By Kalinga Seneviratne
SYDNEY (IDN) – A battle is brewing up between Australian Prime Minister Scott Morrison and Victorian State Premier Daniel Andrews over an agreement the latter has signed with China to link his state with the joint infrastructure development to China’s Belt and Road Initiative (BRI).
US Secretary of State Mike Pompeo added fuel to the conflict on May 24 in an interview with Rupert Murdoch owned Sky News when he said if Victoria joined the BRI, the US could “simply disconnect” from Australia.
The latest flare-up over the deal came hard on the heels of a looming trade conflict between Australia and China, over Beijing’s displeasure of Morrison leading an international campaign to mount an “independent” inquiry into the origins of COVID-19.
In addition to a public spat between Beijing and Canberra, China has slapped sanctions on Australian barley, meat and wine exports, and hinted at further economic sanctions against Australia which is mainly dependent on trade with China for its economic prosperity.
This is precisely the point Premier Andrews is making – who comes from the Australian Labour Party (ALP), which is in the opposition in federal parliament in Canberra. While the right-wing federal government under the Liberal-National Party Coalition has been hostile to the BRI project, prodded on by its military alliance partner the United States, Victoria state government has gone it alone on signing up to the infrastructure initiative, with Andrews inking a Memorandum of Understanding with China in 2018 and committing to deepen the state’s involvement with the project with a further agreement in October 2019.
The non-legally-binding agreement allows Victorian infrastructure companies to get access to the hundreds of billions of dollars of projects slated for the BRI. It also encourages Chinese infrastructure firms to establish a presence in Victoria and to bid for major infrastructure projects.
When asked about Pompeo’s comments at a press conference, Andrews said that “it’s all about Victorian jobs and we’ll continue to work at a strong partnership (with China)”. He was also at pains to point out that the new partnership is not about agreeing to everything the Chinese throw at you.
A Government spokesperson later said the Belt and Road framework was “about creating opportunities for Victorian businesses and local jobs — opportunities that will be more important than ever as we rebuild from the coronavirus pandemic”.
Australia hosts a crucial military communication base for the US in northern Australia and US ambassador, Arthur Culvahouse Jr, released a statement in response to coverage of Pompeo’s interview, saying he wanted to “set the record straight”. He said that the “United States has absolute confidence in the Australian Government’s ability to protect the security of its telecommunications networks and those of its Five Eyes (US, UK, Canada, Australia and New Zealand) partners”.
Culvahouse added, “if there were telecommunications initiatives that we thought put the integrity of our networks at risk, of course, we would have to take a close look at that, as the Secretary suggested.”
In October 2015 the Northern Territory (NT) government’s Chief Minister Adam Giles was also criticised in the media here when he announced that a Chinese company had won a bid to operate the Port of Darwin on a 99-year-old lease in a deal worth AUD 506 million (USD 345 million).
Under the terms of the agreement, Giles said, the Territory would lease the Darwin Portland and facilities of East Arm Wharf, including the Darwin Marine Supply Base, and Fort Hill Wharf to the Chinese-owned Landbridge Group for 99 years.
Chinese billionaire Ye Cheng owns Landbridge Group with interests in petrochemicals, logistics, real estate and international trade” as well as port operations. Cheng is said to be close to the Chinese Communist Party.
The NT government did this deal after years of frustration at the federal government’s lack of interest in funding infrastructure development at the Darwin Port. Interestingly this deal was done just two years before Sri Lanka’s Chinese-built Hambantota Port was given on a similar 99-year lease to a Chinese company in return for debt-relief which western media and government made into a big propaganda issue calling it a “debt-trap”.
The Chinese company is expected to invest over AUD 200 million in the next 25 years to develop Darwin Harbour, funds that were not forthcoming from Canberra. “Landbridge intends to grow two-way trade between Australia and Asia, leveraging Landbridge’s existing port and logistics businesses and firmly putting Darwin on the map for Chinese business,” Landbridge’s spokesperson Mike Hughes told the media at the time.
Both NT and Victoria state governments see these ventures as a way to connect Australia to the developing BRI trade networks across Asia into Eurasia and Europe. But the conservative Australian government has been a primary initiator of the controversial “Indo-Pacific” alliance that also includes Japan, US and India, which has openly been hostile to the BRI.
While China has presented BRI as a development project to revive the ancient trade links across Asia with investments in infrastructure such as building roads, bridges, railways and ports across the region, the Indo-Pacific partners see this as a Chinese debt-trap. They have encouraged the region to arm themselves against imagined Chinese aggression.
Much of the Australian media promotes the latter viewpoint and has been hostile to Andrews government’s agreements with China – even some conservative media has dubbed Victoria as the “Peoples’ Republic of Victoria”. Andrews himself is to the left of the centre-left ALP, a rare breed in Australian politics in recent times. Thus, the Victorian state government has come under fire from the conservative side of politics, defence commentators and some members of the right-wing of the ALP.
Under the Australian constitution, state governments have control over the state’s economic matters, while national defence and foreign relations come under the federal government. There seems to be a thin line between the BRI deal and the responsibilities of various governments in Australia.
Victoria state government treasurer, Tim Pallas, told a parliamentary inquiry last month that the state would “absolutely not” reconsider its belt and road agreement, and accused the federal government of “vilifying” China over its push for an international inquiry into the Covid-19 pandemic.
The home affairs minister, Peter Dutton, a hawkish right-winger, has criticised Victoria for making the deal, describing the BRI as “a propaganda initiative from China” that brings an “enormous amount of foreign interference”.
On May 24 Prime Minister Morrison, speaking on a Sunday current affairs program, said Victoria was stepping into federal government policy territory. “It’s always been the usual practice for states to respect and recognise the role of the federal government in setting foreign policy”.
Since Victoria government signed up to the BRI project in October 2018, Morrison and Daniels have been arguing about the demarcation of such boundaries. With China putting Morrison on the firing line lately, Andrews has been painted by the media here as running a separate pro-China government.
“Daniel Andrews seems determined to ignore federal leadership in this area, which is mandated by the constitution. In not seeking federal advice he is choosing to be fully ignorant of Australian national security concerns”, executive director at the Australian Strategic Policy Institute Peter Jennings told Melbourne’s Age newspaper on May 23. But, the Andrews government argues that they are assisting Australia’s economic interests in the region, at a time the economy is drifting into a recession.
“I think all of us here and indeed both parts of our partnership – both Victoria, Australia and China – surely we all have to concede, and we all have to recognise that a good, strong partnership is in everyone’s interests” Premier Andrews said at the press conference. [IDN-InDepthNews – 02 June 2020]
Photo: Collage of images of Australian PM Morrison (left), US State Secretary Pompeo (centre) and Premier Andrews of Victoria (right) from Wikimedia Commons.
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