Prime Minister Scott Morrison said last year that Australia would create a development fund which would offer countries in the region up to $3billion – approximately £1.6billion – in cheap loans and grants. Sources suggest that it will be operational by the end of next month, with a view to approving a plethora of loans immediately. The move is seen by experts as a way of countering Chinese influence in the area.
A source said: “We haven’t finalised which projects will be approved first but the plan is to have them rubber stamped quickly.”
While Australia has historically enjoyed regional dominance of the Pacific – including its resource-rich ocean – China’s recent push for soft power has threatened their hegemony.
To combat this, Australian investment in telecommunications, energy, transport and water projects are set to boost links between Canberra and the surrounding islands.
Xi Jinping and Scott Morrison are locked in a battle for soft power (Image: GETTY)
PM Morrison pledged $250million to the Solomon Islands (Image: GETTY)
Prime Minister Morrison pledged $250million worth in grants to the Solomon Islands earlier this month to reaffirm his country’s
