Pacific allies don’t usually air their dirty laundry in public.
But a rare on-the-record dispute between New Zealand and Kiribati has renewed focus on the poor and isolated island nation, highlighting the existential threat it faces from the climate crisis – against the backdrop of a tussle between the world’s biggest powers for regional dominance.
When New Zealand’s right-wing government unexpectedly announced an aid review for its Pacific neighbor last week – ostensibly over an alleged snub to a top official – it “caused serious anxiety” for the approximately 120,000 people who live in Kiribati, according to one i-Kiribati minister.
Foreign aid accounted for 18% of Kiribati’s national income in 2022, according to the Lowy Institute – with New Zealand among its largest donors.
The Micronesian nation of 33 coral islands is scattered over a remote area of the central Pacific that spans 3.5 million square kilometers (1.3 million square miles) – an area larger than India.
Though among the least populated countries, Kiribati has one of the world’s largest exclusive economic zones. Its relative proximity to Hawaii and United States military bases in Guam also gives it strategic importance as great powers compete for influence in the vast waterways between Asia and the Americas.
The diplomatic fallout has put fresh attention on the battle for influence in the Pacific between China and Western nations, mainly the United States.
It also comes as US President Donald Trump’s administration threatens to disrupt American relations in the region, with concerns from Pacific leaders over how US withdrawals from the Paris Climate Agreement and World Health Organization, as well as a 90-day aid freeze, will impact vulnerable communities.
Diplomatic spat
The dispute erupted last week with a sudden move from New Zealand’s deputy prime minister.
Winston Peters, also New Zealand’s foreign minister, put tens of millions of dollars in assistance for Kiribati under review after President Taneti Maamau pulled out of a planned meeting, Peters’ spokesperson told CNN.
Peters had planned to lead a delegation to Kiribati last month, which included the handover of a New Zealand-funded $14 million hospital upgrade.
But a week before they were set to arrive, Kiribati told the delegation that Maamau, who is also the country’s foreign minister, “was no longer available” to receive them, Peters’ spokesperson said.
“The lack of political-level contact makes it very difficult for us to agree on joint priorities for our development program, and to ensure that it is well targeted and delivers good value for money,” Peters’ office added.
Between 2021 and 2024, New Zealand’s aid commitments to Kiribati totaled $57 million, with investments in health, education, fisheries, economic development, and climate resilience.
An analyst said New Zealand’s surprising move to review the entire assistance package was born out of “deep frustration” from Peters “that several diplomatic efforts to engage with the Kiribati government have been rebuffed.”
“New Zealand has struggled to get access with the Kiribati government, including across those key areas in which New Zealand is supporting health, climate, and education, for instance,” said Anna Powles, associate professor at the Centre for Defence and Security Studies at Massey University in New Zealand.
Kiribati framed the situation as a misunderstanding, however, in a statement, the Kiribati President’s Office said it was “surprised to learn” there were media reports on Peters’ visit, “which was still under active negotiations based on the understanding that alternative dates were to be explored.”
