Pacific

Overview

Australia has a shared interest with our Pacific neighbours in security, stability and growth in our region, and we are the lead partner in these areas.

The department supported several high-level meetings between the Australian and New Zealand governments. In February 2016, prime ministers agreed to promote seamless trans-Tasman business through the Single Economic Market and to enhance cooperation on security, defence and cyber issues. Our foreign affairs and trade ministers collaborated on PACER Plus and Trans-Pacific Partnership trade negotiations, bilateral trade arrangements and combatting terrorism.

A number of ministerial exchanges strengthened relations with Papua New Guinea. The Australia – Papua New Guinea Ministerial Forum, held in March 2016, agreed to new border and maritime security, policing, aid, health, science and visa measures. The department worked with Papua New Guinea on its preparations for hosting APEC in 2018. The Torres Strait Treaty’s 30th anniversary highlighted Australia’s successful border arrangement with Papua New Guinea, including its provisions for traditional inhabitants. Australian-funded rehabilitation works began at the Lae ANGAU Memorial Hospital.

We strengthened relations with Fiji, including through multiple ministerial and senior official exchanges. The Foreign Minister visited Fiji in March 2016 to review our joint work in response to Tropical Cyclone Winston.

In Vanuatu, the department supported the restoration of infrastructure and services destroyed in March 2015 by Tropical Cyclone Pam. We also participated in the monitoring of Vanuatu’s general election.

We continued to work with Solomon Islands to support stability and preparations for the conclusion of the Regional Assistance Mission to Solomon Islands (RAMSI) in June 2017.

The department supported trade and investment in the region. Then Minister for International Development and the Pacific Steven Ciobo participated in bilateral business forums with Fiji and Vanuatu and in December 2015 led a parliamentary delegation to Fiji, Samoa, Solomon Islands and Tonga to promote economic growth and labour mobility. In May 2016, Minister for International Development and the Pacific Senator Fierravanti-Wells participated in the Australia Papua New Guinea Business Forum.

PACER Plus negotiations advanced on the legal text and market access for goods, services and investment. The department supported the Office of the Chief Trade Adviser to provide independent advice to Pacific countries and to consult with civil society and the business sector.

The aid program also supported initiatives to enhance economic growth. For example, we upgraded and maintained over 2,600 kilometres of core economic roads across the region, and extended skills-for-growth initiatives in Kiribati, Solomon Islands, Tonga and Vanuatu.

The department supported the Prime Minister’s participation in the Pacific Islands Forum (PIF) leaders’ meeting in September 2015. Leaders considered the progress of Pacific regionalism and agreed a number of measures, including a declaration on climate change action and a regional roadmap for sustainable fisheries.

We assisted the Foreign Minister to host a meeting of her PIF counterparts in July 2015 which agreed on measures to strengthen regional disaster management.

The department delivered $1.01 billion in ODA to the Pacific. Our bilateral aid addressed priorities agreed with partner governments. Key areas of investment included governance, health, education, infrastructure and gender. For example, our aid to Nauru supported improvements in public sector management, infrastructure, education and training and health, including the redevelopment of Nauru’s hospital.

We also worked with regional organisations to deliver aid in support of economic growth, effective regional institutions, healthy and resilient communities and the empowerment of women and girls.

Results

Promoting a stable and prosperous regional and global environment by cultivating and deepening our engagement with bilateral and regional partners and multilateral institutions

Pacific Leadership and Governance Precinct

Case Study
Foreign Minister Julie Bishop discussing an architectural model of the University of Papua New Guinea’s proposed School of Business and Public Policy. [DFAT]
Minister for Foreign Affairs Julie Bishop (2nd right), and PNG Minister for Foreign Affairs and Immigration Rimbink Pato (2nd left), with Executive Dean of the School of Business and Public Policy, University of PNG, Professor Lekshmi Pillai (left), discuss an architectural model of the university’s proposed School of Business and Public Policy with Director, James Cubitt Architects, Paul Chrismas, official launch of the Pacific Leadership and Governance Precinct, Port Moresby, November 2015. [DFAT]

Pacific Leadership and Governance Precinct

The Foreign Minister, in conjunction with the Papua New Guinean Ministers for the Public Service and Higher Education, Science Research and Technology, launched the Pacific Leadership and Governance Precinct in November 2015.

Strengthening the public sector is a key pillar of Australia’s engagement in Papua New Guinea. The precinct aims to build leadership skills and management competencies of public servants at all levels of government. The precinct also helps with the development of better business practices and resource allocation in the private sector.

The precinct supports the Government of Papua New Guinea’s objective of reforming and renewing leadership in the country. Stronger leadership and governance will contribute to stability, prosperity and development.

The precinct brings together the University of Papua New Guinea School of Business and Public Policy and the PNG Institute of Public Administration, and builds on relationships between Australian and Papua New Guinean educational institutions.

The Australian National University and the University of Papua New Guinea have established an academic partnership through which a number of Australian academics are working with their counterparts on the development of economics and public policy courses. Our aid program is funding infrastructure improvements so that suitable learning facilities are available. A new Executive Leadership Program will enable public servants and members of the private sector, professional associations, and civil society to discuss, develop, learn and influence policy debate in Papua New Guinea.

The precinct has delivered courses to more than 1,100 PNG students since February 2015, with the support of partners, including the University of Queensland, CIT-Solutions, the Ethics Centre, the Australian Institute of Company Directors, ExxonMobil, and the Australia and New Zealand School of Government.

Improving market access for Australian goods and services, attracting foreign investment to Australia and supporting Australian business abroad

Seasonal Worker Programme

Case Study
Former Minister for International Development and the Pacific Steven Ciobo signing the Seasonal Worker Programme MOU with the Fijian Minister for Employment, Productivity and Industrial Relations. [DFAT]
Then Minister for International Development and the Pacific Steven Ciobo (left), and Fijian Minister for Employment, Productivity and Industrial Relations Jioji Konrote, MOU signing ceremony facilitating the addition of Fiji to the countries participating in Australia’s Seasonal Worker Programme. [DFAT]

Seasonal Worker Programme

The Seasonal Worker Programme links workers from participating Pacific Island countries and Timor-Leste with Australian employers in the agriculture, accommodation and tourism industries. The program benefits Australian businesses by addressing shortages in the Australian labour market, where employers can demonstrate an unmet need for low-skilled labour, and by offering a reliable workforce that meets employers’ requirements.

Pacific Island countries appreciate the program as it provides their workers with income, skills and experience. Since 2009, over 8,500 visas have been issued. The program strengthens people-to-people links and also supports economic growth in the region by providing employment opportunities lacking in home countries.

Remittances form an increasingly important component of Pacific Island countries’ economies and the program has helped improve the lives of participating workers’ communities. The average worker remits around $5,000 over a six-month placement, which communities spend on housing, education, healthcare and household consumption. This amount compares with a per-capita income in most Pacific countries of around $1,650 per annum.

As part of the White Paper on Developing Northern Australia, and in consideration of PACER Plus negotiations, the Government expanded the program in 2015, by removing the annual cap on places, widening eligibility in the agriculture industry, permanently adding the accommodation sector, and commencing a tourism pilot in northern Australia.

The department, including through our Pacific posts, worked with Australian industry and partner governments in the region to bring around 4,500 workers to Australia in 2015–16.

The Government also announced a further five-year labour-mobility pilot between Pacific microstates and northern Australia, led by the department. This will provide up to 250 citizens of Kiribati, Nauru and Tuvalu access to a multi-year work visa for employment in lower-skilled non-seasonal jobs in cities and regions in the north of the country. We expect the first workers to commence in the hospitality industry in late 2016.

Delivering an innovative
aid program, centred on the Indo–Pacific region, which contributes to sustainable economic growth, poverty reduction and regional stability

Stimulating private sector investment in Pacific countries

Case Study
Vanuatu entrepreneur Rona Garae working with Anthea Smits of The Difference Incubator to prepare her business for investors. [DIGITAL STORY TELLERS/Julia Lörsch]
Vanuatu entrepreneur Rona Garae (left), working with Anthea Smits, The Difference Incubator, to prepare her business, Oils of Paradise, for investors, Port Vila, November 2015. [DIGITAL STORY TELLERS/Julia Lörsch]

Stimulating private sector investment  in Pacific countries

Pacific Island countries struggle to attract investment for small and medium enterprises (SMEs). A lack of access to finance for SMEs constrains private sector growth and economic development in the region.

To lift sustainable growth rates, the department trialled two new approaches to attract investment capital for SMEs. In a first trial, we partnered with the Asian Development Bank’s (ADB’s) Pacific Business Investment Facility, which helps SMEs secure loans from commercial banks. Businesses received technical assistance tailored to their specific needs. Recognising that women in the Pacific face particular challenges in raising finance, we also offered a performance payment to the ADB as an incentive, payable when the facility secures loans for 20 businesses led by women.

In a second trial, the department partnered with a Melbourne-based company, The Difference Incubator, to pilot impact investment in the Pacific. Impact investors seek investments that are profitable and which also provide social returns to communities. It is a rapidly growing market internationally, but has had limited penetration in the Pacific.

The Difference Incubator worked with enterprises in Samoa, Tonga and Vanuatu to develop their business models and become ‘investment ready’. A number of potential investments are now well advanced. Many of the businesses participating in the pilot are led by and employ women.

While stimulating private sector investment in the Pacific is not easy, the pilot highlighted the growing interest from impact investors in the Pacific and demonstrated that a pipeline of potential investments exists . Drawing on the success of the pilot, the department is developing a larger-scale initiative—the Pacific Impact Investing Facility—for launch in late 2016.

Analysis and Outlook

The department maintained Australia’s good relations with countries and organisations in the Pacific. The quality of these relationships allowed us to engage in constructive policy exchanges and manage policy differences, while strengthening cooperation on common challenges.

While the Pacific is stable, with a cooperative regional architecture, the region also faces real challenges. Aid delivery remains difficult. Geographic isolation, limited resources, dispersed populations and typically large informal economies with small private sectors pose difficulties for economic growth, human development and the delivery of services. Natural disasters and global economic shocks further exacerbate these factors. Violence, a lack of women in leadership roles and constrained financial opportunities limit women’s economic, political and social participation.

Through our trade negotiations, we advanced work on the removal of trade barriers within the region. The department also facilitated Australian business engagement and investment in Pacific countries.

In cooperation with partner governments, the department’s aid programs supported economic reforms and improved access to domestic and international markets. We assisted countries to deliver services and respond to natural disasters, as well as to improve their disaster preparedness and adaptation to climate change. The department also made incremental progress in increasing Pacific women’s access to justice and support services, improving their representation in decision-making and expanding their access to economic opportunities.

We will continue to work with Pacific partners, both bilaterally and regionally, to address the long-term challenges to stability, security and economic opportunity the region faces.

We will continue to strengthen the Pacific Islands Forum, as the region’s premier political organisation.

Together with New Zealand, we will promote business through the Single Economic Market and also collaborate to advance regional and international peace and security. We will strengthen bilateral relations with Papua New Guinea, particularly as it prepares to host APEC in 2018. We will maintain close engagement with Fiji and continue our support for longer-term post-cyclone recovery. The department will work with Solomon Islands on the transition of Australian support for security to the bilateral aid program, as RAMSI draws to a conclusion.

Increasing economic growth and resilience in the region remains a priority. We will enhance our support for national and regional responses to climate change, push towards conclusion of PACER Plus negotiations in 2016 and work with PIF members and the Secretariat to progress implementation of the Framework for Pacific Regionalism.

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