Australia concludes $89M security and economic treaty with Nauru
PHOTO CAPTION: Australian Army snipers are seen during Rim of the Pacific (RIMPAC) 2022. (Photo by Royal Australian Air Force Corporal John Solomon via U.S. Defense Visual Information Distribution Service)
By Renju Jose and Kirsty Needham
SYDNEY (Reuters) -Australia concluded an economic and security treaty with Nauru on Monday, pledging A$100 million ($64 million) in direct budget support over five years and A$40 million to boost security in the remote Pacific island nation, which is also being courted by China.
It is the second security deal Australia has made in the Pacific Islands that effectively blocks China from forming policing ties after a similar deal with Tuvalu, and gives Australia a veto over Chinese involvement in Nauru's security, banking or telecommunications.
Australian concern about Beijing's ambitions in the Pacific Islands grew after the Solomon Islands signed a security deal with China in 2022, and China test-fired an intercontinental ballistic missile with a dummy warhead into the Pacific in September.
A Chinese space-tracking vessel was sailing northwest of Nauru at the time of the launch.
Defence Minister Richard Marles on Monday said Australia had for the first time test-fired a Tomahawk cruise missile under a plan to boost deterrence through long-range strike capability. The missile, with an extended range of 2,500 km (1,550 miles), was fired off the west coast of the United States.
Under the treaty, Nauru must gain agreement from Australia before Chinese navy vessels use its main port, recently upgraded by a Chinese state company.
The deal prevents third countries from accessing Nauru's critical infrastructure for security purposes, Australian Prime Minister Anthony Albanese and Nauru President David Adeang told a joint press conference.
Australia will commit to ensuring Nauru keeps access to banking services, and provide budget support for education, health and other needs.
"(The deal) will strengthen Nauru's longer-term stability and economic resilience. It is also firmly in Australia's interests in a peaceful, secure and economically resilient Pacific region," Albanese said.
He said Australia would remain Nauru's primary security partner, and pledged fresh investments to support policing and national security.
"We appreciate Australia's steadfast support as we try to address our unique development challenges while we continue diversifying our economy, exploring innovative opportunities and safeguarding our region's peace and stability," Adeang said.
Nauru is the world's third-smallest country by area and uses the Australian dollar.
In January, it switched diplomatic ties to China from Taiwan, and the Bank of China later signed an agreement to explore opportunities there.
Under the deal announced on Monday, the Commonwealth Bank of Australia will gain an exclusive right to offer banking services, filling a gap that will be left by the exit of Australia's Bendigo and Adelaide Bank next year.
Australia operates a Regional Processing Centre for asylum seekers in Nauru that is forecast to contribute about $135 million in government revenue in 2024-25. An Australian official said the treaty was unrelated to the centre.
Nauru said in a statement on Facebook that it was exploring an air services agreement with China to boost its international connections.
($1 = 1.5640 Australian dollars)
(Reporting by Kirsty Needham and Renju Jose in Sydney; Editing by Alasdair Pal, Saad Sayeed, Lincoln Feast and Kevin Liffey)
