What Happened: A liquefied natural gas project in Papua New Guinea will be the first to receive financing under the Indo-Pacific Infrastructure Initiative, a cooperative development effort among the United States, Japan and Australia, Nikkei Asian Review reported June 25. Japan Bank for International Cooperation, the U.S. Overseas Private Investment Corp. and Australia's Export Finance and Insurance Corp. are expected to provide more than $1 billion for the project within two to three years, with additional money possible for associated infrastructure such as power plants and communications networks.
Why It Matters: The United States is rallying regional support through the investment partnership as a way to compete with China's Belt and Road Initiative. The three countries are looking at joint financing of projects in other Pacific nations such as the Solomon Islands and Palau as well as investigating development opportunities among members of the Association of Southeast Asian Nations.
Background/Context: The launch of the Papua New Guinea project comes as China pursues its interests in the South Pacific with projects including port development in Vanuatu, defense cooperation with Fiji and cable projects in the Solomon Islands. Beijing's infrastructural development efforts in the Pacific have prompted Australia to step up both its military presence and aid program in the South Pacific, and are drawing an increased U.S. focus on the region.
- China Changes Gears on the Belt and Road Initiative (April 26, 2019)
- China Encroaches on Australia's Backyard (April 23, 2019)
- China Sets a Course for the U.S.'s Pacific Domain (Feb. 22, 2019)