Viewing cable 06WELLINGTON451

06WELLINGTON4512006-06-13 00:04:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Wellington
DE RUEHWL #0451/01 1640004
R 130004Z JUN 06
E.O. 12958: DECL: 06/08/2016 
(U) Classified By: Deputy Chief of Mission David R. Burnett, 
for reasons 1.4(b) and (d). 
¶1. (C) Ministry of Foreign Affairs and Trade (MFAT) officials 
say New Zealand's main areas of concern in the Pacific are 
governance, economic stability and security.  New Zealand is 
revising its approach to and strengthening engagement with 
Pacific Island countries (PICs), and is coordinating more 
with other countries with interests in the region (notably 
the European Union, France, China and Japan).  MFAT suggests 
increased information sharing about what the United States 
and New Zealand are doing in the Pacific, improved 
coordination in regional fora (especially the Pacific Island 
Forum Post-Forum Dialogue), and greater dialogue in the 
management of Pacific fisheries as three potential areas for 
U.S.-New Zealand cooperation.  End summary. 
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Initiating a Dialogue on Shared Pacific Interests 
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¶2. (SBU) On June 1, DCM and Emboffs met with representatives 
of MFAT for a high-level discussion about New Zealand's 
activities and interests in the Pacific.  Deputy Secretary 
Alan Williams led the New Zealand side, accompanied by Dell 
Higgie, Director of the Security Division; Heather Riddell 
Director of the Pacific Division; Marion Crawshaw, Deputy 
Director of the Pacific Division (Bilateral Relationships); 
and Niels Holm, Deputy Director of the Pacific Division 
(Regional Relationships). 
¶3. (C) Williams said he was struck by EAP Assistant Secretary 
Hill's "unrequited appetite about what New Zealand is doing 
in the Pacific."  New Zealand and the U.S. once held regular, 
documented conversations on respective activities in the 
Pacific, but Williams said New Zealand turned off that 
dialogue when budget cuts constrained resources.  Williams is 
eager to resume contact and invited Emboffs to meet with him 
and the Pacific Division every five to six weeks.  DCM 
Burnett agreed this would be helpful, noting that often our 
exchanges have been crisis (e.g. Solomons and Papua New 
Guinea) or event driven (Samoan elections) rather than 
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Areas of Concern: Governance, Economic Stability and 
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¶4. (C) Williams said MFAT's Statement of Intent, which 
outlines GNZ's overarching foreign policy goals, highlights 
the agency's goal of redefining engagement in the Pacific to 
promote regional stability and development and reduce risks 
to New Zealand's security and trade.  He also noted that the 
Pacific Islands rated second only to sub-Saharan Africa for 
poor performance on the Millennium Development Corporation's 
indicators of development. 
¶5. (C) On governance, Williams is concerned about 
undemocratic trends in the so-called "Arc of Instability" 
encompassing Melanesia, and referred to the region as "close 
as we come to failed states in our region."  He recognized 
that while New Zealand's provision of targeted development 
and good governance assistance to the region was expanding, 
weak institutions and political instability continue to pose 
risks.  New, more active approaches by Australia and New 
Zealand are needed, including in the Regional Assistance 
Mission in the Solomon Islands (RAMSI). 
¶6. (C) Crawshaw reported that New Zealand is (in the last 
eight or nine months) moving past the post coup environment 
in Fiji.  New Zealand is watching with interest as the Prime 
Minster puts together Fiji's first multi-party cabinet. 
While not expecting the arrangement to last, MFAT views the 
process as a positive step toward building cross-party 
relationships that will later contribute to stable governance. 
¶7. (C) While New Zealand's concerns in Melanesia are 
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principally about governance and security issues, in 
Polynesia, the worry is about the lack of economic 
development, demographic challenges, the threat of HIV/AIDS, 
and land ownership issues.  MFAT said the quality and nature 
of the interventions made by external partners are critically 
important to prosperity and stability in the region: a bit 
more cultural sensitivity, including the need for buy-in by 
host governments, is definitely needed. 
¶8. (C) "We're even facing the winds of change with 
long-standing Polynesian partners," Williams said, among whom 
"even the most successful and best governed countries are 
having problems with law and order such as in Tonga, which is 
the last of the feudal monarchies."  "The king is ailing in a 
New Zealand hospital," Williams continued, "and we're 
expecting rapid and intensive change."  Williams explained 
that with a large population of Pacific Islanders in New 
Zealand (especially Polynesians), "Pacific issues quickly 
become domestic issues."  Thus New Zealand is necessarily 
deeply involved in Tonga reform discussions, while flirting 
delicately with the bounds of interference. New Zealand 
concerns in Micronesia are similar to those of Polynesia. 
While GNZ acknowledges that its engagement with Micronesia is 
less robust, it also realizes that Micronesia is a critical 
partner for regional economic stability, particularly for 
sustainable fisheries. 
¶9. (C) As GNZ revises its engagement with the Pacific, it is 
adopting a listening approach in which New Zealand "has some 
humility that we don't have all the answers." Riddell 
highlighted the difficulty of promoting good governance where 
institutions of democracy might be incompatible with cultural 
structures (e.g. Solomons and Papua New Guinea) where there 
is not a strong sense of statehood, and where loyalties are 
at the sub-state level (such as provincial governments) or to 
particular institutions (such as the police). (NB: Andrew 
Ladley, Director of the Institute of Policy Studies, School 
of Government, Victoria University of Wellington -- a legal 
scholar focusing on democracy in Pacific -- has similar 
views.  Ladley asserts, for example, that election processes 
in many Pacific countries are based on deeply ingrained 
patron-client relationships and institutionalized bribery. 
Legislators do not seek reelection to office but rather treat 
their terms in office as one-time opportunities to loot 
government coffers and reward friends, Ladley said, resulting 
in high legislator turnover -- more than 80 percent in Papua 
New Guinea and between 60 and 70 percent throughout the 
Western Pacific.) 
¶10. (C) Riddell said in these fragile democracies, there are 
obstacles to good governance on both the demand and supply 
side.  People do not demand democratic governing structures 
because they've never had them.  On the supply-side, these 
countries are "coming toward the end of their post-colonial 
generation and we're not seeing the next generation."  The 
DCM said because cultural institutions are breaking down, 
traditional processes are not in place to supply the next 
generation of leaders.  Williams said GNZ is using its 
Pacific Partnership visitor program to address the leadership 
gap by, for example, bringing provincial governors from the 
Solomon Islands to New Zealand to experience New Zealand's 
system of governance first hand. 
Economic Stagnation 
¶11. (C) The MFAT participants lamented limited economic 
progress in the region.  Beyond fisheries and Papua New 
Guinea's mineral resources, Niels Holm, Deputy Director of 
the Pacific Division said, the region has few natural 
resources on which it can rely.  MFAT recognizes that trade 
and economic growth is not proceeding quickly enough to 
respond to population growth in the Solomons and other 
Melanesian countries.  The MFAT officials were not all doom 
and gloom, noting that a number of countries (even Papua New 
Guinea) are showing better growth than at any time over last 
20 years and that regulatory reform in countries such as the 
Cook Islands and Samoa appear to be yielding real economic 
¶12. (C) Holm said the PICs share a number of disadvantages, 
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such as low skills, limited natural resources, poor 
communications links, and rapidly declining or expanding 
populations.  Despite the PICs' inclination to respond to 
these challenges individually, they would benefit from 
collective action, particularly for problems such as bird flu 
and security.  The Pacific Island Forum should pull back from 
a bias towards policy implementation by individual 
governments and instead focus on defining regional policy and 
achieving buy-in, Holm said. 
¶13. (C) Pacific nations are plagued by low levels of capital 
where governments, often the only modern institutions, are 
hampered by problems of culture (such as land tenure issues) 
and tend to excessively regulate so that "even panhandlers 
need a license," Holm said.  Despite the fact that fisheries 
are the only significant natural resources in the region, 
Pacific nations still operate on the "Olympic principle of 
the first one out gets the fish" and not the principle that 
sustainable fisheries is "not about managing fish but 
managing the fisherman," said Holm.  While he noted that it 
was important to harmonize donor effort and minimize conflict 
between New Zealand, Australia, United States, China, Japan 
and the European Union, regional cooperation is mostly about 
recognizing "interdependence and promoting self-reliance and 
a business friendly environment." 
¶14. (C) Expressing frustration with the Pacific Agreement on 
Closer Economic Relations (PACER) and the Pacific Islands 
Countries Trade Agreement (PICTA), Holm said, "until we have 
a regional trade framework that works, we're going to have a 
problem with economic stability in the region."  (NB: Vince 
McBride, Executive Director of the Pacific Cooperation 
Foundation and a retired New Zealand diplomat with extensive 
development experience in the Pacific, separately told Poloff 
that a gross Pacific Island trade imbalance in favor of 
Australia and New Zealand needs correction for the longer 
term viability of the economies of Pacific Island Countries 
Security Concerns and Capacity Building 
¶15. (C) On security, Higgie highlighted the PICs' acute 
capacity issues with meeting international counter-terrorism 
obligations, and said the PICs believe the international 
community has imposed obligations without adequate 
consultation.  Higgie said in fact there had been 
coordination with the PICs' UN missions, but that they suffer 
from the same type of capacity issues that afflict PICs in 
general (e.g. dearth of skilled personnel, insufficient 
financial resources, weak communications infrastructure, and 
-- in some cases -- lack of political will).  The 
international community needs to consider whether it will 
"modulate" CT requirements to address these very real 
capacity issues, she added. 
¶16. (C) The Pacific Islands Forum (PIF) Working Group on 
Counter-Terrorism (WGCT) held a regional CT tabletop exercise 
(Exercise Ready Pasifika) in Suva in November 2005.  During 
the debriefing portion of the exercise, PICs representatives 
identified as a weakness the general lack of national 
frameworks for counter-terrorism.  Recognizing the capacity 
issues faced by the PICs, Australia offered to draft a 
template; New Zealand further suggested drafting an "all 
hazards" plan, believing that it would achieve better buy-in. 
 Interestingly, some PICs wanted to develop stand-alone CT 
plans, believing that global best CT practice requires a 
separate plan.  They did see the plans as a de facto audit 
tool for other action plans, such as hurricane response, 
however.  Other PICs responded that if they faced a real 
problem, they would just call on New Zealand or Australia. 
Higgie said she responded "fine, but have you investigated 
the law to see if the legal authorities are there?  Can we 
attach Status of Forces agreements?  Are there opt in/opt out 
clauses?"   Williams added that PIF meetings had migrated to 
a perspective of asking how to meet national needs within a 
regional framework. "After all, we are ourselves a Pacific 
Island country," he said. 
Opportunities for Cooperation 
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¶17. (C) Williams said he shared USG interest in bilateral 
cooperation in the Pacific, and said GNZ has also been 
revising its programming language to note the importance of 
working with the EU, Japan, and China.  For example, he said, 
over the last six months, GNZ has increased its level of 
diplomatic interaction with the European Union, asking that 
it not ignore the Pacific in favor of Africa.  GNZ has also 
told Japan its interests in the region should be broader than 
just the International Whaling Commission (IWC).  On June 21, 
New Zealand will host a high-level Chinese diplomat to 
discuss Pacific regional cooperation. 
¶18. (C) "France has been sending signals about where it wants 
to be involved -- in police training and intelligence," said 
Williams.  In May, the heads of mission from France's Pacific 
posts met in New Zealand.  During that visit, they also met 
with GNZ officials to discuss mutual interests. 
¶19. (C) "Can the region be all that it can be without U.S. 
involvement?" asked Williams rhetorically.  "There's a lot we 
could and should be doing" Williams continued.  For example, 
a Pacific Island Forum review team is investigating how to 
improve the quality of the dialogue from the regional 
architecture: the PIF, the Post Forum Dialogue and the 
multiplicity of other regional fora.  "We need better 
choreography so that Chris Hill has time to talk to leaders." 
 When the review team visits Micronesia, U.S. assistance 
suggesting contacts would be helpful, Williams added. 
¶20. (C) Williams offered to provide a revised Pacific 
strategy paper (an "environmental scan" as he called it) 
submitted to Cabinet earlier this year, which summarizes 
GNZ's activities in the PICs.  DCM Burnett said that the 
Embassy would see if Washington could provide a similar 
document from our sub-PCC process.  Williams said his Pacific 
Division should share relevant reporting with the Embassy, 
and recommended scheduling a regular meeting every five to 
six weeks with Emboffs and the Pacific Division to discuss 
recent events and explore possible areas of cooperation. 
Williams also welcomed the opportunity for a high-level 
policy discussion, noting that he intended travel to 
Washington later in the year, and that he would be happy to 
swing through Hawaii. 
¶21. (C) Pol-Econ Couns recalled A/S Hill's interest in New 
Zealand's use of trust funds for delivering official 
development assistance (ODA).  Williams said that New Zealand 
is increasing its use of trust funds in Tuvalu, Niue, 
Tokelau, and would share more information on their use. 
¶22. (C) Williams also asked to what extent the U.S. Coast 
Guard remains engaged in fisheries management in the Pacific, 
noting that New Zealand and France are discussing possible 
exchange of data within the FRANZ cooperative arrangement. 
Williams asked how the U.S. and New Zealand exchange 
fisheries-related satellite data.  He noted that as New 
Zealand rolls out its new multipurpose vessels, it could be 
useful to discuss New Zealand's role in patrols of Pacific 
fishing areas. 
¶23. (C) Comment:  Sydney Morning Herald columnist Peter 
Hartcher, in an article picked up by the June 12 Dominion 
Post, warned that if Australia and New Zealand do not want to 
see places like East Timor "lapse routinely into chaos" and 
"become a permanent dependency," they need to revise their 
engagement with the Pacific and avoid a "moral hazard" where 
Pacific governments find their incentives toward good 
governance and economic development reduced by offshore 
arbiters of law and order and providers of financial 
assistance.  As we move forward cooperating with Australia 
and New Zealand on Pacific Island issues, we will need to 
explicitly address this issue.