Chinese Aid Diplomacy and Its Implications

China’s growing influence in Vanuatu and recent spikes in Chinese aid to the country have triggered some interesting counter-responses from our traditional partners.

The most extreme version of this was the blunt allegation by Fairfax Media that Vanuatu has been facilitating plans for a Chinese military base on Santo. That scaremongering was quickly shot down by the Government, though when you look at lessons learnt from other jurisdictions around the world, a certain level of caution must still be exercised. We cannot afford

to rest on our laurels and assume everything is about ‘friendship’. In diplomacy, ‘Trusted Friends’ can create unpleasant and undesirable

surprises too.

Since the announcement of the Chinese Government’s Belt and Road Initiative (BRI) in 2013 by Chinese President Xi Jinping Vanuatu has seen an unprecedented massive boost in infrastructural development over the past 5 years. The BRI project has been dubbed as China’s ‘project of the

century’. This project has certainly reshaped financial and geopolitial ties across the globe including Vanuatu.

The BRI is the modernday version of the ‘Marshall Plan’ which was introduced by the United States in 1948 to support reconstruction efforts after World War II.

But the BRI appears to be a lot more pervasive than the Marshall Plan. Dr Sandra Tarte of the USP rightly pointed out recently that “China is not

going away; they are going to grow even more powerful and even more dominant in the global economy and in our region”. Negative reactions

from the US and ‘middle power’ friends within the region are to be expected. Honae Cuff in ‘The Conversation’ describes the current ‘Fears about China’s influence’ as ‘a rerun of attitudes to Japan 80 years ago’. It’s largely to do with territorial security fears. The discussions had back in 1938 within Australia were about Japan, only this time, it is about China.

The focus of this brief article is on the operational implications of this new

landscape of aid diplomacy that’s being played out before us, not just by China but by all the other traditional partners that are now increasing their

aid packages to Vanuatu and to the rest of the Pacific region in reaction to China’s growing geopolitical influence.

Two key implications require our serious attention here. One, the workmanship and quaility of the projects being implemented – especially

via Chinese infrastructural aid – roads and in particular, buildings. And two, the capacity of our officials to manage these increasingly massive aid projects.

It makes absolutely no sense to implement and construct projects that are

not up to expected standards. Philippa Brant from the Lowy Institute succinctly explains in her article entitled ‘Chinese aid in Fiji coming under new pressures’ (https://www.lowyinstitute.

org/the-interpreter/chineseaid- fiji-coming-under-newpressures) where she points to design failures as a major drawback. She argues, ‘we've

heard numerous stories of inappropriate or unsustainable Chinese aid projects.

Time and again it seems problems stem from issues around design. A Chinese company will implement a project according to a design usually done by a separate Chinese company.

As the Chinese aid system currently stands, it is difficult to negotiate changes to the design down the track.’

That’s exactly what we are faced with in Vanuatu today. This particular issue the Vanuatu Government needs to take into full consideration in order to properly address when negotiating future projects, especially with

Beijing.

We have several examples of the problem pointed out by Brant with Chinese projects in Vanuatu – a National Convention Centre that is not professionally built as a proper convention centre, a PMO complex that was facing sewage and other problems after it was handed over to the Government, poor construction workmanship within the MSG Secretariat

building, to name a few.

The Government has to stop signing off on and saying ‘yes’ to projects for implementation unless the question of design has been properly and

professionally settled. No proper and satisfactory design, no project.

The second issue relates to staffing capacity both in terms of numbers and skills set. And this is the big one.

The vast increase in projects does not necessarily equate to a corresponding increase in staf f ing numbers to manage greater workloads.

The other more worrying issue is that of insufficient project management skills in the system. We faced this at MALFFB when I had to establish a project management unit (PMU) in preparation for the arrival of the over 3 billion vatu EDF 11 funds for the so-called ‘Vanuatu Value Chain’ (VaVac)

project. High level skillsets in project management are very scarce in Government today.

A few days of basic project management training will not cut it, especially with big million or billion dollar projects that require advanced project management skills.

The Government, through agencies such as VIPAM and the Scholarships Unit need to move away from these piecemeal-type training programs as more and more projects flow into the country through various negotiations

by leaders who do the easiest part of the job in saying ‘yes’, though they don’t necessarily understand what this entails when it comes to their poor

officials’ unreadiness to manage and to implement these projects.

In closing, and in retrospect, Vanuatu has obviously ticked the ‘Yes’ box

to entertaining Beijing’s ‘debtbook diplomacy’. In the PM’s mission to China last month he sought more support, be it via grants or more loans.

Australia being the most predominant donor partner in the region might have to do things a bit more creatively than just rely on its 2017 Foreign Policy White Paper.

For many years Vanuatu wanted to build certain infrastructural development projects for its own development needs, yet it’s diplomatic friends in the region simply ignored this.

So China is basically filling a gap Vanuatu’s traditional partners possibly disregarded over the past 30 years. If others are so concerned about China’s chequebook diplomacy and now the ‘debtbook diploamcy’, they should perhaps ask themselves an honest question, ‘why didn’t we respond with greater effort all this time, before China stepped in with its massive loans?’

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