Is Australia Serious About Asia?

FEATURES | March 5, 2013     

Is Australia Serious About AsiaThe good, the bad and the ugly of Canberra’s attempted pivot

Australia’s national identity is at risk of a double bipolar disorder. Its cultural identity is transatlantic, but it is located geographically in Asia-Pacific. Its chief security guarantor is the US, but its biggest trading partner is China. The process of reconciling these twin tensions can be emotionally and intellectually wrenching, resulting in policy incoherence: witness the inconsistent defence and foreign policy white papers periodically coming out of Canberra. A new defence white paper is due this year. And a white paper on Asia, Australia in the Asian Century, was published in October of last year.

Australia’s fortunes are shaped and determined by the broader political, economic and social forces at work around Asia and the Pacific. The historical origins and cultural roots of most of the country’s people are in Europe, its primary strategic alliance is with the US, its primary security focus is Southeast Asia, and its major trading partners are in Northeast Asia. During the Howard years (1996-2007), the dominant mantra was that Australia did not have to choose between history and geography. Now Labor Prime Minister Julia Gillard has emphatically affirmed that Australia’s geography is indeed its destiny. In Australia in the Asian Century, the government sets out 25 national objectives to be met by 2025, with targets ranging from improving trade links and increasing scholarships, to teaching Mandarin, Hindi, Japanese and Bahasa Indonesia to young Australians as priority languages.

For most of Australia’s history as a European settler society, Asia as the ‘other’ was the point of reference for defining Australia as the ‘self.’ Australia’s historical memories and the ideas on which Australian society has been constructed are all European. But Australia is not part of Europe, and its distinctive identity can only be interpreted with reference to its geographical dislocation from Europe at the edges of Asia.

In a lecture at the Australian National University last year, Singapore’s Kishore Mahbubani noted that “[t]he logic of cultural identity cannot” indefinitely “trump hard geopolitical considerations.” In the aggregate, Australia has successfully navigated the gravitational pull of a resurgent Asia with the civilizational pull of European cultural and political heritage. Where in the past Australians fought against their geographic reality in seeking security from Asia in defence, trade and immigration, they have since the 1990s sought security in Asia through cooperative arrangements. Australia’s historical and cultural links to Europe and North America enhance the country’s value to Asian states, and propinquity to Asia increases Australia’s usefulness to other Western states. Multicultural diversity at home underpins the breadth and depth of these relationships abroad. It gives Australia some European and Asian language skills, cross-cultural expertise, and international family and social connections. To many Asians, it is precisely the European heritage of Australia that is most attractive: the rich texture of civil society, the impersonal workings of the law, the respect for – and institutional protection of – human rights, and, to be sure, the transparency and robustness of parliamentary politics.

From the 1950s to the 1980s, the primary focus of Australia’s engagement with Asia was Southeast Asia: managing the independence of Indonesia, the Malayan Emergency, the Malaysian-Indonesian Confrontation, the Indochina wars and refugees, the triumph of communism in Indochina, the consolidation of Southeast Asian identity under the newly created ASEAN, and the rise to middle income prosperity of millions of people in that region. This focus changed at the end of the 1980s, and Ross Garnaut’s report, Australia and the Northeast Asian Ascendancy (1989), guided and shaped Australian policy parameters toward Asia-Pacific through the 1990s. By the end of the last century, Australia stood at the crossroads of its history and geography.

Meanwhile, Asia was experiencing its own massive changes. Until the 18th century, China and India were among the world’s great powers. Europe rode to world dominance through the Industrial Revolution, innovations in transport and communications, and the ideology and practice of imperialism. The eminent Indian economist Deepak Nayyar has shown that from 1870 to 1950, Asia’s per-capita income plummeted from one-half to one-tenth that of the combined per-capita income of Western Europe, North America and Oceania. Asia’s economic output, industrialization and trade have been on the rebound since colonialism ended, and the process accelerated after the end of the Cold War. China’s and India’s future economic potential is increasingly translating into political clout discounted to the present.

The recent US National Intelligence Council quadrennial report on global trends, Global Trends 2030: Alternative Worlds, maps the world out to 2030. It posits that in a radically transformed world, power will be dispersed among states, and diffused from states to informal networks and individuals. The era of general Western ascendance since 1750 – and of specific US ascendance, or Pax Americana, since 1945 – is coming to an end. By 2030, Asia will be bigger in economic size and strategic weight than Europe and the US combined. But the report reminds us that the US will still, by 2030, remain the first among equals, with an unmatched edge in its ability to form coalitions of allies and friends, and to mobilize networks of civil society actors and individuals.

This is the historical and current strategic backdrop against which Australia’s Asia white paper was produced. The paper powerfully maps the magnitude of change across Asia. The staggering scale and pace of change are described as “transformative” for the continent, the world and Australia’s “economy, society and strategic environment.” Asia’s middle class is accurately characterized as expanding in size and growing increasingly wealthy and mobile. The continent is set to become both the world’s largest producer and consumer of goods and services. In drawing a “roadmap” for all of Australia – governments, the private sector and the broader Australian society – the paper points out that Australia has much to offer Asia: top-tier institutions, a skilled and multicultural workforce, an open, productive, robust and resilient economy, a cohesive society, and a growing population.

To profit from the transformations in Asia, Australia is enjoined to become Asia-savvy, build pro-Asian links in all sectors of life – including the creative arts – invest in Asian languages and people-to-people relationships, and promote fairer representation of Asian voices and interests in international organizations. The engagement with Asia is also notably part of domestic policy reforms to enhance Australian productivity and competitiveness, strengthen education and innovation, improve infrastructure, and advance tax and regulatory reforms, as well as broaden and deepen Asia literacy in order to lift average national income from AUD $62,000 today to
AUD $73,000 by 2025.

The strategic complexity and regional flashpoints based on territorial disputes, maritime claims and resource competition are acknowledged, as is the risk of conflict arising from accident and miscalculation. This produces essentially a hedging strategy of deepening US defence links in case the security situation turns dramatically worse, while consolidating commercial relations with Asia and encouraging confidence and trust-building through regional institutions in order to try to ensure that it does not.

The numerous strengths described above notwithstanding, the Gillard white paper has five notable shortcomings. First, Australia’s embrace of Asia is manifestly transactional, not familial: Asia is set to grow economically; this will create a large consumer class; Australia would like the growing middle class to spend its money in Australia and on Australian products. The core question addressed is not: Australia is no longer a European transplant – the oddity on the continent – but an inalienable member of the Asian family, and so how do we give this reality deeper meaning in our daily lives? Instead, the core question is: given that Asia is increasingly prosperous, how can we position ourselves to exploit this prosperity, and indeed to ensure that Australia remains a high-skill, high-wage economy? In other words, the tyranny of distance is to be displaced by profits extracted on the strength of relative proximity.

But economic geography by itself is not enough to deal with the cultural identity conundrum at the heart of Australia’s Asia pivot. And the white paper offers no deep reflections on Australia’s place in Asia-Pacific, nor does it provide a coherent, cohesive and compelling narrative that can anchor Australia intellectually, culturally and emotionally in Asia.

Second, the dominance of trade and economics in structuring the Australia-Asia relationship is reinforced in the white paper by the cold language of business school metrics. (Tellingly, the chair of the task force that wrote the white paper is the former head of the Australian Department of the Treasury – something that also supports the aforementioned impression that the pivot to Asia is purely transactional.) There are timetabled and measurable performance indicators across the board. Moreover, entrapment by business school boosterism means that major potential fault lines are ignored and discounted. For understandable political reasons, the risks of economic slowdown are understated. How much longer is the growing divergence between continuing political centralism and expanding economic freedoms sustainable in China? What of Japan’s shrinking and ageing population, and China’s own greying work force? What of the structural and political obstacles to India’s economic reforms, or of the unresolved Korean partition? Straight line projections of growth trends are as flawed as they might be unavoidable: India, for example, has an unmatched capacity to look opportunity firmly in the eye, turn around, and walk off resolutely in the opposite direction.

Third, the paper fails to pay full homage to Asian-Australians – to the point of disrespecting them. The Asianization of Australia is evidenced by the profiles of incoming migrants and tourists, with Indians and Chinese increasingly displacing traditional arrivals. The vibrance of contemporary Australia owes something to the presence of Asians in the demographic mix; it would be nice to see some of this reflected in public life. (The contrast between the prominent role of overachieving Asians in Canada and their invisibility in Australian public life is striking.) For a country still struggling to overcome the legacy of a White Australia policy, this is especially unfortunate. That the white paper task force did not include a single Asian-Australian is further proof of how far Australia still has to travel before reaching ‘Destination Asia.’

Fourth, Mahbubani argues that ASEAN suffers from benign neglect in the white paper. To be sure, ASEAN has enhanced Australian security by keeping Southeast Asia at peace, keeping Asian powers like China and India at arm’s length, and increasing multilateral webs of cooperation across the territory of the continent. Yet the criticism might be overstated. ASEAN has been ineffectual in addressing the occasional minor skirmishes involving China, Taiwan, Japan, South Korea, Vietnam and the Philippines. The ‘ASEAN way’ has been resistant to ceding authority from member states to regional organizations. On top of conflicting territorial claims, Asian states have a long history of uneasy relationships, and tend to have exceptionally long memories of historical slights and perceived grievances. The smaller countries might see in the regional institutions vehicles for cooperation; the big Asian powers, however, have often treated them as theatres of competition.

Fifth, there is a serious risk of slippage between ambition and delivery. It is disconcerting to read of plans to expand Australia’s diplomatic footprint to parts of Asia against the practical backdrop of a continuing drawdown of resources to the chronically under-funded Australian foreign ministry, and in the recent context of non-negligible defence cuts.

Asia’s destiny will arguably be shaped by China, India and Japan. (Indonesia, at almost 250 million people, also increasingly sees itself as a major Asian and even global player.) China’s billion-plus population and growing strategic power and wealth set the overarching strategic context for regional security and economic relations. The other key strategic parameters within which regional countries must calibrate their foreign and security policies include India’s rising power and wealth (shadowing China’s by a dozen years), Japan’s prolonged economic slump and dysfunctional politics, the US promise of a pivot back to Asia, and ASEAN’s position as the only standing regional organization that can facilitate and underwrite security dialogues in Asia-Pacific.

Australia’s key bilateral relations in Asia, not surprisingly, are with the continent’s major powers. Four propositions are worth recording in this regard. First, China has no historical, philosophical or literary tradition or discourse of acting as a great power in a system of great powers. Rather, its inheritance is that of the Middle Kingdom, with tributaries accepting its suzerainty and paying tribute in return for not being attacked. Second, the unique feature of the contemporary international transition is the simultaneity of the rise-and-decline dynamic within the China-US dyad on a global level, and in Asia within the China-India dyad. Third, China is a continental power whose maritime interests and activities are ever-growing. Fourth, for China, matters of status and identity trump calculations of economic gain and pain.

Plainly, ‘they’ do not think like ‘us.’ Many Asians may be too busy making money to think of making war. But not all Asians privilege money-making over wounds to national pride. Analysts’ neglect of politics in the belief that geo-economics dictates geopolitics is patently strange considering the clear evidence that political risk has been driving world financial markets for the last several years. It would therefore be foolish to underestimate the power of raw politics to inflame nationalist passions – even to the point of destructive conflagration.

Australia’s relations with China are conditioned by several verities. There has been a massive expansion in two-way trade. China is the main market for the commodities boom that has underpinned Australia’s continued prosperity and economic resilience through the global financial crisis since 2008. The relative US decline under the impact of long-term structural changes, as well as the financial crisis, heightens the impact of the changing balance of importance between China and the US for Australia (and all other Asians). As intimated, Australia is unique in the acuteness of the disconnect between its largest trading partner (China) and its chief security guarantor (the US). The unease with this disconnect in Canberra and Washington alike is deepened by China’s sustained military modernization and expansion, and also by the accompanying rise in regional tensions.

China is dependent no longer on US power (to offset superior Soviet power), markets, managerial know-how and technology. It has become notably more assertive in its territorial disputes in the East and South China Seas, through which more than half of Australia’s trade passes. An outbreak of armed conflict to Australia’s north would destabilize its strategic backyard, while restrictions on US naval presence and movement in the Seas would degrade the strategic balance in the Pacific – to Australia’s net disadvantage.

Conversely, an Australian policy of containment would become self-fulfilling by provoking China’s hostility. Former Prime Minister Malcolm Fraser and others today actively worry that, under the rhetorical rubric of a strategic pivot to Asia (a pivot that has to date had disproportionate military trappings), and with Australian complicity – if not collusion – Washington is turning China into an enemy that Australia does not need, and that China does not wish to be.

There is more historical depth and texture to the Australia-India bilateral relationship than commonly appreciated, encompassing military forces fighting alongside one another in the two world wars, trade, government and people-to-people relations, including through a shared erstwhile colonial link to Britain. In addition to the persistent Non-Proliferation Treaty (NPT) irritant in general, and the ban on Australian uranium sales to India in particular, problems in the recent past between Australia and India have included on- and off-field controversies in cricket, the safety and welfare of Indian students, and occasional assaults on Australian tourists and missionaries in India. To be sure, the noisy media in both countries can inflame popular passions and prejudices and complicate political relations.

India’s attraction to Australia has grown in the context of their diplomatic approaches to shared major global problems and challenges – as policy and operational partners in managing the global commons of the high seas (India has a longstanding and prominent role in combatting piracy in the Gulf of Aden and the Strait of Malacca); on climate change; on disaster relief (as in the 2004 tsunami); and in fighting international terrorism and Islamic fundamentalism. Australia also greatly values India as a strategic counterweight to China; as a market for primary resources and services; and as a growing source of tourists, immigrants and investments. The two countries have a common strategic interest in a stable Indo-Pacific Asia that links them to Indonesia and South Africa around the Indian Ocean rim. Bref, Australia’s abundant natural resources and its word-class service sector, combined with its small population, complement India’s billion-plus population, youthful demographic profile, growing middle class, vibrant private sector, and voracious appetite for energy and infrastructure development.

Institutional memory as a key carrier of grievances within government bureaucracies is an insufficiently understood and theorized phenomenon. In Canada, two generations of officials were soured on India: first, in the Indochina control commissions that India chaired from the mid-1950s to the early 1970s; and second, by India’s nuclear explosion in 1974 – an explosion that betrayed the trust on which rested Canada’s original assistance in the development of India’s nuclear power sector. Similarly, Peter Varghese, Australia’s new foreign secretary, argues that, even if relations have now improved, the history of trade and non-proliferation differences between Canberra and New Delhi “soured a generation of Australian and Indian diplomats toward each other.” In this sense, the decision, late last year, by the Labor Party to lift the ban on uranium exports to India removes a major impediment to the elevation of the bilateral relationship to a priority level.

Australia and Japan, among a small number of full-fledged industrial liberal democracies in Asia-Pacific, are the northern and southern anchors of the Western alliance system. Within the alliance, both pursue ‘good international citizenship’ in international peacekeeping, human rights, foreign aid and so on. In the last few decades, Australia and Japan have continually reinvigorated and reinterpreted their separate military alliances with the US, and also extended the scope of their own bilateral military relationship.

Like the nascent but growing Australia-India relationship, the strengthening security cooperation between Australia and Japan might be seen by some observers as anti-Chinese. Such a perception would be erroneous. Neither Australia nor Japan has given any indication of interest in a formal military alliance. From Canberra’s perspective, deepening the bilateral security relationship with Tokyo will strengthen overall regional security. Japan could well be an anchor of regional stability and, beyond that, provide practical contributions to the promotion of regional peace and prosperity. The alternative – especially after the 2012 general election – is that Japan retreats inward, turns to the hard right, remilitarizes, and perhaps even acquires nuclear weapons. The choice between this scenario and that of like-minded and trusted friends helping Japan to acquire the self-confidence and poise to play a more ‘normal’ role of regional heavyweight should be uncontroversial.

For reasons of geography and demography, Indonesia is no less important to Australia than the big three in Asia. It is the largest and most populous country in Australia’s immediate neighbourhood, and occupies a strategic position astride its northern approaches. Its GDP has overtaken that of Australia in purchasing power parity terms, and its population is more than 10 times bigger. Links between Australia and Indonesia have been growing in volume and range, encompassing technical, economic, cultural, defence and educational exchanges. After a decade of economic and social volatility and post-Suharto political consolidation, the Indonesia relationship requires careful management, as well as a new governance construct to underpin the breadth of necessary consultation and cooperation. Still, it is not clear that the present Australian government has been as attentive and sensitive to Indonesian concerns and interests as it should be.

Former Australian army chief Peter Leahy argues that Australians have been xenophobic in imagining threats emanating from the sea-air gap to their north. In fact, this is “a land-sea-air-land bridge” (not a “gap”) that needs reinforcing, because “[a] secure northern border would be firmly in Australia’s national interests” – just as a secure southern border would be in Indonesia’s national interests. Indonesia has successfully made the transition from dictatorship to democracy, is engaged in the momentous effort to balance Islam with modernization, has strong growth prospects, and is a leader in ASEAN. It also sees itself playing a bridging role between ASEAN and the rest of the world. (It is the only member of ASEAN to have joined Australia, China, India, Japan and South Korea in the G20.) In addition, according to Varghese, Australia, India and Indonesia are moving to establish a troika within the larger configuration of Indian Ocean countries.

In the end, Australia needs and will continue to need Asia more than Asia will need Australia. The burden of adjustment falls unevenly in the Australia-Asia relationship. As an actor of modest means and influence, Australia can but try to mould the contours of great-power economic and security interactions – hence the twin emphases in Australian foreign policy on coalition-building and concentration of efforts on areas and issues where Australia can make a difference. Australia is so isolated geographically that it cannot be isolationist in foreign policy. Regional engagement is the solution to this dilemma – the path to salvation from economic marginalization, political loneliness and, ultimately, strategic irrelevance.

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Ramesh Thakur is Director of the Centre for Nuclear Non-Proliferation and Disarmament and Professor in the Crawford School of Public Policy, Australian National University. He is the co-author of The Group of Twenty (G20), and co-editor of The Oxford Handbook of Modern Diplomacy.

(Illustration: Jean Tuttle)

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