Australia and Vanuatu sign delayed security deal seen as curbing China

By Alasdair Pal

SYDNEY, June 29 (Reuters) – Australia and Vanuatu on Monday signed a development and security pact that had been delayed for months over Vanuatu’s concerns that it could stifle investment from other countries.  

Australia, which is in a battle for influence in the Pacific with China, will be consulted on any third-party investment in Vanuatu’s critical infrastructure and remain the country’s preferred security and policing partner.

Canberra has previously unveiled funding of A$500 million ($345 million) over 10 years for the pact, known as the Nakamal Agreement.  

“It encapsulates Vanuatu’s sovereign decision not to permit its territory to be used for any foreign military base or infrastructure and that Vanuatu’s critical infrastructure remains free from militarisation,” Australian Prime Minister Anthony Albanese said at a news conference with his Vanuatu counterpart, Jotham Napat. 

The agreement was to be signed in September, but was delayed after Napat said his coalition partner had raised concerns that it could restrict Vanuatu’s ability to secure infrastructure funding from other countries.

China is Vanuatu’s largest external creditor, having provided loans through Chinese banks that financed Chinese contractors to build major infrastructure projects, including the presidential office complex, parliament building and road network.

Asked about the agreement, China’s foreign ministry said on Monday it hoped the pact would contribute to regional development and stability rather than target any third party or be used for geopolitical rivalry.

“China will continue to expand friendly exchanges and cooperation across various fields in accordance with Vanuatu’s wishes and needs,” ministry spokesperson Guo Jiakun told a press briefing in Beijing.

Vanuatu is currently pursuing its own economic deal with China. Napat said on Monday it was awaiting approval from Beijing.

“We will share the agreement, there is nothing to hide,” he said, responding to a question about whether the deal would contain security elements. 

($1 = 1.4514 Australian dollars)

(Reporting by Alasdair Pal in Sydney; Additional reporting by Ethan Wang in Beijing; Editing by Thomas Derpinghaus and Kate Mayberry)