India-China Chase now Extends to Fiji with Modi and Xi�s Visits

The Indian and Chinese competitive graph has stretched till the island nation of Fiji in Melanesia in the South Pacific Ocean, with Indian PM Narendra Modi and Chinese President Xi Jinping visiting Fiji during the same week, following the G20 Summit in Australia. It took India’s Prime Minister 33 years to put Fiji back on India’s foreign policy radar with PM Modi visiting the Pacific island nation this week to be welcomed by a support base of 37 percent Fijians (people of Indian origin). It was unfortunate that Fijian opposition Social Democratic Liberal Party boycotted Modi’s address to the Fijian Parliament. That apart, while seeking stronger engagement with Fiji and the overall Pacific Islands, Modi has proposed a Forum for India–Pacific Islands Cooperation (FIPIC) to be held regularly, and invited the leaders for the next meeting in New Delhi in 2015.

In a volley to comforting announcements including visa-on-arrival facility for the Pacific Island nations, Modi also pledged $75 million of credit line for Fiji for a co-generation power plant, and upgrading Fiji’s sugar industry. This is line with India being a key player in Fiji’s sugar, rice and horticulture sectors and Indian assistance for upgrading the sugar mills of the Fiji Sugar Corporation. Besides, India and Fiji have also agreed to expand their defence and security cooperation. It needs to be recalled that in 2012-13, 43 slots for Navy and 10 slots for Fiji defence personnel for short/long-term training programmes had been offered. Besides, India has also coordinated closely with Fiji in the past in its election processes by offering electronic voting machines for trial purposes as well as training of election officials.

Fiji, a scenic island nation in the heart of the Pacific Ocean, is an archipelago of 332 islands of which around one-third are inhabited permanently. But, what accounts to being negative credit for Fiji, it has witnessed several armed coups starting 1987. More specifically, the coups of 1987 and 2000 were followed by racial violence. Albeit, the last 2006 coup did not lead to racial tensions. Nations including the US, and prominent regional players including New Zealand and Australia placed heavy sanctions on Fiji in wake of the military coup in 2006. These sanctions have recently been lifted with Fiji holding democratic elections in September 2014 and restarting its journey towards becoming a democratic nation once again.

There is visible competition amongst regional heavyweights and global players to rebuild relations with Fiji understanding fully well that of the 14 South Pacific Island nations, Fiji remains a prominent one. During the period following the coup in Fiji in 2006 which overthrew the then elected government, the West and their partners and allies cut back/blocked direct government funding to Fiji. This was a but obvious opportunity for Asian giant China to step up aid and investment and fill the crack caused by the sanctions slapped on Fiji by the West. What the West failed to foresee was that the means called sanctions to achieve the end of pushing Fiji back towards democracy, ended up providing room for China to exploit the situation to its advantage. Although Fiji receives substantial aid from Australia, over the years it has distanced itself from appearing to be overtly dependent on Australia and has gone on to challenging the Australian-dominated regional status quo. Fiji’s deepening relationship with China, Brazil, India and the rest of Melanesia appears to be a manifestation of this shift.

Surely, China did not disappoint and made maximum use of the opportunity to extend its clout on the picturesque island nation, and more importantly, raise its overall profile among the Pacific island nations. The past eight years have witnessed China bankrolling various infrastructure/construction projects in Fijian cities of Nasinu and Suva. In addition, Beijing also supported a $158 million hydroelectric power project. Today, the Chinese influence and presence in Fiji is hard to miss with Chinese grants and loans reaching $23.2 million, as per the Lowy Institute in Australia. Chinese companies have bought massive stakes in Fiji’s largest gold mine and invested heavily in its bauxite industry.

Moreover, in 2013, China announced $1 billion in advantageous loans to the Pacific and another $1 billion in commercial credit. Local Fijians welcome and to a large degree value Chinese investments, arguing that it has rescued them and the nation’s economy from collapsing and slipping into recession during a very difficult period. This could be read as an oblique reference to the West and the fact that it withdrew support at an important juncture, leaving Fiji stranded. It has often been stated that the government in Fiji has pursued a “Look North” policy—implying improved ties with China and the Arab world.

A particular area of immense significance and consequence for Fiji is that of climate change given that the Pacific islands are low-lying and most susceptible to climate change effects. Fijian analysts have opined that China and India, are not just powerful political and economic players globally, they are major contributors to the problem of climate change, to which the Pacific Island countries are at the receiving end. The most vital question remains, whether India will manage to outmanoeuvre China within Fiji and overall in the South Pacific? Pragmatically speaking, at the moment India’s economic investments are not as liberal and expansive as that of China and this gives Beijing a definitive edge over New Delhi, at least in the near future. That said, sharpening geopolitical competition between regional rivals will see all tools of statecraft at display to gain primacy and outshine each other.

The author is Senior Fellow at CLAWS. Views expressed are personal.