Australia, US commit $739 million to support Pacific Island nations
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The flags of Pacific Island nations during the 55th Pacific Islands Forum Leaders Meeting in Koror, Palau, on Sept 1.
PHOTO: REUTERS
- Australia and the US have pledged a total of US$580 million to support Pacific Island nations amid growing Chinese influence in the region.
- US funding focuses on energy security and grid stability, while Australia targets drug smuggling with enhanced surveillance and training.
- The 2026 Pacific Islands Forum is marked by tensions over Taiwan's participation.
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SYDNEY/WASHINGTON – Australia and the United States on Sept 2 announced a combined US$580 million (S$739 million) in funding for the Pacific Islands as they battle China for influence in the region.
The US contribution, while smaller at US$150 million, is one of the most public signals from the Trump administration that it is still engaged in the Pacific after it dismantled the US Agency for International Development in 2025.
The funding, announced by Deputy Secretary of State Christopher Landau at the 2026 meeting of the Pacific Islands Forum in Palau, follows an increase in China’s influence in recent years via grants, infrastructure projects and donations.
These include the donation of a presidential building complex in Vanuatu, a comprehensive strategic partnership with the Solomon Islands including a deal on policing cooperation as well as a comprehensive strategic partnership with the Cook Islands.
“Chinese measures in the region are a forcing function for the US to understand to be more deliberate in their engagement,” said Jared Mondschein, director of research at the United States Studies Centre.
The US funding includes US$60 million to help countries address the global energy crisis by expanding fuel storage capacity and supporting grid stability.
The region has been badly hurt by the Iran war exacerbating energy security concerns, said Oliver Nobetau, the Lowy Institute’s Pacific Islands Program director.
The fallout has resulted in “slowing economies, prioritisation of essential services, all against the backdrop of a super El Nino – which require support from external partners to curb,” he added.
Australia said it will offer A$600 million (S$545 million) to combat drug smuggling in the region including funds for enhanced aerial surveillance and more training for police and border officials.
“The Pacific is our home and our family. That’s why it’s in Australia’s interests to work with our Pacific partners to combat organised crime,” Prime Minister Anthony Albanese said in a statement.
The 2026 forum has been dominated by a spat over Taiwan’s participation.
China, which views Taiwan as its own territory, has objected to the democratically run island’s presence at the annual meeting of the 18-member forum.
Australia and New Zealand said on Sept 1 the bloc would decide the guest list.
Palau is among three Pacific nations that have maintained diplomatic ties with Taiwan. The meeting, which began on Aug 30, will run to Sept 4. REUTERS
