AUSTRALIA’S INDIAN OCEAN TERRITORIES: DEVELOPMENT CONSIDERATIONS AND FUTURE PROSPECTS

Assistant Minister for Regional Development and Territories, Australian Government

The external territories of Christmas Island and the Cocos (Keeling) Islands, collectively known as the Indian Ocean Territories (IOT), are a unique and strategically valuable part of northern Australia. Indeed, northern Australia has long been considered of great strategic importance, with the region critical to the future of our national prosperity.

Though geographically isolated, the IOT play an important role in Australia’s northern region. Among Australia’s most remote and culturally diverse communities, the region is home to a pristine environment, protected natural wonders and heritage sites, a rich cultural life and vibrant, distinct communities. The region is geographically close to Asia, is surrounded by the world’s third-largest ocean, and has a long and rich military history.

A secure and stable Indian Ocean region is crucial for Australia’s national security and prosperity. It is an essential conduit for Australian and global trade, contains some of the world’s fastest growing economies, and hosts strategic competition between regional powers. Maritime threats including illegal fishing, people smuggling and other forms of transnational crime rely on maritime routes that pass near Christmas Island and the Cocos (Keeling) Islands. To ensure the region is equipped to meet both current and future challenges, the Australian Government is committed to the economic, social and environmental sustainability of the territories.

War time activity in the 20th century demonstrated the geo-strategic importance of the region. In 1914, a German raider, SMS Emden, destroyed the Cocos (Keeling) Islands’ Cable Station, which provided a vital link between Australia and the United Kingdom. HMAS Sydney then engaged the Emden in one of the first naval battles of World War I, with the German ship running aground on North Keeling Island. During the World War II the Japanese occupied Christmas Island and launched an attack on the Cocos (Keeling) Islands. From March 1942 until August 1945 Christmas Island was a prime staging post and source of phosphate for Japanese industry. The gun emplacement and ammunition bunkers remaining on Christmas Island provide a tangible reminder to residents and visitors of the earlier military threats to the Island.

As external territories of Australia, the IOT are administered by the Australian Government, with state-type services delivered directly by the Commonwealth, through service delivery arrangements with the Western Australian government or by the private sector under contract. Though geographically isolated, the Indian Ocean Territories play an important role in Australia’s northern region. A secure and stable Indian Ocean region is crucial for Australia’s national security and prosperity.

The Australian Government is committed to long-term economic viability, an active population, and strong social fabric in the IOT. As small and geographically isolated islands, the economies of the IOT are vulnerable, and face a number of economic challenges, including a high cost of living, vulnerability to extreme weather events and dependence on a small number of industries (primarily mining and the provision of government services).

The economy of Christmas Island in particular is undergoing a period of transition, with fluctuations in the operating status of the North West Point Immigration Detention Centre and a reduction in phosphate mining expected in the medium-term. Without greater economic diversification, the economies of the IOT are highly susceptible to boom and bust cycles. A fall in employment opportunities each time a large employer leaves the islands has a flow-on effect on the communities. These boom and bust cycles can also have a detrimental effect on the communities.

While there are challenges, opportunities exist to leverage the unique natural environment and cultural heritage of the IOT to diversify the economies and support long-term sustainability. The government is focused on supporting economic growth in northern Australia, including Christmas Island and the Cocos

(Keeling) Islands, through targeted investments in areas of growth and supporting businesses and industry to invest and upscale in the region. Local residents and businesses are focused on diversifying their economy, with a particular focus on tourism and natural assets.

A key government priority for the IOT is supporting economic development through critical investments to assist with improved water security, waste management and trials for innovative agricultural methods to diversify the economy over the coming decades. These measures are directly targeted at addressing identified risks arising from their remote location and environmental threats such as marine plastic debris.

The government is also moving to secure the future of Christmas Island and the Cocos (Keeling) Islands’ marine environments with plans to establish two new marine parks, covering up to 740,000 square km of waters around the IOT. Funding of $5.4m has been provided to support local jobs and economic growth associated with the marine parks. UNIQUE OPPORTUNITIES

The attractive landscapes, rare animal and bird life, and unique cultures of the IOT provide a solid foundation for economic opportunities in the development of the tourism, education and research sectors. The future prosperity of the region is dependent on encouraging innovation and becoming more self-sufficient. While Government investment and funding will continue to play an important part in building a stable economy in the region, it will ultimately be up to the communities of the IOT to seize future opportunities and build a more sustainable, self sufficient economy.

In recent years the Government has delivered significant funding for infrastructure and economic diversification measures. The community is working hard, including through the establishment of a new business association, to take advantage of opportunities created by these investments. I am heartened to see this work ethic and dedication to building stronger and more self-sustaining communities. Let me assure everyone that the government is committed to the longterm viability of both Christmas Island and the Cocos (Keeling) Islands, to ensure the IOT continue to be a flourishing, strong and valued part of Australia.

The Hon Nola Marino MP laying a wreath at the memorial on Christmas Island commemorating HMAS Sydney II, and her crew, during her visit to the Indian Ocean Territories from 27 - 30 August 2019. The memorial marks the location of an unknown soldier. Photographer: Sophie Beeton, Senior Adviser, Territories.