1.4 Interests in the South Pacific, Africa and the Middle East

Table 12: Resources Summary for Sub-program 1.4

Figure 23: Interests in the South Pacific, Africa and the Middle East Program and Organisational Structure as at 30 June 1998

Sub-program Objectives

In 1997-98, the objectives of sub-program 1.4 were to:

• inform and advise the Government on the protection and advancement of Australia’s political, economic and security interests in the South Pacific, Africa and the Middle East
• enhance trade and investment opportunities in countries in these regions through commercial diplomacy, bilateral government/ industry forums, systematic lobbying to remove or reduce impediments to trade, and the provision of information and in-country assistance to Australian companies
• expand high-level consultations, exchanges and mechanisms for dialogue to promote Australia’s interests in economic development and security, especially in the South Pacific
• project an accurate, contemporary image of Australia in the countries concerned and contribute to informed debate within Australia in support of Australia’s interests in them
• assist the peaceful settlement of disputes within and among countries in the South Pacific, and where feasible, contribute to encouraging respect for basic human rights and freedoms in Africa and the Middle East.

Description

The South Pacific, Africa and Middle East Division administers the sub-program. PMD comprises three branches: Pacific Islands Branch, New Zealand and Papua New Guinea Branch, and Middle East and Africa Branch. Throughout the South Pacific, Middle East and Africa, 21 Australian overseas posts play an important role in working on sub-program objectives.

The sub-program pursues strategies designed to help achieve four of the Department’s corporate goals: to enhance Australia’s security; to promote Australia’s economic growth, jobs and standard of living; to strengthen global cooperation in ways which advance Australia’s interests; and to promote public understanding of Australia’s foreign and trade policy. These strategies include advising, managing and coordinating all aspects of Australia’s bilateral relations with these countries in a manner consistent with Australian government foreign and trade policy objectives and in accordance with Australia’s national interests. The sub-program covers a region of crucial strategic importance to Australia and involves some of our closest and most intense bilateral relationships. Economically, it includes responsibility for Australia’s relations with its fourth largest export market (New Zealand), as well as increasingly important markets in the Middle East and southern Africa.

Table 13: Australia's Trade with the South Pacific, Africa and the Middle East

Performance Information

In 1997-98, the Department indicated that it would evaluate its performance using:

• increased support for the economic reform agenda in the Pacific island region, including through developing and implementing practical measures in tariff reform, investment policy and private sector development; effectively supporting efforts to develop a comprehensive pelagic fisheries management regime to protect the longer-term economic interests of the island countries; encouraging bilateral representations; and using multilateral mechanisms, notably the Forum Economic Ministers Meeting in July in Cairns and the South Pacific Forum in September in Rarotonga
• development of a strategic approach to Pacific island regional law and order challenges in consultation with other relevant departments and agencies
• extent to which Australia encourages South Pacific regional organisations to soundly manage and efficiently implement programs, including through the fiftieth South Pacific Conference in October in Canberra
• effective engagement with the newly elected PNG Government on the bilateral relationship; continued adherence by Papua New Guinea to the economic reform process; progress by the end of the review period on the Bougainville peace process; consolidation of Australian commercial interests in Papua New Guinea; and regular and substantive ministerial contact between the two countries, including the Ministerial Forum in October
• finalisation of acceptably revised bilateral social welfare arrangements with New Zealand; resolution of Market Development Task Force priority matters; effective management of any bilateral divergences in multilateral and regional issues subject to Australia-New Zealand coordination; and growing NZ political and public acceptance of enhanced defence commitments
• development of further trade and investment opportunities in Africa, especially southern Africa, through a successful initial Joint Ministerial Commission with South Africa, expanded links with Australian mining companies and constructive outcomes from the meeting of Australian Heads of Mission in Africa
• further development of trade relations with Middle Eastern countries, including resolving the continuing problem with live sheep trade; successful high-level visits to Australia by Middle Eastern leaders and dedicated trade missions; and follow-up activity
• constructive responses to political tensions, particularly in the Pacific island region, and support for the constructive and peaceful resolution of disputes
• consistent provision of highly professional, efficient and useful service to all clients.

Performance Outcomes

1.4.1 Interests in the South Pacific

Regional economic reform has been an Australian priority in the Pacific islands region for some time. In line with this priority, the Department facilitated Australia’s hosting of the first South Pacific Forum Economic Ministers Meeting in July in Cairns. The Department provided substantial input into the FEMM Action Plan which committed forum island countries to enhanced public accountability, private sector development and more open trade and investment policies. This significant achievement was overshadowed at the time by the mass media’s publication of sensitive Australian government briefing documents. Managing the fallout from this incident, including through regional posts, became a priority for the Department.

Following endorsement of the FEMM Action Plan by forum leaders in September in Rarotonga, the Department actively and successfully encouraged implementation of the Action Plan in the region through Australia’s aid program and relevant regional and bilateral meetings. For example, after the Rarotonga Forum, Samoa reduced its maximum tariff levels from 60 per cent to 25 per cent; this accords fully with Australia’s regional interests in promoting economic development and reducing trade impediments. Vanuatu and the Solomon Islands also adopted economic reform programs, partly in response to Australian encouragement. The Department also promoted trade interests through organising the Pacific Heads of Mission business ‘roadshow’ in April to Queensland which opened up commercial opportunities for Australian business.

The Department worked successfully to gain better recognition of the importance of fisheries to the economic security of the Pacific region and a commitment by Japan (one of five distant water fishing nations active in the Pacific) to cooperate fully in establishing measures to ensure the long-term conservation and management of the region’s tuna stocks. These important steps supported Australia’s strategy to ensure a secure and stable economic and political regional environment. Another step was to promote a more effective Forum Regional Security Committee to oversee implementation of the 1992 Honiara Declaration on Law Enforcement Cooperation. In 1997, this committee was instrumental in developing the Aitutaki Declaration on Regional Security Cooperation, which forum leaders adopted at Rarotonga.

The Department was instrumental in the success of the fiftieth anniversary South Pacific Conference which Australia hosted in October. The Department was the primary organiser of the conference which provided an important opportunity to underline Australia’s continuing commitment to the region. This commitment also underpinned the Department’s initiative in drafting the Canberra Declaration on Social and Economic Development, identifying new and continuing challenges the region will face in the twenty-first century, which the conference adopted. Representatives to the conference, including several Heads of Government, expressed particular satisfaction with its organisation and outcomes.

Photo: Minister for Foreign Affairs, Alexander Downer (centre), and Parliamentary Secretary (Foreign Affairs), Kathy Sullivan (far left), with departmental officials and international delegates at the fiftieth anniversary South Pacific Conference in October in front of the RG Casey Building, Canberra. (photo: Michael Jensen)

The Department continued to promote effective and efficient delivery of economic and social development programs by regional organisations, including supporting a new, permanent headquarters in Samoa for the South Pacific Regional Environment Programme. At the Rarotonga Forum, the Prime Minister committed Australia to a substantial contribution towards the project. The Department then focused on identifying donor support, particularly possible interest by Japan, to enable the construction of a modest, functional headquarters. Funding commitments of more than $2 million suggest the project will proceed within the target timeframe.

The Department supported successful visits by the Minister for Foreign Affairs to Fiji and Vanuatu. These visits helped to highlight Australia’s strong and growing ties with both countries and underline Australia’s commitment to the countries of the South Pacific.

Fiji

The Department contributed to the strengthening of the bilateral relationship between Australia and Fiji, at both political and economic levels. In partnership with AusAID, the Department managed Australian assistance to Fiji to build the institutional capacity needed under its new non-racial constitution which established a new electoral process and new boundaries. Elections are scheduled for February 1999. Recognising the increasing level of bilateral trade (valued at $1 billion in 1997) and the growing strength and breadth of the commercial relationship, the two governments agreed at the annual Australia-Fiji Ministerial Consultations in December to negotiate an Australia-Fiji Trade and Economic Relations Agreement.

French Pacific Territories

The signing of the Noumea Accords between the Government of France and the New Caledonian parties set the scene for greater New Caledonian autonomy and boded well for further improving Australia’s relations with both France and New Caledonia, where commercial opportunities for Australian companies increased. The Department promoted trade relations by supporting the Queensland-Northern Province Business Cooperation Agreement and obtaining access for Australian dairy products and telecommunications in French Pacific territories. Cooperation with France in the Pacific improved on a number of fronts, including maritime surveillance, disaster relief and scientific research.

Solomon Islands

Following elections in August, the new Solomon Islands Government sought Australian assistance, particularly with economic reform, capacity building and law and order. The Department was active with other Australian agencies in meeting these requests. The Department also worked very closely with the Solomon Islands Government on the Bougainville peace process issues.

It assisted in negotiations between the Solomon Island authorities and an Australian company, Ross Mining, which produced an agreement allowing the Gold Ridge mining project to begin operating in 1997. Indications are that the mine will yield around one million ounces of gold (worth about $380 million) over its eight to ten-year life span.

1.4.2 Interests in New Zealand and Papua New Guinea

New Zealand

Departmental efforts during the review period to influence NZ Government thinking produced good progress on some key bilateral objectives.

The Department contributed significantly to the progress achieved on an equitable and mutually beneficial revision of bilateral social welfare arrangements; a new reciprocal health-care agreement was signed in May. An exchange of notes in July 1998 will implement the identical two-year social security qualifying periods both countries announced in their May budgets. Negotiations on a reciprocal child support agreement are well advanced, while residual social welfare issues remain under discussion.

The Department contributed to a better focused debate on defence issues in New Zealand, especially pressing for an increase in NZ defence spending. This involved sustained contact with NZ ministers and opposition figures, media commentators and academics. Joint Australian-NZ involvement in the Bougainville peace initiative and high-level bilateral contacts led to an increasingly lively NZ media and political discussion of defence priorities, with New Zealand registering the need for greater defence investment. The November 1997 New Zealand Defence White Paper incorporated modest first steps towards rebuilding NZ defence force capacities, while the May budget declared the Government’s commitment to future increases in funding. A key concern for the Department next year will be to encourage New Zealand to maintain this commitment.

The Department worked hard over the review period to maintain a close multilateral and regional collaborative partnership with New Zealand, including supporting prime ministerial and ministerial meetings as well as through regular officials level dialogue. Major bilateral meetings included NZ Prime Minister Shipley’s visit in February to Sydney, the biannual Australian-NZ Foreign Ministers’ Talks in August in Auckland and in January in Christchurch, the Australian-NZ Trade Ministers’ Talks in September and the Australian-NZ Defence Ministers’ Talks in March.

The Department advanced Australian economic interests by strengthening economic integration under the Australia-New Zealand Closer Economic Relations and by expanding links with Australian business, notably through the launch in May of the Trans-Tasman Mutual Recognition Arrangement and of a TTMRA Users’ Guide by the Deputy Prime Minister and Minister for Trade. Good progress also was made on the Department’s Market Development Task Force objectives. The Department’s strong representations enhanced Australian market access in New Zealand. In response to Australian lobbying, New Zealand withdrew subsidies for electromagnetic compatibility testing and provided ministerial assurances that barriers to Australian optometric services investment would be removed. Australia achieved wider access to the NZ market for Riverland oranges, expanding export opportunities for Australian growers.

Figure 24: Australia's Merchandise Trade with New Zealand

Papua New Guinea

Australia’s relationship with Papua New Guinea is recovering well from its low point after the Sandline crisis in early 1997. The Department, particularly through its mission in Port Moresby, worked with other government agencies to ensure early and frequent contact with the new Skate Government, including supporting four successful visits by the Minister for Foreign Affairs to Papua New Guinea during the review period. This enabled Australia to engage the PNG Government on a range of issues affecting our national interest, including economic reform, development assistance, commercial concerns, civil aviation, defence cooperation, management of the Torres Strait and the Bougainville conflict. In line with this strategy, the Department took advantage of opportunities, such as the PNG-Australian Ministerial Forum, to ensure key messages were reinforced at ministerial level.

The Department continued to pursue Australian commercial and economic objectives in Papua New Guinea, with varying degrees of success. It exerted its influence to keep Papua New Guinea engaged with the World Bank and the International Monetary Fund on the issue of economic reform, and Papua New Guinea’s 1998 budget seemed to demonstrate a higher level of government commitment to the reform program. In civil aviation, the Department persuaded Papua New Guinea to take action to remedy serious safety concerns with its national airline and successfully lobbied the PNG Government to grant a licence to the Australian company Questair. After many months of sustained diplomatic effort, partial success was achieved on the vexed question of unpaid debts to Australian companies, as frequent high-level representations brought the issue to the attention of senior PNG government figures. In the coming year, the Department will continue to urge the PNG Government to examine outstanding claims case by case and reach agreement with the companies concerned.

Resolution of the Bougainville conflict and support for the peace process was a major priority for the Department. An historic breakthrough occurred when a ceasefire was signed in April. This was the culmination of substantial diplomatic effort by Australia, New Zealand and regional allies to encourage the warring parties to seek a political solution to the conflict. Since November, the Department, in cooperation with the Department of Defence, AusAID and the Australian Federal Police, has contributed funds and 26 personnel (out of a total of 50 from all agencies) to a multinational truce/ peace monitoring force on Bougainville. Australia eventually took over command of the force from New Zealand in May. The overwhelming majority of Bougainvilleans warmly welcomed the presence of the unarmed monitors and this has contributed significantly to developing a more stable environment in which to advance the long-term task of reconstruction. The Department also worked closely with AusAID to implement the Bougainville reconstruction program agreed jointly with the PNG Government.

Photo: Minister for Foreign Affairs, Alexander Downer, with Prime Minister of Papua New Guinea, Bill Skate, and Bougainville Interim Government Vice President, Joseph Kabui, at the Bougainville Ceasefire ceremony in April in Bougainville, with Australian High Commissioner to Papua New Guinea, David Irvine, looking on.

Photo: DFAT officer, Barbara Wymarra (right), with fellow Australian truce monitor, Sari Sutton, from the Department of Defence and youngsters at Arawa on Bougainville. (photo: Sgt Gary Ramage, Defence Public Affairs)

The highly successful relief operation the governments of Australia and Papua New Guinea jointly mounted at the time of the PNG drought is an excellent example of cooperation under the aid program, and the goodwill this generated at all levels allowed the Department to enhance the bilateral relationship further. The Department is working closely with AusAID and Papua New Guinea on a major review of the PNG-Australian Development Cooperation Treaty to determine the shape of the aid program after 2000.

1.4.3 Interests in the Middle East and Africa

The Department achieved most of its objectives in the Middle East and African region. It kept the Government well informed on Australia’s political, economic and security interests in the Middle East and Africa, drawing extensively on high-quality and regular reporting from its regional network of posts. As a result, the Government took informed positions on events such as the Iraqi weapons inspection stand-off in February, which led to the deployment of Australian troops in the Persian Gulf. In considering regional priorities and objectives, a meeting of Australian Heads of Mission in Africa in July concluded that our overall political engagement in Africa should remain focused on South Africa and the Southern African Development Community.

The Middle East

The Department worked hard to enhance trade and investment opportunities in the Middle East by assisting Australian visits to the region, such as a Victorian Government-led information technology delegation to Israel. The Department also hosted a large number of regional business visitors, and sponsored and participated in a series of seminars in most Australian state capital cities to promote Australian private sector awareness of commercial opportunities in the Middle East.

Good outcomes were achieved on a range of market access issues. The Department improved the competitive position of potential Australian investors in Iran through negotiating a Memorandum of Agreement on line-of-credit facilities with the Iranian Government. The Department also helped to achieve, by coordinating and participating in representations to the governments concerned, improved access for frozen mutton to Egypt, live sheep to Jordan and sugar and barley to Iran.

The Department contributed to high-level consultations in the Middle East, including supporting the Minister for Foreign Affairs’s first visit to Israel, Gaza and Egypt in June, during which he encouraged the negotiating partners in the Middle East peace process to continue direct negotiations. As well as this, the visit provided the opportunity to promote Australia in Israel and Egypt as a reliable supplier of a range of quality goods and services, particularly in information technology, infrastructure provision and services industries.

Figure 25: Australia's Merchandise Trade with the Middle East

Africa

Good progress was achieved in the expansion of high-level consultations and commercial relations in Africa. The Department supported Mr Fischer’s successful leadership of a delegation to an initial Joint Ministerial Commission with South Africa and a business delegation to Zimbabwe. The Commission decided on a program of action designed to enhance trade cooperation between Australia and South Africa. A Double Taxation Agreement was concluded during the visit; this should foster more two-way investment.

The Department hosted a number of regional business visitors, and sponsored and participated in a series of seminars in most Australian state capital cities to promote Australian private sector awareness of commercial opportunities in Africa. Also it took advantage of a visit by the Angolan Vice-Minister for Petroleum to expand links between Australian mining companies with interests in Africa.

Figure 26: Australia's Merchandise Trade with South Africa

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