Pacific Buzz (December 19): 2012 in review

Elections | Geopolitics | Economics | Migration | Aid | Trade | Sustainability

The curtain is drawing to a close on 2012, a big year for the Pacific.
In this final edition of the Pacific Buzz (our 25th for the year), the Pacific Institute of Public Policy and the Development Policy Centre bring you some of the main highlights. The Pacific Buzz will return on January 30, 2013. We wish all our readers a happy Christmas and New Year, and extend our thoughts to those in Samoa and Fiji affected by Cyclone Evan.

Elections and politics

In 2012, six Pacific countries joined over one hundred others around the globe in holding parliamentary or presidential elections. There is a new government elect in Palau where former president Tommy Remengesau Jr. and Antonio Bells have been declared as president and vice president respectively. Voters in Palau rejected incumbent president, Johnson Toribiong, over corruption allegations. In Vanuatu, Sato Kilman returned as prime minister, leading a patchwork coalition. The Kilman government was formed amidst calls for electoral reform. The newly elected governor of American Samoa, Togiola Tulafono, also called for reforms. In Guam, a recount of the ballots confirmed the preliminary results. In Timor Leste, Xanana Gusmao’s party was returned on a plurality of the vote, and there was a brief upsurge in violence after the Fretilin party was excluded from the governing coalition.

Results for women candidates throughout the region were discouraging. Trailblazers such as Dame Carol Kidu retired from PNG politics, and only 3 women (out of 115 female candidates) were elected. Women currently make up around 5 per cent of parliamentarians across the Pacific. PNG parliamentarians rejected a proposed bill to set aside 22 seats for women.

Papua New Guinea’s parliament was dissolved in late May in advance of a 23 June election, leading to hopes of a resolution following months of political and legal wrangling. Belden Namah had suggested a 12-month delay, but the Electoral Commissioner proceeded as planned. Parliamentary attempts to curtail the judiciary were met by public outcry, most notably from UPNG students whose ‘Occupy Waigani’ campaign culminated in a boisterous but peaceful march. In all, 46 parties fielded 3,435 candidates to contest 111 seats in an election marked by irregularities and large financial payouts.

Fiji’s Constitutional Commission began consultations prior to presenting a draft constitution in January 2013, but was warned not to politicise the process after its chair called for people to be heard directly. It was confirmed that members of the military must resign in order to contest the elections and that race-based parties will be ineligible. The Great Council of Chiefs was also formally abolished.

In Tonga, a protracted motion of no confidence in the prime minister, Lord Tu’ivakano, took over three months to be resolved following the conclusion of parliamentary debate on the 2012-13 budget. Three ministers resigned amidst controversy over cabinet reshuffles, but the PM and his cabinet survived the crisis.

The rise of social media was the subject of widespread commentary, especially in the run-up to the PNG elections. Its impact was noticeable, but decidedly mixed. The O’Neill government also came under fire for ‘monitoring’ text messages, emails and comments posted on Facebook. Vanuatu’s new national network was used to present a landmark public forum that brought Vanuatu’s prime minister and leader of the opposition face to face with the nation.

Geopolitics and security

2012 was the year when global powers signalled a re-found understanding of the strategic importance of Pacific island states after decades of neglect, and came courting.

The US, China and Russia all spoke of their deeper engagement with the Pacific. Beyond the rhetoric, some strong symbolism was on display: for the first time a US secretary of state attended the Pacific Islands Forum. The USA also committed the bulk of its warships into the Pacific theatre and has begun stationing a marine force in Darwin, Australia. This complements its military buildup in Guam in the north Pacific.

Russia used its hosting of the APEC summit in Vladivostok to declare that it too is a Pacific power, while China continued to exert strong influence through its large diplomatic presence and aid program.

Traditional powers like Australia and New Zealand continue to be influential, but their influence in the region is under challenge. In May, Vanuatu expelled the Australia Federal Police (AFP) and opened closer relations with Indonesia, Russia and FijiAustralia recruited PNG and Nauru to implement its off-shore asylum seeker policy. The annual Pacific Debate demonstrated island allegiances can no longer be taken for granted and Pacific nations are taking a more flexible and assertive approach to their foreign policy.

The PNG constitutional crisis, which had everyone on edge for six months, and some small-scale disturbances in Timor-Leste and the Solomon Islands were blights on a largely benign Pacific security landscape. Fiji remains under a military government but progress was made towards a new constitution and planned elections in 2014. West Papua continued to be the most serious conflict zone in the Pacific region, with ongoing reports of killings, torture and abuse by Indonesian security forces.

The RAMSI mission in the Solomon Islands announced it was starting to withdraw, leaving its ten year peacekeeping mission in the hands of police, while in Timor Leste, international peacekeepers will also start to withdraw next year.

Economics: Melanesia booming and Pacific Futures

Melanesia led the way in economic growth in the Pacific, with PNG, Timor, Solomon Islands and Vanuatu all doing well in terms of expanding their GDP. Fiji and the Micronesian and Polynesian countries of the Pacific did not fare as well, with the Tonga Central Bank Governor warning of a bleak economic future.

Resource-rich PNG, Timor Leste and Solomon Islands continued to struggle to translate economic growth into substantial development gains. Timor Leste grappled with serious problems of tax evasion. Commentators in PNG spoke of a lost decade, and the head of the country’s anti corruption body described Australia as the Cayman Islands for PNG suggesting Australian authorities weren’t doing enough to stop the laundering of corrupt proceeds.

The World Bank’s Pacific Futures report spoke what was once the unspeakable, with the Bank acknowledging for the first time that some Pacific island economies might simply never be viable without aid and remittances.

Treading water on labour mobility

Australia made its pilot seasonal worker programme permanent on July 1, 2012. Unfortunately, numbers have remained low with a cap of 2,600 Pacific island workers a year. The equivalent New Zealand scheme continues to do much better, taking about 7,000 workers a year. Analysis by Devpolicy pointed to conflicting government policies in Australia, which give backpackers an incentive to work on farms, and the prevalence of illegal labour as the underlying reasons for the poor performance of the Australian scheme. Unfortunately, the Australian government has yet to release its own evaluation of the pilot seasonal worker program. The bright spots for the year were the extension of the Australian scheme to new sectors (cotton, cane, seasonal tourism, aquaculture) – perhaps they will do better – and a new endorsement of the seasonal worker scheme by the Australian opposition, which opposed it earlier.

Delayed but increasing aid

Two of the Pacific’s major donors, Australia and New Zealand, pushed back their targets for increasing aid this year. While these delays will impact the Pacific, both donors pledged that planned increases would take place. Australia has projected an expansion of aid spending to about AUD 1.6 billion by 2015-16, an increase of about AUD 400 million. 2012-13 increases showed only slight changes at the country level, with a notable exception of a doubling of aid to FijiNew Zealand also plans to increase aid spending over the medium-term to NZD 600 million, up from NZD 535 million in 2012. Other considerable funding announcements were Australia’s AUD 330 million gender equality package and commitment of AUD 58 million to climate finance over four years. New Zealand committed NZD 50 million to improving fisheries management and funding three years of secondary schooling for all students in Samoa.

China and the US also used aid to demonstrate their renewed interest in the region. The US committed USD 32 million in programme funding as a part of the Asia-Pacific Strategic Engagement Initiative, while China provided PNG with a USD 5 billion loan to upgrade the Highlands Highway and other infrastructure. And in a regional first, New Zealand partnered with China to deliver a water project in Cook Islands.

Trade and regional integration

Regional trade negotiations dragged on in 2012. Talks on the Pacific Agreement for Closer Economic Relations (PACER Plus) continued without any notable progress. Pacific countries extended the date for concluding the drawn out negotiations on the Economic Partnership Agreements (EPAs) with the European Union to 2016. Negotiations on the existing Pacific Islands Countries Trade Agreement (PICTA) between Pacific countries had more success, with PICTA expanding to include the liberalisation of the service sector. The Melanesian Spearhead Group (MSG) illustrated the relative strength of sub-regionalism, with significant advancements in the trade in goods, skills exchange and investment between FijiSolomon IslandsPNG and Vanuatu. Some Pacific countries also continued bilateral negotiations, including Niue’s attempt to forge a free trade agreement with China.

2012 also brought about increased scrutiny on regionalism with the Pacific Islands Forum Secretariat again coming under the microscope following a review questioning its relevance and ownership. The criticisms come amidst calls to reconfigure regionalism to better reflect the Pacific. Based on these same sentiments, the Pacific Plan will also undergo its own review in 2013.

Sustainable development on the agenda

The Pacific remained focused on climate change policy making this year. The 2012 Doha climate change conference was merely a continuation of the existing impasse, with another weak agreement. Pacific countries called for more action and a heightened sense of urgency, and also called on other nations to break the deadlock. One notable outcome of Doha was an announcement of loss and damage assistance to compensate developing countries, but little progress was made on the substantive task of increasing funding to pay for all this.

2012 saw fatal floods in Fiji and 83 families from PNG’s Carteret Islands displaced to Bougainville. In December, Cyclone Evan battered first Samoa and then Fiji to close out the year. Kiribati used 2012 to search for solutions to climate-driven migration, with Timor Leste making a tentative offer to relocate the country’s refugees. Kiribati President Tong also raised the notion of purchasing land in Fiji, although played down the prospect of relocating the population under such a scenario.

The concept of a ‘green economy in a blue world’ was widely talked of this year, with the United Nations Conference on Sustainable Development (Rio+20) held in June. While the outcome of Rio+20 was unambitious and weak, Pacific countries did make a number of voluntary commitments – including pledges by Pacific countries to increase the provision of renewable energy uptake. Analysis by Devpolicy, however, questioned the plausibility and reasoning of these overly ambitious renewable energy targets in countries with limited resources. A further key pledge out of Rio+20 was the development of a regional framework for ocean conservation. Oceans were also on the agenda at the Pacific Islands Forum Leaders’ Summit, with the announcement of massive new marine parks in the Cook Islands and New Caledonia and a rebranding of the Pacific countries as ‘large ocean’ rather than ‘small island’ states.

Amidst controversy over environmental impacts, Nauru became the first developing country to obtain a license to explore the international seabed. Seabed mining was also in the news in PNG where a dispute between the government and Nautilus Minerals stalled operations. 24,000 people petitioned the government in opposition to the Solwara 1 deep-sea mining project. And in July, Westpac Bank was embroiled in the continued but unsustainable deforestation of the Solomon Islands.

Fishing nations agreed to reduce the overfishing of white-tip reef sharks and increased the protection of whale sharks, but failed to reduce overfishing in the world’s largest tuna fishery. The Parties to the Nauru Agreement (PNA) continued to negotiate better financial returns from foreign fishing fleets. PNA members also signalled tougher enforcement of regional fishing rules, which are at times at odds with bilateral dealsChina doubled its subsidised Pacific tuna fleetPalau joined forces with Greenpeace to tackle illegal fishing and Australia considered purchasing unmanned spy drones for Pacific maritime surveillance.

Editorial content is the responsibility of Derek Brien, PiPP Executive Director, and Stephen Howes, Devpolicy Director.

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The Development Policy Centre is a think tank at the Australian National University that research and promote discussion of aid effectiveness, the Pacific and PNG, and development policy.

The Pacific Institute of Public Policy (PiPP) is the leading independent think tank serving the Pacific islands community.

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