Australia's Asian Future

Address by Professor the Hon Gareth Evans, Professorial Fellow at the University of Melbourne, Chancellor of the Australian National University, President Emeritus International Crisis Group, to the Australian Club's International Table, Melbourne, 16 September 2010

The story of Australia’s relationship with Asia for most of our existence has been one of tension between our history and our geography, with history – the perception of ourselves as a transplanted European outpost – very much in the ascendant until the 1970s and 1980s, when the reality finally struck home that this was the region with which we needed to primarily engage to guarantee our prosperity; in which we had to find our security, with others in the region and not against them; and through engagement with which at a personal, social and cultural level we could much enrich our national life.

There have been some bumps and lurches along the way in the consolidation of this perception, with the Howard Government in its early years being much more inclined to find comfort in the old European and North American relationships rather than the newer neighbouring ones – and Tony Abbott initially echoing this in his talk a few months ago about our future lying with the ‘Anglosphere’. But the wheel had fully turned by the latter part of the Howard Government’s term, and it’s not very likely that we’ll hear any more of that ‘A’ word from the current Coalition leader.

Some opinion polls indicate some continuing uncertainty about where exactly Australia does fit in the world, especially the Lowy Institute’s 2010 Survey, with roughly one third each of respondents opting, respectively, for us being part of ‘Asia’, ‘the Pacific’ and ‘not really part of any region’ (which last choice can I guess be construed as either a very globalist outlook or very narrowly national one). But it clearly isn’t Europe – with only 5 per cent of respondents identifying that way. I suspect that, if pushed to a choice, the overwhelming majority of Australians would identify as part of the ‘Asia Pacific’, seeing us as comfortably glued economically to North East Asia, physically to South East Asia and the South Pacific, and in security terms to the US.

But nothing is ever static in international relations: countries rise and fall; relationships wax and wane; the tectonic plates shift. And they are certainly shifting now, with the rise of China much more rapidly than almost anyone had predicted, and bringing in its wake many new uncertainties. What has been a very relaxed coming of age for Australia as a committed and accepted partner in our own geographic slice of the world may be about to become significantly less relaxed.

If we are going to be able to be as comfortable about our place in the region over the next 30 or 40 years as we have learned to be in the past, it seems to me that there are four basic challenges to which we need to sensibly respond.

Challenge 1: Get right, and keep right, our relationship with Indonesia

We have been too insouciant for too long about nurturing our relationship with our nearest neighbour – which most people seem to forget is the fourth largest country, and largest Islamic country, in the world, as well as being a highly desirable friend and ally to have given its status as a huge potential bulwark against potential security threats from further north.

One of the many enduring mysteries of Australian public policy is why Indonesia simply hasn’t (with only a few honourable exceptions) attracted the same level of attention, understanding, and sustained high level commitment from our political leaders that other Asian countries have received, and which it so manifestly deserves. We all know how political, press and public preoccupation has been almost wholly dominated over the years by irritants and negatives like East Timor, Bali bombers, drug smugglers, and boat people.

As Bruce Grant and I wrote back in 1995 in our book on Australia’s Foreign Relations:

Australia…has always acknowledged the importance of Indonesia, but developed more substantial links in SEA with Singapore and Malaysia. Economically the focus was overwhelmingly on Japan. After 1972 Australia’s enthusiasm was directed towards establishing a substantial political and economic relationship with China…The relations that we went out of our way to cultivate in Asia always seemed to be with other countries.

If I were writing that now, I’m not sure that I’d be able to say anything very different.

As newly minted foreign ministers together in 1988, Ali Alatas and I pledged to add ballast to a relationship which until then had conspicuously lacked it, and I think in a number of ways we succeeded, not only in strengthening some bilateral filaments, but especially in the diplomacy we did together on Cambodia and the development of regional economic and security architecture.

But if you look for that ballast today you have to work hard to find it. One example of what I am concerned about is overseas student enrolments at all levels in Australia. As our next door neighbour and with an increasingly outward looking population of over 240 million one would have thought Indonesia would rank very high, and be the subject of a huge amount of offshore recruitment activity: but last year saw Indonesian students commencements at just 2.5% of the national total, ranking not only after China and India, but Korea, Thailand, Vietnam, Nepal, Malaysia – and Brazil as well!

I suspect that a big part of the reason why a multi-dimensional relationship hasn’t really taken off, at least on the Australian side, is that old stereotypical habits of thinking about Indonesia haven’t really changed very much – and that it is still thought of as military-dominated, authoritarian, undemocratic, hostage to Islamic terrorist fortune, and with an exotic institutional-governance culture about as unfamiliar and unrecognisable in an Australia context as a Balinese funeral. The short point to make is that stereotype is completely outdated: there has occurred a fundamental democratic transformation, which is in the process of fundamentally changing the old governance culture, and which it is critical now that we and the rest of the world recognise, applaud, and do our best to help consolidate.

Challenge 2: Get right our relationship with India, recognising that the Asia Pacific is gradually becoming the Indo Pacific

The rise of India is becoming as visibly important a phenomenon as that of China, but this has so far been insufficiently noticed by global policymakers, and is only slowly dawning on our own very East coast-oriented commentariat. Trade volumes between East Asia and South and West Asia now far outweigh those across the Pacific, and are growing dramatically. A lot of that, true, is Gulf oil fuelling China’s growth, but a lot of it is also burgeoning bilateral trade between the two giants, and the overall trend is unmistakeable. And there is an unmistakeable military build-up occurring by both major powers, reflecting the growing extent of their maritime interests in particular.

There is more for Australia to be excited than alarmed about in this development. Just as South East Asia becomes more important as the geographic hub for most physical communication between the North East and South West, Australia also becomes significantly closer to the action. Australian businesses are certainly starting to recognise that the economic potential of India for us is of the same order of magnitude as that with China, but it has taken a long time for policymakers and publics generally to get their heads past the stereotypical three C’s: cricket, curry and the Commonwealth. It’s more than time that we did.

Challenge 3: Avoid a zero-sum game developing in our relations with China and the US

In his recently published Quarterly Essay ANU Professor Hugh White has opened up an uncomfortable debate – but one we need to have – about whether it is reasonable to assume that Australia can go on enjoying indefinitely a hugely prosperous economic relationship with China, and a hugely reassuring security relationship with the US, in an environment where the tectonic plates really are shifting, and it cannot be assumed that China will continue to recognize – as it becomes over time economically dominant – the primacy of US power.

White’s basic point is that while China is much more likely to seek a balance of power – or 19th century Europe-type ‘concert of powers’ – in the broader Asia of the future than to try to impose any harsh hegemony backed by military force, or even the kind of ‘soft’ hegemony imposed by the US on Latin America in the past, it will only be able to do so if the US recognises it as a genuine equal.

He argues that the US has three basic choices in responding to China’s inevitable further rise: withdraw from Asia (which it is extremely unlikely to do), compete with it for primacy (which runs a very serious risk of ultimately generating conflict) or sharing power with China (which it has so far been reluctant to do, but needs to, with support and encouragement from its allies like Australia).

There is much that one can argue about in White’s thesis, especially some of his detailed description of what it would mean in practice for the US to deal with China as an equal, which reads in places less than it should like peer respect and more than it should like kowtowing abdication. My own view is that, with the right mindset of ultimate mutual respect, and with right institutional machinery in place, both bilateral and multilateral, there is plenty of scope for the accommodation, after muscular debate, of different interests and worldviews.

But that said, the crude vitriol that has been poured on White by some commentators is wholly unjustified. He is right to open up the debate, and his description of the policy choices that are realistically going to be there for the major players – and ourselves – is broadly accurate. We just cannot assume that those hard choices will all go away.

Challenge 4: Develop effective regional economic and security dialogue and cooperation architecture

The environment I have described, and the issues that are emerging over the years ahead, make it imperative that we work as hard as we can to put in place regional policy-making architecture that actually works. There are four main reasons for doing so:

– First, the point I have just been making: no power relationships remain static for very long: the wheels turn. Shocks are less likely, peaceful accommodation to new power realities is more manageable, and stability is more sustainable, if close and confident personal relationships can be built between regional leaders.

– Many contemporary problems are simply beyond the capacity of single countries, however powerful, to resolve unilaterally: terrorism, maritime security, arms control, drug and people trafficking, climate change, health pandemics, refugee management, and some major trade and financial imbalances all need cooperative and collective action. Global level responses may be optimal, but problems which are primarily regional in scope and character are likely to be better dealt with at that level, given limitations of time, attention, commitment and resources at the global level.

–Collective action beats unilateral action almost every time. Unilaterally volunteered actions can make an important contribution to problem solving, but unilaterally imposed solutions, even if possible, generate resentment and stress, are inherently more fragile than cooperatively agreed ones, and very susceptible to changes in underlying power balances.

– Multilateral action beats bilateral action most of the time. Some problems may appear capable of bilateral resolution, but are much better resolved in more multilateral framework: e.g. free trade agreements, and arms control and disarmament agreements.

In the Asia Pacific region, broadly defined, substantial efforts have been made in past to build regional economic and security architecture, most obviously with the creation of APEC in 1989 and the ASEAN Regional Forum (ARF) not long afterwards. There has been much additional activity in the form, especially in the form of ASEAN+ summits and ministerial meetings, and most recently with the emerging East Asia Summit (EAS) process, initiated in 2005, involving meetings held after the ASEAN leaders’ meetings of the ASEAN 10 with the North East Asian 3 (China, Japan and ROK) plus India, Australia and New Zealand). There have as well been varyingly active roles played in other sub-regional and cross cutting organizations like ASEAN itself, SAARC, and the SCO and CSTO.

But there are still obvious basic gaps in the structural architecture for Asia Pacific dialogue and cooperation, three in particular:

– There is no security forum bringing all key players together at leaders level (ARF is ministerial).
– The key economic forum – APEC – does not include India.
– The only forum with potential for broad-ranging dialogue on all major policy issues, security, economic, and broader socio-poliitical – EAS – does not presently include all the relevant players, namely the US and Russia.

These are the perceptions which lay behind the proposal announced by Australian Prime Minister Kevin Rudd in mid-2008 to create an ‘Asia Pacific Community’, which set a major debate running over the last two years. The Australian proposal generated quite a lot of controversy, and looking back, some of criticisms that were directed at the Rudd proposal – at least in the way it was originally formulated – were not entirely unreasonable:

–The public launch could have been preceded by much more prior consultation (even though express purpose was to start a debate, not produce a concluded proposal for endorsement).

– The use of the ‘Community’ word - even with small ‘c’ – and the reference to ‘by 2020’ rather than some earlier date, made the initial proposal sound more grandly ambitious – even EU-like – than it ever actually was.

–There could have been more emphasis from the outset, on the achievability of the desired architecture by the evolution of existing institutions rather than the creation of new ones.

– And there could have been acknowledged more clearly from the outset the necessary centrality in any such institutional architecture of the ASEAN countries. That is not the same as automatically accepting a dominant ‘driving seat’ role for ASEAN: the other major non-ASEAN countries are bound to want their own turns at the wheel. But it is a matter of recognising its geographical status at the hub of the entire region, the stabilizing role it has played in its own traditionally volatile area, and the historic role it has played in encouraging wider regional cooperation. And there is some inherent utility in having at least some smaller-country policy voices in the mix.

There is now every sign that, very much as a response to Australian-initiated debate (but also with some momentum contributed by the parallel Japanese promotion of an ‘East Asia Community’, itself never very clearly defined but responding to some of the same concerns as the Australian proposal), there will in fact shortly be in place the dialogue and policy cooperation mechanism that the Asia Pacific region needs.

In July, after the US made clear that it would welcome participation in the East Asia Summit process, the ASEAN Foreign Ministers invited the US and Russia to attend the 2011 EAS in Indonesia: this is expected to be endorsed by the ASEAN leaders in October and supported by the other participating countries.

So if things go according to plan, we will have in place from next year an annual meeting of leaders from all the key broader Asia-Pacific region countries - ASEAN, China-Japan-ROK, India, Australia-New Zealand, and the US and Russia, which is able to debate in free-ranging way all the key economic, security and strategic political issues (including the environment) that will be crucial to our common future. This is exactly what Australia had in mind from the outset as the core unmet regional institutional need, and we will be delighted if this indeed proves to be the outcome.

It would obviously be highly desirable if over time this leaders meeting could be supplemented by a supporting schedule of ministerial meetings in the different policy areas, starting with foreign affairs, defence, and economics and finance.

But what we all now need to do is move on from our preoccupation with discussing issues of form – who sits around what table when – to focus in a major way on issues of substance: what exactly will the leaders and their ministers talk about, and what practical outcomes can emerge from their discussions that are capable of real-world delivery.

We need real dialogue and policy cooperation, not just another expensive series of photo-opportunities with set-piece speeches endorsing pre-cooked lowest-common denominator communiqués. Improved regional architecture is not an end in itself – all the effort will only be worthwhile if it enhances stability, prosperity, state security and human security.