MELBOURNE, Australia — Australia has entered into a significant financial agreement with Nauru, announced on Monday. As part of this arrangement, Australia will have the authority to veto various agreements that the small Pacific nation might consider making with external countries, specifically including China.
Under this treaty, Australia will provide Nauru with 140 million Australian dollars (approximately $89 million) over a five-year period. This funding is aimed at supporting Nauru’s population of about 12,000 residents, with AU$40 million ($26 million) earmarked specifically for enhancing local policing and security measures.
Australian Prime Minister Anthony Albanese outlined the importance of the treaty, emphasizing that the security concerns of one nation directly impact the other. He stated that both Nauru and Australia will collaboratively decide on any involvement by other countries within Nauru’s security, banking, and telecommunications sectors. Nauru’s President, David Adeang, reiterated that the partnership with Australia, which has historical ties as its former colonial ruler, is essential for the well-being of Nauru.
The new agreement mirrors a previous deal established in May with Tuvalu, another small Pacific island nation of a comparable population size, which also granted Australia veto powers over agreements with outside countries. This move comes on the heels of a 2022 security pact between China and the Solomon Islands that sparked concerns about the potential creation of a Chinese naval base in the South Pacific region.
Meg Keen, who heads the Pacific Island Program at the Lowy Institute, a think tank based in Sydney focused on international policy, noted that Nauru has traded its capacity to negotiate security and infrastructure partnerships with China and other foreign entities for an increase in Australian financial support. She interpreted this as a strategic effort by Australia to curtail Chinese influence in the Pacific region.
Keen further mentioned that the treaty strengthens Australia’s regional relationships and solidifies its position as the preferred partner for development and security in the area. Importantly, a key feature of the arrangement is that Nauru will continue to have access to an Australian banking service. The Commonwealth Bank of Australia is set to establish a branch in Nauru next year, following the exit of Bendigo Bank from the country.
President Adeang expressed optimism about the future benefits of the treaty, noting that it not only fortifies Nauru’s economy but also enhances mutual security. He highlighted the importance of addressing significant challenges such as lack of banking access while ensuring sustainable growth and resilience for the citizens of Nauru.
