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Can a new Pacific climate fund deliver where global efforts have previously failed? (Carolyn Van Houten/The Washington Post via Getty Images)

Pacific Islands Forum 2026: What Lowy’s Pacific team will be watching

The China challenge, climate crisis, Taiwan ties, West Papua – these are the fault lines, but there are opportunities too.

Oliver Nobetau,Connor Graham,Sarah Thompson,Serena Sasingian

27 August 20265 min read

The 55th Pacific Islands Forum (PIF) Leaders Meeting will be held in Palau from 31 August–4 September. Amid new military alliances, a global fuel crisis, maritime disputes, missile tests, disasters, votes of no confidence and a “super” El Niño – here’s what our Pacific experts will be watching for next week.

Oliver Nobetau, Director Pacific Islands Program

The consensus-based approach to decision-making, the bedrock of the “Pacific Way”, is being tested. In the aftermath of China’s ballistic missile test, which splashed down in the Pacific, foreign ministers failed to agree a joint statement (Opens in new window) at their Suva meeting in August, instead folding softer language in their own communique (Opens in new window), not naming China directly and leaving it to the Leaders’ Statement in Palau for resolution. If that kind of stall continues – whether on the missile statement, or the push for funded, binding climate commitments under the Pacific Resilience Facility – it may be time to be candid about the practical limits of regionalism. Some matters might be better left in the realm of individual sovereign choice than forced to seek a consensus that doesn’t exist.

The answer doesn’t lie in more joint political statements but a tangible plan of action, which is meant to be one of themes of the talks this year.

A forum of 18 leaders needs decisive leadership, and Palau’s President Surangel Whipps Jr inherits the Chair at a moment no one will envy. The region is already feeling the pinch of El Niño. Some countries have declared drought while others are being rained out. PNG is facing extraordinary frosts that will worsen existing food security (Opens in new window) and clean water access problems. All this on top of the energy shocks flowing from the Iran war (Opens in new window). The answer doesn’t lie in more joint political statements but a tangible plan of action, which is meant to be one of themes of the talks this year.
Another theme is building internal economic resilience. Business delegations have been travelling within the Pacific (Opens in new window), primarily in Melanesia, as a positive sign. Melanesia’s larger economies can play a larger role by investing outward, to meaningfully strengthen the wider Pacific.

Surangel S. Whipps Jr., President of Palau, addresses the Climate Summit 2025 (Manuel Elías/UN Photo)

Connor Graham, Research Fellow

Taiwan will rejoin the PIF Leaders Meeting this year as a development partner after they (and all non-PIF members) were excluded from last year’s meeting (Opens in new window) in Solomon Islands. Whipps Jr has recently voiced his discontent with China’s unwelcome maritime incursions (Opens in new window) into his country’s waters – Palau is one of three Pacific nations with diplomatic ties to Taiwan – and accused Beijing of attempts at coercion (Opens in new window). Last year, the power of the host was used to shut Taiwan out under pressure from Beijing; this year, the same power is being wielded to welcome Taiwan back in defiance of pressure from Beijing.
Solomon Islands Prime Minister Matthew Wale has championed (Opens in new window) a Pacific-wide security agreement, and will no doubt bring this to the table in Palau. Questions remain about this hypothetical agreement, including concerns around sovereignty and substance. Australia has expressed interest in the concept but should be cautious not to overplay its enthusiasm before wider Pacific buy-in, lest it be accused (again (Opens in new window)) of putting geopolitical ambition ahead of local priorities.
The prospect of commercial deep-sea mining in the Pacific presents an existential challenge to the PIF (Opens in new window), pitting environment against economy. Palau – staunch anti-mining advocates – will host four PIF members who have engaged in deep-sea mining exploration activities, as well as dialogue partners China and the United States who are leading the race to the Pacific seabed. Will the Forum use this chance to find common ground before it’s too late?

A police patrol car provided with aid from the Chinese government in Honiara, Solomon Islands (Saeed Khan/AFP via Getty Images)

Sarah Thompson, Project Director Aus-PNG Network

Whipps Jr presented a proposal (Opens in new window) for a Pacific transition to 100% renewable energy at the Honiara meeting. Now he is PIF chair, the Pacific’s renewable transition is likely to feature again, but this time, with greater urgency (Opens in new window). Shortages and surging fuel costs due to the closure of the Strait of Hormuz have highlighted the Pacific dependence on imported fossil fuel. The need for secure and more affordable energy sources is only growing. Renewed calls are being made for a Pacific Energy Commissioner (Opens in new window).
Indigenous knowledge (Opens in new window) has long guided how Pacific communities adapt to environmental change, but rising seas and increasingly severe weather are outpacing traditional resilience. Climate finance (Opens in new window) offers a chance to bring this knowledge to bear alongside climate science, yet global climate funds have often been insufficient and hard to access at the community level. The Pacific Resilience Facility (Opens in new window), a Pacific owned and managed fund, was designed to address this gap for Pacific communities. Pacific Leaders will call for pilot project proposals in Palau, marking the start of the fund’s first real test: can it deliver where global efforts have previously failed the Pacific?

Vanuatu’s territorial dispute with France has been largely unaddressed by the Forum.

Pacific nations have pursued outstanding maritime boundary delimitations with renewed commitment since declarations in 2021 and 2023 about preserving maritime zones (Opens in new window) and statehood (Opens in new window). The progress has been welcomed by Forum foreign ministers (Opens in new window), and next week will see the finalisation of a PNG and Solomon Islands’ shared boundary treaty (Opens in new window). Yet despite the region’s commitment to safeguarding maritime boundaries, Vanuatu’s territorial dispute (Opens in new window) with France has been largely unaddressed by the Forum. This silence is particularly notable given PIF’s previous involvement (Opens in new window) in New Caledonia’s independence referendums and Vanuatu’s intention to elevate the dispute to an international court. Will Matthew and Hunter Islands be on the cards at PIF?

Serena Sasingian, FDC Pacific Research Fellow

A big step forward in online connectivity this month saw all Forum members connected to the global undersea data cable network (Opens in new window). The next question is how the region captures the full development and economic value of this infrastructure. The Lagatoi Declaration signed in 2023 (Opens in new window) has identified six priority areas for implementation, from infrastructure to innovation, skills and security. In Honiara last year, leaders endorsed the Digital Transformation Action Plan and Governance Framework (Opens in new window). What progress has been made on its implementation at a country level? How will Pacific countries equip their growing youth populations with the digital skills and safeguards needed to fully participate in the digital economy?
Indonesia is an ever more active development partner for Pacific countries, and a PIF Dialogue Partner. While the Forum recognises Indonesia’s sovereignty over West Papua (Opens in new window), human rights concerns remain. In 2025, PIF leaders asked the Secretariat to work towards sending a Forum Leaders’ Envoys visit to West Papua in 2026. What is the status of the visit, and will it be raised in Palau? PNG Foreign Minister Justin Tkatchenko says West Papua is likely to be discussed (Opens in new window). Progress on these outstanding actions would help build greater confidence between PIF members and Indonesia.

About the authors

Oliver Nobetau

Oliver (Oli) Nobetau is Pacific Islands Program Director at the Lowy Institute.

Connor Graham

Connor Graham is a Research Fellow in the Pacific Islands Program at the Lowy Institute.

Sarah Thompson

Sarah Thompson is a Research Associate in the Pacific Islands Program and the Project Director of the Australia–Papua New Guinea Network (Opens in new window) at the Lowy Institute.

Serena Sasingian

Serena Sasingian is the FDC Pacific Research Fellow at the Lowy Institute, with more than 15 years of experience in development and public policy across government, private, and non-profit sectors.

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Oliver Nobetau, Director Pacific Islands Program

The consensus-based approach to decision-making, the bedrock of the “Pacific Way”, is being tested. In the aftermath of China’s ballistic missile test, which splashed down in the Pacific, foreign ministers failed to agree a joint statement at their Suva meeting in August, instead folding softer language in their own communique, not naming China directly and leaving it to the Leaders’ Statement in Palau for resolution. If that kind of stall continues – whether on the missile statement, or the push for funded, binding climate commitments under the Pacific Resilience Facility – it may be time to be candid about the practical limits of regionalism. Some matters might be better left in the realm of individual sovereign choice than forced to seek a consensus that doesn’t exist.

A forum of 18 leaders needs decisive leadership, and Palau’s President Surangel Whipps Jr inherits the Chair at a moment no one will envy. The region is already feeling the pinch of El Niño. Some countries have declared drought while others are being rained out. PNG is facing extraordinary frosts that will worsen existing food security (Opens in new window) and clean water access problems. All this on top of the energy shocks flowing from the Iran war (Opens in new window). The answer doesn’t lie in more joint political statements but a tangible plan of action, which is meant to be one of themes of the talks this year.
Another theme is building internal economic resilience. Business delegations have been travelling within the Pacific (Opens in new window), primarily in Melanesia, as a positive sign. Melanesia’s larger economies can play a larger role by investing outward, to meaningfully strengthen the wider Pacific.

Connor Graham, Research Fellow

Taiwan will rejoin the PIF Leaders Meeting this year as a development partner after they (and all non-PIF members) were excluded from last year’s meeting in Solomon Islands. Whipps Jr has recently voiced his discontent with China’s unwelcome maritime incursions into his country’s waters – Palau is one of three Pacific nations with diplomatic ties to Taiwan – and accused Beijing of attempts at coercion. Last year, the power of the host was used to shut Taiwan out under pressure from Beijing; this year, the same power is being wielded to welcome Taiwan back in defiance of pressure from Beijing.

Solomon Islands Prime Minister Matthew Wale has championed a Pacific-wide security agreement, and will no doubt bring this to the table in Palau. Questions remain about this hypothetical agreement, including concerns around sovereignty and substance. Australia has expressed interest in the concept but should be cautious not to overplay its enthusiasm before wider Pacific buy-in, lest it be accused (again) of putting geopolitical ambition ahead of local priorities.

The prospect of commercial deep-sea mining in the Pacific presents an existential challenge to the PIF, pitting environment against economy. Palau – staunch anti-mining advocates – will host four PIF members who have engaged in deep-sea mining exploration activities, as well as dialogue partners China and the United States who are leading the race to the Pacific seabed. Will the Forum use this chance to find common ground before it’s too late?

Sarah Thompson, Project Director Aus-PNG Network

Whipps Jr presented a proposal for a Pacific transition to 100% renewable energy at the Honiara meeting. Now he is PIF chair, the Pacific’s renewable transition is likely to feature again, but this time, with greater urgency. Shortages and surging fuel costs due to the closure of the Strait of Hormuz have highlighted the Pacific dependence on imported fossil fuel. The need for secure and more affordable energy sources is only growing. Renewed calls are being made for a Pacific Energy Commissioner.

Indigenous knowledge has long guided how Pacific communities adapt to environmental change, but rising seas and increasingly severe weather are outpacing traditional resilience. Climate finance offers a chance to bring this knowledge to bear alongside climate science, yet global climate funds have often been insufficient and hard to access at the community level. The Pacific Resilience Facility, a Pacific owned and managed fund, was designed to address this gap for Pacific communities. Pacific Leaders will call for pilot project proposals in Palau, marking the start of the fund’s first real test: can it deliver where global efforts have previously failed the Pacific?

Serena Sasingian, FDC Pacific Research Fellow

A big step forward in online connectivity this month saw all Forum members connected to the global undersea data cable network. The next question is how the region captures the full development and economic value of this infrastructure. The Lagatoi Declaration signed in 2023 has identified six priority areas for implementation, from infrastructure to innovation, skills and security. In Honiara last year, leaders endorsed the Digital Transformation Action Plan and Governance Framework. What progress has been made on its implementation at a country level? How will Pacific countries equip their growing youth populations with the digital skills and safeguards needed to fully participate in the digital economy?

Indonesia is an ever more active development partner for Pacific countries, and a PIF Dialogue Partner. While the Forum recognises Indonesia’s sovereignty over West Papua, human rights concerns remain. In 2025, PIF leaders asked the Secretariat to work towards sending a Forum Leaders’ Envoys visit to West Papua in 2026. What is the status of the visit, and will it be raised in Palau? PNG Foreign Minister Justin Tkatchenko says West Papua is likely to be discussed. Progress on these outstanding actions would help build greater confidence between PIF members and Indonesia.

Pacific Islands Forum 2026: What Lowy’s Pacific team will be watching

Oliver Nobetau, Director Pacific Islands Program

Connor Graham, Research Fellow

Sarah Thompson, Project Director Aus-PNG Network

Serena Sasingian, FDC Pacific Research Fellow

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Oliver Nobetau, Director Pacific Islands Program

Connor Graham, Research Fellow

Sarah Thompson, Project Director Aus-PNG Network

Serena Sasingian, FDC Pacific Research Fellow

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The donor-dependency trap in multilateral finance

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