Australia PM says Pacific intervention paying off

5.00pm

CANBERRA - Australia's decision to end decades of non-intervention in its South Pacific backyard is paying off, Prime Minister John Howard said on Friday, before heading to a Pacific meeting on tackling economic instability.

Representatives of 16 Pacific nations, among the world's smallest and poorest are meeting in Samoa at the weekend to hammer out strategies for growth and better governance.

"Everybody is now taking the pacific island forum far more seriously because they've seen what has been achieved in the Solomon Islands and that is if Pacific countries work together in a cooperative way then they can achieve a lot," Howard told reporters.

"There's a new spirit in the Pacific and I'm very pleased that Australia is playing its part," he said.

In a major policy shift last year, Australia abandoned its hands-off policy of the past 30 years, sending troops to end lawlessness in the Solomon Islands and has agreed to send police to crime-infested Papua New Guinea.

Australia fears that failed states on its Pacific doorstep could become havens for terror groups and argues that stable governments are needed to avoid such a possibility as well as to build stronger regional economies.

Before leaving for the Pacific Islands Forum, Howard said 14 of its members that receive aid understood that Australia's annual contribution to the region depended on good governance. Australia is the Pacific's largest aid donor. In recent years island states have been rocked by coups, mutinies and ethnic clashes.

"There's a recognition that small countries have got to pool their resources. There's also a recognition that good governance is crucial to attracting investment. That's a view Australia has pushed," Howard told reporters.

"There's also an understanding that we do tie governance to aid and that is reasonable, because the Australian taxpayer is entitled to a good return for their investment," he said.

The forum has generally welcomed the Solomon Islands intervention, which also included troops from member states New Zealand, Fiji, Papua New Guinea and Tonga.

The other forum members are the Cook Islands, Federated States of Micronesia, Kiribati, Nauru, Niue, Palau, Marshall Islands, Samoa, Tuvalu and Vanuatu.

Australian Foreign Minister Alexander Downer said one priority proposal to be considered at the forum on Saturday would be the benefits of creating a regional airline, a perennial subject at the annual meeting.

"There are a number of airlines and some of them are very big loss makers and costing those governments and those communities very dearly," Downer told reporters.

Air travel is crucial in a region of more than 500 inhabited islands, spread over 30 million sq km, with more than 1000 languages.

But Downer said the possibility of establishing a Pacific central bank was a long way off because of the difficulties in creating a common currency and common fiscal targets.

"In the short term, that's not going to happen. In the medium to long term, who knows? It would depend how countries felt," Downer said.

In July last year, Australia led a regional team of 2225 troops and police into the Solomon Islands, the largest military deployment in the region since World War Two, to stop the nation spiralling into anarchy after years of ethnic militia fighting.

Late last month, crime-ridden Papua New Guinea approved plans for neighbouring Australia to send in 230 police and 64 officials to help keep the peace and improve the country's economy.

Forum members range from Australia with a population of 20 million, to tiny Niue, which has fewer than 2000 people.

Excluding Australia and New Zealand, the main industries of the Pacific islands are tourism, small agriculture, fishing and textiles.

- REUTERS