Sky News Interview: North Korea, China Debt Diplomacy



SUBJECTS: North Korea, China Debt Diplomacy

KIERAN GILBERT, HOST: Let’s go to Labor’s Peter Khalil who joins me from Melbourne. Peter, interesting. Quite a bit of optimism over the Trump administration when it comes to these looming talks with Pyongyang.

PETER KHALIL, FEDERAL MEMBER FOR WILLS: Yeah, there is Kieran and, look, you’ve got to give credit where credit’s due. I mean, the unpredictability of President Trump and the way he does things has cut through. It’s been a circuit breaker. But there is obviously a lot of desire by the part of the North Korean regime, Kim Jong-un, to potentially open up a lot of cheap labour in North Korea that they might be able to utilise with South Korean companies. But also he has real issues around, you know, the poverty of his own people and he needs to make changes there too, internally, and also reward the elite that just sits under him. And I think they’re looking at countries like Myanmar and other countries who are opening up to the west and seeing what benefits can actually accrue. And he thinks he can actually manage that.

GILBERT:  And China’s also been more constructive as well around this issue and it’s interesting, I want to get your thoughts on that report today in the AFR regarding regional influence because we’re talking about huge amounts of money. They call it chequebook diplomacy via the State Department report the AFR has obtained. But it’s a massive amount of debt that we’re talking about for some of these very small countries.

KHALIL: It is. And this is a real concern, Kieran, on a national security front. We’ve known about this for a while. We’ve known that China and Taiwan have been throwing enormous amounts of money in a sort of an aid war in the pacific. China has really come out on top and now using this sort of chequebook diplomacy, putting many, many countries – up to sixteen countries in the pacific – into unmanageable debt so that they can actually access those strategic assets down the line. This is of great concern. Vanuatu was one of the stories that we saw the potential for a military base there. And what galls me, Kieran, is that this Coalition Government has actually cut aid by $11 billion, including to the pacific which is our sphere of influence, if you like, where we need to show leadership. And that is a really short sighted step that has been taken by this Government. We actually need to be engaging in the pacific and our development assistance actually helps people in the pacific reduce poverty, lift millions out of poverty. That’s a good thing altruistically, but it’s also in our national interest. It’s about security and it’s about stability of that region as well and that’s in Australia’s national interest.

GILBERT: And I guess by greater engagement, which Julie Bishop, in her defence, argues this budget, while the aid spending is static, there is a greater focus on the pacific. But that engagement helps, I guess, provide the governance, the framework for their funding, whether it be from China or wherever else, but still maintain their own independence and strategic independence as well, Peter.

KHALIL: Well, they’re not tied to the lender. And what’s interesting is that we have protocols obviously, we need to tick boxes around transparency and accountability of the development assistance that we provide to our friends and neighbours in the region, whereas China doesn’t in many respects. They can do all sorts of things like build palaces, build sports stadiums, line the pockets of local leaders and potentates and so on, without having to tick any of those transparency or accountability or other boxes. So we have to do that because it’s actually in the interests of the recipients as well. My great concern, of course, is that these counties are going to be captured in that net. Are going to be stuck. Sri Lanka has already given a ninety nine year lease to China on one of the ports that was built because they couldn’t manage the debt repayments.

GILBERT: Peter Khalil, appreciate your time as always. We’ll talk to you soon.