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SOUTH PACIFIC: Western Sanctions Make Fiji Turn to China, Asia

Shailendra Singh

SUVA, Dec 12 2006 (IPS) - Sanctions imposed on Fiji by Western countries following the overthrow, last week, of the democratically-elected government of Prime Minister Laisenia Qarase may push the country’s new military leaders towards its Asian neighbours, particularly a willing China, for support.

Ganesh Chand, a former University of the South Pacific lecturer in economics, says that while the sanctions are aimed at the perpetrators of the coup, rather than the country, they could cause the regime to distance itself from its traditional bilateral trade partners, Australia and New Zealand, as well as Britain and the United States.

Chand cited precedence from the 1987 and 2000 coups when interim regimes headed by the late Ratu Sir Kamisese Mara and Qarase, respectively, responded to Western sanctions by embarking on a ‘Look North’ policy, seeking new export markets and investment.

Already army commander, Commodore Frank Bainimarama, has hit out at both Australia and New Zealand and warned them against military intervention. On the other hand, he has spoken glowingly about China, which he visited last year and which has lately been showing aggressive diplomacy in the South Pacific.

Chand told IPS that action against Fiji could be expected to be limited by the Western powers’ desire not to permanently damage trade relations, harm their considerable investments in the country.

Besides, he said, the West was keen to limit Asian presence in the region, Chand said adding that, in particular, the U.S. has been wary of China’s growing influence.

With aid from Australia and New Zealand for 2006-2007 (worth 602 million US dollars) suspended, defence ties on hold and travel bans on those involved in the coup, relations have plummeted, prompting an angry and defiant reaction from Fiji’s military-appointed Prime Minister Jona Senilagakali.

Senilagakali said the new regime would seek to increase contacts with Asian countries. “We did it before during the 1987 coup when I travelled with the prime minister (Ratu Mara) to these countries.”

Under Mara’s interim government from 1987-1990, Fiji backed Japan’s effort to become a permanent member of the United Nations Security Council, and supported China’s membership of the World Trade Organisation. China gave the Fijina army 1.8 million dollars in aid Japanese assistance increased, similarly.

Political and trade ties with Malaysia were also strengthened. Connections formed during the coup periods have endured. Chand told IPS that Fiji and the Pacific region have already seen a significant shift in imports from the ‘European’ world to the Asian over the past 20 years. “I attribute this to the very rapid rise of the Asian economies, capable of competing with the European nations in most consumer goods industries, than to a result of any deliberate policy shift in Fiji,” he said.

“After all, the importers are in the private sector, and they go for the best value for money, which Asian nations have been increasingly providing.”He added that Australia and New Zealand would restore full relations after democratic elections, which, according to the interim prime minister, could take two years.

In the meantime, the two countries will keep the military-appointed regime at a distance through the so-called ‘smart sanctions’, but are unlikely to impose economic sanctions as that would harm their significant business interests and investments in the country.

Australian exports of over 600 million dollars annually to Fiji account for over 46 percent of the country’s total imports, while Australia’s imports from Fiji hover at around 400 million dollars a year. This is over 23 per cent of Fiji’s total imports, making Australia by far the largest destination for Fiji manufactured goods.

Chand says the powerful business lobbies in all the countries have opposed trade sanctions and in the tourism sector, where Australians and New Zealanders have significant stakes in Fiji, the two countries will be “extra careful”.

“The maximum economic damage will come from adverse travel advisories at the official level,” says Chand. “This will affect individual and conference tourism. But if law and order does not become a concern, this also will be challenged by the travel industry.”

Fiji’s biggest foreign exchange earner, tourism, had a record 2005 year, earning some 514 US dollars from 549,000 tourists.

Australia, particularly, wants to maintain its status as the key power in the region, and its diplomats are already wary of China’s ever-growing interest/influence in the Pacific. Australian diplomats estimate that China has more diplomats in the South Pacific than any other country, although Australia has more diplomatic missions.

According to John McFarlane of the Australian Defence Force Academy, the influx of Chinese diplomats has been matched by the flow of Chinese citizens coming in for business – and some for illegal or even criminal activity. More than 3,000 Chinese state-owned and private enterprises have been registered in the Pacific region.

Fiji is among those Pacific Island countries that have adopted a ‘One China’ policy and established close relations with Beijing. A significant increase in aid from China as also Chinese immigration has resulted.

Chand says the U.S., given its keenness to curtail Chinese influence in the region, will ultimately send a strong message to Australia that its policy of alienating institutions and people in Fiji has not been working. The U.S. has already been doing this indirectly through annual state department reports.

‘’Sooner than later, the U.S. will make known to Australia that its policy in Fiji (and the Pacific) has been alienating the regional nations from the western sphere of influence. China is ready with open arms and cheque books to take the place of the western nations. ”

Australia has just emerged from a nasty diplomatic spat with the Solomon Islands and Papua New Guinea during which it weathered accusations of “re-colonisation” for its interventionist polices in the two countries.