Nauru’s Rentier Economy and Dependency on Australia
Australia has a longstanding colonial history with Nauru that has evolved into a new client-state relationship. Australia administered Nauru as a United Nations Trust Territory on behalf of New Zealand and Great Britain until Nauru achieved independence in 1968. From 1909 to 1967, phosphate was extracted “for the purposes of the agricultural requirements of the United Kingdom, Australia and New Zealand” until it was handed over to the Nauruan Local Government Council (Scobbie 1993). Katerina Teaiwa contends that the history of phosphate extraction in the Pacific reveals “Australia’s deep, organic… relationship with Pacific Islands, and the imperial structures upon which contemporary Australia-Pacific relations are built” (Teaiwa 2015, p. 375). During its administration, Australia built schools, hospitals, as well as apartment buildings and facilities for non-Nauruans who worked in the phosphate industry. Services such as roads, police force, were constructed using the Nauru Administrative Fund. The British Phosphate Commission paid for technology and infrastructure that directly supported the phosphate industry. Naurans meanwhile did not receive their own benefits, as these services were provided for all residents of the island (Pollock 2014).
Historically, wealth created by the phosphate industry was shared unequally and led to reliance on a rentier economy. A rentier economy is one in which “the larger part of state revenues typically comes from exporting natural resources…National revenues originate from outside sources, rather than from domestic productive sectors” (Luciani 1990, p. 71). In a rentier state, the financial revenues go to a “narrow elite” that controls its distribution, potentially leading to illiberal governance and corruption (Pál 2016). Dependence on one export in a rentier economy can shape social classes, regime type, institutions, and decisionmaking for policymakers (Kirkpatrick 2017, p. 4). While rich phosphate enabled Australia and New Zealand to become agricultural producers, it stripped Nauru of its arable land and sense of autonomy. Reliance on rents can “create an inertia that is hard to overcome…to create and promote new patterns of development” (Kirkpatrick 2017, p. 4). With minimal land and no tourism, a formally independent Nauru was destined to live off rents from dwindling phosphate.
Due to internal and external factors, Nauru failed to use its rentier status in a way that could create a sustainable and viable economy. From 1968, the government of Nauru retained revenues from phosphate extraction and used it to fund the Nauru Phosphate Royalties Trust; however in the 1990s government expenditures and declining exports eventually led to a halt in the industry. To make matters worse, Nauru’s Phosphate Royalties Trust had significant financial investments overseas property markets which went south. At one time one of the wealthiest countries in the world per capita, Nauru was now desperately seeking avenues for government revenue. Between 1999-2002, Nauru attempted to become a center for offshore banking, but a lack of controls led to alleged money laundering. Nauru was placed on an OECD blacklist and was forced to institute tighter banking sector oversight in order for a ban to be lifted (Freedom House 2001). In 2001, the country faced crippling debt and a court case with Japan over unpaid government bonds (Ballantine 2001). By 2003, Australia’s development agency placed Nauru as a priority to avoid it becoming a failed state in the Pacific. Australian Foreign Minister Alex Downer said, “We can’t just abandon Nauru.” From its perspective of colonial oversight, Australia had internal discussions on how to create a clear plan for Nauru to avoid collapse (Forbes 2003).
Offshore Detention: Extension of a Rentier Economy
In 2001, Australia created the ‘Pacific Solution’ to appease the Australian public concerned about the growing wave of asylum seekers arriving by boat. Australia’s policy promoted use of offshore processing centers to disable asylum seekers from entering Australia, thereby discouraging them from fleeing their homeland (Phillips 2012). During the program’s pause between 2008-2012, Nauru attempted to restart phosphate exports. In 2010, in the wake of the global financial crisis and instability in Myanmar and Afghanistan (including an ongoing war in which Australia is involved), Australia experienced an increase in refugee flows. Under the direction of Labor Prime Minister Julia Gillard, offshore processing centers were re-established by 2012 in Nauru and Papua New Guinea (PNG). In 2013, re-elected Prime Minister Rudd and a coalition government launched Operation Sovereign Borders which determined that irregular arrivals intercepted at sea would never be settled in Australia but rather in PNG, Nauru or another third country (Refugee Council 2016). For Nauru, this meant the refugees could be transformed into a commodity central to the country’s livelihood and relationship with Australia. The detention centers became an extension of Australia’s earlier history with extractive industries, where value is placed on foreign land as part of a major economic and political policy.
Australia’s development aid to Nauru has supported its goal influencing politics and development in the South Pacific. In a speech that both announced the 2013 RPC arrangement with Nauru and detailed more than $90 million in previous aid, Prime Minister Rudd linked the RPC directly to Nauru’s economic situation: “Australia is committed to Nauru’s future development” (India Blooms New Service 2013). For Australia, its assistance to Nauru is a drop in the bucket compared to its total Pacific regional official development assistance. Solomon Islands, Fiji and Vanuatu all receive more annual financial assistance, and lack a tangible project as significant as the RPC involving Australia’s government. The peak of Nauru’s aid was in 2002, when ODA was almost 13 percent of Australia’s Pacific island assistance. In comparison, assistance to Solomon Islands reached over 53 percent of its Pacific island ODA between 2005 and 2006 (AusAID 2010). Rather than a strictly aid donor-recipient relationship, Australia relies on Nauru to support its own key domestic policy. And, for a second time, the policy to re-establish the RPC in Nauru came at a pivotal time for a Nauru government facing financial and political instability.
Despite the lack of attention to Nauru, some scholars such as Kirkpatrick (2017) suggest that Nauru has moved to a post-rentier economy. He posits how Nauru will transition to a sustainable economy in the absence of a viable phosphate export industry. This analysis focuses on phosphate processing because it is an obvious commodity and typical scenario of raw material extraction (Kirkpatrick 2017). However, more attention must be given to the centrality of its rented land to process refugees for revenues that are redistributed by a narrow elite. I suggest that Nauru has extended its rentier status with the RPC rather than transitioning to a post-rentier economy. This opens up a new method to analyze Nauru’s economy, political relationships and apply the lessons it learned from its earlier history.
President Waqa has sought to counter some traditional forces of its rentier relationship with Australia but Nauru’s lack of resources has only led to a limited ability to sway policy and take independent positions. Under Nauruan law, the RPC is owned and administered by the Nauruan government. Australia’s role is to fund the RPC and provide capacity development. The government of Nauru assesses asylum claims, and ensures security for the residents (Australia Senate 2015). In addition, Nauru also accepts refugees as settlers. Operations on Nauru cost the Australian government more than $419,425 per person per year and are growing, according to the National Audit Office. According to Australia’s Department of Foreign Affairs and Trade, “The presence of the RPC has generated substantial revenues for Nauru with a high level of employment (revenue is up from $20 million in 2010-11 to $115 million in 2015-16).” Yet, Nauru faces capacity constraints to effectively use those resources to achieve development outcomes and build resilience.
Impacts on Nauru’s Political System
Nauru’s rentier economy has consequences for its governance. Since independence in 1968, Nauru has been a democratic society that consistently holds free and fair elections, including its election of President Waqa in 2013 and 2016 (Packham 2016). For at least a period, wealth in natural resources can provide stability for all types of governments, authoritarian and democratic alike (Kirkpatrick 2017, p. 4). Yet some have challenged the Nauru government’s commitment to democratic principles in light of its rentier economy. Stewart Firth, in his 2016 article in The Journal of Pacific History, outlines multiple examples where the Waqa government has “undermined democracy.” This includes weakening the judiciary, suspension of Members of Parliament, firing high-ranking public servants and curbing freedom of speech and other civil liberties (Firth 2016). For some of these reasons, New Zealand suspended its official development assistance worth US$750,000 in 2015 (Radio NZ 2015). These examples contradict Australia’s desire to support a stable and prosperous neighbor that can effectively support vulnerable refugee populations. I agree with Firth’s consideration that Australia’s need for Nauru to host its RPC has outweighed the need to condemn or seek to restrain the Nauru government.
Several political crises in Nauru stemming from its rentier economy are complicated by intense personal rivalries. Nauru’s lack of a strong party system means that candidates often run as independents and do not follow a party ideology. Changes in allegiances within government is common. Thus, for operations funded and supported by international actors, the less change in leadership, the better (ADB 2015). Corruption is a critical issue for Nauru (Pollock 2014). In an illustration of Nauru’s political frustrations in 2014, a journalist for The Age wrote that “Politicians in Nauru are elected in the hope that they will resist abusing the privilege of office, as many have before them” (Metcalfe 2014). Allegations have surfaced that President Waqa and Justice Minister David Adeang accepted bribes from an Australian phosphate company in 2009 and 2010. During the investigation in 2013, the police commissioner was suspiciously dismissed (Freedom House 2016). Additionally, Minister Adeang’s wife burned to death and did not allow a formal investigation (Fox 2015). These examples of crises and corruption can be linked to Nauru’s rentier status and create a negative climate for its ability to process and settle refugees.
Nauru has also seen restrictions on the freedom of expression and information during the existence of the RPC. In 2015 allegedly in response to public criticism, the government removed the former manager of internet service provider Digicel and requested that they block all access to Facebook and several other sites. President Waqa maintained that the ban was first to prevent access to pornography, and later to protect Nauruans from bullying (Firth 2016; Farrell 2015). Legal changes were also made to criminalize “‘political hatred’ or any statement deemed likely to threaten public order punishable by up to seven years’ imprisonment” (Firth 2016). Australia has taken advantage of Nauru’s remoteness and imposed strict rules on information gathering and release. Most foreign journalists are barred from entry, and the price of a media visa has climbed to $8,000 per application; yet there is no guarantee that the government will allow the request (Doherty 2016). Workers must sign nondisclosure contracts and whistleblowers can be prosecuted (Cohen 2016). The lack of communication has resulted in restricted access to the RPC and controlled information flows.
Major domestic legal changes required for Nauru to prepare for the RPC have centered on security and refugees. Nauru passed two sets of legislation, the Refugees Convention Act 2012 and the Asylum Seekers (Regional Processing Centre) Act 2012. These laws enabled the Nauru government to process refugees for Australia in exchange for financial support. An interim Joint Advisory Committee was established, co-chaired by officials from both governments to provide oversight (Hamburger 2013, p. 3). As part of the Pacific Police Development Program, Australia’s Attorney-General’s Department has worked with the Department of Justice and Border Control in Nauru to replace the Nauru Criminal Code of 1899 with the Crimes Act 2016, and introduce mental health legislation (DFAT 2016; Nauru Government 2016).
These new laws establish the conditions for refugees to be used as a commodity to replace phosphate and help perpetuate a rentier relationship between Australia and Nauru. Pollock (2014) claims that during phosphate mining, “Nauruan autonomy was overridden by external commercial exploitation. The economics of extracting phosphate dominated while humanitarian issues arising from imposed commercial activity were sublimated.” Because of financial, socioeconomic and political problems, Nauru has become a critical pillar of Australia’s development and security policy for the Pacific.
Impacts on Nauru’s Economy
In addition to domestic political changes, the RPC has prompted Nauru to integrate into international organizations and develop more long-term financial planning. Because of its small size, remoteness, and lack of human resources, Nauru is often neglected in international financial statistics, and has only recently become a member of international financial institutions. Statistics vary regarding the island’s GDP growth and per capita income, but it is clear that Nauru is at relatively full employment and the RPC has supported annual economic growth. In April 2016, Nauru became a member of the World Bank and International Monetary Fund, the organizations’ smallest member by land mass (World Bank 2016). Joining the IMF and World Bank will enable Nauru to have access to more capital and technical expertise and improve its prospects of attaining funding from climate funding mechanisms like the Green Climate Fund. At the same time, these institutions place constraints on Nauru’s policymaking.
The Nauru economy continues to expand, but sources of growth are limited and it is heavily reliant on foreign assistance. The RPC and its related revenue streams dominate, followed by phosphate exports and fishing licenses. As a percentage of GDP, Nauru receives more financial aid than any other Pacific island country (ADB 2014). In 2015-16, Australia provided $25.2 million in Official Development Assistance to Nauru, roughly 20 percent of the Nauru government’s budget. It is no surprise then that Australia is Nauru’s major development partner, along with Taiwan and Japan (DFAT 2015).
Australia’s role in transforming Nauru’s economy to support the RPC through financial assistance, payment for the RPC and technical support is evident. For example, in 2014, visa charges were the largest source of government revenue at $18 million, half of which came from asylum seeker visas paid by Australia (Flitton 2014). Australia maintains a breadth of social, security and economic programs as part of its development agency, but these have implications for Nauru’s ability to host the RPC. The Australian Federal Police run the Nauru Police Force Police Capacity Program which focuses on creating and maintaining “effective governance systems, training and the provision of critical policing resources” (DFAT 2016). Yet, the ADB has been critical of Nauru’s development progress. Education outcomes are improving but still poor. Nauru lacks sufficient residents for key public sector management roles, relying on external technical expertise. According to the ADB, “levels of noncommunicable diseases (i.e., diabetes and cancer) are among the highest in the world” (ADB 2014). Australia’s development programs and direct assistance support areas that reinforce the viability of the RPC like security and infrastructure, but less has been achieved in education and health.
If or when the RPC closes, the Nauru government is shoring up options for long-term financial sustainability. Australia helped Nauru to institute its first income tax in 2016, important for Nauru’s long-term self-sufficiency. In the last 2 years, the government created the Nauru Intergenerational Trust Fund for the people of Nauru (NTF), also with Australia’s support. Sovereign wealth funds help a country to avoid shocks to the economy driven by natural disasters, economic sources, or other uncertainties. According to the ADB, “the purpose of the NTF is to build-up a sufficient principal value that can provide a future stream of public revenue to support investments in education, health, environment and public infrastructure” (ADB 2016). The build-up phase is ongoing and started with Nauru’s $20 million deposit in January 2017.
Both Australia and the international community are concerned about the extent that Nauru relies upon the RPC for its revenues. The Asian Development Bank has warned that “If the RPC is closed, or significantly scaled down, the government could undergo a painful and potentially destabilizing fiscal adjustment. Without access to additional external financing, government spending would have to be severely curtailed” (Rajah 2016, p. 12). Nauru’s GDP has grown from $20,443,291 in 2007 to $100,457,157 in 2015. It peaked in 2014 at $117,023,941. In addition, GDP per capita has gone from slightly over $2,000 in 2007 to close to $10,000 in 2015 (World Bank). While the Nauru government appears to be planning for its future, with or without an RPC, deeper economic analysis is needed to assess long-term implications for its rentier status as it relates to Australia’s asylum seeker policy.
Future of the RPC
The future status of the RPC in Nauru is unclear, as Australia continues to refine its asylum seeker policy. In addition, the existing contractor has stated it will not renew its contract or even rebid in October 2017 (Blakkery 2017). As of March 31, 2017, there were 373 people in the Nauru RPC (Department of Border Protection & Immigration 2017). Current Australian policy precludes anyone who has attempted to travel to Australia illegally from every being allowed to settle in or visit Australia. Having an agreement with Nauru for settlement is handy to appease Australia’s domestic public because it allows the government to still ‘process’ refugees and provide a place, albeit outside of Australia, for them to live. Past practice shows that this policy could change with leadership.
The United Nations, Amnesty International and others have called for the closure of Australia’s Offshore Processing Centers. Primary concerns for critics have been the lengthy time that asylum seekers spend on Nauru to wait for processing and lack of independent security and healthcare provisions (Phillips 2012). In 2013, a major riot broke out which cost $60 million and destroyed most of the RPC buildings (ABC 2013). An official review stated it was caused by the uncertainty that migrants face about their futures and lack of information about their processing status (Hamburger 2013). Additionally, reports by the United Nations High Commission on Refugees show that the detention center on Nauru led to worsened mental health for refugees (UN News Centre 2016). This is problematic not only for the refugees but for those that place the individuals back into society (McKenzie-Murray 2016).
Refugees who settle in Nauru and asylum seekers waiting for processing can provide new economic opportunities for the local community. Currently, the government promotes and participates in events that promote local businesses like restaurants started by refugees. Refugees can provide employment, bring new cultures and a sense of stability. However to effectively be processed and settled into the community they should have sufficient access to resources to cope with their new environment and the situation they have fled.
Nauru remains a rentier economy even though it has replaced resource extraction with the processing and holding of Australia’s unwanted refugees as a primary source of income. Nauru is reliant on its relationship with Australia for RPC funding and aid in order to maintain much needed civil programs and benefits from the contributions of settled refugees. Its continued rentier status also entails problems for its economic future and the status of the country’s democracy. The contract to manage the RPC expires in October, and it is unclear who will step forward to take over the role, leaving the future of the center and Nauru uncertain. Further, the resources including money and infrastructure provided by the RPC are controlled by a small group in Nauru and benefits may not be felt by the whole population. Relatedly, the relationship provides opportunities for corruption in Nauru’s political system. There are ongoing concerns regarding Nauru’s commitment to democratic principles, transparency and press freedom. The development of a rentier economy may hinder democratic processes and promote authoritarian rule.
The RPC places pressures on the small island state to balance its commitments to Australia, international human rights and its public. Nauru shares these concerns with other small states with rentier economies, not least PNG, which also hosts an RPC for Australia. The RPC in Nauru has been established to manage populations fleeing wars, persecution, and impoverishment. We may see an increase of these types of offshore processing centers to manage precarious populations uprooted by man made and environmental disasters. Nauru is an important case study in how these facilities affect local populations.
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What are your responsibilities as non-resident Ambassador to the Pacific Islands Forum?
As Non-Resident Ambassador to the Pacific Islands Forum (PIF), my role is to represent Singapore’s interests vis-à-vis the Pacific and, just as importantly, also to enhance existing ties between Singapore and the Pacific Island States. Essentially, I am like a contractor building more bridges between governments, institutions, businesses and peoples. I hope to create a network of friends in Singapore for the Pacific and in the Pacific for Singapore and in the process raise awareness of each others’ strengths and vulnerabilities and the opportunities available in each others’ territories.
My other diplomatic colleagues and I represent Singapore’s broader engagement of plurilateral and multilateral processes, which are imperative for small states like Singapore. Like the Pacific Island States, Singapore has many inherent vulnerabilities due to its size, its serious lack of natural resources, and its limited land mass. As a low-lying island state we, too, are vulnerable to rising sea-levels. Likewise, it is undoubtedly a struggle for small states like Singapore and the Pacific to make themselves heard on the international stage, but working together allows us to amplify our voices. In addition, small island states generally understand the challenges that each faces at a fundamental level, which enables them to better explore solutions that are mutually beneficial. This is a key reason why Singapore established the Forum of Small States (FOSS) at the United Nations.
What are some of the differences between Singapore’s approach to engagement with a multilateral forum like the Pacific Islands Forum compared to bilateral engagement with Pacific island states?
Bilateral and multilateral engagement ultimately serve a similar purpose, which is to promote a country’s interests internationally. As a small country, Singapore’s foreign policy is centred on cultivating as many friends as possible while preserving its sovereignty and independence.
Bilateral engagement focuses on promoting good relations between two countries, through dialogue, cooperation, mutual respect etc. It tends to cover issues that are particular to that relationship. For example, if both countries share a resource such as water from a common source, they need to cooperate to ensure that both are able to access that resource in a mutually beneficial manner. In the case of Singapore’s bilateral relationships with the Pacific Island States, one of the ways that Singapore works with these countries is through the provision of technical assistance. Singapore shares similar challenges to those faced by the Pacific Island States, and has had first-hand experience in addressing such issues. Singapore can therefore work with a Pacific Island State such as Fiji, Kiribati, or Tonga, to identify areas of interest, such as transport planning or economic development, and provide technical assistance in such areas. To date, we have trained close to 5,000 officials from the Pacific Islands under the Singapore Cooperation Programme, a platform through which we share Singapore’s developmental experience.
However, there are issues that cannot be dealt with only bilaterally and have to be addressed at the broader level given their transnational nature; climate change, transnational crime, and infectious diseases are all examples of challenges that have far reaching effects and require a coordinated response across the globe. This is where multilateralism becomes essential. There is certainly an element of promoting good relations with other countries at multilateral fora. However the framework for multilateral engagement is somewhat different and there are generally many more stakeholders involved on any particular issue.
On a broader scale, Singapore uses international platforms such as the UN to voice its views and concerns on global affairs which impact its people or even promote issues that we feel will benefit the global community. One example of this is the “Sanitation for All” resolution, which Singapore tabled at the 67th session of the United Nations General Assembly to draw greater attention from the international community to sanitation, public health and hygiene. Singapore is only a development partner of the Pacific Islands Forum, our role in the Forum is much smaller compared to that of its members. Nevertheless, it affords a space for Singapore to identify commonalities, exchange ideas and explore partnerships with our fellow small island states.
At the latest Pacific Islands Forum Minister’s Meeting in Suva, Fiji in August, attendees agreed that there needs to be a unified Pacific voice at international gatherings. As a small state in ASEAN and APEC, how does Singapore attract international attention and build coalitions around common foreign policy interests in the Asia-Pacific?
Fundamentally, Singapore can only attract international attention as long as we remain relevant, active and constructive. If we are not able to adapt, survive and prosper as an independent and sovereign nation, other countries would quickly lose interest in us. When it comes to building coalitions around common foreign policy interests, it is essential to be constructive, seek common cause, and provide solutions, even where it concerns an issue in which Singapore has no personal interest. One way in which Singapore seeks to make common cause is through our establishment of the Global Governance Group (3G), an informal coalition of 30 small and medium sized states that exchanges views on global governance and financial rules and IMF/World Bank economic policies. The 3G provides input to the G20 to helps make the G20 a more inclusive and representative grouping. It is also important for Singapore to remain engaged in the international system to uphold international norms and practices, including on matters such as the rule of law and freedom of navigation.
Getting a group of countries to come to a consensus is difficult where they have different national interests and priorities. The challenge is in identifying common purposes and benefits, which are often determined by circumstances and factors beyond our control. To do this, we must be able to understand other countries’ concerns and persuade them to appreciate our ideas from their point of view. If we are able to convince others that they will benefit from a certain course of action, this will effectively align our interests and contribute towards building consensus. Take ASEAN, which is comprised of 10 member states of different sizes, demographics, levels of development, geostrategic circumstances and histories. Despite our differences, in 2015 the ASEAN Member States came together to form the ASEAN Community, to catalyse deeper integration within the region in the economic, social and cultural spheres. Of course, there are issues on which the ASEAN Member States have different positions, however there is ultimately a broad consensus among the ASEAN Member States that we have a common interest in closer integration and cooperation. By doing so, we are able to collectively face global uncertainties and complexities, and maintain stability for growth.
As a small island state in the Asia-Pacific, Singapore faces common geographical challenges to its Pacific island neighbors in the region. Yet, study done by Carbon Brief showed that between 2000 and 2014, Singapore achieved the largest emissions reduction in percentage terms and carbon intensity (the CO2 emissions per unit of GDP). How has Singapore sought to counter its natural resource constraints and the impacts of climate change while still growing its economy?
Enhancing energy efficiency has been and will continue to be a core strategy for Singapore’s mitigation efforts, given our limited access to alternative energy options. Our small size presents real difficulties in pursuing alternative energy options such as nuclear, hydro-electric, wind or geothermal power. Harnessing solar energy in a significant way is also a challenge due to competing uses for limited land and rooftop space, and intermittency issues. We made early policy choices to switch from fuel oil to natural gas, the cleanest form of fossil fuel, for electricity generation. Today, around 95% of electricity is generated from natural gas. Singapore also prices energy at market cost, without any subsidy, to reflect resource scarcity and promote judicious usage.
We will continue to encourage the adoption of more efficient power generation technologies, and encourage the use of more energy efficient industrial equipment, buildings, transportation, and household appliances. We are also working to enhance energy efficiency in the industry sector, which contributes to the bulk of our emissions.
We will also continue to invest in R&D to develop low-carbon technologies which can address our climate and sustainability challenges, and create solutions that can also be applied abroad. S$900 million will be invested from 2016 to 2020 to tackle Singapore’s energy, water, land, and liveability challenges. We have embarked on an energy storage programme, and are also test-bedding floating solar PV panels on our reservoirs, which will help to overcome some of the challenges of solar deployment in Singapore.
Singapore will harness green growth opportunities to develop and test-bed various innovative solutions in the areas of clean energy, energy efficiency, green buildings, and clean transportation. For example, our nationwide electric vehicle car-sharing programme, which will see the deployment of 1,000 electric vehicles and installation of 2,000 charging points, serves as a “living lab” platform to attract new players to develop, test and commercialise innovative urban solutions in Singapore before scaling up for the region.
With the National Climate Change Secretariat established under the Prime Minister’s Office, Singapore is taking a whole-of-nation approach to developing and implementing domestic and international policies and strategies to tackle climate change. Where do you see the international aspects of Singapore’s climate change efforts focused in the near future?
Singapore supports the multilateral rules-based process under the UNFCCC. We will continue to contribute proactively to international efforts to address climate change. Singapore ratified the Paris Agreement at the High-level Event on Entry into Force of the Agreement, at the United Nations Headquarters in New York on 21 September 2016. This is further affirmation of our support and commitment for climate action. We also acknowledge the contributions from other sectors towards the global action to address climate change, for example from the international aviation sector. Singapore has volunteered to participate in the pilot phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) under ICAO.
Singapore works closely with other countries and institutions to tackle climate change. We regularly share our experiences, best practices and technical knowledge on climate change and green growth issues with other countries at international conferences and technical cooperation programmes. For example, Singapore hosts the biennial World Cities Summit, Clean Enviro Summit, Singapore Green Building Week, the Singapore International Water Week and the Singapore International Energy Week. These platforms gather policy makers, practitioners and stakeholders in city planning, water and energy management to examine urban challenges, identify shared solutions and share best practices. Under the Singapore Cooperation Programme, we have trained almost 11,000 developing country officials on clean energy, emissions reductions and broader sustainability and environmental issues. We will deepen such contributions to help fellow developing countries implement the Paris Agreement.
We will continue to collaborate with international research hubs to push the envelope in several low-carbon scientific and engineering disciplines, and leverage Singapore as a test-bedding hub for innovative solutions. Some international research and innovation hubs in Singapore include the Singapore-MIT Alliance for Research and Technology (SMART), and the Cambridge Centre for Carbon Reduction in Chemical Technology (C4T).
Verghese Mathews is Singapore’s High Commissioner to the Republic of Fiji and concurrently Ambassador to the Pacific Islands Forum, resident in Singapore. He is a Senior Fellow at the MFA Diplomatic Academy, a Visiting Fellow at the Institute of Southeast Asian Studies, Member of the Advisory Board of the International Business Chamber of Cambodia, and a Member of the Malawi Advisory Committee on Economics. Mr. Mathews joined the Ministry of Foreign Affairs in May 1969.
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As Minister, you played a central role in several significant achievements, such as the finalization of New Zealand’s free trade agreement with South Korea, conclusion of Trans-Pacific Partnership Agreement negotiations, and securing the Paris Climate Agreement. After settling in to life in Washington, what are your priorities as Ambassador in the coming months?
To begin with, paradoxically, my focus was dominated by the Paris climate change agreement and TPP; as a former Minister I have a unique position in both these areas. I have had to avoid becoming involved in internal US politics on these issues, but put forward the substance of the case as the New Zealand Government’s Ambassador in Washington.
With time, I have begun to reacquaint myself with the defence and security elements to the relationship and enhancements to the scientific and innovative sectors. It has been pleasing to see in my time as Ambassador the announcement of a 15-year modernisation plan worth nearly $20 billion to ensure the New Zealand Defence Force has the capabilities it needs to meet the country’s security and defence challenges. Demonstrating New Zealand’s willingness to share the burden of international peace and security is an important part of our relationship here.
Prior to the signing of the Paris Agreement in April, the Royal Society of New Zealand released a report detailing the impacts of climate change for New Zealand. What has been the New Zealand Government’s response to the report?
The report observes that New Zealand is strongly dependent upon international connections and that the way other countries respond to climate change will influence New Zealand’s international trade relationships. This is something that I followed closely in my former capacities as Minister for Trade and for International Climate Change Negotiations. It is important to me that these debates are informed by sound economics, and a real understanding about the carbon cycle. Otherwise, real damage can be done by junk concepts such as “food miles”. Research has shown that New Zealand’s mild climate, greater efficiency, and availability of electricity that is over 90% renewable leads to a very low carbon footprint for its food production, and the amount of carbon emitted by shipping product halfway across the world is about the same as that emitted by driving between the supermarket and one’s home. There is an opportunity for New Zealand agriculture to tell this story as consumers become more conscious of climate change impacts.
Because the country is so interconnected with the international economy, the Royal Society of New Zealand report states that “New Zealand cannot chart its response to climate change based on impacts in New Zealand alone.” Since your time as Minister Responsible for Climate Change Issues, what have been some highlights of the New Zealand Government’s work with other countries in this area? How do you see international cooperation reducing the impact of climate change on New Zealand?
As a resource dependent and export dependent economy, New Zealand needs an effective global response to climate change.
The Paris agreement last December was an historic step forward and serves New Zealand’s interests well. It was the first truly global agreement on climate change. All countries are committing to take ambitious action. We can’t underestimate the significance of 185 countries making emission reduction pledges over the course of this year. The Paris Agreement banks these. While they collectively won’t solve global warming in one hit, the new agreement sets up a process for regular, 5 yearly, updates. This sets the world on a clear pathway to a lower-carbon future.
New Zealand’s 2030 target, to reduce emissions to 30 percent below 2005 levels, is a strong contribution to this global effort. At the Paris Conference, Prime Minister Key announced New Zealand would provide up to $200m in climate finance, particularly for Pacific Island countries, over the next four years.
Since 2013, we have been working closely with Pacific Island countries as they transition to renewable sources of energy. At the latest Pacific Energy Conference in Auckland in June, donors committed more than $NZ 1 billion to renewable energy projects in the Pacific. This investment will support Polynesia to achieve more than 50% renewable energy by 2024, provide access to electricity for an estimated 1 million people in Melanesia and support other countries in the Pacific to double their renewable energy generation.
Of conservation efforts, the creation of marine sanctuaries, reserves and national monuments are an essential method to restore fisheries and protect local industries in the United States and across the Pacific. Last year, U.S. President Barack Obama and New Zealand Prime Minister John Key announced significant, new marine reserves. How has the New Zealand Government engaged with locally impacted parties to decide on the scope its conservation efforts?
Prime Minister Key’s announcement last year of the creation of the Kermadec Ocean Sanctuary will lead to one of the world’s largest and most significant fully protected areas. It includes the second deepest ocean trench at over 10 kilometres and an arc of 30 underwater volcanoes, the largest anywhere on earth. It is home to six million seabirds of 39 different species, over 150 species of fish, 35 species of whales and dolphins, three species of sea turtles, and many other marine species like corals, shellfish and crabs unique to the area.
We continue to see news stories where the ‘largest’ or ‘one of the largest’ marine reserves and sanctuaries are announced, for example in Palau, Chile, and New Zealand. Why do you think governments have embraced policies that institute ever-larger marine reserves?
Oceans are the new frontier for environmental protection. They make up 72 per cent of the globe and are home to half of the world’s species, but currently only two per cent is protected. There is increased pressure from over-fishing, mining and pollution. Just as earlier New Zealanders set aside significant areas of our land in National Parks, we need to protect special areas of our sea like the pristine ocean around the Kermadec Islands.
New Zealand is a party to the United Nations Convention on the Law of the Sea and a party to the Convention on Biological Diversity. This means we have obligations to protect and preserve our marine environment. Under the Convention on Biological Diversity, we have committed to having 10 per cent of coastal and marine areas conserved by 2020. The Kermadec Ocean Sanctuary contributes to these targets. New Zealand currently has 9.7 per cent of our territorial sea fully protected, but no full protection in our EEZ. The Kermadec Ocean Sanctuary will mean 15 per cent of New Zealand’s ocean environment will be fully protected.
In the past year, Pacific island countries have faced a number of devastating storms and damaging floods, including Cyclone Winston in Fiji and Cyclone Pam in Vanuatu. El Nino is taking a toll on Palau and other Pacific states, causing water shortages. What has been the New Zealand Government’s strategy in aiding its Pacific neighbors in the face of extreme weather events? Does the New Zealand Government have any plans to modify its approach, such as concentrating more on preventative, disaster risk reduction, climate change adaptation or humanitarian response efforts?
Disaster Risk Management, preventative measures, and humanitarian responses are significant parts of the New Zealand Defence Forces’ thinking and planning.
The New Zealand Government engaged extensively with neighbours in the south-west Pacific ahead of last summer’s El Nino weather event, with a particular focus on preparedness for forecast drought and water shortages. The New Zealand Defence Force’s response to Cyclone Winston in Fiji was one of our biggest peacetime deployments to the Pacific, with close to 500 personnel, two ships and six aircraft, involved in delivering hundreds of tonnes of critical aid.
The New Zealand Government has committed more than $15 million for relief and recovery activities to date. The reconstruction phase of New Zealand’s support to Fiji will focus on rebuilding schools, evacuation centres and medical facilities, as well as efforts to stimulate the local economy.
In an interview last year, Prime Minister John Key alluded to the idea that you were selected to be the next Ambassador to the United States in order to support U.S. ratification of the Trans-Pacific Partnership (TPP) Agreement. From your perspective, what is the current status of the TPP, and how has becoming Ambassador changed the role you’re playing in supporting it?
The current status of TPP is that it awaits ratification by the 12 member countries. This is a complex undertaking in every country, but as Ambassador to the United States my focus is on events in Washington. My role is to make the case for TPP as the mechanism for sustained US engagement in the Asia-Pacific, and for setting the rules of the road in the 21st century.
It’s certainly the case that the environment on trade in the United States is very complicated, with the two major Presidential candidates opposed to the deal in its current form. What I have found, though, is a real understanding in Washington of the risks to the United States’ economic and strategic future in the Asia Pacific if it fails to ratify the agreement. I am confident the United States will make the right decision, and my job is to continue to argue for the reasons why.
Tim Groser was appointed New Zealand Ambassador to the United States in January 2016. He is also New Zealand’s Special Envoy to the Pacific Alliance. In 2005, Mr. Groser was elected to Parliament and from 2008 to 2015 was cabinet minister, most recently as Minister of Trade and Minister Responsible for Climate Change Issues. From 2002-2005 he was New Zealand’s Ambassador to the World Trade Organization (WTO), and the Chair of Agriculture Negotiations for the WTO. He also served as Ambassador to Indonesia from 1994-1997.
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In October 2015, Spain hosted a celebration for the 20th anniversary of the Code of Conduct for Responsible Fisheries. The event goal was to “foster a debate on the need to adopt a future strategy that would guarantee the sustainability of fisheries.” Yet recently in February 2016, the United States added momentum to global efforts targeting illegal fishing by ratifying the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing. Why are the Code of Conduct and the Port States agreement important to Spain? What are the next steps for these agreements?
Ending with the scourge of Illegal, Unreported and Undocumented fishing is a priority for the Government of Spain. Its adverse impacts on the conservation and management of fishery resources are unacceptable. Moreover, it represents an unfair competition of those operators that do not follow the rules. This is why already in 2002, Spain was one of the first countries to pass its National Action Plan against the Illegal, Unreported and Unregulated Fishing, within the framework established one year before by the FAO.
The fight against IUU requires a joint effort among all actors involved. Those who work outside the law do not respect borders neither national efforts to combat their activities, therefore they have to be confronted with all means at our disposal.
In this regard, the Code of Conduct for Responsible Fisheries has supposed an unprecedented boost for the sustainability of the fisheries and indeed, we are proud to have hosted in Vigo, Spain, its 20th anniversary. It is the recognition of the global community of the good practices and prestige of the Spanish sector.
The strength of this Code of Conduct is that it comes after the consensus among Member States, Intergovernmental Organization, Private Sector and specialized non-governmental Organizations. Despite the fact that this is not legally binding, it is deemed an effective and indispensable tool to ensure the contribution of sustainable fisheries to poverty eradication, sustained economic growth, food security or creation of jobs among many other benefits.
We welcome the recent entry into force of the Port State Agreement. It is the first binding international treaty focused specifically on illicit fishing and constitutes a milestone in the fight against IUU.
What has Spain learned over the last two decades with the Code of Conduct for Responsible Fisheries that it can share with the United States regarding sustainable fisheries?
The Code of Conduct for Responsible Fisheries has proved itself an essential tool to increase the awareness of Member States on the need to ensure availability of resources for present and future generations. It stresses the importance of applying a precautionary approach in conservation, management and exploitation of living resources of the sea in order to protect and preserve the aquatic environment. It also foster the cooperation between all parties at all levels including sub-regional, regional and global level. Furthermore, it contributes to the promotion and planning of responsible fisheries, and to have a legal and institutional framework that encourage all necessary measures regarding the conservation and the long-term sustainable use of fisheries resources, based on the most accurate scientific data available.
Spain cooperates closely with United States in various working groups at the United Nations and within Regional Fishing Organizations. When it comes to sustainable fisheries, we share same objectives and we know that only if we manage to join our efforts we will be able to succeed in this endeavor.
Following on from its fisheries policies, how does Spain manage its own national fishing fleet to ensure it has “the highest standards of monitoring and compliance in the world”? In what ways does Spain cooperate with international actors to maintain high standards?
Spain was the first Member State of the European Union to put in place a system of verification of private licenses. The largest number of countries adopting this system, the most effective tool will it be. Our country is also a pioneer when it comes to initiate infringement procedures to nationals enlisted in third country vessels, which are included in IUU lists. We work towards avoiding any space for impunity to those companies related directly or indirectly with vessels identified for its activities of IUU Fishing. Those measures are also accompanied by strict monitoring of imports control in order to ensure that the catch, regardless its origin has been obtain observing all rules applicable.
Our fishing activity is based on the best scientific knowledge available; this management ensure[s] the best efficiency in the use of the resources in the long term and guarantee[s] the strict enforcement of the control standards.
In this regard, it is necessary to highlight our Vessel Monitoring System. Through this state of the art mechanism, Spain has real time information on the location of its vessels, 24 hours a day. Together with the Electronic Reporting System that notifies its activity on a daily basis, constitutes the cornerstone of our control scheme.
Spain actively cooperates and shares its knowledge with other Member States and International organizations. Many of them come to our country to learn about our Monitoring System. On the multilateral scene, we support both technically and financially the Global Record of Fishing Vessels launched by the FAO.
In September 2014 and in collaboration with Italy, Luxembourg and Austria, Spain signed memorandums of understanding with Pacific Small Island Developing States to support cooperation projects funded by Spain and the UNDP Fund. These projects are aimed at attaining sustainable development goals. The countries engaged in MOUs with Spain include Marshall Islands, Kiribati, Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Fiji, Solomon Islands, Tonga, Tuvalu and Vanuatu. What are some of your most valued or successful programs with these SIDs countries? For Spain, how has the signing of the MOU opened up avenues to promote Spanish foreign policy in the Pacific?
The signing of the MOU was a strong signal on our side that we consider our relations with the PSIDS as strategic and geared towards the long-term. Spain has a long history in the Pacific, dating back to the XV century, but it is true that since the late XIX century our presence in the region had waned. With the negotiating and signing of the MOU we wanted to signal that we are back…and we are back to stay. For that reason, we have devised some instruments to channel our renewed interest in the region. One, as said, is our participation in the MOU led by Italy, where Spain is contributing with 1 million US $. The countries that are at the moment benefiting from the Spanish contribution are Micronesia, Tonga and Vanuatu. Spain also opened up our recently created SDG Fund to projects presented by the PSIDS. Actually, three countries from the region- Vanuatu, Fiji and Samoa- are already benefiting from financing from the SDG Fund aimed at fostering the participation of youth in sustainable economic activities.
Most of Spain’s engagements with Pacific Island leaders takes place through the United Nations in New York. How often do you engage with the Pacific Small Island Developing States (PSIDS) caucus at the United Nations? What are the benefits of engaging with the PSIDS for Spain?
We see our relations with the PSIDS as mutually beneficial. We also care about climate change and pursue the same sustainable development goals, though we are also aware of their particular vulnerabilities. We also think that Spain´s experience in a number of areas, like renewable energies, can be valuable to the PSIDS. As a token of our good relations with the PSIDS and of Spain´s interest and engagement in matters that are of particular relevance to them, we actively participated in the process that led to the III UN Conference on SIDS held in Samoa in September, 2014. Our Minister of Foreign Affairs and Cooperation attended the Conference and co-chaired the Interactive Dialogue on Climate Change and Disaster´s Mitigation. Since then, we have strengthen[ed] our relationship by becoming members of the Post-Forum Dialogue. Our Secretary of State for Foreign Policy has attended the 45th and 46th session of the Pacific Island Forum held in Palau and Papua New Guinea respectively. This Forum constitutes a unique opportunity to exchange and reinforce our partnership with Pacific SIDS.
Jesus Garcia, Secretary of State for Development of Spain, said at the UNSC Open Debate last July that the post-2015 agenda encouraged the international community to acknowledge the inter-connectedness between security and sustainable development. What challenges to international peace does Spain seek to address that are posed by climate change?
Climate Change is one of the greatest challenges of our time. All countries, but particularly developing countries, are vulnerable and are already experiencing increased impacts including persistent drought and extreme weather events, sea level rise, coastal erosion and ocean acidification, further threatening food security and efforts to eradicate poverty and achieve sustainable development.
We know that, in particular, it is a matter of survival for many Small Island States as well as the low-lying coastal territories of numerous States, which are currently facing serious threats of permanent inundation from sea-level rise.
Since it is a global threat, we consider appropriate to deal with these issues from an international perspective. In this sense, we have to explore all means at our disposal, including today’s discussion, on the possible role of the Security Council in its primary responsibility to maintain international peace and security.
This is why last year, together with the Mission of Malaysia to the United Nations, we convened an Arria-formula meeting of the Security Council on the role of Climate Change as a threat multiplier for Global Security. The aim of the meeting was to better identify the inter-connected threats to international peace and security related to Climate Change.
Without prejudice to the responsibilities conferred upon the UN General Assembly regarding Sustainable Development and Climate Change, it is necessary to explore and utilize all existing means at our disposal, including further discussion on the possible role of the Security Council over these issues as part of its primary responsibility to maintain international peace and security. The empowering of a preventive approach and the improvement of the response capacity are essential aspects to confront the new threats to global security.
Román Oyarzun Marchesi has been Permanent Representative of Spain to the United Nations since January 2014. Until this appointment, Mr. Oyarzun served as Ambassador to Argentina since 2012, before which he was Deputy Permanent Representative to the United Nations in New York from 2008 to 2012. He holds a Bachelor of Laws degree from Deusto University and a Master in International Relations from the Diplomatic School.
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