Pacific allies don’t usually air their dirty laundry in public.
But a rare on-the-record dispute between New Zealand and Kiribati has renewed focus on the poor and isolated island nation, highlighting the existential threat it faces from the climate crisis – against the backdrop of a tussle between the world’s biggest powers for regional dominance.
When New Zealand’s right-wing government unexpectedly announced an aid review for its Pacific neighbor last week – ostensibly over an alleged snub to a top official – it “caused serious anxiety” for the approximately 120,000 people who live in Kiribati, according to one i-Kiribati minister.
Foreign aid accounted for 18% of Kiribati’s national income in 2022, according to the Lowy Institute – with New Zealand among its largest donors.
The Micronesian nation of 33 coral islands is scattered over a remote area of the central Pacific that spans 3.5 million square kilometers (1.3 million square miles) – an area larger than India.
Though among the least populated countries, Kiribati has one of the world’s largest exclusive economic zones. Its relative proximity to Hawaii and United States military bases in Guam also gives it strategic importance as great powers compete for influence in the vast waterways between Asia and the Americas.
The diplomatic fallout has put fresh attention on the battle for influence in the Pacific between China and Western nations, mainly the United States.
It also comes as US President Donald Trump’s administration threatens to disrupt American relations in the region, with concerns from Pacific leaders over how US withdrawals from the Paris climate agreement and World Health Organization, as well as a 90-day aid freeze, will impact vulnerable communities.
Diplomatic spat
The dispute erupted last week with a sudden move from New Zealand’s deputy prime minister.
Peters had planned to lead a delegation to Kiribati last month, which included the handover of a New Zealand-funded $14 million hospital upgrade.
But a week before they were set to arrive, Kiribati told the delegation that Maamau, who is also the country’s foreign minister, “was no longer available” to receive them, Peters’ spokesperson said.
“The lack of political-level contact makes it very difficult for us to agree joint priorities for our development program, and to ensure that it is well targeted and delivers good value for money,” Peters’ office added.
Between 2021 and 2024, New Zealand’s aid commitments to Kiribati totaled $57 million, with investments in health, education, fisheries, economic development, and climate resilience.
An analyst said New Zealand’s surprising move to review the entire assistance package was born out of “deep frustration” from Peters “that a number of diplomatic efforts to engage with the Kiribati government have been rebuffed.”
“New Zealand has struggled to get access with the Kiribati government, including across those key areas in which New Zealand is supporting health, climate and education, for instance,” said Anna Powles, associate professor at the Centre for Defence and Security Studies at Massey University in New Zealand.
Kiribati framed the situation as a misunderstanding, however.
In a statement, the Kiribati President’s Office said it was “surprised to learn” there were media reports on Peters’ visit, “which was still under active negotiations based on the understanding that alternative dates were to be explored.”
What’s really going on?
The dispute may reflect concern shared among Western countries that their interests in the Pacific are being weakened by China’s diplomatic and economic outreach, experts say.
Maamau had embarked on a visit to two of Kiribati’s nearest neighbors when the dispute became public.
“Kiribati has clearly indicated who its preferred partners are in the region: Fiji, Nauru and then, of course, China,” Powles said.
“Both New Zealand, as we’ve just seen, and Australia have had challenges in terms of engaging with Kiribati and getting the type of access that they would hope to get. Whereas China has not had those same challenges at all.”
Many Pacific nations have forged closer ties with Beijing in recent years. In 2019, pro-China President Maamau oversaw Kiribati’s switch in diplomatic ties from Taiwan to China, one of several Pacific countries to do so.
Under Maamau, who was re-elected to a third term in October last year, Kiribati has taken an authoritarian and isolationist turn, critics say. A prominent opposition leader last year raised concerns over a lack of transparency about 10 agreements signed between Kiribati and China in 2022.
Tensions rose that year when Maamau also pulled out of the Pacific Islands Forum, threatening the unity of the 18-member grouping at a time when the region faced increased geopolitical pressure. It rejoined in 2023, though some suspected Beijing’s hand in the decision to leave, a claim China’s Foreign Ministry rejected as “completely groundless.”
Pacific security partners Australia, New Zealand and the US have also expressed concern about the presence of uniformed Chinese officers on Kiribati and the Solomon Islands.
New Zealand going public with the spat was “not smart diplomacy,” said Jon Fraenkel, professor in comparative politics at Victoria University of Wellington. But it was unlikely that Wellington would ultimately cut the aid package, he added.
And though Beijing is a significant partner, “the level of Chinese assistance to Kiribati has not been extraordinarily large,” Fraenkel said. “A lot of it is just grant assistance, which may or may not have some kind of developmental impact.”
Concerns over Beijing’s influence in the region were reinforced on Wednesday when the Cook Islands’ Prime Minister Mark Brown announced a state visit to China next week to discuss a strategic partnership agreement. The Cook Islands is in free association with New Zealand, which means its people hold New Zealand citizenship.
The ministry said it expects the Cook Islands government to fully consult Wellington on “any major international agreements” that have “major strategic and security implications.”
US concerns
Under former President Joe Biden, the US ramped up rhetoric, as well as defense and security assistance to the Pacific to counter China’s growing regional influence.
It signed security agreements with Papua New Guinea and Fiji, renewed the Compacts of Free Association with Palau, the Federated States of Micronesia and the Marshall Islands, and opened an embassy in the Solomon Islands.
But US aid to the Pacific only accounted for 7% of oversees funding to the region in 2022, according to the Lowy Insitute’s Pacific Aid Map.
“There is a sense of concern that the US was not able to make as many inroads into the region as many partners in the Pacific had hoped,” Powles said.
The Biden administration unsuccessfully attempted to reopen an embassy in Kiribati and the US has “very little leverage on the ground,” she added.
And with Trump back in power, there is more concern that cuts to USAID, and Washington’s impending withdrawals from the Paris climate agreement and WHO “will further undermine the US’ reputation in the region,” Powles said.
The climate crisis is one of the region’s biggest security concerns. The Pacific Islands are among the most climate vulnerable places and are disproportionately affected by a warming world despite contributing the least to global emissions.
Rising and warming seas, the loss of coral reefs, acidic oceans, dwindling supplies of fresh water and fish, as well as disaster recovery support from more powerful cyclones are among the most pressing concerns.
Papua New Guinea’s Prime Minister James Marape said last month that the US withdrawing from the climate agreement was “totally irresponsible.”
As well as setting the US back on its own climate commitments, the withdrawal would impact funds for climate resiliency, disaster relief, and health.
“Trump’s strategy in the Pacific will be both deeply transactional but also prioritizing security over other forms of assistance and cooperation,” Powles said.
Among the tranche of executive actions Trump signed on his first day in office was an order to increase US Coast Guard presence around the world, including in the Pacific.
With Trump’s transactional nature, there are concerns Pacific Islands would be forced to choose between China and US assistance, Powles added.
But the island countries “are not fools,” said Fraenkel, of Victoria University of Wellington.
“Certainly, anything that isolates Kiribati from New Zealand or Australia makes it more likely that they’ll look elsewhere,” he added. But the impression that the island states are “just simply being seduced by the baubles of Beijing, is a slightly crude characterization.”