The great dragon and tiger connect to a Pacific Ocean of opportunity

Two of the world’s most powerful leaders have just visited the Pacific: the leaders of China and India were in Fiji within two days of each other. The significance of this for the region is difficult to overstate.

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Both leaders may have been taking advantage of being on this side of the world for the G20 Summit in Australia but for India’s Narendra Modi and China’s Xi Jinping the visit is momentous nonetheless.

"For Fiji in particular the visits were a turning point, reinstating its presence on the world scene."
Vishnu Mohan, CEO Pacific & CEO Fiji, ANZ

For Fiji in particular the visits were a turning point, reinstating its presence on the world scene following successful elections in September and marking its brand as the ‘hub of the Pacific’. 

Following visits to Myanmar and Australia, India’s Prime Minister Modi arrived in Suva amidst crowds of cheering bystanders. Much ceremony and flurry followed, as well as significant development commitments from Prime Minister Modi, including: 

  • a $US70 million line of credit for Fiji for a co-generation power plant to support Fiji’s sugar industry;
  • a $US5million fund to develop small businesses and villages in Fiji;
  • Doubling of Fiji scholarships and learning opportunities in India;
  • Visas on arrival for 14 Pacific countries;
  • Training for Pacific diplomats;
  • Sharing of expertise in fields of agriculture, health care and IT;
  • Support in tourism and cultural exchanges; and
  • Co-operation in renewable energy sector, especially solar and wind energy, and in building capacity to adapt to climate change. 

Two days later, Chinese President Xi landed in Nadi, following visits to Australia and New Zealand, adding China’s development assistance commitments to the mix, including: 

  • 2000 scholarships over the next five years for eight Pacific countries with whom China holds official diplomatic ties – Fiji, Samoa, Vanuatu, Niue, Tonga, Federated States of Micronesia, Cook Islands, and Papua New Guinea;
  • Zero-tariff preference on most items exported from the least developed countries;
  • More tourists to the region;
  • An additional 70 million yuan in aid to Fiji; and
  • Support in trade, agriculture and fishery, marine industry, energy and resources and infrastructure. 

It is clear substantial connectivity is essential to any nation’s long-term prosperity. From where I’m sitting, I see a significant opportunity for nations to flourish off the back of the momentum that’s already apparent in pockets across the Pacific. China and India’s renewed interest and support to the region, along with the help from other development partners, is imperative to maintaining this drive. But it will be the energy and commitment from the people on the ground – local leaders, communities, the private and public sectors – that will make the final impact. 

The focus here on infrastructure development is important. Without the ability for Pacific nations to connect internally and with each other through viable road networks, ports, air travel and technology, there is little possibility of connecting more globally through trade and movement of people. 

Road networks facilitate wider provincial trade and people movement. I saw this happen when living in Sub-Saharan Africa in the mid-90s and we know China appreciates this, having built an extensive network of roads and railways across their vast country to connect people and trade. 

The good news is that there is also much activity in this space here in the Pacific. 

Only last week Fijian Holdings Limited, a leading local equity investment company, signed an agreement to acquire 25 per cent of Pernix (Fiji) Ltd, a local arm of the Pernix Group, a leading construction and power infrastructure company out of the United States. 

This sort of partnership gives global expertise a stronger local context. In Papua New Guinea, much-needed infrastructure development is the priority destination for revenue from the ExxonMobil-led PNG LNG project, which delivered first exports in May this year. 

Meanwhile, the roll-out of 4G mobile communication network infrastructure in the likes of Kiribati, Fiji, Samoa and PNG tell us a story of a shifting world of technology that’s no longer seen as a luxury but an expected resource to bridge the social and economic gaps faced by developing nations. 

Our world is indeed getting smaller and more connected. As Prime Minister Modi told an audience at the Fiji National University "India must not work for just India but for the rest of the World!”. What a statement from the leader of the world's largest democracy which could well be the world's largest economy by 2050. Even with this in sight, the Pacific remains an important region for India, as Prime Minister Modi later blogged

Clearly we all have a role to play in the bigger picture. The key is getting those connections right.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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