10 Aug 2018

US Indo-Pacific funding - a step-up or all talk?

4:35 pm on 10 August 2018

Trailing other Western nations pushing into the Pacific in a bid to counter Chinese influence and promote regional stability, the United States seemingly only arrived on the scene in recent weeks.

New US Secretary of State Mike Pompeo.

US Secretary of State Mike Pompeo Photo: AFP

The announcement of hundreds of millions of dollars into the Indo-Pacific region promised to turn it "free and open."

But it has some questioning whether the US is really stepping up or merely putting on a show with little substance.

On Saturday, US Secretary of State Mike Pompeo pledged nearly $US300 million in security funding for the Indo-Pacific, on top of $US113 million in various initiatives for the region the week before.

But there was little said of where the Pacific fits - at least in dollar terms - into an expanse stretching from the east coast of Africa to the west coast of America.

In a statement, a State Department spokesperson said details on a country basis were not finalised yet, but Pacific Islands are an important part of the Indo-Pacific strategy.

"During the last fiscal year, we provided more than $350 million in projects, grant assistance, and operations that directly benefit the people of the Pacific," the spokesperson said.

"Our close collaboration and support for good governance, security and economic development will continue."

Van Jackson, a former policy adviser to the US secretary of defence, said only trivial amounts will reach the Pacific Islands, once the funding is broken down.

"You'll see a country like Vanuatu get at most five or ten million dollars in security assistance," said Dr Jackson, who now teaches at Victoria University in Wellington.

"What is that going to do?"

Meanwhile, regional competitor China is pushing out hundreds of billions of dollars into the Asia-Pacific through its One Belt One Road infrastructure initiative.

The recent US funding pales even compared to the $US500 million "Pacific Reset" of New Zealand, and almost $US1 billion set aside for the Pacific in Australia's 2018 budget.

"To put it in Trump's New York real estate terms, you can't buy a really great building in New York for $113 million. It's only a third of what his Trump Tower is actually worth," said Sarah Graham, a researcher at Sydney University's United States Studies Centre.

In order to push through foreign aid, Washington is forced to package it up as security or military assistance, which is domestically popular, said Dr Jackson.

"In the current political environment in the US, you're not going to get money to assist foreign governments unless it's in the military space. They're not in the nation-building business."

This is despite Washington's close ties with the Pacific through the territories of American Samoa, Guam and the Northern Mariana Islands, and Compact of Free Association agreements with Palau, the Marshall Islands and the Federated States.

But these relations are being competed with, if not strained, as China opens its own engagement with several countries in Washington's Pacific circle.

Recently, Palau has found itself caught between Taiwan and China as the two jostle for diplomatic recognition from the capital Ngerulmud.

Other states are embracing a more independent outlook, developing strong local tourism industries and adopting renewable energy.

Observers say the US is losing influence in the region fast and will need more than the recent funding boosts to renew its presence.

"A lot of states in the region, particularly South East Asia, particularly small states, will be looking to see whether that engagement is sustained as well," said Dr Graham.

"Is this another example of nice talk and big talk from the United States without substantial follow through?"

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