Australia to use aid funds to build internet connections for two Pacific nations

Australia to use aid funds to build internet connections for two Pacific nations


Australia will use a significant portion of its annual Pacific aid budget unveiled in May 2018 to build high-speed internet cables for Papua New Guinea and the Solomon Islands, amid fears about China’s growing influence in the region.

The center-right coalition government did not detail the cost of the networks in its 2018/19 budget, citing commercial agreement limitations, but confirmed the funds would come from the country’s AUS $1.3 billion regional aid budget.  Analysts have estimated the combined cost of the two pipelines at about AUS $200 million — one-sixth of the overall funding pool for the region, which increased from AUS $1 billion in 2017 and is at a record high.

“Improved access to the Internet will support both countries’ long-term economic trajectories,” the government said in the budget papers.

The investment is viewed as an attempt to block China’s growing ambitions in the region, which has been fueled by its own significant expenditure on aid. Australian think tank the Lowy Institute estimates that China spent U.S. $1.78 billion in the decade to 2016, and has ramped up investment since.

That has concerned Australia, which until recently held unprecedented sway in the region and has global allies that include the United States, Britain and France.

China insists the Pacific aid is part of its U.S. $126 billion Belt and Road Initiative to build a modern-day Silk Road connecting China by land and sea to Southeast Asia, Central Asia, the Middle East, Europe and Africa.

Australian Minister for International Development and the Pacific Concetta Fierravanti-Wells in January 2018 accused China of “building roads to nowhere” in blunt comments that triggered a diplomatic protest from Beijing.  Western suspicion of China’s motives deepened in April 2018 after media reports that China had held discussions with the Vanuatu government about establishing a permanent maritime presence in the island country, 2,000 kilometers east of northern Australia, after funding an expansion of its main port terminal. Vanuatu and China both denied the reports.

French President Emmanuel Macron in May 2018 pledged to increase his country’s diplomatic presence in the region while on his first official visit to Australia.

The funding deal for the internet cables, linking Australia and the Pacific Islands, killed an agreement between the Solomon Islands and China’s Huawei Technologies to develop the links.

A source familiar with the thinking of the Australian government said Canberra was concerned that China could gain access to its broadband network if Huawei built the cable, echoing similar national security fears from the United States. The source declined to be named because he was not authorized to talk to the media.

Huawei has denied the allegations, insisting it is an independent company with no links to Beijing.