Will China exploit the situation?

Alfred Sasako





It’s not often that we hear of Russia offering aid assistance in a big way to a Pacific islands nation. Nor have we in this region seen any major projects undertaken by the Russians with Moscow’s funding. Not that we don’t want to engage with the former communist state. No.
Our lack of engagement is due largely to the fact that our own traditional friends have tried everything under the sun to keep the Russians at bay.
Not any more it seems. This year, the Russians have finally and truly penetrated what was once the “us and them” impregnable wall by setting up shop in the tiny central Pacific nation of Nauru.
Donor fatigue, a phenomenon which has forced traditional Western aid donors to give less and less each year, could be a contributing factor to this apparent change of heart.
To show it is genuine, Moscow has made good on its pledge, confirmed seven months ago by Nauru’s Foreign Minister, Dr Kieren Keke, by disbursing the first $10 million of a multi-million dollar aid package Nauru had struck with the former communist state.
In an interview with ISLANDS BUSINESS on “Our Airlines” flight between Brisbane and Honiara on December 19 last year, Keke said his country had struck a multi-million dollar development deal with Russia. Funds under the deal, reportedly about US$50 million, would be used to rebuild the struggling nation’s foundering infrastructure.
Following a visit to Nauru by Russia’s top officials earlier this year, work has begun in earnest, starting with the nation’s port facilities as reported by ISLANDS BUSINESS in January this year.
“Work on critical repairs of Nauru’s port and moorings facility has begun, thanks to the Nauru government receiving $10 million as the first phase of development assistance committed by the Russian government late last year,” Dr Keke who also holds the finance portfolio, announced in an official statement.
Generous grant: The receipt of this generous development grant was a clear indication of Russia’s confidence and support in the present government, despite the current political situation the government was dealing with, he said.
“This is excellent news for all Nauruans. Russia’s assistance is funding the total relaying of the deep sea mooring system with new buoys and new mooring gear, the purchase of a new multi-purpose barge and a complete rebuilding of the port building.
“This is a multi-million dollar project that means the port can return to full capacity handling 45,000mt phosphate ships and overall, port operations will be safer, faster and more cost-efficient,” Minister Keke said.
“And that will translate to greater revenue from export of our phosphate and improved returns for Nauruan stakeholders,” he said.
He added that, “Several million dollars in new equipment and materials have already been ordered and this project is now being fast-tracked.”
The $10-million dollar injection has also enabled the national carrier, “Our Airline” to start work on the heavy maintenance schedule for one of its two aircraft (VH-NLK).
Dr Keke said the aircraft had already been delivered to the John Holland maintenance facilities in Melbourne and the aviation authority’s “C check” and associated maintenance work was well underway.
A new engine for NLK is also being ordered and it will be installed on the aircraft as part of the scheduled maintenance programme.
“This will ensure continued viability and reliability for the airline, which now services a number of charter commitments in addition to its weekly service to Nauru, via Honiara and onwards to Tarawa and Nadi.”
The balance of the $10 million Russian development grant will be allocated to a variety of smaller activities through general budget support.
Minister Keke explained that Nauru’s relationship with Russia went back several decades, but had been dormant for some years until President Marcus Stephen’s government had revived the friendship when the Russian Federation was represented at last year’s Donor Roundtable on Nauru.
There had been follow-up meetings and visits since then.
Dr Keke said Russia had made a commitment to provide both “immediate” and “long-term assistance” to help Nauru address its many development challenges which were self-evident to the Russian visitors.
“During bilateral talks between the respective Foreign Ministers in Moscow last December, Russia had expressed a focus on addressing core economic issues through assisting with the development of key infrastructure and commercial opportunities,” he said.
He warned that the continuation of Russia’s assistance was heavily dependent on Russia’s confidence in Nauru’s leadership and political stability.
“In the event there is a change of government in the foreseeable future, I would think it would be natural that our friends from Russia and all our other development partners for that matter, would naturally review their aid commitment to Nauru in light of the policies and direction any new government on Nauru would want to take,” Dr Keke said.
How did Nauru and Russia get hooked up in the first place? The match-making, it seemed, started last November during a Donors’ Roundtable in Nauru.
Despite its hard-to-get-to location, the Nauru Roundtable was well attended. Countries such as Germany, Greece, Israel, Turkey, the United States of America, and of course, Russia were present.
Russia, it seemed, had an agenda. It is desperate to garner international support for its recognition of Abkhazia and South Ossetia—the breakaway provinces of Georgia. And it is willing to pay the price for the support.
It found that support in Nauru. Soon after the November 14 Roundtable ended, Dr. Keke was on the next flight out to Moscow where he met his Russian counterpart.
From Moscow, Dr Keke was whisked away on a whirlwind visit to the two renegade provinces. Subsequently, Nauru signed on the dotted line, recognising Abkhazia and South Ossetia, staunch supporters of Moscow, as independent states.
The deal reportedly infuriated Georgia, the country that has just fought a bitter war with Russia over the renegade provinces. Although many feel that Nauru’s move would anger traditional allies such as the United States which supports Georgia, there’s been little or no reaction at all from Washington.
As the old adage goes, one man’s loss is another’s gain. For Russia and Nauru at least it is a win-win situation.
Foothold in the Pacific: Russia in this case has gained two areas—a foothold in the Pacific in Nauru and international support for its recognition of Abkhazia and South Ossetia, again through Nauru’s support.
In siding with Russia as it is in this instance, Nauru has in fact become not only a player in international politics but has shown being small is not necessarily a barrier to dealing with the “big boys” of international politics as long as the nation’s interest is at heart.
In its heyday, Nauru was the envy of all other Pacific Islands economies because of revenue from its phosphate mining. Millions earned from the mining operations, however, were largely squandered, especially in real estate investments around the world.
In the end, Nauru was forced to sell many, if not most of its multi-million dollar properties, including the skyscraper it once owned in Melbourne, Australia.
In recent years, Nauru and Manus Province of Papua New Guinea were used as offshore processing centres for Australia’s refugee problem. They were paid tens of millions of dollars. But the Australian Labor Government closed down these facilities after it won power about three years ago, drying up a major revenue source for Nauru.
Given what Nauru has begun receiving from the Kremlin, some cash-strapped Pacific islands states could be already eyeing Nauru’s lead. If they did fall for Russia’s irresistible bait, donors who are unwilling to give without strings attached, shouldn’t be complaining.
With growing mouths to feed in the Pacific, small islands states no longer accept their impoverished nations as mere security reference points in discussions in Canberra, Wellington, Washington or London.
With growing populations and threats from sea level rise, the toll heralding the need to find extra cash in order to remain in the cash economy continues to ring louder by the day.
They want financial recognition to remain in the fold. With Moscow’s foot in the door, and donor fatigue pulling in opposite directions, remaining loyal to traditional partners can become a tricky business indeed.
One thing seems certain. China, which has been growing both militarily and economically in the last decade, could also be on the look-out for opportunities to outdo Moscow.
Whatever happens, the second decade of the third millennia could produce some fireworks in the battle to regain control of the Pacific.