Australia announced a multimillion-dollar agreement with Nauru on Monday that gives Canberra a veto right over a range of pacts the tiny Pacific atoll might want to enter with third countries, including China.
Australia offered 140 million Australian dollars ($89 million) over five years to the remote nation’s population of 12,000 under the treaty to be implemented next year, including 40 million Australian dollars ($26 million) to enhance policing and security.
“Recognizing the security of one of us affects the security of both of us, the treaty provides that Nauru and Australia will jointly agree to any engagement by other countries in Nauru’s security, banking and telecommunications sectors,” Australian Prime Minister Anthony Albanese said in a joint statement with Nauru President David Adeang at Australia’s Parliament House.
Adeang said Nauru’s partnership with Australia, its former colonial master, is “vital” to his country.
The pact has some similarities to a deal a struck in May with Tuvalu, another tiny Pacific island nation with a similar-size population as Nauru, which also gave Australia veto power over third-country deals.
The Tuvalu deal followed a security agreement struck between China and the Solomon Islands in 2022 that has raised concerns over a Chinese naval base being established in the South Pacific.
Meg Keen, director of the Pacific Island Program at the Lowy Institute, a Sydney-based think tank on international policy, said Nauru had sacrificed its ability to strike security, banking and infrastructure deals with China and other third parties in return for a big increase in Australian funding.
“It is a move by Australia to limit Chinese reach and influence in the region,” Keen said in an email.
“The treaty allows Australia to strengthen regional ties and cement its leading role as the development and security partner of choice,” she said.
A key part of the deal is that Nauru will retain an Australian bank. The Commonwealth Bank of Australia will open a branch in Nauru next year after Australia’s Bendigo Bank withdraws from the country.
“This treaty strengthens our own economy, enhances also our mutual security and addresses critical challenges like debanking and ensuring inclusive growth and resilience for our own people,” Adeang said.