While some change appears inevitable, it is not obvious what Trump and Musk can do to the organisation because its current independence is enshrined in legislation, meaning that Trump would almost certainly have to find support in Congress if he wants to make substantial changes. However, Trump has currently frozen the spending of foreign aid by executive order. The freeze is set to last for 90 days.
Mihai Sora, who leads the Pacific Islands programme at the Lowy Institute, an Australian foreign affairs think tank, told the Herald the shake-up and funding freeze would have an impact on the Pacific in areas such as “civil society… community development organisations” and “disaster preparedness”.
Sora said these areas “contribute to US soft power, but clearly are not appreciated for having any kind of strategic dividend for the United States”.
Sora said the United States had been making the right noises on development spending in recent years, but often this rhetoric was not matched by reality.
“The US’ renewed interest in the Pacific over the last couple of years has come with a lot of really fine language around values and prosperity and partnership and economic development, but Pacific Island stakeholders were still essentially waiting for US financial and bureaucratic systems to spool up and match that rhetoric,” Sora said.
The US was the fifth-largest donor to the region in 2022, just behind China, and the sixth largest in the years 2008-2022 combined. That equates to about 7% of all aid spending in the region over that period. The largest recipients of US aid in the Pacific are countries such as the Marshall Islands and the Federated States of Micronesia in the north Pacific with whom the US has a free association agreement.
According to the Lowy Institute’s Pacific Aid Map, the US has funded projects such as supply chain help with eradicating HIV/Aids in Fiji at a cost of nearly US$1 million and a similar amount of money to help Fiji’s response to Cyclone Winston.
In Vanuatu, US$40m was spent on transport infrastructure. Millions more have gone towards overseeing a fisheries treaty in the Solomon Islands and a hospital in Papua New Guinea.
Sora said he was concerned the US was making a “cynical calculation” in its aid shake-up. Its free association agreements with northern Pacific states “locked in” US access to the region. However, recent US appeals to “partnership” with the Pacific now ring “pretty hollow”.
Sora also raised concerns that the new aid shake-up may see the health of civil society groups atrophy.
“Maybe the new Trump administration has calculated they’ve secured these relationships with the decision-makers in the Pacific and it won’t cost them that much diplomatically to neglect other stakeholders like civil society organisations and community development organisations.
“What they fail to see is that these smaller entities are actually the biggest champions for that international rules-based order that the US is still presumably seeking to uphold. They’re the biggest champions for anti-corruption drives, for gender parity, for improved educational and health outcomes, and an inclusive way in the communities,” he said.
What US retrenchment means for China is not immediately clear, but a pullback will likely create some opportunity.
Sora said the US was “fairly well embedded” in the Pacific in terms of security co-operation agreements and its relationships with Pacific countries.
“Those really would be prizes if China could turn that context around,” he said.
However, just how China might exploit any US withdrawal from the region is less clear. Many of the organisations the US supports are in the civil society and community sector, which China tends to look less favourably upon given its own undemocratic form of government.
China would “benefit from the diminished image of the United States broadly around the Pacific”, Sora said.
“I think what happens is with a diminished civil society sector and a diminished community development sector throughout the Pacific, these countries become more vulnerable, more politically volatile overall, and that makes them more susceptible to elite capture and the sorts of chequebook diplomacy that China specialises in – so China will benefit in an indirect way from that,” Sora said.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
