The Pacific is of critical importance to New Zealand's foreign policy because it is our neighbourhood, and our primary sphere of influence. As well, how we conduct our foreign policy in this context has an important bearing on our relationships with key partners in other parts of the world.

Three key factors define our place in the region. The first is geography. The Pacific is our neighbourhood. The second is cultural. Around one in sixteen New Zealanders is of Pacific Islands origin and the tangible impact of the Pacific on New Zealand's cultural experience is evidenced in the distinctive voice and contribution New Zealanders with a Pacific Islands heritage bring to our wider arts and cultural communities.

The third factor relates to constitutional and historical linkages. The people of the Cook Islands, Niue and Tokelau are also citizens of New Zealand, and we have a unique Treaty of Friendship with Samoa. Special immigration access quotas for the Pacific are an important part of New Zealand's migration and cultural links with the wider region.

These factors are part of both the depth and breadth of the many bilateral relationships with the Pacific which serve as a basic starting point for New Zealand's engagement with the region.

Many challenges

Many challenges confront the Pacific. Some are intrinsic to the region's physical reality, such as distance and isolation, fragile physical environments, limited natural resources, and vulnerability to natural disasters. Others reflect social trends. These include non-communicable 'lifestyle' diseases such as diabetes and communicable diseases such as malaria and, increasingly, HIV/AIDs. Population increase is placing severe strain on education, health and employment prospects in much of Melanesia, while the reverse 'dramatic population decline' is testing the viability of some microstates, such as Niue.

A number of Pacific Islands states face challenges of governance. These arise from weak or corroded institutions of state, capacity and human resource constraints, and an uneasy tension between traditional wantok power systems and contemporary demands for transparent accountable government. Sadly, parochialism and corruption are too often the result.

Poor governance can not only affect internal stability and equitable development but also undermine the sustainable management of scarce natural resources such as fisheries, forests, and minerals. These are vital to the future viability of the Pacific states as economic entities.

Absolute poverty

In pockets of the Pacific absolute poverty is increasing. The socio-economic indicators of some countries in Melanesia are almost on a par with countries of sub-Saharan Africa. In some cases there are major internal disparities in living standards. Internal instability, land conflicts and ethnic tensions further drive down standards of living. These factors also affect the overall regional security environment.

While this seemingly paints a gloomy picture, the news is not all bad. A number of countries have enjoyed sustained economic growth in recent years. There have been positive moves to work with partner governments to help build and supplement capacity in key government institutions, for example in the Solomon Islands, Papua New Guinea and Niue.

Situations of internal conflict and unrest are being addressed. Elections taking place again this year in the Solomons and Fiji will demonstrate that effective democratic institutions can be rebuilt after a period of disruption to constitutional processes.

New impetus

The Pacific Plan for regional co-operation has given new impetus to enhanced co-operation and development of regional resources. The Pacific Islands Forum as an organisation has been empowered by its leaders to take a more active role in addressing potential or actual situations of instability. I commend the excellent work that Secretary-General of the Pacific Islands Forum Greg Urwin and the Secretariat are doing in pressing ahead with implementation of the Pacific Plan.

Regional co-operation across a range of key functional areas such as police, defence, customs, and immigration is proving its value in addressing issues such as cross-border security. In the area of fisheries it has been strengthened through the entry into force of the Western and Central Pacific Tuna Convention. Such co-operation should help the region to engage in systematic and sustainable management of its most important natural resource. Achieving sustainable fisheries management is crucial to the prospects of the Pacific Islands region. It will continue to be a top priority for New Zealand's Pacific diplomacy.

Interdependent world

When assessing the challenges confronting the Pacific, it must be noted that not all of these are internal to the region. In today's world no region is immune from the impacts, positive and negative, of wider international developments. These factors complicate the already challenging set of issues with which the region must grapple. For example, in a global environment, where terrorism is a real and present risk, the Pacific cannot rely on relative isolation for protection. Nor can the Pacific stand aside from the need to meet international counter-terrorism measures. Bad money and bad people are like water in a leaky bucket--'they will flow to where the holes are'--and the Pacific region cannot afford to be the weak link. Organised trans-national crime, including money laundering and narcotics production, are already a reality in the region and require concerted international co-operation to be tackled effectively.

Fortunately, when confronting such challenges the Pacific can draw on best international practice. This allows for the adaptation of a considerable body of practical experience and analytical work to develop more effective responses to the needs of states in the Pacific.

Partnership aim

New Zealand seeks partnership with its Pacific neighbours as we confront the many and varied challenges within our region. Only with the consent of, and in full partnership with, regional governments can we hope to make an effective, positive and lasting impact in the region. Tailored responses, as opposed to a one size fits all approach to regional challenges, are a key to effectiveness.

These include bilateral partnerships where appropriate, and regional responses where these will be more effective. We pursue intensive whole of government bilateral engagement where New Zealand has special responsibilities or particularly close ties. We work in collaboration with other external partners where 'for reasons of scale, complexity or the need to bring wider perspective to bear' this is likely to deliver the best outcome.

Main objectives

Among the key objectives that New Zealand seeks to pursue in the Pacific is security and stability. At the regional and national level, they are the cornerstones for economic growth and investment, sustainable development, and effective government. Security in the wider Pacific region has a direct bearing on New Zealand's security. Border and transport security, and exchanges of information on criminal activities or illegal migration, enhance the national security of all countries of the region.

Linked to this objective is the promotion of good governance. Good governance is a driver for development, economic growth and stability. It is about ensuring that government revenues and expenditure are managed transparently and responsibly, that institutions of government perform effectively, that robust democratic processes are followed, and that the rule of law is respected. It is about providing a framework for business investment and encouraging strong leadership at all levels in the best interests of all the peoples of a country, including the most vulnerable groups.

Economic growth is a key to prosperity in the Pacific region. Regional trade integration, the development of WTO compatible trade policies, and support for the creation of enabling business environments are all foundations for sustainable growth. A regional basis for future trade integration has already been laid through the Pacific Islands Countries Trade Agreement and the framework for closer economic relations between the Pacific, Australia and New Zealand set out in the Pacific Agreement for Closer Economic Relations. Progress in implementing both agreements should enhance the region's economic growth.

Development aid

The Millennium Declaration and the adoption of the Millennium Development Goals have led to a renewed international and regional focus on the levels of poverty. New Zealand's aid programme to the region aims to eliminate such poverty over time, promote equitable economic growth, improve health and education outcomes and develop capacity in support of good governance.

Many regional challenges can only be effectively addressed by enhanced regional co-operation, sharing of resources and pooling of ideas and experience. We are promoting stronger and deeper regional approaches through the Pacific Islands Forum and the development of the Pacific Plan. In addition we engage in active participation on the governing bodies of key regional organisations such as the Forum Fisheries Agency, the Secretariat for the Pacific Community, and the South Pacific Regional Environment Programme.

Active involvement

We encourage active and positive involvement by external partners in ways that support good governance, sustainable development, security and economic growth objectives. This includes countries with longstanding Pacific connections, and countries that have more recently come to develop linkages with the region. We also encourage a strong role in the region by international organisations such as the United Nations and its family of specialised agencies.

The Pacific needs to retain an outward looking approach that ensures it is able to be competitive and effective in a global context. This means ensuring timely compliance with international regulations and standards, for example on port and aviation security and anti-money laundering regulations. It means ensuring that regional trade and economic policies keep pace with the wider international trends towards greater integration.

National priorities

What does all this means for New Zealand's engagement in the Pacific over the next twelve months and beyond?

In Niue New Zealand is involved in a major multi-year strengthened co-operation programme. On a recent visit to Niue I was pleased to be able to review first hand the effectiveness of our programmes, particularly those supporting Niue's efforts to rebuild from Cyclone Heta. It is hoped a visit to the Cook Islands later in the year will provide an opportunity to review at first hand what New Zealand and the Cook Islands government have been able to achieve, and what more can be done.

In the case of Tokelau, New Zealand has agreed to keep the draft treaty of free association on the table until Tokelau has had a chance to take stock of February's referendum result and decide on its next steps.

We are continuing to work with Samoa on a series of practical inter-agency initiatives in support of the Treaty of Friendship. Later this year New Zealand will host joint ministerial consultations in Wellington with the participation of a number of Cabinet colleagues from New Zealand and Samoa.

Political change

New Zealand will continue to support Tonga along the path of political change. Our hope is that change proceeds peacefully and promotes internal stability and economic well-being. We look forward to engaging with Tonga on the regional agenda as it takes up the chairmanship of the Pacific Islands Forum from October.

In the case of Fiji, we will be focussed on dialogue that will help support the country's democratic processes and on developing further a relationship that fully reflects the significance and contribution of this important regional partner.

We will continue to deepen our links with Melanesia, building partnerships around governance and economic livelihoods and working closely with other partners to maximise our effectiveness. We remain committed to our involvement in the Regional Assistance Mission to Solomon Islands. A visit to the Solomon Islands with Australian Foreign Minister Alexander Downer is planned in order to make contact with the new government and discuss joint strategies to build on the progress made by RAMSI.

Key objective

A key objective in Papua New Guinea will be to take forward a programme of mentoring support for heads of government departments in support of governance capacity building. We will also continue to engage collegially with Vanuatu in support of the Lini government's good governance objectives. I will be visiting Vanuatu to reinforce relations with senior political figures. In the case of Micronesia and the French territories New Zealand's focus will be on building links that reflect their interest in closer regional engagement and, in the case of the French territories, of promoting increased trade integration into the region.

In a broader sense we will continue to focus on the Pacific through the application of existing and increased aid funding. New Zealand's aid programme endeavours to place the partner government in the driving seat in developing whole of sector approaches to the delivery of development assistance instead of a scattering of smaller projects.

Pacific plan

At the regional level our emphasis will lie on working with the Pacific Islands Forum on the successful implementation of the Pacific Plan for strengthened and deepened co-operation. The key areas of focus of the Plan include governance, sustainable development, security and economic growth. Specifically, New Zealand will be focusing on encouraging strong national ownership of the Plan throughout the region, and ensuring that it delivers an early dividend to Pacific Islands countries from successful initiatives.

We will work with the Forum and other regional organisations to see that regional arrangements evolve in a way that supports strengthened regionalism. In March we supported the implementation of a digital strategy, a specific Pacific Plan initiative, and we are continuing to provide substantial support for agencies such as the International Monetary Fund's Pacific Financial and Technical Assistance Centre based in Suva.

A major priority in the fisheries area is to build on the entry into force of the Western and Central Pacific Tuna Convention to develop robust mechanisms for sustainable allocation of resources. We will continue to work towards the establishment of the Regional Fisheries Management Organisation as a mechanism to manage non-migratory species offish in the region.

Security risks

New Zealand is providing legal drafting assistance to Pacific Islands countries which will provide a legal basis to help address security risks. We are also helping Pacific countries to meet reporting obligations they are presently required to undertake by the United Nations in the counter-terrorism area.

The Pacific Security Fund, a multi-year inter-agency fund of $12 million, will continue to support practical activities to improve regional security. We hosted a second regional Working Group on Counter-Terrorism for Pacific Islands countries in April. In the same month we hosted a meeting of Pacific officials to discuss how the region might further strengthen regional co-operation amongst border and internal security agencies to improve trade, transport and border security infrastructure. We will continue bilateral capability building measures through our aid programme, such as the joint Australia-New Zealand programme of support for the Tonga Customs Service.

Trade integration

On the trade front we are supporting the Forum Secretariat in an assessment of the impact of trade liberalisation. This study was mandated by Forum trade ministers last year. Its aim is to provide expert information to enable Pacific countries to take decisions on their approach to regional trade integration. In June New Zealand co-hosted a trade seminar with Australia and the European Union.

One aspect of the trade relationship that is often overlooked is the economic importance of the Pacific Islands to New Zealand. Last year for example they accounted for more than NZ$1 billion, over 3 per cent of our total merchandise exports, as well as contributing to our invisibles earnings such as in tourism and contracting.

New Zealand will also continue to work with individual Pacific partners to develop quarantine pathways, to allow Pacific countries to export fresh produce to New Zealand in ways that meet our quarantine concerns and support regional capacity in the areas of quarantine, customs and standards and conformance through the Regional Trade Facilitation Programme.

Finally, New Zealand intends to pursue a close dialogue with key external partners to the region. New Zealand attended China's Economic Cooperation and Development Forum in April in Suva, the bi-annual Pacific Leaders' Meeting in Japan in late May, and the Oceania Summit held in Paris in June. In also hosted France's Overseas Minister in early April, and will pursue opportunities for consultation with the European Union in the course of several forthcoming high-level visits to Europe and from Europe to the Pacific region.

Bilateral benefits

As noted above, the Pacific is crucial to our bilateral relationship with other nations. It was pleasing that US Assistant Secretary of State Chris Hill, when speaking to the media during his visit to New Zealand in February, noted that the United States appreciated what we were doing in the Pacific. He also stated that there was further work which we could do together, and that this should be one of the building blocks for our relationship into the future. This is an important point. It is reflected also in our relationship with Australia, with whom we share so many interests and with whom we work so closely in the Pacific.

This theme was prominent in my discussions with UK Foreign Secretary Jack Straw in London in late November 2005. These discussions were followed up with the welcome announcement that the United Kingdom would make a contribution to the Tokelau International Trust Fund. The fact is that our role in the Pacific strengthens our most important bilateral relationships, not only those with the United States, Australia and the United Kingdom but also those with other key bilateral partners, in Asia and Europe.

There is no question about the unique importance of the Pacific in New Zealand's foreign policy. The Pacific faces many challenges, and it is in New Zealand's interests for Pacific nations to be successful in addressing them. To this end, New Zealand is committed to long-term engagement with the region.

The Pacific is important to New Zealand geographically, historically and culturally. It is New Zealand's primary sphere of influence. New Zealand's foreign policy will be directed towards helping to alleviate the many problems that afflict Pacific societies, including especially poverty. It strongly supports the Pacific Plan for regional co-operation being implemented by the Pacific Islands Forum Secretariat. New Zealand will make its contribution in partnership with its Pacific neighbours. It will tailor its response to the needs of the situation as it seeks to encourage security and stability. The promotion of good governance and economic development will be central aspects of New Zealand's approach. New Zealand's long-term engagement with its Pacific neighbours is important--and will favourably influence its relationships with other nations.

Rt Hon Winston Peters is New Zealand's Foreign Minister. This article is the edited text of his address to the NZIIA's Wellington branch on 28 March 2006.