Australia and Vanuatu forge landmark security and economic partnership

Australia and Vanuatu have sealed a $328 million deal aimed at strengthening ties, enhancing security, and promoting economic growth, amidst growing Chinese influence in the Pacific.

Australia and Vanuatu have entered into a transformative 10-year agreement, valued at A$500 million ($328 million; £241 million), aimed at boosting their security collaboration and economic partnership. Dubbed the Nakamal agreement, the deal results from protracted negotiations and represents a significant shift in Australia's relationship with its Pacific neighbor.

Australian Deputy Prime Minister Richard Marles remarked, "We are family," highlighting the interconnected destinies of both nations, while Vanuatu’s Prime Minister Jotham Napat called the agreement a "win-win situation." With the formal signing scheduled for September, the deal arrives as Australia looks to expand its influence in response to China's growing presence in the Pacific region.

Although the Australian government has not disclosed comprehensive details, reports indicate the funds will be allocated toward constructing two major data centers in the capital, Port Vila, and on Santo, Vanuatu's largest island. Significant resources will also be directed to help the island nation tackle the challenges posed by climate change and to bolster its security framework.

Earlier discussions included the provision for visa-free travel for Vanuatu citizens; however, this aspect will likely be addressed in a forthcoming subsidiary agreement, according to Napat. The precise commitments made by Vanuatu to Australia remain unclear, especially following a similar agreement that fell through in 2022 due to security concerns that led the then Prime Minister to withdraw.

During a press conference on Tanna Island, situated in the volcanic region of the Vanuatu archipelago, Marles reaffirmed the shared security objectives of both nations, stating, "[The deal] acknowledges that as neighbours, we have a shared security environment and a commitment to each other." Foreign Minister Penny Wong emphasized the long-term vision of the agreement, stressing the importance of where both nations will stand in three, five, and ten years.

Prime Minister Napat highlighted the multitude of advantages the agreement would afford, encompassing security, economic transformation, and a focus on mobile labor mobility and financial backing. This agreement follows a series of similar pacts between Australia and its Pacific neighbors, including a recent A$190 million security deal with the Solomon Islands and existing agreements with Tuvalu and Papua New Guinea.