By Alasdair Pal
SYDNEY (Reuters) -Australia and Vanuatu on Wednesday agreed a A$500 million ($326.50 million) deal to strengthen economic and security ties between the two countries, amid increasing competition from China, the Pacific island nation’s largest external creditor.
Vanuatu Prime Minister Jotham Napat said the deal, known as the Nakamal Agreement, will see Australia invest the funds into Vanuatu over the next decade and was a “win win” for both countries.
“The agreement… will transpire into a lot of trade benefits between the two countries, whether it be the security agreement, economic transformation, with some specific focus on labour mobility,” Napat told a news conference on the island of Tanna in southern Vanuatu.
Australia Deputy Prime Minister Richard Marles said the agreement showed the two nations had a “shared destiny”.
“It acknowledges that as neighbours, we have a shared security environment and a commitment to each other,” Marles said
The deal will be formally signed by Napat and Australia’s Prime Minister Anthony Albanese in the coming weeks, he added.
The deal also covers funding for climate resilience following a December earthquake that hit the capital Port Vila, killing at least 14 people and injuring hundreds.
In recent years Vanuatu has moved closer to China, the country’s largest external creditor after a decade of infrastructure loans for construction, including a new president’s office last year.
($1 = 1.5314 Australian dollars)
(Reporting by Alasdair Pal in Sydney; Editing by Michael Perry)
