By Alasdair Pal and Kanishka Singh
SYDNEY/WASHINGTON, Sept 2 (Reuters) - Australia and the United States on Wednesday announced a combined $580 million in funding for the Pacific Islands as they battle China for influence in the region.
The U.S. contribution, while smaller at $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 U.S. Agency for International Development last year.
The funding, announced by Deputy
Secretary of State Christopher Landau at this year's 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 U.S. to understand to be more deliberate in their engagement," said Jared Mondschein, director of research at the United States Studies Centre.
The U.S. funding includes $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 ($430 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.
This year's 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 Tuesday 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 August 30, will run to September 4.
($1 = 1.4002 Australian dollars)
(Reporting by Alasdair Pal in Sydney and Kanishka Singh in Washington; Additional reporting by Christine Chen; Editing by Edwina Gibbs)
