Asia Needs One Big New Institution

Kevin RuddGB sits down with the former Australian premier to discuss the future of Asian stability and the continent’s not-so-automatic stabilizers

GB: Do you foresee military conflict in Asia in the next decade?

KR: We cannot rule out military conflict in Asia in the next decade because there are too many hot spots on the one hand, and an absence of predictable diplomatic control mechanisms on the other. If we look across the whole spread of the region from the Korean Peninsula through to Kashmir, and all points in between, we have ample opportunity for military conflict to occur – that is, ample opportunity for the occurrence of incidents that are difficult to contain diplomatically. This is why we need, as I have long argued, enhanced regional institutions capable of reducing these tensions over time and managing conflicts that might emerge.

GB: Which potential conflict in Asia worries you most?

KR: There are two that involve nuclear weapons. The big one, of course, is on the Korean Peninsula. We have in North Korea a nuclear programme and a regime that is proving increasingly difficult even for China to manage. Second, at the other end of Asia, is the continuation of the Iranian nuclear programme and our inability, thus far, to negotiate an outcome. When we are dealing with the breakout or the potential breakout of nuclear weapons capabilities, we have a huge problem – one compounded by the fact that the world community has perhaps forgotten the monstrously destructive nature of nuclear weapons.

GB: What will China look like 10 years hence? What about Japan?

KR: The next 10 years are an open question. Xi Jinping has a blueprint for the country’s future. By 2023, Beijing wants to have achieved middle income status for the Chinese people. And by 2023 we are likely to see China’s GDP exceeding that of the US in both nominal terms and purchasing power parity terms.

Over the next 10 years, in strategic terms, we will see an increasingly active China right across Asia, seeking to improve its diplomatic operating environment. We will see a continued expansion of China’s military capabilities, but these will still fall far short of those of the US, which maintains an overwhelming strategic margin over China.

As for the Japanese, we understand what Prime Minister Abe and Finance Minister Taro Aso are trying to do economically in terms of reviving the national economy via the three arrows strategy. The international community will be assessing, with deep interest, the capacity of the Japanese to bring about systemic reform in the Japanese economy in order to promote growth beyond that which is the product of temporary fiscal and monetary policy stimulus. Whether Japan succeeds in this systemic reform is an open question. There have, of course, been signs of the economy at last growing. The question is whether Tokyo will bite the bullet in order to genuinely cause a new takeoff in Japanese growth.

GB: What is the current prospect of Chinese-Japanese conflict?

KR: The China-Japan impasse is fundamentally unresolvable because there are such deeply entrenched official positions in Beijing and Tokyo in respect of the status of the disputed islands. We need to be vocal about the reality that a concession by either Beijing or Tokyo on the question of sovereignty would be politically unpalatable in the context of their domestic politics. Unfortunately, there is a real danger of Japan and China entering conflict by miscalculation simply because there is so much military hardware lying around. If a collision were to occur, the political capacity to control escalation would be highly limited, particularly given the nature of national sentiment in each capital against the other.

More encouraging is the fact that over the last six months Japan and China have tried to de-escalate. The number of military, naval and coast guard assets is, on my understanding, smaller now than it once was. There seems to be a mutual calculation to the effect that the chances of an incident occurring – again, through miscalculation, given the sheer quantity of military assets – are reduced to the extent that the volume of military assets, in what is a confined area, is reduced. Note, however, that when I say that the China-Japan impasse is unresolvable, I do not mean to suggest that the bilateral tension is unmanageable.

GB: What is your view of the proposition that Indonesia will, after China and India, be Asia’s third most important country this century?

KR: I have long been bullish on Indonesia. This goes back to when Susilo Bambang Yudhoyono (SBY) assumed the presidency about a decade ago. Indonesia has undergone a democratic transformation. The country’s corruption is not fully under control, but it is certainly not spiralling out of control. Finally, until recently, Indonesia, with its significant natural resources and growing middle class, enjoyed a decade of over six percent economic growth. I do indeed see Indonesia being the third large anchor of the Asian economy. At present, the fourth largest economy in Asia, after China, Japan and India, is Australia. But within the next decade Indonesia will be bigger economically than Australia. And that forward trajectory will continue well into this century.

GB: How would Indonesia behave as a large Asian power? Does it have the psychology of a large power?

KR: Indonesia’s preoccupations have been overwhelmingly domestic in unifying a vast entity consisting of tens of thousands of islands containing over 250 million people into a single functioning nation-state. This is the continuing miracle of Indonesian politics – democratic progress coupled with reasonable economic growth.

In terms of Jakarta’s external orientation, under SBY Indonesia has begun to take upon itself a conspicuous regional and global role. You can see some of this through the ambition of the Bali Democracy Forum. Indonesia is a democracy and a major developing, Muslim country that has served as an exemplar for democratic transformation in the Organization of Islamic Countries (OIC), the G77 and also in the G20. I think that we are going to see the continued gradual emergence of a wider regional view and an increasingly mature global view on the part of the Indonesians, even if there remain challenges on the home front.

GB: How goes Australia’s Asia pivot?

KR: Australia’s engagement with Asia is by now a bipartisan consensus. Twenty years ago that was not the case. Australia is now a member of virtually every single pan-Asian institution. We are members of the East Asia Summit, APEC, the Afghan Regional Forum, and the Asian part of the table of the Asia-Europe Summit. We have been dialogue partners for 40 years with ASEAN, and we are members of the Asian Development Bank at the vice-presidency level. In my view, therefore, the institutional underpinnings of Australian engagement in Asia have been fundamentally established. The country is quite relaxed about that, and that is a good thing.

GB: What are the missing pan-Asian institutions for this century?

KR: We need to develop a robust pan-regional institution that includes all emerging powers in Asia together with an open mandate to deal with political, economic and security questions. I called this the Asia Pacific Community in 2008. In 2010, we took a significant step forward with the US and Russia joining the East Asia Summit.

My argument is quite simple. You take the expanded membership of the East Asia Summit, which includes all 18 major East Asian states, plus India, plus Russia, plus the US. That institution then begins to craft out basic levels of strategic trust, consensus-building, as well as dispute resolution mechanisms. Given the absence of any regional mechanism like the EU in our part of the world, a large part of my own personal diplomacy lay precisely in advocating for such an institution. I continue to advocate for the creation of such an institution to this day.

GB: How would you propose to call this new institution?

KR: The name that I am proposing is Asia Pacific Community.

GB: How important is language to a country’s capacity to pivot meaningfully to Asia?

KR: We are engaging great civilizations in Asia. It is important to convey respect. A key way to convey respect for some of the world’s great civilizations is to spend some time understanding the language and cultures of countries in the region. These countries, in many cases, have a high degree of national pride. These are all very large countries on the block – much larger than ours. If you look at China, Japan, India or Indonesia, we need to get beyond the simple arrogance that English is the global lingua franca. English only really acquired that status after WW2. Prior to that, combinations of French and Latin occupied that status for many hundreds of years longer than English. But Chinese is now the most widely spoken language in the world. So for all these practical reasons, but also because of the need for cultural respect, there is a need for countries such as Canada, Australia and the US to take seriously the languages and cultures of Asia.

GB: Do federations like Australia, Canada and the US have more difficulty effecting pivots – say, Asia pivots – than unitary states?

KR: The virtue of federal arrangements like those in Canada, the US and Australia is that through the principle of competitive federalism, provinces and states can often, within constitutional limits, do what they wish to do. States and provinces can therefore take the lead in mandating that Asian or other languages become part of the school curriculum. Australian states have done a lot of work in this respect over the years.

GB: Australia was touched by the Ukraine crisis this past summer through the downing of Malaysia Airlines Flight 17. How does this affect Canberra’s Asia pivot, and does Australia have any serious strategic capacity in the former Soviet space?

KR: The principal point of Western engagement with the old Soviet Union and today’s Russia has been NATO, for obvious historical reasons, and more recently the EU and also the US via bilateral engagements with the Russian Federation. For Australia, we engage the Russians through institutions like the UN Security Council (Australia has been a non-permanent member for the last two years) and even the East Asia Summit. But the bottom line is that the primary line of engagement has been European-Russian rather than Australian-Russian.

GB: Will Singapore survive this century?

KR: Singapore will change and evolve in response to its strategic circumstances, and will continue to carve out its future this century. What has made Singapore work is simply the energy of its people. It has no national resources other than its human resources. The Singaporeans turned the country from a swamp some 60 years ago – peripheral in the world – to one of the planet’s most important hubs. The operating environment for Singapore will be complicated by the rise of China, but I know that our Singaporean friends are thinking their way through that.

GB: Which leaders in the world today – democratic or non-democratic – are the most forward-looking? And do democratic systems limit the planning function and capacity of political or public leaders?

KR: Publicly nominating political leaders as good, bad or indifferent does not help anyone in any global diplomatic processes. As for specific countries, there are evidently players that in their actions take both national and global interests into account – that is, they are national players and at the same time very invested in the health of the global order. The Scandinavian countries are the first to come to mind in this respect.

As for the second question, you ask whether democracies are hamstrung. The truth is that democracies have a huge capacity not just to legitimize the actions of government in virtue of the way in which governments are elected, but also a great degree of political ballast capable of enduring great political shocks in ways that other forms of government do not enjoy.

It is true, of course, that it is very difficult for democracies to sustain a strategic focus over time if leaders are constantly being buffeted by the reality of electoral politics. But that is where in our various systems of government in Canada, Australia and the UK, there is great virtue in the idea of having a permanent, high-quality, committed civil service that is dedicated to the sustained advancement of particular national policy projects or the prosecution of particular international initiatives.

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Kevin Rudd was Prime Minister of Australia between 2007 and 2010, and also in 2013.

(Photograph: The Canadian Press / Kym Smith)

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