Australia and Vanuatu recently signed an innovative agreement known as the Nakamal Agreement. Under the initiative, Australia has committed to invest $490 million in Vanuatu over the next decade. High-ranking officials from both countries launched this agreement to strengthen collaborative efforts. They’re working on deep climate change resilience, security support, strategic infrastructure, labor mobility and fiscal support.
The deal replaces a largely symbolic bilateral security agreement, signed by the previous PM of Vanuatu, that Vanuatu unilaterally tore up soon after its 2022 signing. Ministers from each country sped to complete the pact’s terms, including in the final flurry of negotiations. They wanted to be sure that agreement could be initialed at a meeting in late July.
Foreign Minister Penny Wong, Deputy Prime Minister Richard Marles, and Pacific Minister Pat Conroy personally led the negotiations with their Vanuatu counterparts. They made Australia proud in these crucial negotiations. Next month, we hope to see the official signing of the Nakamal Agreement. Prime Minister of Vanuatu Charlot Salwai and his Australian counterpart Malcolm Turnbull will meet in the country to finalise the deal.
A New Era of Cooperation
Under the Nakamal Agreement, Vanuatu and Australia enter a new and deeper relationship. It is meant to promote holistic, whole-of-government cooperation, rather than just on security issues.
Richard Marles expressed the significance of the agreement during discussions, stating that it “makes clear that it is core business for Australia to be engaged in the human development of Vanuatu.” He noted that the deal was significant in that it recognized the profound cultural relationship between the two countries.
“What this agreement really does is, for the first time, acknowledge what has always been the truth, and that is that as two nations, we are family, and that our future is very much bound together.” – Richard Marles
The Nakamal Agreement details much deeper commitments than just security, a sign of a changing partnership that is developing toward mutual benefit. One of the most remarkable elements among them is unanimous support for climate resilience, in light of increasing environmental threats suffered by Pacific island nations.
Last-Minute Negotiations and Concessions
In doing so, both countries took another step toward the adoption of the Nakamal Agreement. In a flurry of intensive negotiations, they reached consensus on an in-principle accord. According to reports, Australia and Vanuatu both had to compromise to seal the bilateral agreement.
To date, Vanuatu’s government officials have testified that these negotiations were critical in ensuring a successful outcome. For instance, while Australia will play a supportive role in Vanuatu’s development, it will not retain veto rights over Vanuatu’s security partnerships with other countries.
“The process is the main difference — this has been signed off by both the National Security Council and the Council of Ministers, which did not happen in 2022.” – An unnamed source
These two amendments are an effort to make sure that the Nakamal Agreement has more legs than its predecessor.
Implications for Regional Dynamics
Now that it’s been signed, the Nakamal Agreement will largely determine the future of the bilateral relationship between Australia and Vanuatu. It will shape regional competition in the Pacific. Vanuatu has increasingly relied on Chinese institutions for investment in major infrastructure projects, including a recently gifted presidential palace valued at $31 million.
Some analysts argue that Australia’s deepened involvement through this agreement could help to offset China’s increasing presence and sway in the region. As Tess Newton Cain explained, Vanuatu’s political landscape has made this agreement extremely important. She emphasized its possible ramifications for Prime Minister Salwai.
“He has said that this is a ‘must have’ as far as he is concerned and he knows that if it doesn’t transpire, it will reflect badly on him.” – Tess Newton Cain
If Australia extends visa-free access to Vanuatu officials under this agreement, it would open the door for other Pacific island nations. Both of these developments would encourage them to seek similar settlements going forward.
