	Overview

The United States plays an overarching security role in the Southwest Pacific, but it is not the only provider of security, nor the principal source of foreign aid, and has relied upon Australia and New Zealand to help promote development and maintain political stability in the region. Key areas of U.S. engagement in the Pacific include its territories (Guam, the Northern Mariana Islands, and American Samoa), the Freely Associated States (Marshall Islands, Micronesia, and Palau), military bases on Guam and Kwajalein atoll (Marshall Islands), and relatively limited aid and economic programs. Australia, Japan, New Zealand, the United Kingdom, and the United States are the major providers of development assistance. In the past several years, China has asserted increasing "soft power" in the region—primarily diplomatic and economic influence. Some experts suggest that the United States should pay greater attention to or more directly engage the Southwest Pacific. In some Pacific Island countries, weak political and legal institutions, corruption, civil unrest, and economic scarcity could lead to "failed states" and/or become springboards for terrorism. According to some observers, unconditional and unregulated foreign aid and business investment from China and Taiwan—provided without goals related to democracy, sustainable development, fair working conditions, and the environment—may exacerbate underlying political, economic, and social problems in the region. Pacific Islands Conference of Leaders and Policy Proposals

In May 2007, the Pacific Islands Conference of Leaders (PICL), a triennial meeting of Pacific states and territories sponsored by the East-West Center, gathered for the eighth time since the organization was founded in 1980. The Bush Administration pledged to "re-engage" with the region and declared 2007 the "Year of the Pacific." Among the main topics, aims, and initiatives under discussion were: expanding public diplomacy efforts through a new public affairs office in Fiji; strengthening the Joint Commercial Commission; Pacific fisheries management; the U.S. military expansion in Guam and its impact on the region; global warming and rising sea levels; and establishing a regular U.S.-Pacific Islands dialogue. With the end of the Cold War, U.S. attention to the Pacific region, including foreign aid and public diplomacy, has waned. Several bills to increase U.S. foreign aid to the region have been introduced in the 110 th Congress. Although China's influence is largely limited to diplomatic and economic "soft power," some analysts worry about the PRC's long-term intentions. The ethnic Chinese population in the Pacific Island region is economically influential but remains relatively small numerically. Pacific Island Countries at a Glance
This report focuses on the 14 sovereign nations of the Southwest Pacific, or Pacific Islands region, and the major external powers (the United States, Australia, New Zealand, France, Japan, and China). It provides an explanation of the region's main geographical, political, and economic characteristics and discusses United States interests in the Pacific and the increased influence of China, which has become a growing force in the region. The report describes policy options as considered at the Pacific Islands Conference of Leaders, held in Washington, DC, in March 2007.
Although small in total population (approximately 8 million) and relatively low in economic development, the Southwest Pacific is strategically important. The United States plays an overarching security role in the region, but it is not the only provider of security, nor the principal source of foreign aid. It has relied upon Australia and New Zealand to help promote development and maintain political stability in the region. Key components of U.S. engagement in the Pacific include its territories (Guam, the Northern Mariana Islands, and American Samoa), the Freely Associated States (Marshall Islands, Micronesia, and Palau), military bases on Guam and Kwajalein atoll (Marshall Islands), and relatively limited aid and economic programs.
Some experts argue that U.S. involvement in the Southwest Pacific has waned since the end of the Cold War, leaving a power vacuum, and that the United States should pay greater attention to the region and its problems. They contend that in some Pacific Island countries, weak political and legal institutions, corruption, civil unrest, and economic scarcity could lead to the creation of failed states or allow for foreign terrorist activity within their borders. According to some observers, unconditional and unregulated foreign aid and business investment from China and Taiwan, which may be attractive to some Pacific Island states, may exacerbate underlying political, social, and economic tensions in the region. While China's influence is largely limited to diplomatic and economic "soft power," many analysts disagree about the PRC's long-term intentions.
In 2007, the Bush Administration pledged to "re-engage" with the region and declared 2007 the "Year of the Pacific." Among the main topics, aims, and initiatives under discussion at the Pacific Islands Conference of Leaders were: expanding U.S. public diplomacy efforts and foreign aid activities; strengthening U.S.-Pacific trade and preferential trade programs for Pacific Island countries; addressing global warming and other environmental concerns in the region; and enhancing educational and cultural exchanges. Several bills to increase U.S. foreign aid to the region have been introduced in the 110th Congress. This report will be updated as warranted.