Micronesian nations withstand PRC influence

Micronesian nations withstand PRC influence

FORUM Staff

Several sovereign states that make up the Federated States of Micronesia (FSM) have moved to guard against influence by the People’s Republic of China (PRC). 

The PRC has shifted to the Pacific islands region to carry out its expansion ambitions there, given that it has largely completed its plan to aggressively seize control of the South China Sea by constructing artificial islands and militarizing them. 

The PRC has been targeting the FSM, which include Chuuk, Kosrae, Phonpei and Yap, as well as such Pacific island nations as the Cook Islands, Fiji, Papua New Guinea, Samoa, Tonga and Vanuatu. Chinese regional foreign direct investment increased more than 170% to U.S. $2.8 billion from 2014 to 2017, reported Stratfor, a leading geopolitical intelligence platform.   

FSM’s Chuuk is especially attractive because it could provide a strategic location for a PRC military base in striking distance of Guam. For this reason, Chuuk could be vulnerable to the PRC’s plan to increase its economic, political and social footprint and thus its influence and control over the region, analysts worry.  

FSM includes more than 605 islands that cover 2.6 million square kilometers of the Pacific Ocean and make up the world’s 14th largest exclusive economic zone. The FSM became a sovereign state in November 1986 under a compact of free association with the United States. All the sovereign Pacific island nations that are United Nations members have a vote in the U.N. General Assembly, which is a leading impetus for the PRC’s influence campaign. (President of Federated States of Micronesia Peter Christian addresses the 73rd session of the United Nations General Assembly at U.N. headquarters in New York, U.S., on September 27, 2018.) 

Chuuk will vote in March 2020 to determine whether it will secede from the FSM. Wary of the potentially detrimental ramifications, Chuuk’s legislature decided in March 2019 to delay a vote on secession for a year. 

The U.S. funds about 60% of the FSM’s budget under the compact, and by seceding, the nation stands to lose roughly U.S. $37 million annually in various forms of U.S. support, including coast guard and other agency assets, and its long-term commitment, while making itself vulnerable to PRC predation. FSM, for example, received U.S. $1.5 billion in aid from 1986-2003, Stratfor reported.   

“We are renewing our engagement in the Pacific islands to preserve a free and open Indo-Pacific region, maintain access, and promote our status as a security partner of choice,” Lt. Col. Dave Eastburn, a Pentagon spokesman, told The Wall Street Journal newspaper in April 2019. 

In addition to FSM, the U.S. plans to deepen relations with such nations as the Marshall Islands, Palau and the Northern Mariana Islands. 

“We are looking at ways to step up involvement in the other subregions, where New Zealand and Australia have traditionally led and are playing a significant role,” Lt. Col. Eastburn said. 

Australia, Japan, New Zealand, South Korea and Taiwan are all looking for ways to counterbalance possible PRC influence because the U.S. allies also have a strategic interest in preserving security and freedom of navigation across the region. 

Some analysts worry that an independent Chuuk would be more susceptible to PRC influence and possible debt traps and other forms of coercion.  

“Chuuk would find in China a new source of financing to substitute for the abandoned compact, while Beijing could cultivate a new ally in the Pacific. Indeed, China could even assume responsibility for Chuuk’s defense and foreign policies, especially if it establishes a military presence in the archipelago,” analysts at Fitch Solutions, a research group, predicted, according to Australian Broadcasting Corp.  

In addition to direct investment, PRC aid has increased substantially to Chuuk and other Pacific island nations over the past five years. The PRC provided U.S. $1.7 billion in developmental assistance from 2006 to 2014Stratfor reported, roughly matching that of the U.S. PRC aid, however, increasingly comes in the form of concessional loans, which must be paid back with interest and often lead to a loss of sovereignty. Australia provides the most aid to the region. 

PRC attempts to infiltrate FSM have been met with skepticism, given the negative outcomes of PRC investments and debt traps in other countries worldwide, from Djibouti to Sri Lanka. 

In March 2019, Yap Gov. Henry Falan nullified an agreement with a Chinese firm to build a roughly 100-room, U.S. $25 million hotel in Colonia, Yap’s capital. Falan was elected in November 2018 on a platform that promised to review such controversial Chinese-funded development plans, according to Radio New Zealand (RNZ), New Zealand’s independent public service multimedia organization. 

In May 2019, RNZ reported that “Chinese developers in the Federated States of Micronesia (FSM) are facing increasing opposition from local communities, with one company blaming racism for setbacks it has faced there.” 

Locals are not discriminating against the Chinese, Tom Tamangmow, a manager with Yaps Visitors Bureau, told RNZ. Instead, they want to preserve Yap’s culture and stop it from being overrun by tourists and foreign influences.  

“The Yapese people have survived for so many years even on the very little that they have. I think they can still go on with the little that they have. They’re not desperate to be millionaires overnight… What good for a person that would gain everything in this world and lose their soul?” 

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