PETER LAYTON* |
From an Australian defence viewpoint, the Pacific is suddenly fashionable. This renewed attention has encouraged some interest in possible regional opportunities for those companies operating within the Australian defence industry sector. The Pacific does have some real security issues but these are not military threats from hostile states but rather threats to human security.
Regional security concerns
A major concern often discussed is climate change but this is really just making an already difficult situation worse. The latest World Risk Index ranks Oceania as the region at greatest risk globally in terms of natural disasters and the region’s ability to respond. Vanuatu is the country with the highest disaster risk of 181 countries assessed, with Solomon Islands second, Tonga third, PNG ninth and Fiji fourteenth. All of these countries are in Australia’s near neighbourhood and are members of the Pacific Islands Forum.
The region typically averages ten cyclones per season, with an increasing frequency of larger cyclones. The cost of their impact is high: Cyclone Pam cost 64% Vanuatu’s GDP and 30% of Tuvalu’s, Winston 20% of Fiji’s GDP; and Gita 38% of Tonga’s GDP. Most worryingly, a Pacific island country now may not fully recover from a weather-related disaster before the next one hits. For long-term security planning purposes, the Pacific Islands are disaster central.
Fishing is regionally economically important with some Pacific island governments generating 80% of their revenue from fishing licenses, while some 25,000 people work in fish processing facilities in Fiji, Marshall Islands, PNG and Solomon Islands. However, as the oceans warm from climate change, fish are moving away from the Equator and to the east, global fish stocks are in long-term decline, and the world’s largest distant water fishing fleet, China’s, is increasingly present regionally. All this makes it important to prevent Illegal, Unregulated and Unreported (IUU) fishing activities. For long-term planning purposes, maritime law and order is an ongoing, major issue.
The focus on the islands tends to overlook the elephant in the Pacific room: only 4 km from Queensland, PNG has a land area bigger than NZ and a population twice as large, and a GDP bigger than all the other Pacific islands combined. On the other hand, PNG has some of the poorest human development indicators in the world, and most people work in the informal economy mostly in agriculture. For long-term security planning purposes, PNG is really mainly interested in nation-building and law and order.
A role for Australian defence industry?
The Australian defence industry sector is overwhelmingly dominated by small and medium enterprises, with the few large companies and these mainly foreign-owned. In general, each SME only has very limited investment capital available to explore new opportunities. In considering regional possibilities, the question for each company is whether to be involved directly in the islands independently or indirectly through being part of Australian defence regional cooperation activities. Influencing answering this question is that the islands can be complicated places to do business, each country has only a very limited budget, there are few local companies to partner with and skilled staff are rare. On the other hand, there are many young people looking for opportunities to develop and apply skills, with the Australian Government keenly interested in funding regional education and trade skilling initiatives.
Maritime law and order. Defence has contracted to an American company for periodic fishery IUU patrols by a single aircraft until 2023 or so. Next time, perhaps Defence could contract an Australian company and operate more aircraft given it’s a big region; the new government may be onboard. Longer term, it’s tempting to suggest smallsats able to detect fishing boats launched into low earth orbit by Queensland’s Gilmore Space Technologies. Such smallsats are in commercial service now.
Regional infrastructure. The region has a real need for improved roads, ports and airfields, for reasons of both security and prosperity. There is the now A$3.5bn Australian Infrastructure Financing Facility (AIFF) but getting approval for a project can take years. In that time, a Chinese company may have stepped in. Defence would gain from better infrastructure in the islands, especially during disaster relief operations. This suggests the department could help expedite the approval of useful projects perhaps including providing military civil engineers to oversee the overall project, including the contracting. That may sound unusual but the US Army Corps of Engineers does that in the United States. Federal Cabinet might have greater confidence in implementation costs and delivery schedules if Australian Defence Force engineers were involved, and so could agree more quickly. In passing, it should be noted that the Pacific Islands are becoming wary of debt financing mechanisms like AIFF.
Connectivity. The islands are hard to get around with sea and air transport currently the most practical ways. As regards, sea transport, the PNG Defence Force’s two old Australian-built landing craft retired last year after 50 years of service. Australia’s Defence Department quickly, and for sound reasons, bought a Malaysian-built temporary replacement. This episode suggests a possible new Defence Cooperation Program building landing craft, in a manner similar to the nearing completion A$500m Pacific Patrol Boat Replacement project. Landing craft are considerably more versatile than patrol boats and can undertake many sea transport tasks whether security-related, search and rescue, disaster relief or nation-building.
A landing craft project could be considerably more broadly based than the earlier patrol boat one. Cairns has substantial engagement already with PNG and the other Pacific Islands (pp. 24-25) Moreover, the Cairns shipbuilding precinct is being upgraded through significant Queensland Government funding. New landing craft could be built in Cairns using Australian and Pacific island companies and workforce, and then supported long term from there. In this, it is noteworthy that while Australia has workforce shortages, TAFE Queensland provides skills training to some 1200 Pacific Islanders annually under the Australia Pacific Training Coalition program.
There are several possibilities for Australian defence industry companies to get involved in the Pacific. However, as the contracting to an American company for fisheries policing suggests, Australian companies will need to be proactive and somewhat ambitious to secure emerging business opportunities.
Dr Peter Layton is a Visiting Fellow at the Griffith Asia Institute, Griffith University, and an Associate Fellow at the Royal United Services Institute.
* With special thanks to Dr Tess Newton-Cain for sage advice.