donors”. The windfall, which is yet to eventuate, was offered through a purported Beijing-based financier who signed himself “Terry Wong”. Mr Kuma’s department advised “the rewards far outweigh the risk”. But the mysterious offer would have left Solomon Islands with a world-leading debt of 77 times GDP, as Ben Packham reported on Monday.

The timing was interesting. The bonanza was offered weeks after Solomon Islands severed diplomatic relations with Taiwan in September last year. At the time, Prime Minister Manasseh Sogavare declared Taiwan was “completely useless to us”. China, he said, would be a better partner “because it could stand up to Australia”. A report by his government on the benefits of switching allegiance from Taiwan to China exposed Solomon Islands’ mendicant mentality. The nation “stands to benefit a lot”, the report said, by normalising diplomatic relations with China. At the same time, the Solomon Islands government chose to ignore a scathing assessment by the Central Bank of Solomon Islands. The bank warned Chinese largesse would result in soaring debt levels. It also noted that Pacific countries allied with Taiwan had higher growth rates than those allied to China.

Graham Lloyd, who visited Solomon Islands as part of The Australian’s China Diaspora series, reported on Monday that Honiara residents said desperate living conditions were a reason many local people were prepared to turn to China in search of greater infrastructure spending. In 2006, a major Australian-led campaign to relocate families from the rubbish tip failed within months. Some families moved out of the tip in 2006 returned shortly after to make money from scavenging metal.

MORE FROM THE AUSTRALIAN’S DIASPORA PROJECT: Overseas Chinese have mixed feelings about Hong Kong’s fate under Beijing’s rule | A tale of two Chinas | Winning over the locals is difficult business

Much of Australia’s aid to the Solomons, which will be $174.4m this year, down almost $14m from last year, will be used for road funding, governance, law and order, gender equity and empowering women. The latter is a peculiar priority when children are camped out on the rubbish tip and Guadalcanal’s garbage and sanitation problems are deteriorating. The Morrison government, under its Pacific step-up, needs to ensure Australia’s aid is carefully targeted. There is no doubt that Solomon Islands and other Pacific nations would benefit from prudent support from Australia. Mr Kuma’s letter to the mysterious “Terry Wong”, warmly welcoming his $US100bn finance offer, suggests Solomon Islands officials are naive at best and willing to throw in their lot with China.