Economics spats grow deeper amid endemic corruption in Pacific

Ever since the Howard government embarked on a more assertive approach toward the Pacific with the watershed Solomons intervention in 2003, diplomatic spats with our neighbours have grown closer and deeper. The Moti Affair will not be the last. It merely confirms Australian concerns over rotten governance that made the 2003 policy turnaround necessary.

The Australian government has now indicated that it is prepared not only to intervene to prevent state failure, but also to penalise corrupt behaviour and the flagrant flouting of legal processes. The denial of Australian visas to Papua New Guinean and Solomons politicians should therefore be seen as a line in the sand. Cross it, and you pay a price—if not in your country, then in ours.

Gross misconduct among regional political and bureaucratic elites is constantly covered in the Pacific press. But corruption is so endemic that even large scandals barely attract more than a day’s attention. Ordinary people have wearily begun to accept the unacceptable in their governments. Australia is attempting to flip the pot off the stove before the rising temperature of the water boils the frog.

Restoring law and order in the Solomon Islands has been in the interests of the political elites, but any step to address corruption gets blocked because it threatens their privileged position and interests. The Solomons Prime Minister Manasseh Sogavare’s threats to kick out RAMSI officials and to reject Australian aid so that ‘foreigners cannot push his government around’ is thus a familiar refrain.

Last April relations between Papua New Guinea and Australia nosedived after the Papua New Guinean Prime Minister (the Grand Chief) Sir Michael Somare was asked to take his shoes off during a security check at Brisbane airport. After this incident Somare was only too glad to be able to suspend the Enhanced Cooperation Programme (ECP), a police intervention he only ever grudgingly accepted. (The offending shoes became a collector’s item, fetching over $5000 at a charity auction.) 

Somare’s reluctance to accept the ECP was shared by other parliamentarians, including Luther Wenge MP and Governor of Morobe province. Wenge accused Australia of trying to ‘invade’ Papua New Guinea and instructed a rent-a-crowd rally of some 2000 people to ‘chase away’ Australian police. Mr Wenge instigated the successful Supreme Court challenge to the immunity granted to ECP officials, ostensibly because he considered it an affront to Papua New Guinea’s sovereignty. The Australian police were forced to return home.

In late 2004, a major diplomatic row erupted between Vanuatu and Australia. Newly elected Prime Minister Serge Vohor accused two Australian federal police officers of spying, and expelled them. The officers were helping Vanuatu police combat money laundering and drug trafficking. Only a few weeks before a record haul of cocaine (120kg) had been found on a remote coastline just half an hour from the capital Port Vila.

Australia threatened to cut its aid to Vanuatu—over $31 million a year—unless the Vohor government took concrete steps to crack down on corruption and improve the rule of law. But Mr Vohor insisted that ‘good governance’ was a ‘foreign principle’. So he approached a donor he knew would not attach such onerous conditions to its largesse: Taiwan. Two weeks of flip-flopping ensued during which his government broke with China (after 22 years), recognised Taiwan and finally returned to Beijing after Vohor fell from office in a vote of no-confidence. China reportedly gave Vanuatu $32 million in ‘aid’ and two new boats.

This week Solomons Prime Minister Sogavare narrowly avoided a vote of no-confidence, thanks in part to an alleged Taiwanese slush fund for buying votes. Allegations of Taiwanese slush funding were the catalyst for the April riots that saw angry mobs burn Honiara’s Chinatown to the ground after the election of Sogavare’s predecessor Synder Rini. The going rate for a Solomons MP at the time was thought to be less than $10,000.

Canberra has held sway against such ‘chequebook diplomacy’, but Taiwan’s competition with China for diplomatic allegiance is white-anting Australian efforts to improve governance. It has now moved from funding to fostering corruption. Responsibility to taxpayers demands that the Australian government ensures its aid is not wasted.

Media commentators have wrung their hands over ‘Australian machismo’ and ‘megaphone diplomacy’. Kevin Rudd has told Alexander Downer to take a cold shower and then pursue matters through normal diplomatic channels.

But treading softly is not going to lead to the changes needed to turn the failing states of Melanesia around. A key challenge remains how to overcome the resistance of elites who wrap themselves in the flag and hide behind a façade of sovereignty to protect their ill-gotten gains and corrupt practices. Patriotism is indeed the last refuge of a scoundrel.

Susan Windybank is a foreign policy research fellow at The Centre for Independent Studies