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Energy & Economics
Middle East Conflict. Conceptual photo

How might a wider Middle East conflict affect the global economy?

by Ahmet Kaya

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The world economy is underperforming as a result of tight monetary policies, weaker global trade, a slowing Chinese economy and uncertainty around the US election. An escalation of conflict in the Middle East could increase uncertainties, harming inflation reduction efforts and hurting growth. It has been over a year since the Hamas-led attack on Israel. Israel’s response in Gaza has resulted in widespread destruction and significant loss of life. The conflict has since expanded beyond Gaza, involving the Houthis in Yemen, Hezbollah in Lebanon and Iranian strikes targeting Israel. In addition to the awful humanitarian cost of the conflicts, the war and the possibility of its further expansion pose significant repercussions for the global economy. This article discusses three potential ways in which the current conflict and a wider conflict in the Middle East could affect the global economy. Increased geopolitical uncertainties First and foremost, an escalation of the Middle East conflict could lead to greater geopolitical uncertainties. Figure 1 shows the evolution of the geopolitical risk (GPR) and geopolitical acts (GPRA) indices (Caldara and Iacoviello, 2022) – these are text-based measures of heightened uncertainties due to adverse geopolitical events such as wars, terrorism and international tensions. (See this article for more discussion about these measures.) Following the Hamas-led attack on 7 October 2023, both the overall GPR index and its ‘war and terror acts’ component spiked strongly, to a level higher than that seen during the ISIS attack in Paris in November 2015. Both indices eased significantly in the months following October 2023 despite the continuation of the conflict. But they jumped again following Israel’s attack on southern Lebanon in September 2024. As of mid-October 2024, the GPR and GPRA remain, respectively, 21% and 35% higher than their historical averages.   What might be the consequences of such elevated levels of risk? Research tells us that higher geopolitical risk raises oil prices (Mignon and Saadaoui, 2024). It also reduces global investment and increases inflation (Caldara et al, 2022). Greater geopolitical risk has a significantly negative impact on business and consumer confidence in several advanced economies (de Wet, 2023). This is because consumers typically cut non-essential spending and businesses postpone investment decisions during turbulent times. This reduces firm-level investment, particularly for businesses with higher initial investment costs and greater market power (Wang et al, 2023). Higher geopolitical risks also reduce global trade and financial flows, causing greater volatility in capital flows in emerging markets (Kaya and Erden, 2023). Oil production cuts and higher energy prices The second way in which the Middle East conflict could affect the global economy is its impact on energy prices, both directly through production cuts and indirectly through greater uncertainties. In response to Israel’s actions against its neighbours, the Organization of the Petroleum Exporting Countries (OPEC) could reduce oil production to penalise countries supporting Israel. A similar action in the 1970s led to a significant jump in oil prices, which contributed to years of stagflation, with higher global inflation and recessions in major economies. Before Israel's attack on Lebanon at the end of September, oil prices had been declining due to falling demand, particularly from China. On the supply side, oil production had increased in Canada and the United States, countering the production cuts by OPEC, and Saudi Arabia was expected to increase oil production from December. But the situation quickly reversed following Israel’s attack on Lebanon. Oil prices jumped by nearly $10 per barrel within a week, before easing by around $5 per barrel. While the immediate oil price impact of Israel’s attack has mostly faded, the potential for higher oil (and other energy) prices still poses a risk to global inflation and economic activity (Liadze et al, 2022). To provide further context for the potential scale of this impact, we can show what would happen if oil and gas prices were to remain $10 higher for two years than the baseline levels projected in the Summer Global Economic Outlook from the National Institute of Economic and Social Research (NIESR), using NIESR’s Global Macroeconometric Model (NiGEM). The results demonstrate that the $10 rise in oil and gas prices increases inflation by around 0.7 percentage points in major economies in the first year (see Figure 2). The impact is higher in China, where the economy relies relatively more on oil imports for its strong manufacturing industries. The inflationary pressures persist for two years despite central banks’ efforts to curb inflation by increasing interest rates.   The effect of higher oil and gas prices on real GDP is shown in Figure 3. In the scenario described above, GDP would fall by 0.1-0.2% in major economies immediately. Partly due to higher interest rates, real GDP would continue to weaken for three years following the shock. After this, economic activity would start to return to base levels as oil and gas prices revert to their levels in the baseline forecast.   Increased shipping costs and supply chain disruptions A wider conflict in the Middle East could also affect the economy through higher shipping costs and supply chain disruptions. Houthi attacks on commercial ships in the Red Sea in late 2023 showed that such disruptions can have a huge impact on global trade through shipping, which comprises 80% of world trade volume. Following the rocket attacks by the Houthi rebels, some commercial shipping re-routed from the Red Sea to the Cape of Good Hope, leading to significant delays in travel times and increased freight costs. As a result, the Shanghai Containerized Freight Index – a measure of sea freight rates – rose by around 260% in the second quarter of 2024 with additional disruptions to supply chains. Our analysis shows that an increase of 10 percentage points in shipping cost inflation can lead to import prices rising by up to around 1% and consumer inflation increasing by around 0.5% in OECD countries. As Figure 4 shows, the impact of shipping costs on inflation shows its full effects over six quarters. This means that inflationary concerns could be with us for the next year and a half as a result of higher shipping costs that may emerge from any possible escalation of the Middle East conflict.   Wider economic implications and policy responses While rising geopolitical risk and increased oil and shipping costs can each individually exert upward pressure on inflation and may slow down economic activity in the global economy, the combined impacts are likely to be greater. Countries with stronger trade and financial ties to the Middle East and those that rely heavily on oil imports as an input for domestic production would be most affected. On the monetary policy front, central banks may have to take a more hawkish stance in response to rising inflationary pressures from the Middle East conflict. This could lead to higher interest rates, which would further dampen economic activity, particularly in an environment where there are already recessionary concerns in some major economies. Beyond its immediate economic implications, an escalation of the Middle East conflict could trigger large-scale displacement of people, which would increase economic and social pressures on neighbouring countries. Many countries may also have to increase their military spending in response to growing regional tensions. Given that public debt levels are already elevated in many countries due to successive shocks to the global economy over the past decade, any additional defence spending could come at the expense of public infrastructure investments that would otherwise boost productivity growth. Overall, the global economy is already underperforming as a result of the lagged effects of tight monetary policies, weaker global trade, a slowing Chinese economy and uncertainties surrounding the upcoming US election and possible changes to US trade policy. A potential escalation of conflict in the Middle East could exacerbate the situation by increasing uncertainties, harming efforts to bring down inflation and reducing global GDP growth. Over the medium and long term, it could further damage the global economy, with the possibility of refugee crises as well as increased defence spending, making the effects more complex and longer lasting. This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Defense & Security
Pacific Island Forum (PIF), vector flag of members

Australia stepping up to assist Pacific cybersecurity

by Anthony Adams, Monash University

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском In Brief Australia has made a long-term commitment to developing cybersecurity capabilities across the Pacific Islands region. The emerging challenge is to ensure that Australia receives the best return on its investment across the region. With Pacific Island nations developing cybersecurity capabilities at different rates, a one size fits all approach will not work. When allocating development spending, Australia should target Pacific Island nations’ respective cybersecurity capability gaps and tailor assistance that aligns with the domestic priorities of each nation, while remaining bound to a consensus driven regional framework. The Australian government’s Cyber Security Strategy (2023–2030) underpins its long-term commitment to investing in the development of sustainable cybersecurity across the Pacific Islands region. These investments include spending AU$26.2 million on deploying cybersecurity experts to nations in the region and AU$16.7 million on helping these nations identify and address vulnerabilities to cyberattacks. This commitment reinforces two key points that underpin Australia’s regional security. First, as a leading regional economic partner and neighbour, Australia’s security and prosperity are intrinsically tied to its Pacific neighbours. Maintaining a strong and active presence is crucial to safeguarding Australia’s interests and preventing states with differing values and strategic goals from dominating the region at Australia’s expense. Second, Pacific Island nations face entrenched environmental and development challenges, such as their small size, lack of natural resources, geographical remoteness, high telecommunications and transportation costs and inadequate infrastructure. These factors limit their ability to develop sustainable cybersecurity capabilities without sustained assistance. These challenges expose Pacific Island nations — and by extension, Australian interests — to a heightened risk of cybercrime and cyber-enabled crime. With the region’s ability to develop cybersecurity capabilities being constrained by these challenges, Australia has a key role to play in both actively promoting its own strategic interests and helping Pacific Island nations enhance their foundational capabilities. The goal for the Australian government is to invest in regional cybersecurity development strategically, ensuring optimal long-term returns for its national interests and fostering sustainable development across the region. Australia will need to invest in identifying and remediating cyber vulnerabilities, reducing the likelihood of attacks and mitigating the impacts of attacks. These efforts could be supported by leveraging regional and bilateral frameworks to identify areas of shared cybersecurity capability interest and strengthening domestic legislation in Pacific Island nations to combat cybercrime and cyber-enabled crime.  The Pacific Islands Forum has developed the 2050 Strategy for the Blue Pacific Continent, the 2023 Lagatoi Declaration on Digital Transformation of the Pacific and the 2018 Boe Declaration of Regional Security as consensus-based multilateral frameworks. Through these mechanisms, Pacific Island governments have pledged to bolster regional cyber resilience, including safeguarding their national critical infrastructure. These pledges empower nations to work together on matters of shared interest while respecting their different levels of cybersecurity policy maturity and capability.  These forums provide an opportunity for Australia to target cybersecurity engagement and collaboration towards areas of mutual interest. Australia can also leverage bilateral agreements including the Fiji–Australia Vuvale Partnership and the Australia–Kiribati Tobwaan Te Reitaki (Nurturing Cooperation) Memorandum of Understanding to focus cybersecurity investment on areas of strategic interest and to reinforce strategic values and priorities.  The likelihood of cyberattacks targeting Pacific Island nations, and consequently Australian interests in the region, is closely tied to the effectiveness of each nation’s cybercrime legislation. Strengthening these laws typically reduces the probability of cyberattacks within a jurisdiction. Governments that enact robust legislation to combat cybercrime enhance protection for Australia’s regional cybersecurity interests. Conversely, nations with inadequate cybercrime provisions pose higher risks of data compromise affecting Australian interests. While multilateral declarations commit Pacific Island nations to working together on matters of shared interest, they are not legally binding and rely on nations implementing domestic cybersecurity-related legislation to enact the intent of these declarations.  The state of domestic cybercrime legislation varies across the region. Several nations, including the Federated States of Micronesia and Palau, have not committed resources to developing or uplifting domestic legislation pertaining to cybercrime and cyber-enabled crime. Others, including Tuvalu and Nauru, have established foundational legislation to define cybercrime and related matters.  In contrast, nations including Fiji, Kiribati, Tonga and Australia have partnered with the Council of Europe to collaborate on the creation and improvement of domestic cyber resilience legislation, historically aligned with the Convention on Cybercrime (the Budapest Convention) and its protocols. Such legislation typically includes definitions of cyber crime and cyber-related crime, the ability to collaborate with law enforcement agencies and permission to exchange information to support cross-border cybercrime investigations.   Cybersecurity capabilities differ among Pacific Island nations, as each country develops its capacity to detect and counter cyber threats independently. Australia should expect that national governments will strengthen their cybersecurity capabilities at varying rates, reflecting their distinct domestic policy focuses and investment priorities. As nations evolve their ability to address cyber threats, their approach to regional engagement and collaboration on cybersecurity is likely to change. This dynamic relationship has significant implications for cyber diplomacy, especially regarding the targeting of support for cyber capability development, emphasising the importance of demand-driven cybersecurity development assistance. Nations with an open approach to engagement typically demonstrate a willingness to engage with regional and development partners and are more likely to collaborate on shared interests. These nations prioritise cyber resilience policies that promote domestic self-reliance while aligning with international standards, treaties and conventions. On the other hand, nations with a closed approach are likely to prioritise the development and maintenance of domestic cyber resilience capabilities over regional engagement and collaboration. These nations are less inclined to identify and collaborate with development partners and other stakeholders on shared interests and instead prioritise cyber resilience policies that promote domestic self-reliance. Australia’s investment will be best served where it responds to this demand-driven approach by targeting the domestic cybersecurity policy priorities of each partner nation based on their relative cybersecurity capability maturity and approach to collaboration. Examples of this demand-driven approach in action include the Fiji–Australia Vuvale Partnership and the Australia–Kiribati Tobwaan Te Reitaki (Nurturing Cooperation) Memorandum of Understanding, which each allow Australia to provide targeted bilateral assistance for information sharing, collaboration and cybersecurity capability building that aligns with both nations’ interests. https://doi.org/10.59425/eabc.1727215200

Diplomacy
The tenth Pacific Islands Leaders Meeting

Who speaks for the Pacific?

by Kerryn Baker , Theresa Meki

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском As the Pacific Islands Forum came to an end, the underlying questions remain: who has a voice and legitimacy to influence the region, and who doesn’t  The Pacific Islands – a grouping largely made up of small island developing states – is in the middle of an increasingly contested strategic space, making regional politics an important, and closely observed, site. At the end of August, Pacific Islands Forum heads of government met in Tonga for the organisation’s annual leaders’ meeting. Along with the Pacific heads of government, other dignitaries were also present, including United Nations Secretary General António Guterres. This is the apex event on the regional calendar, and it came with a crowded agenda, including issues like climate change, transnational crime and health security. But one of the pressing issues facing the Forum is an existential one, as membership debates and geopolitical tussles highlight: the question of who and what the Forum represents. In recent years, divisions within the region have become apparent, including the perceived marginalisation of North Pacific countries in what was initially called the South Pacific Forum. These tensions culminated in the decision by five Micronesian states to leave the Forum in 2021, although this was later reversed. Yet, the final Forum communiqué demonstrates that Pacific leaders are on the same page on many issues, covering agreed outcomes relating to health, education, fisheries and other key issues. Climate change was highlighted as ‘a matter of priority to the Pacific region’ and as an intersecting and broad-ranging issue affecting Pacific states. A new Pacific Policing Initiative – a proposal to create a multinational Pacific police force and invest in subregional policing hubs – was endorsed, although in a nod to some debate surrounding its implementation, leaders emphasised the need for further consultation. Emerging geopolitical frictions  A controversy over the final version of the communiqué, however, highlights enduring divisions in the Forum. In the communiqué initially published online on Friday afternoon, paragraph 66 read that ‘Leaders reaffirmed the 1992 Leaders decision on relations with Taiwan/Republic of China.’ This refers to Taiwan’s established status as a ‘development partner’ of the Forum. After public statements from China’s special envoy for the Pacific Qian Bo criticising this language, the communiqué was taken offline and revised, with the paragraph referencing Taiwan removed. Forum officials blamed the confusion on an administrative error. Three of the 18 full members of the Forum recognise Taiwan: Marshall Islands, Palau and Tuvalu. While the Pacific was once a key focus of Taiwan’s diplomatic strategy, its influence has waned in the region in recent years with moves from Solomon Islands, Kiribati and Nauru to shift recognition to Beijing, prompted by a diplomatic offensive by the People’s Republic of China. In an increasingly contested geopolitical context, Taiwan’s status in regards to the Forum is likely to remain a difficult topic for member countries. The concept of sovereignty has always been relatively flexible in the Forum: founding members include the Cook Islands and Niue, which are countries in free association with New Zealand and are not UN member states. In light of rising strategic competition, issues of membership of the Forum also raise existential questions for its future. In 2016, the French territories of New Caledonia and French Polynesia became full Forum members. But their political status does pose interesting questions for the Forum, especially considering the recent riots and ongoing tensions in New Caledonia. In the Forum communiqué, leaders reaffirmed a decision to send a mission to New Caledonia, a move that has been fraught; prior to the meeting, the French Ambassador to the Pacific had asserted that ‘New Caledonia is French territory and it is the [French] State which decides on who enters’. The communiqué also endorsed the applications for associate member status for Guam and American Samoa, two US territories with clear ambitions to accede to full membership status in the future as New Caledonia and French Polynesia have. The concept of sovereignty has always been relatively flexible in the Forum: founding members include the Cook Islands and Niue, which are countries in free association with New Zealand and are not United Nations member states and also do not issue their own passports. Yet, the 2016 decision represented a substantive shift in the principles of Forum membership, one likely to bolster the claims to full membership of other territories. On the one hand, it can be argued that the Forum is becoming more representative in encompassing more Pacific polities and acknowledging the remarkable diversity in political status that exists in the region. On the other, an expanding membership raises questions of the influence of metropolitan powers like France and the US in the Forum. This is an already fraught conversation given the perceived outsized influence of founding member states Australia and New Zealand. Pacific leaders have in the past been outspokenly critical about the role of larger countries in the Forum, given the power differentials and differences in policy on key issues like climate change. France and the US, along with Australia and New Zealand, all have colonial histories – and, for many, an enduring colonial presence – in the region. Given this context, their present and prospective roles in the Forum have been critiqued as preventing the institution from being a truly Pacific space. Pacific leaders like former Fijian Prime Minister Frank Bainimarama have in the past been outspokenly critical about the role of larger countries in the Forum, given the power differentials and differences in policy on key issues like climate change. Behind all of these decisions and controversies are fundamental questions: who has a voice in the Forum and who does not; who has the legitimacy to exert influence in the region and who does not. Resolving these issues in a way that strengthens the Forum’s own legitimacy as the primary regional institution is a pressing and existential matter. In the midst of this, what was not on the Forum agenda is also worth considering. Even in the presence of two elected women heads of government – President Hilda Heine of Marshall Islands and Prime Minister Fiamē Naomi Mata’afa of Samoa – and even following last year’s endorsement of a Revitalised Pacific Leaders Gender Equality Declaration, gender equality is absent from the 2024 communiqué.

Energy & Economics
offshore oil platform and gas drillship with illumination

Undersea geopolitics and international law: Deepsea mining in the Indo-Pacific

by Abhishek Sharma , Udayvir Ahuja

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском The pursuit of critical minerals does not come at the expense of the environment; a global moratorium on deep-sea mining should be the natural course of action The world is looking at a potential geopolitical and environmental point of conflict, which will affect every country in more ways than one. This dispute stems from a search for critical minerals in the deep sea. Critical minerals are considered the building blocks of contemporary technology. To say that they are crucial to the economic and national security of every country would be an understatement. Due to the inherited complexities of mining and attaining critical minerals from challenging geographies, the hunt for them has intensified. Beyond land, many countries are now looking at space as an alternative. Finding and commercially harnessing minerals from celestial bodies like the Moon and asteroids, however, is still a challenge. Therefore, the search for critical minerals in the deep sea has now entered a new phase of competition, where countries are no longer waiting but are actively engaged in the process of deep-sea mining. In this race, while some countries such as China, India, and South Korea (see Table 1) are preparing to grab the opportunity and are trying to build capacities and capabilities, others have raised the environmental and ecological impacts of deep-sea mining. Against this background, it is crucial to identify the key players in this race and understand the accompanying international legal nuances. Table 1: Exploration Contracts issued by the International Seabed Authority (ISA)   Source: ISA. What’s the rush? The urgency of the critical mineral problem is exacerbated by two factors: Fast-depleting reserves of critical minerals for human use and their rising demand. Behind this sudden rush are two important reasons: Firstly, the focus on clean and renewable energy, which is crucial in driving the green energy transition, and secondly, the increasing consumption of high-technology products, which depends on the heavy use of critical minerals. As an illustration, consider its application in high-tech items of various sizes, such as smartphones, electric car magnets, and intricate machinery like F35 stealth aircraft. A F35 aircraft, for example, needs 920 pounds of rare earth elements, demonstrating the significance of these minerals for any nation. Although deep-sea mining is not an exclusively Indo-Pacific phenomenon, competition is most felt in this region due to the high stakes involved. The major actors involved in this race are China, India, South Korea, and even non-state actors, such as private companies such as the Metals Company (TMC, a Canada-based company, which have considerable stakes in the space. International Seabed Authority: China and influence politics Under the 1982 United Nations Convention on the Law of the Sea (UNCLOS), the International Seabed Authority (ISA) was constituted with the mandate to ‘organise and control all mineral resources-related activities’ and guarantee ‘effective protection of the marine environment’ on the seabed of international waters, which are a global commons. ISA is constituted by the Assembly, Council, and Secretariat. ISA’s key advisory body, the Legal and Technical Commission (LTC), should help the authority frame the rules, regulations and procedures (RRPs) to govern mining activities on the international seabed. While the conversation on setting a legal framework for undersea mining has been in process since 2016, ISA has garnered increasing international attention due to the triggering of the ‘two-year rule’ by the island nation of Nauru back in 2021. As per UNCLOS, if the Council of ISA fails to adopt the relevant RRPs within two years of receiving the application for approval of a plan of work for exploitation, the council will have to consider and approve such plan ‘based on the provisions of the Convention and any rules, regulations and procedures that the Council may have adopted provisionally, or based on the norms contained in the Convention and the terms and principles contained in this Annex as well as the principle of non-discrimination among contractors.’ Since this incident, negotiations have naturally picked up, with China playing the leading role in shaping the deep sea mining code, as it wants to influence and is eager to push forward the negotiations in its infancy phase. In the 2023 ISA Council’s July meeting, China blocked the motion introduced by France, Chile, and Costa Rica to discuss a moratorium on deep sea mining. The absence of the United States (US) from the ISA elevates Beijing's role to a prominent position. This discussion will likely have severe implications for the future of the high seas, which cover 60 percent of the world’s oceans. At the ISA’s Council meeting in July 2023, China and other states like Nauru, Japan, Australia, India, Norway, and Russia supported deep-sea mining against a group of 20 countries that opposed it due to lack of scientific evidence and are pushing to put a moratorium in place. France was the exception, calling for a total ban on deep-sea mining. Apart from nation states, many international Multinational Corporations (MNCs) like Google, Samsung, BMW, Volvo Group, and Tesla have also joined the call for a moratorium on deep-sea mining. This call includes 804 marine science and policy experts from 44 countries recommending a ‘pause until sufficient and robust scientific information’ is obtained. The call for a moratorium has increased since the discovery of “dark oxygen” on the seafloor. Even the European Union has adopted a resolution to support a moratorium in response to Norway’s decision to initiate deep-sea mining in the Arctic . Stuck in a limbo As commercial deep-sea mining comes closer than ever to being a reality, it is critical to analyse and take stock of the complex interplay of geopolitical, environmental, and legal challenges that will define the future of international relations and environmental stewardship. As nations such as China, Norway, South Korea, and even India accelerate their efforts to exploit these untapped resources, the world faces a crucial decision: To prioritise immediate economic and technological gains or the fragile ecosystems of the deep ocean. China's geopolitical and strategic goals and its growing influence on international organisations, including the ISA, must be kept in mind while taking a call when the stakes are undeniably high, not just for the Indo-Pacific but for the entire planet. The moratorium is also being proposed as per the established precautionary approach. This approach is a broad legal and philosophical principle that suggests a pause and reassessment in case of a human innovation/activity that could potentially result in harm given the lack of scientific knowledge. In light of the pressing concerns raised by scientists, environmentalists, and several nations, a global moratorium on deep-sea mining should be the natural course of action. While some have argued that such a precautionary pause would not be in accordance with UNCLOS, including the current Secretary General of ISA, it would be an obligation under the constitution of the oceans. In an advisory opinion, the International Tribunal on Law of Sea (ITLOS) has confirmed a trend of precautionary approach becoming a part of customary international law and stated that it is a ‘binding obligation’ on both states and the ISA. This approach is enshrined in Principle 15 of the Rio Declaration. An example of such a moratorium under international law is the International Whaling Convention, which was adopted based on the precautionary approach and has been largely followed for the past 35 years. As the global community navigates this uncharted territory, it must ensure that the pursuit of critical minerals does not come at the expense of the environment that sustains us all. The choices made today will have far-reaching consequences, shaping the geopolitical landscape and determining whether the international community can unite in the face of shared challenges or whether the race for resources will lead to further fragmentation and conflict.

Diplomacy
20240229 - PHAU Bilateral meeting -ph2

Australia Responding to Pacific Priorities

by Melissa Conley Tyler , Jessica Subbaraman

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском The Pacific Islands Forum this week adopted a Pacific Policing Initiative which marshalls Australian resources to meet Pacific needs. A Parliamentary inquiry is looking at proposals from a range of sectors to collaborate on the region’s priorities. As Prime Minister Anthony Albanese meets with his counterparts at the Pacific Islands Forum Leaders Meeting this week, he will be greeting many old friends. In February, Papua New Guinea’s prime minister James Marape became the first Pacific leader to address Australian Parliament. New Solomon Islands prime minister Jeremiah Manele visited in June and new Tuvalu prime minister Feleti Teo in July. Right now, a proactive approach is being taken by a Parliamentary inquiry looking at Australia and the Pacific. The Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) is holding hearings on how Australia can respond to the priorities of Pacific Island countries. Judging from submissions, there’s wide enthusiasm for what’s possible. The committee has received 84 submissions covering a range of topics. For example, Asia-Pacific Development, Diplomacy & Defence Dialogue’s (AP4D) submission focuses on supporting Pacific youth, civil society and media, enhancing women’s peace and security and improving maritime safety, drawing on three years of consultations. Recognising that short-term transactional approaches are counterproductive, it advocates for long-term investment that genuinely engages with Pacific priorities. What is striking about the submissions is the whole-of-nation enthusiasm for engaging with the Pacific across a range of sectors such as science, culture, technology, and civil society. This includes the Australian Academy of Science working to establish a Pacific Academy of the Sciences and the National Reference Laboratory contributing to capacity projects. Other examples include the National Archives of Australia and the National Film and Sound Archive helping preserve the Pacific documentary and cultural heritage, and Australian technology leader CyberCX on the transformative impact of investments in digital infrastructure. Australian civil society is responding to Pacific needs through community-led initiatives. People-to-people links and partnerships are contributing to provide better water and sanitation, reduce HIV infections, enhance the quality of education, improve child and youth protection, advocate for women’s rights, promote disability equity, and contribute to community development. This includes leveraging cultural and family connections to strengthen relationships with the Pacific. There are many examples of Australian bodies working with their Pacific counterparts, such as the Federal Court collaborating with Pacific courts to support justice and the rule of law, the Australian Human Rights Commission helping establish and support Pacific human rights institutions, and Standards Australia providing technical support to Pacific counterparts. And there are many areas where Pacific priorities are common priorities, like the Australian Maritime Safety Authority working with senior maritime officials on issues like search and rescue and maritime spills—and, above all, advocacy and cooperation on the existential threat to Pacific Islands from climate change. The inquiry provides a rich vein for continuing to foster stronger regional ties through collaborative efforts. An example of how this can be brought to fruition came this week when a Pacific Policing Initiative was adopted at the Pacific Islands Forum Leaders Meeting. The initiative has three parts: specialist police training centres of excellence in Pacific countries, a police training and coordination hub in Brisbane, and a new Pacific Police Support Group ready to deploy in response to regional emergencies and major events. It builds on the Australian Federal Police’s long engagement in the region. As well as the outcome, the process of creating the initiative was equally important. The initiative was designed by the Pacific Islands Chiefs of Police, a multilateral body founded in 1970 to bring together regional police chiefs to exchange information and drive regional policing agreements. That means that its genesis is from Pacific priorities around transnational security challenges, including seeing an increase in drug trafficking and transnational crime. While Australia will be the lead funding body contributor, Tonga’s prime minister announced it as “a Pacific led, Pacific owned initiative that reinforces the existing regional security architecture.” This is what it looks like for Australia to support Pacific regionalism as advocated in the latest paper from AP4D: where Australia perceives itself as a fully integrated part of the Pacific Islands region, not just as a partner or an advisor. Given the resources that it has, Australia can be tempted to establish separate arrangements which sit outside of formal structures. By contrast, the new policing initiative was announced by Prime Minister Albanese as “a Pacific led initiative, very importantly. This is something that has arisen from the Pacific family to look after the Pacific family, ourselves.” While Australia’s money and capacity has value, Pacific Island countries contribute knowledge, networks, and experience that are critical to understanding and working effectively within the Pacific Islands region. Australia needs to respond to Pacific priorities. A whole-of-nation approach—involving government, parliament, national institutions, and a range of actors responding to Pacific needs—is key to Australia positioning itself as an invested part of the Pacific.

Diplomacy
Indonesia and Australia small flag with blur green background

Could a green investment deal help Indonesia and Australia overcome their past tensions?

by Cahyani Widi Larasakti

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском Australia and Indonesia have long had an uneasy relationship, over issues ranging from Timor-Leste’s independence to asylum seekers and bans on live cattle export to the aftermath of the Bali bombings. While the politics have long been challenging, there’s reason to believe a change may be coming. One of the fastest-growing economies in the world, Indonesia has long been powered by coal. Now, it’s endeavouring to go green through renewables, grid modernisation, electric vehicles and geothermal. That’s where Australia comes in. In March this year, the two nations formalised a climate partnership, named KINETIK. Through the agreement, Indonesia will secure supplies of lithium for EV batteries, and Australia will gain more export markets for its critical minerals, as well as potential access to the batteries’ industry supply chain. Why has the relationship been rocky? Since winning independence from the Dutch, Indonesia has focused heavily on keeping its many islands and ethnic groups united. But Australia’s role has sometimes been destabilising. During the Cold War, Australian agencies backed the Indonesian army’s bloody purges of communists. Australia also backed the cause of East Timorese secession. In 1998, Australian Prime Minister John Howard wrote to Indonesia’s President, B.J Habibie, pushing for East Timorese independence. A year later, over 5,500 Australian soldiers arrived as peacekeepers during a tense referendum over the region’s future. Many people in Indonesia saw Australia’s involvement as a threat to national unity and cohesion. Before Howard and Indonesia’s next president, Megawati Soekarnoputri, had time to restore the relationship, tensions ramped up again after the 2002 terrorist bombings in Bali which killed 88 Australians. Four years later, the Australian decision to grant temporary protection visas to 43 asylum seekers from Papua, which has long sought independence from Indonesia, led Indonesia’s ambassador to Canberra to be recalled. This diplomatic incident bore positive fruit, resulting in improved dialogue and, the same year, the signing of the Lombok Treaty, in which both countries promised not to interfere with the sovereignty of the other. Since then, Australia has been diplomatically silent on other Indonesian territorial issues, such as the separatist movement in Papua. Despite these efforts, many differences remain. Experts have often warned the relationship is tenuous. In 2019, the two nations signed a new Comprehensive Economic Partnership after a tortuous negotiation period. With a focus on climate change and energy transition, this paved the way for this year’s announcement. In a broader context, this partnership also illustrates Australia’s approach as a middle power nation to counterbalance China’s increasing economic dominance in the Indo-Pacific region. Could the green transition help the relationship? In 2022, Australian Prime Minister Anthony Albanese visited Indonesia, where he promised A$200 million to kickstart climate and infrastructure projects. Now we have a formalised partnership. This is an important step, which should improve the political relationship. The two nations already trade $18 billion of goods and services yearly, centred on Australian coal and beef and Indonesian fertilisers and petrol. But there is room for much more growth. Indonesia’s population is young and large, with almost 280 million people. By 2030, estimates suggest it could be the world’s fifth-largest economy. If the KINETIK partnership works, it will be because it offers both nations what they need – Australia gets a new export market for green minerals, technology and know-how, and Indonesia starts to shift away from coal. The agreement builds on a memorandum of understanding on electric vehicles and another between Export Finance Australia and Indonesia’s State-owned Electricity Company last year. What are we likely to see as tangible outcomes? Indonesia perches on the Pacific Ring of Fire, with a number of active volcanoes and frequent earthquakes. This also means the archipelago nation has huge geothermal resources, estimated at 40% of the world’s total. Many geothermal plants are already running. But making the most of the resource faces many technological challenges. The best underground heat resources tend to be located in mountains or in isolated areas. The KINETIK partnership could help through connecting Australian mining expertise to Indonesia’s deep heat resources. Australia’s expertise in using renewables to power isolated communities will be vital to make exploration easier. And Australian investors will be allowed to own a majority share of Indonesian geothermal plants. The partnerships are expected to align with Indonesia’s National Energy Policy, which aims in part to shift from exporting raw energy resources and critical minerals to exporting value-added energy products through downstream projects such as EV and battery industries. Australia is home to the world’s largest hard-rock lithium mine, Greenbushes. The new partnership will open up options for Indonesian battery manufacturers to access this key metal. Indonesia, in turn, is rich in nickel, which will be needed in great quantities for green technologies. In fact, cheaper Indonesian nickel has pushed some Australian producers out of the market. Indonesia has already secured commercial deals with EV and battery manufacturers such as Hyundai and LG from South Korea, as well as Foxconn from Taiwan. Will this be enough? Politically, the relationship between Indonesia and Australia has long been thorny. A new focus on mutual advantageous investment could help, especially given the deal has strong political backing on both sides. Developing electric vehicles in Indonesia was also a key campaign issue for the newly elected Indonesian president, Prabowo Subianto. From the Australian side, the agreement bolsters the Albanese government’s push to make the nation a green energy superpower. Of course, many agreements stay on paper and don’t shape the real world. But this one has a better chance, given the alignment between Indonesia’s efforts to make itself part of the electric vehicle supply chain, and Australia’s dream of becoming a green superpower. Bilateral agreements like these also show how the world is changing. More and more, middle power cooperation is emerging as a counterbalance against the intensifying Chinese-American rivalry. It’s also a positive sign Australia has realised the need to more actively build alliances across the Indo-Pacific region.

Diplomacy
3D Rendering of two flags from China and Republic of Fiji together with fabric texture, bilateral relations, peace and conflict between countries, great for background

Continuity and Flux in Fiji-China Relations

by Sandra Tarte , Nicola Baker

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском Increasing geopolitical tensions and domestic political pressures have tested Fiji’s efforts to strike a balance in relations with its traditional partners and China. Its actions also illustrate that on questions of sovereignty, external pressure, undue influence, and interference extend beyond China. When the Coalition Government led by Prime Minister Sitiveni Rabuka was sworn into power in Fiji on Christmas Eve 2022 it marked an historic moment: the beginning of a peaceful transition of power, uninterrupted by coups or civil disturbance. But international attention was preoccupied not with whether Fiji had finally ended the coup cycle, but with what the new Government’s stance would be towards China. As a recently aired documentary by the Australian television program 60 Minutes makes clear, that preoccupation has fanned claims in Western media about China as a disruptive – if not predatory – actor in Fiji and the wider region. It is little wonder that the Fijian prime minister (who is also foreign minister) has repeatedly described the Pacific as being “at the centre of geopolitical tensions.” Major powers were, in his view, seeking to “polarize the Pacific into their own camps,” compelling countries to choose sides and further militarising the region. Like a number of other Pacific island countries, Fiji has long held the position of “friends to all, enemies to none.” In the Pacific islands context, this posture has been interpreted to mean being free to choose who to partner with; and not being told by others who they can or cannot be friends with. It is a form of non-alignment that does not preclude security agreements but seeks to avoid or resist being confined to spheres of influence. As former Prime Minister Frank Bainimarama declared in 2015: “We have no desire as a Pacific Small Island Developing State to be drawn into the conflicts of others.” This non-alignment principle has been qualified to some extent by the foreign policy orientation of the government of the day. During the early years of the Bainimarama era, there was a tilt towards China. This was primarily a response to the diplomatic isolation and sanctions imposed on the government by Western partners (including Australia, New Zealand, and the United States) after the coup of 2006, which had compelled Fiji to actively seek new friends and allies. After the return to elected government in 2014, relations were restored with Australia, New Zealand, and the United States, and some foreign policy equilibrium was achieved. But it was not long before the Western partners, led by Australia, began publicly asserting the existence of a Chinese strategic threat to the region. Soon thereafter, these states launched a new campaign of “strategic denial” and, inter alia, escalated their engagement with Fiji. When Bainimarama’s regime was ousted by a coalition of parties dominated by Rabuka’s People’s Alliance Party in the 2022 general election, it was expected that the new government would be less friendly towards China and realign itself more with its “traditional” Western partners. Some saw signs of such a shift in Rabuka’s cancellation of a meeting with the visiting Chinese foreign minister in April 2023, the March reinstatement of the Taiwanese mission’s name to Trade Mission of the Republic of China (Taiwan) to Fiji (after a 2018 downgrade), and promises of an end to Fiji’s longstanding police cooperation agreement with China. But Western optimism did not last. The diplomatic upgrade of the Taiwan Trade Office was reversed; Fiji withdrew its signature from the 51 country statement at the UN calling for an end to China’s persecution of its Uighur minority; and revised but did not terminate the policing agreement. Fiji also accepted a large Chinese grant for the construction of roads in Vanua Levu and, to great alarm among its Western partners, announced on the sidelines of APEC that China had agreed to help with port upgrades and with developing a shipbuilding industry. The Chinese government admitted that the quid pro quo for this infrastructure assistance to Fiji was that “China expects Fiji to continue providing firm support on issues concerning China’s core interests and major concerns.” The “core interests and major concerns” are the One China policy, China’s domestic sovereignty, and its rights in its territorial disputes with neighbouring states. Fiji’s governments are likely to continue to provide such support as long as there is no serious conflict with Fiji’s fundamental foreign policy interests. These include upholding the sanctity of the principles and rules embedded in the United Nations Convention on the Law of the Sea. Moreover, Fiji benefits from Chinese development assistance, and does not view China’s regional presence as strategically threatening as do its Western partners. Rabuka’s continued engagement with China has had the effect of provoking these Western partners into seeking to outbid or delegitimise Chinese initiatives, especially in the security sector where China is suspected of attempting to extend its strategic reach. But, while his government would have anticipated and welcomed the Australian offer to replace China as its partner in upgrading Fiji’s ports and shipbuilding industry, Australia’s attempt to delegitimise the policing arrangement with China by associating it with official Chinese transnational drug promotion was not appreciated. As the Fiji government’s reaction to the latter suggests, its concerns about the effects on its sovereignty of external pressure, undue influence, and interference extend beyond China. That Western partners, and in particular Australia, have increasingly asserted their right to a say in regional and individual Pacific Island Countries foreign policy decisions has caused some dismay and discomfort. The Rabuka government may be attempting to maximise Fiji’s foreign policy independence, manoeuvrability, and leverage, or to strike a balance between its relations with its traditional partners and China. But it also may not yet have developed a settled foreign policy posture based on consultation and consensus within its foreign policy and security establishment. If there is some disagreement and a lack of direction and coordination, the recently initiated Foreign Policy White Paper drafting process should, if sufficiently inclusive, prove of great value. Sandra Tarte is Associate Professor and acting head, School of Law and Social Sciences, University of the South Pacific Pacific. Sandra specialises in the international politics of the Pacific Islands region with a particular interest in Fiji’s foreign policy. Nicola Baker lectures in the Diplomacy and International Affairs Program at the University of the South Pacific in Suva. Her research interests encompass various aspects of the region’s geopolitics.

Defense & Security
Paris,France,1st of May 2024.Thousands of people protested and celebrated on mayday in Paris. Labour unions,workers,students and others marched through the streets

The nickel behind Macron's recolonization project in New Caledonia

by Pablo Elorduy

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском The protests by the Kanak population are taking place against an electoral reform that will further benefit the settlers recently established on the island. In the background are the profits from nickel mining, which the metropolis wants to monopolize. The riots in New Caledonia have led the Government of the French Republic to intensify repression on the Pacific Island. This week, High Commissioner Louis Le Franc has announced that the police presence would be increased, nearly doubling from 1,700 to 2,700 officers. Officially, five people, including two police officers, have died in the clashes, which have arisen due to a legal change in the system of electing representatives that discriminates against the indigenous Kanak population, who make up 40% of the total population. The clashes are also a result of the deep inequality between the Kanak people and the settlers, who are organized into militias, and are said to have carried out executions of civilians. Kanak organizations claim that the death toll among civilians could be higher. Since Wednesday, May 15th, an emergency state has been declared in the archipelago, and the army has been deployed around ports and airports. More than two hundred people have been detained. The situation has worsened due to problems accessing food — due to distribution issues, according to the island government — and healthcare services, which have arisen since the unrest began in early May. The government has stated that in several neighborhoods, "control is no longer assured," and they hope to dismantle the barricades with explosives placed by the masses of protesters. It is estimated that there are around 9,000 protesters, of whom 5,000 are in Nouméa, the capital, especially in the neighborhoods of Kaméré, Montravel, and Vallée-du-Tir. Additionally, the metropolis has banned access to TikTok — a network used for information among the protesters — and the Ministry of Justice has announced "harsher penalties against rioters and looters." The Ground Action Coordination Cell (CCAT) is the main organization of the Kanak population and has linked the protests to the "methodical sabotage of the decolonization process by the French state" from the very beginning. The fact is that since 1986, New Caledonia has been part of the territories to be decolonized according to the United Nations. "Since Emmanuel Macron came to power, France has radically sabotaged the decolonization process," stated the anticolonial organization Survie in a statement. The government's response has been to discredit the CCAT as a "mafia-like" organization and to denounce foreign interference from Azerbaijan, a country which, according to the Élysée Palace, would be seeking revenge for France's support of its Armenian rivals in the Nagorno-Karabakh conflict. Why do protests arise in New Caledonia? The protests arose in response to a reform by the French government aimed at expanding the electorate for provincial elections in New Caledonia, a territory with an estimated population of 300,000 people. The plan involves extending the right to vote to the recently settled colonial population, around 25,000 people, which would further exclude 40% of the island's indigenous population from the representative system, who are the most affected by poverty and exclusion. The settlers are already able to vote in French presidential and municipal elections, but the plan would change the balance in provincial elections. Thus, supporters of independence and the Kanak population interpret that the "Nouméa Accord" of 1988, which grants more guarantees to the Kanak population, would be reversed in order to further privilege the settlers who have gradually been settling in the territory, attracted by tax benefits and the relationship between their high salaries with European standards and the low prices in the archipelago. This is yet another nail in a hardline shift directed by Macron's government, which in 2021 imposed a referendum to shore up French colonial power over the archipelago despite demands for postponement from the Kanaks and significant voices in French society, who called for respect for the Kanak mourning for those who died from COVID-19. As expected, abstention determined the results. The current constitutional bill to "unfreeze" the electorate, which has been voted on in the Senate and must be endorsed by the French Assembly, has sparked multiple protests, including strikes at the port and airport of Nouméa, closure of numerous administrations, the beginning of a riot at the Nouméa prison, and clashes between police and youth from working-class neighborhoods of Nouméa. As noted in an article from the environmentalist newspaper Reporterre, the control of New Caledonia is strategic for France. The island hosts between 20 and 30% of the world's nickel resources, a resource used in the manufacturing of batteries for electric cars. One out of every four people works in the nickel sector, despite which the industry is in crisis, leading the metropolis, under the guidance of Bruno Le Maire, Minister of Economy, to present a "nickel pact" that would introduce millions in aid to the sector but, at the same time, reverse a 1998 agreement by which the island secured management of the nickel. The proposed pact, explained by an expert cited by Reporterre, "completely departs from the model of mining revenues that benefit New Caledonia for its own development" and follows point by point with a neocolonial logic. Additionally, the metropolis aims for the archipelago to export more raw material, which would lead New Caledonia to lose the added benefit of in-situ nickel processing.

Defense & Security
Wellington, New Zealand - November 29 2019: HMNZS Wellington, a protector-class off-shore patrol vessel in the Royal New Zealand Navy sailing into Wellington harbour.

New Zealand is waking up to threats

by Tim Hurdle

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском While Australian defence policy looks north, Kiwis focus west. New Zealand has always benefited from strategic isolation and the distance from international conflicts. But as global dangers increase, the reality of the geo-political situation is cutting through in New Zealand’s public discourse. With the active aggression of totalitarian powers like China and Russia causing disruption, New Zealand is waking up the threats they pose to the international order. That’s a good thing for Australia, creating a stronger, more engaged partner to work with in the Pacific and on regional security arrangements. Awareness of the threat that China and Russia pose has evolved in the past 10 years. In June 2022, then Labour prime minister Jacinda Ardern attended the NATO Summit, calling her participation a ‘rare thing’. She condemned Russia’s invasion of Ukraine and said ‘China’s increasing assertiveness is resulting in geopolitical change and competition.’ This mild comment provoked the strong rebuke from Beijing that her comments were ‘unhelpful, regrettable and wrong.’ Her open criticism was a shift from a foreign policy that had been closely tied to protecting the strong trading relationship with China. This shift continued under Chris Hipkins, who replaced Ardern as prime minister until Labour lost office in November. The Ministry of Foreign Affairs and Trade released a strategic foreign policy assessment, ‘Navigating a shifting world’, in July 2023. And Hipkins’s defence minister, Andrew Little, said ‘In 2023, we do not live in a benign strategic environment’ as he unveiled a Defence Policy Strategy Statement that achieved cross-party support. With a three-party centre-right coalition government now in office, there is a growing recognition that New Zealand will need to spend more on defence. This is challenging due to excessive pandemic spending that has left a legacy of a bloated public service and a structural fiscal deficit. But on 10 May the government said money from cost-cutting elsewhere in the Defence budget would be recycled back into Defence rather than being subsumed by fiscal consolidation. All parties in the new government have made positive statements about New Zealand reaching the NATO standard of spending 2 percent of gross domestic product on defence. New Zealand last achieved this level in 1992, and spending has continued to decline in recent decades. Currently sitting just above 1 percent of GDP, the fraction is significantly less than Australia’s. New Zealand’s GDP per capita is only three-quarters of Australia’s, meaning its defence spending per person is much lower. The inaugural Australia–New Zealand Foreign and Defence Ministerial Consultations in February bought a new focus to the trans-Tasman relationship. Ministers of both countries said the meetings had taken place amid the most challenging global strategic environment in decades. They committed to increasing military integration. The debate in New Zealand has become sharper as the country has considered joining Pillar 2 of AUKUS, the part of the Australian-British-US defence partnership that deals with technology other than nuclear submarines. Active military collaboration for international security marks a strong shift away from the view of then Labour prime minister Helen Clark, who said in March 2001 that New Zealand was ‘very lucky to live in one of the most strategically secure environments in the world’ and that New Zealanders ‘would like other nations to experience the peace of a benign strategic environment too.’ For as long as her view dominated foreign policy circles, attention was on trade policy; there was little focus on national security or defence issues, beyond a fascination with nuclear disarmament. Clark and her generation promoted a so-called independent foreign policy. Encouraged by the anti-American and anti-nuclear lobby, this amounted to a shift away from the Western alliance. The more modern view in New Zealand is that, as a small country, it must help to uphold the international rules-based system and contribute to stability and security efforts. New Zealand has engaged with Asian-centred regional collaborative security frameworks. More spending is needed. The government will release a new Defence Capability Plan in June or July, setting out procurement priorities. There is no longer a sense that spending on defence will be unpopular. The main challenge will be renewing the fleet of the Royal New Zealand Navy (RNZN). Key units that need replacement are the two Anzac-class frigates, and there are clear signals that New Zealand will consider buying ships of the general-purpose frigate class that is intended for the Royal Australian Navy. Using the same design would promote interoperability and economy. The Royal New Zealand Air Force has modernised with the recent purchase of P-8A Poseidon maritime patrollers and C-130J Hercules airlifters. New naval helicopters are likely to come soon. New Zealand can provide better awareness of the eastern approaches to Australia with Poseidons. A runway extension on the Chatham Islands, 800km east of mainland New Zealand, was opened in January to handle aircraft of the size of Poseidons. These assets are vital to supporting ongoing participation in collective security efforts. The first international deployment of a New Zealand Poseidon was to Japan in April, to help enforce UN Security Council sanctions against North Korea. Kiwi gunners have trained Ukrainian soldiers in Britain. The RNZN is vital to Pacific relationships. New Zealand’s strategic isolation is becoming less apparent amid cyber attacks on the parliament in Wellington, great-power competition in Antarctica and acceptance that the country’s trade routes are exposed. Global conflicts feature on Kiwis’ screens daily, showing that the world is a more dangerous place and that foreign policy must change. It’s understood that stepping up will come at a cost. New Zealand needs to have defence capability that can integrate and enhance Australian forces in the Indo-Pacific. The new government knows that Australia, as New Zealand’s only formal defence ally, is the most important partner.

Defense & Security
France and New Caledonia flags.

France, New Caledonia and the Indo-Pacific

by Denise Fisher

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском How France manages the first outbreak of serious violence in New Caledonia in 40 years will affect not only its future role there but its acceptance as a resident Pacific, and Indo-Pacific, power. The violence of indigenous independence supporters, many of them very young, signals that the inconclusiveness of earlier peace agreements risks taking New Caledonia back to the bloodshed of the 1980s. The unrest is targeting the capital, Noumea, and its population of Europeans, who mostly support staying French. The wounds are deep. The peace agreements that ended violence in the 1980s largely succeeded because of difficult and constant compromises by the French state, loyalist parties and independence parties. Mutual trust in the promises of those agreements to work towards self-determination underpinned the French state conducting three referendums in New Caledonia from 2018 to 2021. The first two were impeccably organised and showed, respectively, that 56.7 percent and 53.3 percent opposed independence. But the state dropped the ball in a third referendum in 2021, sticking with an intended voting date despite indigenous requests for postponement. At the time, hundreds of Kanaks had died from Covid-19. Their leaders said they could not ask their people to campaign or vote when their traditions required lengthy mourning rituals. The resulting indigenous boycott saw the count of opposition to independence soar to 96.5 percent. Since then, divisions have deepened. Loyalists, backed by the government in Paris, say all three votes were valid and want to cement the territory as part of France. Independence groups reject the third vote and seek another; some refuse to participate in discussion about the future. They rejected Macron’s offer of a chemin de pardon (path of forgiveness) when he visited in July 2023. They did not attend a meeting he convened, and their supporters did not turn out for his major speech there, sending a strong message of discontent. Macron then threatened unilateral action unless local parties came to an agreement. Informal discussions between some parties from each side in December ended with wide divergences, including over a further independence vote and voter eligibility. To set a deadline, Macron introduced legislation postponing local elections from April 2024 to December 2025, and he put forward another bill that would amend the French constitution, imposing broader voter eligibility and thereby diluting the Kanak voting share, unless locals reached agreement before the end of June. Demonstrations erupted into violence on 13 May, the day France’s National Assembly debated imposing from Paris the enlargement of voter eligibility. The destruction perpetrated by young Kanaks signalled not only to France and loyalist parties who were their targets but also to Kanak leaders and neighbouring countries the depth of distress of a new generation who felt disrespected and excluded from determining the future of their homeland. How France responds will be decisive for its sustainable future in New Caledonia. New Caledonia’s population is about 270,000. In the census of 2019, indigenous Kanaks were 41 percent, Europeans 29 percent and other Pacific islanders and ‘others’ composed the remaining 30 percent. Another census is due this year. Kanaks may now exceed 45 percent, since there have been net departures of about 2000 people a year since 2015, almost all presumably non-indigenous. Moreover, some people in the ‘others’ category, which includes the sub-categories of ‘mixed’ and ‘Caldeonian’, would also be Kanaks. And the Kanak share of the population will rise, especially since recent developments may contribute to an increase in non-Kanak departures. While New Caledonia’s neighbours have quietly supported the peace agreements, they remain concerned about the interests of the islanders in the non-self-governing French territory. Some of them took New Caledonia to the United Nations Decolonisation Committee in 1986, ensuring annual UN scrutiny of the territory and France’s dealings with it since then. The Pacific Islands Forum (PIF) has regularly sent missions monitoring implementation of the Noumea Accord and observed each referendum, expressing serious reservations on the third. The Melanesian Spearhead Group (Papua New Guinea, Fiji, Vanuatu, Solomon Islands and New Caledonia’s FLNKS independence coalition) was formed in the mid-1980s specifically to support Kanak independence claims. With the eruption of violence, their silence has broken. Making Australia’s highest-level statement in decades, Prime Minister Anthony Albanese said Australia was closely monitoring the situation and encouraged all parties to work together constructively to shape the institutional future of New Caledonia. PIF Secretary-General Henry Puna said he was not surprised by the riots, noting it was unfortunate that the third referendum had been allowed to go ahead amid the pandemic. PIF chair and Cook Islands Prime Minister Mark Brown said New Caledonia and French Polynesia had been included in the forum ‘in recognition of their calls for greater autonomy coming from their people’, and supported providing help to prevent conflict. Vanuatu Prime Minister and Melanesian Spearhead Group Chair Charlot Salwai publicly opposed France’s constitutional change and urged a return to the spirit of the peace agreements and the sending of a dialogue mission led by a mutually respected person. France has done much to regain the acceptance and trust of the region in recent decades. Responding to island governments’ visceral opposition to its policies in the 1980s, France abandoned nuclear testing in the region and gave greater autonomy to its Pacific territories. It did so by respecting local governments and people. Macron has articulated an Indo-Pacific vision for France that’s firmly based on its sovereignty in the Pacific. But, to maintain France’s claims as an Indo-Pacific power, he must listen to the large and growing indigenous minority in its pre-eminent Pacific territory, New Caledonia. And he must listen to the appeals of Pacific island governments, so they and France can move forward together with humility and respect.