Earlier this week I used the opportunity of the 2012 Pacific Islands Forum, now taking place in the Cook Islands, to start a blog series on Australia's Pacific Islands strategy. I outlined two elements that characterise Australia's Pacific policy.

First is Australia's tendency to project our domestic issues into the region, the current example being the Australian Government's push to re-open two Pacific-based asylum seeker detention centres (in PNG and Nauru). Australia's domestic immigration agenda has distracted from the Forum's agenda and will consume much of Prime Minister Gillard's time in the Cook Islands. This diversion means Australia's high-level delegation will miss opportunities to engage more on Pacific Islands issues important to the whole region.

Secondly, I discussed Australia's crowded and distracted foreign policy agenda and our fixation on UN diplomacy as we bid for a UN Security Council seat and woo Pacific Islands votes this week. The Department of Foreign Affairs and Trade has channeled substantial resources (financial and intellectual) to the UN in New York, and as our focus has shifted to engaging smaller countries far outside Australia's core national interest, we have lost our footing in the Pacific Islands. 

When asked about foreign policy aims in the 2011 Lowy Institute poll, Australians placed 'improving Australia's relationship with its immediate neighbours' (94% said 'important') far ahead of 'seeking a seat on the UN Security Council' (70%). In fact, Australians ranked the UN Security Council bid as the least important foreign policy goal out of the twelve options put to them in the poll, with only 32% of Australians believing it was 'very important'; 27% of Australians said seeking a seat on the UN Security Council was 'not important'.

Now I want to throw in a third premise which characterises Australia's relationship with the Pacific: the dominance of Australia's aid program. More than 50% of all foreign aid that pours into the Pacific comes from the Australian Government, approximately $1.2 billion annually.

Development assistance is an important part of Australia's relationship with the Pacific Islands, and foreign aid is rapidly becoming Australia's most effective international policy tool. The size of Australia's regional aid budget means it dominates Australia's relationship with the region. But this comes at the expense of the type of relationship we really want with the Pacific, one that is multifaceted and goes deeper than that of donor-recipient. 

Australian policymakers too often rest on the size of the aid budget. When in the Pacific Islands, aid announcements pepper the media releases of any visiting Minister or Parliamentary Secretary. But this over-reliance on the aid program has stifled Pacific policy in Australia and resulted in a lack of creative policy thinking. We fail to think through and design Pacific policy that builds Australia's goodwill in the region.

Aid is always going to be a key part of our Pacific policy, however, it does not always have to be at the centre. Annmaree O'Keeffe is spot on when she recommends Australia should look for other ways to engage with Pacific island states. Facilitating greater opportunities for 1.5 track dialogues (particularly in Papua New Guinea), launching an Australia-Pacific Island Council under DFAT, developing greater opportunities to connect with emerging leaders in the region, a Pacific-tailored ediplomacy strategy for those Pacific countries going through a mobile phone boom and getting our Prime Minister out to Melanesia for the first time are all ideas worth exploring.

The Pacific Islands region can only look on in envy at the wide-ranging policy discussion occurring on Australia's role in the Asian Century – Australia-Pacific relations will never be the subject of such a substantial debate in Australia. It's hard to imagine policymakers in Canberra seeing our relations with the Pacific Islands as White Paper-worthy, despite the desperate need for innovative policy ideas.

The Australian Government needs to reach for its thinking cap and work with Australian civil society and the private sector to develop a set of innovative policies which will build Australia's goodwill and soft power in the Pacific Island region, because the relationship is stale and has seen far better days. Our sustained distraction is leaving the region open to other foreign powers. More on that in my next blog post.

Photo by Flickr user AusAID Photolibrary.