Will the U.S.-Australia Alliance Sprout a Development Dimension?

The Pacific Islands are piercing the strategic imagination of Washington political leaders. As the U.S. and Australian governments renew their commitments to cooperation under the alliance, it is time for a proper plan on development cooperation.

The significance of the Pacific Islands region to the United States has never been clearer. Vice President Kamala Harris’s address to the Pacific Islands Forum announced a suite of measures and a commitment on approach to “listen, collaborate and coordinate at every step of the way.” In coming months, Washington will devise its first-ever national strategy on the Pacific Islands. The United States will establish new embassies in Kiribati and Tonga, reopen its Solomon Islands mission, as well as triple the request for U.S. economic development assistance. The United States will also appoint its first Pacific Islands Forum envoy, reestablish a U.S. Agency for International Development (USAID) regional mission for the Pacific, and bring the Peace Corps back to the region.

Through this uptick of engagement in a region where the United States has had a minimal presence and where Australia is the largest donor, the U.S.-Australia alliance is being given due prominence. Australian deputy prime minister Richard Marles welcomed the Harris speech, emphasizing that U.S. rhetoric on the Pacific Island countries was complemented by “real policies and real engagement.”

The last two decades under the U.S.-Australia alliance paved the way for closer defense and security ties. This includes the annual rotation of U.S. Marines to Darwin, a U.S.-Australia Force Posture Agreement in August 2014, ongoing Australia-United States Ministerial Consultations (AUSMIN) talks, and the AUKUS submarine deal in 2021 (a trilateral strategic defence alliance between Australia, the United Kingdom and the United States). Recently, the United States and Australia completed the ninth Talisman Saber joint military exercise—designed to ensure and demonstrate the ability of Australia and the United States to work together “with the highest levels of interoperability.” All these activities build a long-standing defense and intelligence relationship.

But as People’s Republic of China (PRC) concerns unite the security interests of Australia and the United States in the Pacific Islands, a critical truth confronts strategic leaders. If the United States and Australia want the alliance to function in the Pacific, it can only do so on Pacific terms. Far from wanting to be treated as a theater of geostrategic competition or venue for superpower military presence, Pacific leaders have made it abundantly clear that they have security concerns of their own, starting with the existential threat of climate change and expanding across the fully documented gambit of development concerns: jobs, education, health care systems, social prosperity, and inclusive economic growth. 

Marles put it well last week at a CSIS address when he reflected on Australia’s battle to win back trust in the Pacific, offering a warning to the United States that to get anywhere on its security interests in the region, it needed to advance the security interests of the Pacific Islands first:

The Pacific has been clear in saying that geopolitical competition is of less a concern to them than the threat of rising sea levels, economic insecurity, and transnational crime. Australia respects and understands this. And we are listening.

Both the U.S. and Australian governments emphasize that development assistance will feature heavily in an increased prioritisation of the Pacific Islands. The 2020 MOU on development cooperation signed between Australia’s Department of Foreign Affairs and Trade (DFAT) and USAID sets out a menu of options.

But the political rhetoric will only get the United States and Australia so far. While the U.S.-Australia alliance is mature on security, the picture looks different for development. USAID and DFAT do not exchange staff or share development project pipelines, joint programming on the ground is scarce, and there are significant practical hurdles to cooperation, such as procurement barriers. To date, neither government has sought to tackle these challenges. Marles described this element of the U.S.-Australia alliance as “underdone” due to the absence of the “same kind of deep, organic interoperability as there is in other areas, such as defence” meaning that there is “huge opportunity to develop this and do more.”

While this mattered less in the past when there was limited overlap between the two countries’ aid programs, if Australia cannot coordinate effectively with its major allies, it is likely to become a challenge for Pacific Islands as the United States increases its presence. 

There are a number of short- to medium-term steps both governments can take to mitigate this challenge and enhance the interoperability of U.S. and Australian development cooperation. These include:

  1. Establish an AUSMIN-style development dialogue. Both governments should also include development experts in existing U.S.-Australia alliance discussions. This will elevate the relevance of development cooperation in the U.S.-Australia alliance.
  2. Establish a small coordination unit in either Washington, D.C. or Canberra. This offers an opportunity to co-locate key development staff (alongside other relevant agencies) from each country and integrate them into broader bilateral alliance engagement. The first-order priority of the unit should be an audit of the existing presence, capability, and comparative national advantages. The unit should then focus on addressing critical barriers to interoperability and establishing a roadmap to joint financing and development programming.
  3. Fund government-to-government, research-to-research and track 1.5 exchanges. This will build Pacific literacy in the United States and bolster a strong ecosystem for governments and Pacific leaders to draw on when making critical policy and developmental decisions.
  4. Commission an integrated strategic assessment of priority countries. This will build joint analysis capabilities under the alliance. Assessments should take into account key poverty, inequality, resilience, economic, environmental, security, and social justice drivers of instability and underdevelopment in the region. This will build the critical foundations from which the United States and Australia can effectively cooperate to support the development aspirations of Pacific leaders.
  5. Cofund a grant window that incentivizes U.S. and Australian agencies. This will allow organisations to cooperate on development on the ground and administer aid embassy by embassy in priority countries if needs be.

Ultimately, strong development alliances do not happen by accident. They take practical people, ideas, and the ability to execute them. With political will high and strategic visions aligned, now is the time to make things happen. 

Bridi Rice is a Fulbright visiting scholar with the Project on Prosperity and Development at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Conor Savoy is a senior fellow with the CSIS Project on Prosperity and Development.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2022 by the Center for Strategic and International Studies. All rights reserved.

Bridi Rice
Senior Associate (Non-Resident), Project on Fragility and Mobility and Project on Prosperity and Development
Conor M. Savoy

Conor M. Savoy

Former Senior Fellow, Project on Prosperity and Development