South Pacific: Diplomatic Spat between New Zealand and Kiribati
The announcement of a New Zealand spending review concerning aid programs across Oceania has sent shockwaves into many small island states. With New Zealand facing structural economic challenges that have led to a recession, senior leadership in Wellington is undoubtedly looking for ways to cut back. Kiribati, an atoll state that relies extensively (18%) on aid from neighbouring states Australia and New Zealand, is anxious and uncertain about the future. With the 12th largest exclusive-economic zone, referred to by the Americans as ‘the corridor of freedom’, this small island is undoubtedly gaining popularity among strategic thinkers in Washington and Beijing.
The commitment of over $102 million across three years (2021-2024) by Wellington has prioritised Kiribati’s development in health, education and climate resiliency programs. Fundamentally, the diplomatic spat occurred when President of Kiribati, Taneti Maamau prioritised a church service over meeting the New Zealand Foreign Minister, Winston Peters. Prior to this spat, senior leadership only heard about the spending review through the media and demanded proper diplomatic consultation between Wellington and Tarawa. As such, bilateral relationships following a foreign engagement freeze during the 2024 Kiribati elections remain on edge. With the addition of the Cook Islands and the Solomon Islands strengthening relations with Beijing, to what extent can New Zealand salvage a complex relationship?
The implications of stubborn diplomacy of both sides in furthering a split is historic. And has the potential to redefine the region in recognition of Beijing’s worldview.
Diplomatic Strain Between Kiribati and New Zealand
During the 2023 New Zealand General Election, Foreign Minister and Deputy Prime Minister Winston Peters pledged to strengthen ties with the Pacific region by visiting each small island state on a diplomatic tour before the 2025 election. This diplomatic blitz would position New Zealand as a trusted regional ally to many, including Kiribati.
A senior spokesperson for Minister Peter stated "This was especially disappointing because the visit was to be the first in over five years by a New Zealand minister to Kiribati and was the result of a months-long effort to travel there”. Prime Minister Maamau has disengaged from international affairs and instead focuses on the domestic challenges facing the I-Kiribati.
The China Factor
The diplomatic complexity of engaging in dialogue with Kiribati is cause for concern among many foreign affairs departments across the region. With the ban on diplomatic visits during the 2024 Kiribati election, due to concerns of foreign interference in the democratic process. Moreover, New Zealand has had nearly five years of no high-level bilateral dialogue. This contrasts with recent developments, as President Maamau has been strengthening relations with Beijing, challenging the continuities of relying on New Zealand and Australia.
Importantly, Kiribati, like the Cook Islands and the Solomon Islands, have renounced their recognition of Taiwan. Therefore, Beijing is seeking to redefine the world order through foreign direct investment in aid-dependent and vulnerable nation-states. Moreover, President Maamau had in attendance during the January 21 church service the Chinese Ambassador Zhou Limin.
Wellington remains sceptical of the sustainability of the Kiribati-New Zealand relationship, given significant aid spending contrasted by diplomatic disengagement. In response to the spending review, Peters argued no decision would be made until the review is completed. However, the guarantee of a continuation of the Recognised Seasonal Employer Scheme provides guaranteed job security across Oceania to access similar job markets as Australia’s PALM scheme
Australia’s position and the Broader regional dynamics
Unlike New Zealand, Australia was welcomed into Kiribati. On January 18th, Deputy Prime Minister of Australia, Richard Marles met with Hon Vice President Teuea Toatu. A key focus of the bilateral dialogue was on maritime security and economic development. As a show of commitment to Kiribati’s maritime security, Australia delivered a Guardian-class Patrol Boat RKS Tobwaan Mainiku. With China increasing investment into Kiribati’s policy and security services, Australia is seeking to leverage the demand in return for unclear guarantees.
The regional dynamics of Oceania are becoming strategically important to international security. China’s record investment into the region through foreign direct investment schemes in addressing infrastructure and policing services is unparalleled. As such, Pacific Island Countries can strategically hedge pre-existing relations with new partnerships in order to gain significant financial aid and development packages. The geostrategic importance of Kiribati is the three-island chain to the Northern Pacific Ocean that provides projectile capability for Blue Water navies including the People’s Liberation Army Navy (PLAN) and the US Indo-Pacific Command. This sub-region of Micronesia is referred to as the “Corridor of Freedom” due to the projectile capability of naval bases Guam and Hawaii into the Indo-Pacific. China in turn uses the region to project Yuan Wang-Class Surveillance ships into Oceania.
The United States has been unable to gain a diplomatic footing in Kiribati, even with the leverage of Australia and New Zealand's long-held investment. Under the Presidency of Maamau, it is unlikely an American embassy would be built.
The findings and actionable outcomes of the aid review will be consequential for the region. Amid internal pressure from a recession in New Zealand, Prime Minister Luxon and Deputy Prime Minister Peters must prioritize sustainable spending that ensures a return on investment through strengthened relations with Kiribati. Soft power diplomacy, particularly in the form of aid packages, will face scrutiny, requiring clear communication of the strategic importance to voters in an era of shifting alliances and increasingly uncertain partnerships.
