- by Graham Holton
- The Guardian
- Issue #2121
Government building in Funafuti, Tuvalu. Photo: lirneasia – (CC BY 2.0)
The tiny nation of Tuvalu, formerly the British Gilbert and Ellice Islands, has a population of 11,500. Though independent since 1978, Tuvalu is strongly tied to Australia, politically and economically, although separated by 3,500 kilometres of ocean. In November 2023, at the Pacific Islands Forum, Foreign Minister Penny Wong and Tuvalu signed the “Falepili Union.” The bilateral agreement includes immigration, regional and multilateral issues. It is based on “values of good neighbourliness, care and mutual respect,” meaning neighbouring states have a responsibility for any environmental harm, impact and damage caused. The Union provides for Australia to assist Tuvalu following military aggression, natural disaster, or a public health emergency. Prime Minister Anthony Albanese called the Union “the most significant agreement between Australia and a Pacific island nation ever.”
The agreement aligns Tuvalu with Australia’s military interests, leading to an amendment of the Rarotonga Treaty to include AUKUS submarines. It is part of Australia’s strategic goal to limit China’s increasing political and economic interests in the South Pacific. After China signed a security pact with the Solomon Islands in 2022, Australia wanted veto power to prevent a future Chinese military base in Tuvalu. The treaty allegedly gave Australia veto power over Tuvalu’s foreign policy and security agreements.
Prime Minister Kausea Natano has claimed the Union is essential for Tuvalu’s national identity. His predecessor, Prime Minister Enele Sopoaga believed it would undermine the country’s sovereignty and that the agreement must be repealed. Tuvalu’s sovereignty is seen as being diminished, as the United States, Australia, and China compete for economic, military and political influence in the South Pacific.
One issue important to China is that Tuvalu still recognises Taiwan as independent from China, which is counter to the “One China” principle. China’s presence in the region was a major election issue in January 2024, as two contenders wanted Tuvalu to switch ties from Taiwan to Beijing, and to revise the security pact with Australia. In March the new prime minister, Feleti Teo, said Tuvalu’s ties with Taiwan “are purely based on democratic principles.” China’s Foreign Minister urged Taiwan’s diplomatic allies to “stand on the right side of history and make the right decision that truly serves their long-term interest” by recognising China. PM Teo said he would renegotiate development assistance agreements with Taiwan, and that Australia should drop the clause that both countries must “mutually agree” on any third-country security agreement that Tuvalu may seek, as it encroaches on “Tuvalu’s sovereignty.”
In May Australia and Tuvalu signed a new security deal aimed at easing any sovereignty concerns. Meg Keen, director of the Pacific Island Program at the Lowy Institute, has claimed that the new agreement reassures Tuvalu “that provisions related to the veto-of-third-party arrangements are not intended to impinge on Tuvalu’s sovereignty, but rather to ensure effective responsiveness/coordination and interoperability in times of crisis response.” It’s a veto, all the same. Teo said his government would maintain diplomatic ties with Taiwan.
Tuvalu is tied to Australia financially, as it does not have a monetary authority or a central bank. Since 1966, the official currency of Tuvalu is the Australian dollar, with Australian banknotes having been used prior to independence. The Tuvaluan dollar is pegged to the Australian dollar at parity, making the value of the Tuvaluan dollar dependent on the Australian dollar.
Australia opened a High Commission in Vaiaku, the de facto capital of Tuvalu, in 2019. Australia supplies important aid to the country. In May 2023 the Australian Infrastructure Financing Facility for the Pacific (AIFFP) approved $21.4 million towards a $120.6 million Asian Development Bank (ADB) fund to finance the construction of passenger and cargo facilities on Pacific islands. The AIFFP funds, together with $11 million from the Tuvalu government, will construct workboat harbours and reclaim shoreline. Another $50 million is for Tuvalu’s first undersea telecommunications cable.
Is Australia following a neo-imperial path in regards to Tuvalu? Neo-imperialism is the dominance over another country through legal agreements, economic power, and cultural influence. Neo-imperial anxiety about an ‘assertive’ China has bought much needed finance and a regional political influence that far outweighs its tiny size, an example of China helping Pacific countries without spending a cent.
Australia is Tuvalu’s closest neighbour and will remain very influential in a relationship that is increasingly seen as Neo-Imperial, having reduced Tuvalu to a colonial dependency. The Australian government sees Tuvalu as pivotal to restricting Chinese influence in the region and will maintain its political and economic influence over the Pacific nation for the foreseeable future.
