"There are conditions which hedge it around: the conclusion of commerce and navigation treaties; agreements for economic co-operation; the right to meddle in internal finances, including currency and foreign exchange, to lower trade barriers in favour of the donor country’s goods and capital; to protect the interests of private investments; determination of how the funds are to be used; forcing the recipient to set up counterpart funds; to supply raw materials to the donor; and use of such funds a majority of it, in fact to buy goods from the donor nation.
These conditions apply to industry, commerce, agriculture, shipping and insurance, apart from others which are political and military. So-called ‘invisible trade’ furnishes the Western monopolies with yet another means of economic penetration. Over 90 per cent of world ocean shipping is controlled by me imperialist countries.
Regarding the issue of geopolitics of energy, a 2008 lecture hosted by Standford University by Michael Klare outlines the new dimensions in that particular arena. (Video posted below).
With regards to the geopolitics of energy as postulated by Klare, the recent and unfathomable effects of the global financial crisis had major implications on geo-political relationships; which was addressed in keynote address by Paul Krugman at the Center for International Security Study's second annual symposium and was held on May 13-14, 2010. (Video posted below)
Coupled with Paul Krugman's ideas, the inability of the U.S to pay its debts (by borrowing more) will have major and irreversible damages to their relationships with other countries including in the Pacific region, and most importantly how the Washington consensus is perceived.
As of this posting, news reports indicate that the U.S Congress had not passed a legislative Bill to raise the debt ceiling and a Bloomberg article highlighted that Australia also seeks to her own debt ceiling maneuver as well. Both countries are currently involved in wars in Afghanistan and Iraq and have spent a considerable amount of treasury and lives in the two-front, open ended conflict.
Australian think tank, Lowy Institute, whose recent blog posting also raised serious concerns about the sacrifices involved. Neither the U.S, Australia nor New Zealand's influence in the Pacific had progressed significantly due to their past, present and projected war footing; one might even argue that the ANZUS trio's grass roots perception in the region, had taken an un-remediable dramatic turn for the worse.
Undoubtedly, the perceived implications derived from the global financial crisis (GFC) is clearly demonstrated in, the intuition and reactions of the South Pacific region nations and its inhabitants, that have long recognized the incurable symptoms of a life-threatening ailment. The spheres of influence and their competition within the region, are moving from the rather nuanced level, to a more defined and overt manner- like prospective suitors wooing their brides.
The problem is these sphere-of-influence policies are a based on a Cold War-era model, in which the traditional allies are the only game in town and so can decide policy in a relative geopolitical vacuum.
Those days are long gone. In an increasingly multipolar world, all sorts of new foreign policy options are available, especially as the enormous value of the island nations of the Pacific becomes increasingly clear.
From a geopolitical perspective, the nations of the Pacific offer (among other things):
Sea-lanes and ports in relatively calm waters (increasingly important as China, in particular, increases trade with South America);
Crucial votes in international fora (Pacific Island countries represent around a dozen votes in the UN - a substantial voting block).
Given what is at stake, other nations are understandably keen to take advantage of discontent with traditional partners in order to advance their own position in the Pacific.
As China’s expanding influence in the Pacific rekindles Cold War rhetoric and America’s fears play out, do we have good cause to be afraid?
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US Secretary of State Hillary Clinton was blunt: “We are in a competition for influence with China. Let’s put aside the humanitarian, do-good side of what we believe in. Let’s just talk straight realpolitik. We are in competition with China.”
Steven Ratuva On China's Growing Influence
"Fiji is now fully entrenched in the Chinese camp, cemented by millions of dollars of aid, intensified military exchanges, increased investment and trade, and enhanced political and diplomatic links. What Clinton fears is already happening.
One of the grave concerns is that China might set up a military base or even a minor military establishment in Fiji. This would redefine the regional strategic balance of power in a significant way, since Fiji is the regional hub and crossroad for South Pacific nations."
Clinton then added, “We have a lot of support in the Pacific Ocean region. A lot of those small countries have voted with us in the United Nations. They are stalwart American allies, they embrace our values.”
In her speech to the Senate Foreign Relations Committee in March, Clinton was not only drawing a “them” versus “us” line of demarcation in the middle of the Pacific Ocean, but making claims to political and ideological support on her side of the line. This is classical Cold War political psychology and a sign we may be witnessing a rebirth of this type of rhetoric as the US and China vie for influence in the Pacific.
Her recent visit to the area was partly to reconsolidate the US-Australian-New Zealand strategic links, which the three countries are keen to maintain following the demise of the old Australia New Zealand United States defence alliance, Anzus.
The increasing acceptance of the Chinese by the Pacific Island states is not because of any ideological preference but rather a response to the growing demand for development aid by the poor Pacific economies. Despite Australian and New Zealand aid over the years, Pacific economies have continued to decline and policy planners have started looking for alternatives.
Australian aid in particular has been singled out as the most problematic because it is based on the paternalistic assumption that it is possible to replicate Canberra-based models of governance and ethics around the Pacific by sending out “experts” to change institutions and associated modes of behaviour. This social-engineering-type approach has provoked charges of cultural insensitivity, neo-imperialism and self-serving economics.
More than 70% of the “boomerang” aid goes back to Australia and very little benefit trickles down to its “backyard”, a term used often by Australian leaders to refer to the Pacific. Recent revelations about fraudulent practices within the Australian aid regime have made a mockery of its own professed philosophy of aid for “good governance”.
Furthermore, Australia’s policy towards the Pacific has provoked unease. The Pacific Islands Forum has been seen as too biased towards Australia (most directors of programmes are Australians), causing leaders of small Pacific Island countries to seek an independent adviser for regional free trade under the Pacific Agreement on Closer Economic Relations (Pacer plus). They are also thinking of taking the advisory role for the Economic Partnership Agreement with the European Union away from the Pacific Islands Forum for the same reason.
Perhaps one of the most significant developments was Fiji’s chairmanship of the intergovernmental Melanesian Spearhead Group, despite Australia’s attempt to thwart this; of interest is how Fiji – considered the “pariah state” of the Pacific – might use this new-found power to get back at Australia.
Worse still, Fiji is now fully entrenched in the Chinese camp, cemented by millions of dollars of aid, intensified military exchanges, increased investment and trade, and enhanced political and diplomatic links. What Clinton fears is already happening.
One of the grave concerns is that China might set up a military base or even a minor military establishment in Fiji. This would redefine the regional strategic balance of power in a significant way, since Fiji is the regional hub and crossroad for South Pacific nations. If this happened, it would certainly vindicate Australia’s naval expansion in recent years to counter increasing Chinese naval presence.
So far, China has made aid commitments of about US$600 million for infrastructure, technology and agriculture to the Pacific. According to a report by ANZ Bank, trade between China and the Pacific Islands has risen from US$180 million in 2001 to US$1.5 billion in 2010.
There are many sides to the growing international interest in the Pacific. Economic opportunities abound from the growth in land and sea mining in Papua New Guinea, Solomon Islands and Fiji. In Papua New Guinea, US oil giant ExxonMobil has started a US$15 billion natural gas project, and Australian and Chinese companies are scrambling for a share of the country’s abundant minerals. A Chinese company has been granted a bauxite mining licence in Fiji, and more are queuing up to take advantage of any future mining boom there.
The Pacific Ocean holds the world’s largest seabed mining potential, with countries like Tonga, Papua New Guinea, Cook Islands, Fiji and Kiribati eager to provide prospecting licences to potential investors. In addition, Pacific Island states collectively own the world’s largest exclusive economic zone per land area, a big attraction for fishing nations such as China, Japan, Korea, the US, Canada and Russia.
The Pacific Island states also own an important political asset – their votes in the United Nations and other international forums. China and Taiwan have been competing over this for years; recently, the Arab League and others have made either bilateral or multilateral approaches hoping to secure voting allies among the Pacific states. Clinton’s speech raised concerns that the US might lose these votes. For Australia, a few votes may have already been lost – China stands to be a winner.
Although China may consider it’s making forays into the Pacific basically for economic reasons, this is not how the West sees it. China is viewed through dual – and, in fact, hypocritical – lenses. On one hand, the US sees it as an economic saviour for propping up the economy with US bond purchases and preventing a collapse, Australia sees it as its biggest market and New Zealand sees it as its third-largest trading partner. On the other hand, China is viewed with suspicion because of its huge military spending for no articulated purpose, and because it is seen as a sometimes difficult, vicious and conspiratorial competitor whose infectious influence on small Pacific Island states should be curbed.
Getty Images/Listener photo illustration
As in the Cold War, the view often held by the US, Australia and New Zealand is that small Pacific states are too timid and unsophisticated to deal with the big bad Chinese dragon, which has taken the place of the big bad Soviet bear.
Australian politicians, think tanks and scholars have taken turns condemning Chinese aid in an array of moralistic denunciations: “non-transparent”, “corrupting” and “debt-generating”. This was a typical Cold War technique meant to confer the moral high ground on the West while painting the adversary as morally corrupt.
The anti-Soviet propaganda may have worked during the Cold War but the anti-China rhetoric is definitely not working today, as Pacific Island states realise they need to move on as mature global citizens and look for alternative alliances outside their immediate post-colonial circle controlled by Australia and New Zealand. Country after Pacific Island country – Fiji, Tonga, Samoa, Cook Islands, Papua New Guinea – have accepted Chinese aid with open arms.
This is transforming the future developmental and political trajectory and reshaping the regional geopolitical architecture of the Pacific in a significant way.
Unlike in the Pacific Cold War, when the line of demarcation was clear, today the line is blurred, except in the rhetoric. What we have is a hodgepodge of interests by a variety of actors, some more powerful than others. The US and China are just two of those actors, although the most powerful economically. They depend on each other: the US provides the market for Chinese goods, and China’s economic surplus helps pay for US debt. For the Pacific Island states, China is not really the big bad dragon with fiery nostrils but, rather, a golden panda whose Midas touch is most welcome. Australia and New Zealand also welcome China’s foreign investment, but both are wary.
China’s emergence as a major power, just as American influence appears to be on the wane, has significantly changed Pacific geopolitics in recent years. The South Pacific is rarely central to major international affairs, but at the height of the Cold War between the Soviet Union and the US, the Pacific was not spared ideological brinksmanship and manoeuvring.
The Pacific was used as testing ground for nuclear weapons and the US had military bases, spy installations and communication posts dotted around the ocean. To reinforce this strategic architecture, the Anzus alliance was formed, based on the “strategic denial” doctrine to keep the Soviet influence out of the “American lake”, a term often used in the 1980s to refer to the Pacific Ocean. New Zealand, as a result of its anti-nuclear policies, withdrew from Anzus in the mid-1980s.
Part of the strategic denial approach was to ensure that small Pacific Island states were to be kept away from Soviet influence through the three countries providing aid. The paternalistic perception, which still persists, was that only the big powers could deal with the Soviets effectively.
At the end of the Cold War in the 1990s, Soviet power in the Pacific diminished and no longer posed any threat to US hegemony. As a consequence, the Pacific lost its strategic value. The US closed down it USAid office in Fiji, and the UK withdrew from the Secretariat of the Pacific Community and closed its High Commissions in Kiribati, Solomon Islands and Tonga. The Pacific became a forgotten “backyard”.
Responsibility for the Pacific was left to Australia and New Zealand, which liked to imagine themselves as mini-imperial regional powers of sorts. During the period of the “war on terror” (in which New Zealand once again withdrew support from the US-led coalition of the willing), Australia – as Washington’s “sheriff” – used the Pacific as a buffer for its own national security. One way of doing this was to cast the Pacific as an “arc of instability” consisting of “failed states” that needed to be fixed, as they were potential breeding grounds for terrorists.
Then suddenly, as a result of China’s intensive involvement, interest in the Pacific began to increase. China is not as ideologically or politically imposing as the Soviet Union was, but its expanding economic influence, at the cost of the old Anzus allies, means the Pacific is living, as the old Chinese proverb suggests, in interesting times.
Steven Ratuva is a political sociologist and a senior lecturer in Pacific studies at the University of Auckland.
Although, the interesting times in the Pacific as alluded to by Ratuva, has become much more acute amid the new mania to mine the seabed; this situation has created an awareness among the various Pacific island nations to re-look, re-define, reclaim interest with their economic exclusive zones (EEZ) with much vigor, but unfortunately viewed through the prism of a dollar sign, at the very expense of environmental concerns and community consultations, as pointed out by NGO's in a Fiji Times article.
The excerpt of the Fiji Times article:
Mining problems appear in Pacific
By IOANE BURESE
Thursday, June 02, 2011
PACIFIC rights groups have called for a moratorium on deep-sea mining until individual nations have decided where they stand on the controversial new activity.
According to AAP South Pacific correspondent Tamara McLean, the call comes ahead of a regional meeting in Fiji next week to map out the future of ocean mineral mining, a potentially lucrative but as yet unexplored industry.
The PNG government granted the world's first commercial lease for deep-sea mining in January to Canadian-based Nautilus Minerals, which is set to extract gold and copper from the sea floor 50km off PNG's north coast.
About eight Pacific nations have been granted licences for the new industry, however, there are few regulation guidelines to manage it.
The Deep Sea Minerals Project, funded by the EU and administered by the Pacific Islands Applied Geoscience Commission, aims to fill that void.
The project's team leader, Akuila Tawake, said the Fiji meeting would provide a much-needed framework which would take shape over the next four years.
"The purpose of the workshop is to help representatives of those countries participating in the project to better understand issues related to seabed minerals and mining," Mr Tawake said in a statement.
However, an advocacy group has spoken out strongly against the meeting.
Maureen Penjueli, coordinator of Fiji-based Pacific Network on Globalisation, said individual governments needed to consult their citizens about ocean mining before the discussion went regional.
"It doesn't seem right to be having regional talks when countries haven't had the discussion with their people," Ms Penjueli told AAP.
"The public perception among educated people is that we really don't know what we're getting ourselves into.
"We've had a terrible time with land-based mining so people are very weary.
"Jumping ahead with a framework for how to do it suggests we've already said we're happy about it, but we most certainly haven't."
She said the issue had to be very carefully managed as multi-million dollar leases were a "terrible temptation" for relatively poor Pacific governments.
"It would be easy for the environmental and cultural concerns to be overlooked due to the huge economic interests," Ms Penjueli said.
She called for a moratorium on activity and regional talks "until the basic issues are dealt with".
Fifteen Pacific nations will be involved in the meeting, to be held in Nadi from June 6.
Australia and New Zealand will be represented and 15 of the world's leading industry experts will be present.
