For Fiji and several other Pacific island countries it was the latest in a series of Chinese actions that have convinced them they have been right to align more closely with Australia. Their concern about the missile launch is born of their history. Bigger countries turned the Pacific into a battleground in the second world war and into a testing ground for nuclear weapons during the cold war. (Both the July test and an earlier one in September 2024, which also landed in the Pacific, were of nuclear-capable missiles.) Now, many Pacific island leaders fear that rivalry between America and Asia’s biggest military power will once again destabilise their region. Rather than choose between America and China, however, Pacific leaders are choosing to deepen ties with Australia by signing the Asia-Pacific’s first new alliances since the early days of the cold war. The mutual-defence treaty between Australia and Fiji, the Pacific islands’ commercial and diplomatic hub, is the second new military alliance that Australia has signed with a Pacific island state in less than a year. It did a similar deal with the region’s biggest state, Papua New Guinea, in October 2025. Negotiations with Tonga, now the only Pacific island country with defence forces that does not have an alliance with Australia, are under way. (Australia and New Zealand have been allies since the early days of the cold war.)
Ministers insist the deals are not about confronting China, but about keeping security arrangements within the “Pacific family”. That means Australia and New Zealand, which have long been members of the Pacific Islands Forum (PIF), the regional organisation. It makes room, too, for America, which has sole responsibility for the defence of three states that are members of the PIF (and two heavily fortified territories, Guam and the Northern Mariana Islands, that are not). But it would lock China out of the region’s security arrangements. That is a big shift from just a few years ago, when Australian officials feared that China had the momentum, and was within reach of realising its ambition of a military base in the islands. All of this adds up to a new system of military alliances among Pacific island countries. For the moment that system looks like a smaller version of the hub-and-spoke model of America’s alliances in Asia. Unlike in Europe, where NATO is a multilateral alliance, America has only bilateral alliances with its five treaty allies in Asia. Likewise, Australia now has three bilateral alliances in the Pacific. But that could soon change. New Zealand has expressed an interest in also signing the Veitacini Treaty, as the new alliance between Australia and Fiji is known. If it follows through, probably only after elections in New Zealand in November, the pact could become the basis for a new multilateral alliance
in the Pacific, say officials in all three countries. “A bit like a NATO, kind of,” modestly offers Fiji’s deputy prime minister, Manoa Kamikamica, in an interview in his office in Suva, the capital. The alliance is open only to those countries that have defence forces, however. For those that don’t, Australia offers other deals. Agreements with Tuvalu in 2023 and Vanuatu in June would block China from building military bases there and make it harder to do security deals dressed up as police co-operation. The Solomon Islands, for the past several years China’s closest Pacific ally, is negotiating a similar agreement with Australia after a change in government in May. Of the region’s other fully independent states, only two—Kiribati and Samoa—have yet to conclude a treaty with Australia or open negotiations. Both the defence pacts and the other treaties discourage Chinese investment in critical infrastructure that could have military uses, like ports or telecommunication networks. In return, Australia is investing more than $1bn each year in its new treaty partners. In Fiji Australian diplomats hope to get the Millennium Challenge Corporation, an American aid agency that Elon Musk and DOGE forgot to destroy last year, to add several hundred million dollars for redeveloping Suva’s strategically located deepwater port. Matthew Wale, the new prime minister of the Solomons and a longtime critic of China’s attempts to buy influence in the region, wants all Pacific island countries, whether they have defence forces or not, to agree on a new multilateral treaty limiting security co-operation to the “Pacific family” at their annual summit, which begins on August 30th. But approval would require consensus between all of the forum’s members. For two of the bloc’s weakest states, Kiribati and Nauru, that may go too far towards alienating China. The two have also blocked a statement condemning the Chinese missile launch, to the dismay of the other members. Nauru opposed the protest despite the treaty it signed with Australia in 2024. Much of the discussion avoids the fact that by choosing Australia, an American ally, Pacific leaders are choosing sides. There is little talk in Fiji or the other treaty signatories of what an Australian ally might be asked to do if Australia joined America in a conflict with China. And military co- operation between Australia and its new allies will proceed slowly; there is,
for example, little prospect of Australian troops deploying permanently on its new allies’ territory any time soon. That does not bother American officials, however, who are happy that Australian diplomacy seems to be blocking a Chinese presence in Pacific island countries that were once crucial territories in the battles of the second world war. ■ For exclusive coverage of Asian politics, economics and security, sign up to Asia Bulletin, our weekly subscriber-only newsletter. This article was downloaded by zlibrary from https://www.economist.com/asia/2026/08/27/australia-builds-a-pacific-alliance- system-to-keep-china-out
Can AI make dysfunctional governments more effective? Asia demonstrates the promise and perils of AI in the public sector Aug 27th 2026 HOW MANY laws and regulations are needed to govern an archipelago, home to 287m people, spread across some 13,500 islands, and stretching more than 5,000km? For Indonesia, the answer is 251,232. Yet all too often this bureaucratic morass only worsens persistent problems, from rampant graft to sluggish growth. Indonesia is a vivid example of a challenge common to Asia’s populous poorer countries. Governments need to manage complex economies and provide services to diverse societies with limited resources. Officials across the region have long turned to digital technology for help making their operations more transparent and effective. Yet Indonesia has launched more
than 27,000 digital public-sector platforms and apps, to little avail. Now they hope artificial intelligence can do better. AI models could help boost the very capabilities that poor states often lack. They are adept at analysing lots of data, from tax filings to farm yields, at a relatively low cost. Properly adapted to local conditions, AI could allow developing countries to do “in a decade what might otherwise take a century”, the World Bank argues. Public-sector experimentation with AI in poorer parts of Asia has so far been promising, albeit limited. Consider the courts in Pakistan, which face a backlog of more than 2m cases. In 2024 trial-court judges were given access to JudgeGPT, a generative-AI assistant grounded in Pakistani statutes and court judgments. The tool helped judges with legal research, summarising and drafting. Those who used it cleared around 6.3% more cases a year. Greater speed did not mean lower quality: appeal rates did not increase. Similarly, in India, where there is an even bigger legal logjam, Adalat AI, a startup, claims that its transcription tools and document-processing software have reduced case times by 30-50% across 11 Indian states. The biggest gains may come from helping governments make better predictions, says Indermit Gill, the World Bank’s chief economist. Rampant theft and poor infrastructure make it hard for electrical utilities in poor countries to estimate demand. AI can help them take giant leaps, says Mohak Mangal, the co-founder of Pravah, a startup that is helping utilities in six Indian states deliver power more efficiently. In Telangana, a southern Indian state, a recent study found that AI-enhanced monsoon forecasts helped farmers reap savings of as much as 42,000 rupees ($560) in a cropping season, the equivalent of three months’ minimum wage in the region. Overloaded officials hope AI can help meet a perennial challenge, directing welfare benefits more accurately. For example, a big food-assistance programme the Indonesian government runs reaches less than 50% of its intended recipients, according to SMERU Research Institute, a local think- tank. One pilot project in Banyuwangi, a port town in eastern Java, used AI to analyse data from different government databases to help verify recipients’ eligibility; a government-commissioned study found that the new
system reduced the time taken to register recipients from 75-200 days to less than one. The government hopes to roll out the initiative to the rest of the country by the end of the year. But wider adoption poses risks. Poverty can be dynamic, specific to local conditions and difficult to quantify, point out researchers at SMERU. More than 9,000 households challenged the AI’s initial categorisation in Banyuwangi. Researchers in Bangladesh tested whether a machine-learning model trained on mobile-phone use could examine data on phone top-ups, call patterns and mobility to improve the targeting of a cash-transfer programme. Only 32% of the households it identified were eligible, so more than two-thirds of the programme’s funds went to households that should not have received them. Such findings point to the bigger challenge poor countries face when deploying AI: the places that could most use the technology to supplement state capacity are the same places that lack capacity to deploy the technology safely and effectively, and to develop models of their own. In a World Bank survey of officials from nearly 60 countries, around 80% of those from lower-income countries said they had no tools, or only basic ones, for evaluating the performance of their AI experiments. Governments may not like the idea of running essential public services on technology controlled by foreign powers, yet most poor countries must rely on frontier models developed in America or China. The World Bank recommends using interoperable systems drawing on suppliers from different countries and starting by adapting simpler models to local conditions. Mr Gill thinks parts of Asia, such as India’s southern states and countries in South-East Asia, are well placed to do so. To succeed, poorer states will need to focus on less glamorous back-end processes. This includes basics such as improving data quality, training officials and procuring technology sensibly, says Shahrukh Wani, who heads AI partnerships at the International Growth Centre, a British research institute. JudgeGPT is a case in point: the striking gains appeared only when access to the model was accompanied by targeted training on how to use it; when judges were handed the tool alongside a generic legal course, they