- by William Briggs
- The Guardian
- Issue #2108
Photo: pixabay.com (CC0)
Australian Treasurer, Jim Chalmers’, has announced that the government will inject $6.3 million for initiatives to bolster Anti-Money Laundering and Counter Terrorism laws in the Pacific. The claim is that it’s all about making banking less risky. It has a good-news feel to it. Chalmers made it seem even cosier when addressing the Pacific Banking Summit in Brisbane. “The message we are sending today to the entire Pacific family is clear – you can bank on us.”
The Australian government and the Americans have expressed concerned about local banks pulling out of the region due to risks arising from breaching these laws. A process known as ‘de-risking’ looks to be underway. Banks either end or restrict relationships with customers rather than managing the potential risk to those customers.
For banks to withdraw their services from these small island states would have a devastating impact. We need look no further than regional and isolated communities in Australia who suddenly lose contact with a bank branch as it closes operations. The concern being shown by the Pacific nations’ big-brothers’ in Washington and Canberra may seem touching but the motivations are not entirely altruistic.
The US Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, spoke of his government’s recognition of the “economic and strategic significance of the Pacific region … De-risking – and the weakening of international financial ties more broadly – can impede financial access and inclusion for significant populations, drive financial activity into unregulated financial systems, inhibit investment and trade, and undermine financial stability and resilience.”
US Treasury Secretary Janet Yellen told the Summit that the Biden administration remained committed to an Indo-Pacific that was “free and open, connected, prosperous, secure, and resilient … A key part of achieving that is making sure people and businesses in the region have access to the global financial system.”
The real commitment for Yellin, Nelson and for Chalmers is how to make sure that China does not offer any sort of banking lifeline to these states. Nauru, for instance has just one bank – Bendigo Bank. It had planned to shut up shop but has since delayed the move (possibly with a little persuasion from Canberra). News reached the Albanese government that a Chinese state-owned bank had expressed an interest in filling the void. This would not be permitted.
Chalmers said at the Brisbane conference that “the Albanese government is doing the hard work to make Australia the partner of choice for you all. We’re restoring trust and we’re rebuilding relationships in the Pacific.” That is very nice of the Australian government.
ANZ is the largest lender in the Pacific. It is in talks with the government about ways to make its business that little bit more profitable. They are playing the China card and almost declaring that their actions are ‘patriotic.’ ANZ CEO, Shayne Elliott went so far as to say that if “we were there purely commercially, we would have just shut it down.”
The conference was told that from 2011 to 2022, the Pacific region lost almost 80 per cent of its correspondent banking relationships (where one financial institution provides services to another one, usually in another country). Clearly these institutions do not have a Shayne Elliott at the helm who decry “purely commercial” interests.
The problem for countries like Australia and the US is that they have held these island nations as virtual colonies for decades. Economic realities and a steady capitalist crisis mean that profiteers like banks are simply cutting losses. China’s willingness to enter into ‘win-win’ relationships in key areas of trade and finance is, for imperialism, a terrifying prospect.
For the people of the Pacific islands, the prospect of the withdrawal of banks is more than simply inconvenient. The fact that slackness in the existing laws has allowed money laundering to become such a problem as to necessitate international intervention is concerning. It is hoped that a remedy can be found.
The broader concern for Treasurer Chalmers is to ensure “the ability of the Pacific to engage with the world,” or at least with those bits of the world that he considers appropriate.
