Stepping up Australia’s Pacific Step Up during COVID-19


Illustration of map of the South Pacific with staked coin piles representing Australian and Chinese currency
Source: Natalie Leung (2019). CNN, https://edition.cnn.com/2019/07/22/asia/china-australia-pacific-investment-intl-hnk/index.html

Rhiannon Arthur


Australia’s recent COVID-19 Response Package for the Pacific is welcome news for a region battered by the economic impacts of the COVID-19 pandemic. But Australia must look at extending it beyond its two-year sunset clause if Australia is serious about reaffirming its leadership in the increasingly contested Indo-Pacific.


In early October, the Australian Government announced in its 2020 Federal Budget that it will provide $304 million in temporary funding to the Pacific and Timor Leste as part of a COVID-19 Response Package. The once-off supplementary funding will go towards delivering critical economic support to the region, which has suffered substantial economic shocks from the COVID-19 pandemic. The Australian Government has made it clear that the funding is momentary, with a two-year life span, and is separate from Australia’s $4 billion Overseas Development Assistance (ODA) laid out in the budget. Given the recent year-on-year cuts to Australia’s foreign aid budget, this extra funding commitment is a welcome gesture from the Government.


Fortunately, Pacific nations have largely been spared the severe health impacts of COVID-19 suffered elsewhere. However, as remittance and tourism-dependent nations, the region has been heavily impacted economically with the disruption of international travel. According to the ANU’s Development Policy Centre’s Pacific COVID Economic Database, Fiji’s post-COVID GDP is expected to contract 20.9 per cent, while the GDP of Vanuatu and the Solomon Islands are set to decline 9.8 and 6.0 per cent respectively. Notwithstanding the even more deleterious threat of climate change on Pacific nations, in the words of Fiji’s Prime Minister Frank Bainimarama, “COVID-19 is clearly the job-killer of the century”.


While this extra Pacific aid commitment will make some headway in addressing the COVID-induced economic devastation to the region, it falls far short of what is needed. What the region needs is greater economic support, in combination with targeted diplomatic engagement over a series, not just a couple, of years. If the Australian Government is serious about mitigating and responding to the severe economic impacts of COVID-19, on top of countering China’s growing influence in the region, it is within Australia’s interests to mount a serious reinvigoration of its ‘Pacific Step Up’.


First launched in 2016 by Prime Minister Malcolm Turnbull, the ‘Pacific Step Up’ campaign seeks to increase Australia’s engage