Lowy Institute

Stephen Grenville seems to have misunderstood the purpose of my post on American and Chinese power and the Gillard Government's 'Asian Century' White Paper.

I certainly did not intend to downplay Asia's importance. Even further from my mind was reopening what John Howard aptly calls the 'endless seminar on our national identity'. This would also be a major mistake for the White Paper. Michael Wesley demonstrated eloquently in his book 'The Howard Paradox' Howard's success in putting that sterile debate to bed, exploding many of the shibboleths of Australia's Asianists as he went about strengthening ties with Asia's major powers at the same time as revitalising the US alliance.

Stephen's post rehashes a number of these shibboleths: a tendency to view Asia as a monolith; the conviction that Australia's strong relationship with the US is a liability when we engage Asian countries; and, above all, the notion that to succeed in Asia, 'it's we who need changing'.

Australia has its flaws and can doubtless do better. In particular, we need to ensure our economy remains competitive, avoid unhealthy dependence on any one market and strengthen our ties with Asian countries that share similar interests and values – including Japan, India, South Korea and Indonesia.

But the idea that we are somehow marginalised in the region is behind the times. Moreover, it's far from clear than counting up Asia experts and language students provides a good measure of our interaction with the region. Australia today is widely acknowledged and respected as an active and constructive participant in the economic, political and strategic life of the Indo-Pacific in our own right. Our access and influence in Washington is accepted and in many cases welcomed as an added reason to take us seriously.

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No doubt there are some elements in Asia who would prefer America wasn't around. But to judge from moves to strengthen links with the US not just by Australia but by many of China's other close trading partners – Japan, South Korea, Singapore, India, Indonesia, the Philippines, Malaysia, Vietnam, and now even  Burma – that must be a pretty small club. North Korea and China seem to be the only states in Asia that aren't looking for a stronger US profile.

Nor was it my objective to defend American policy in Asia (which Rawdon Dalrymple has done rather well), least of all the US Treasury's ill-judged response to the 1997 Asian financial crisis. Indeed, as Stephen knows from his own close involvement, at that time the Australian Government lobbied hard, and ultimately with success, to overturn a misguided US position that was jeopardising Indonesia's stability and Australia's interests.

Rather, my purpose was to draw attention to the reality that the US remains a resident power in Asia and, despite growing intra-Asian economic links, an integral political, economic and security player in the region. I also sought to highlight, based on new research by Michael Beckley, that widely-held assumptions about US decline relative to China may prove wrong and that the US is likely to continue to play a central role in the region well into the future, one which the White Paper should take into account.

My concern is that the White Paper risks being framed too narrowly from the outset. Unfortunately, whoever drafted the terms of reference seems to have heeded the advice that what is happening in America or its relations with Asia does not matter to Australia. Among the terms of reference are 'the future course of economic, political and strategic change in Asia' and 'the political and strategic implications of the Asian Century for Australia'. Yet the US – still the region's major political, economic and military player and likely to remain so, if Beckley is right – is not mentioned once. That doesn't make sense.

Nor does the title. Just three years ago the Rudd Government titled its Defence White Paper 'Defending Australia in the Asia Pacific Century'. Now suddenly the nomenclature has changed. Why? Presumably the Gillard Government's choice of 'Asian Century' rather than 'Asia Pacific' or 'Indo-Pacific' century was deliberate. Either way, it was a mistake; signals matter.

Photo by Flickr user iz4aks.

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1 of 9 This post is part of a debate on US-China: Measuring decline and rise

Dr Ken Henry and his team are busy preparing the Government's White Paper on 'Australia in the Asian Century', due to be released in the middle of this year.

In Australian academic, business and media circles there is breathless excitement about the rise of China (and the US decline they assume as its inevitable corollary). But one of the points I would make to the White Paper team is that it would be a major error to write out the US (as the White Paper's title seems to imply), and that we may yet prove to be living in the Asia Pacific century, or indeed the Indo-Pacific century.

Following President Obama's November visit and his historic address to the Australian parliament, a number of influential academic, business and political figures expressed concern about moves (supported by both the major parties) to strengthen further the Australia-US alliance.

In essence, their concern was that stationing a relatively small number of US Marines in Australia's north for half the year might feed the concerns of our largest trading partner that we are part of a US-led strategy to 'contain' it.

To the extent that anyone thinks current US policy really resembles Cold War containment, this reflects woeful ignorance of US strategy during the Cold War and now. But their argument also rests on an assumption that America has had its day and that China's burgeoning gross domestic product will translate directly into predominant power which Australia has to start heeding, now.

I have argued elsewhere that, far from becoming a liability, Australia's strategic relationship with the US is becoming more important. That conviction is made stronger by an important new article by Michael Beckley in the journal International Security.

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Beckley notes the widespread view that the US is declining relative to China and that this owes largely to the leveling effects of globalisation. He analyses a broad set of economic, technological and military indicators to reach a conclusion which, if true, is as profoundly important as it is unfashionable; far from declining in relative terms, America is now wealthier, more innovative and more militarily powerful compared to China than it was in 1991. Here are some of Beckley's main points:

  • Estimates of China's power tend to be exaggerated (and estimates of America's power tend to undershoot) because: GDP correlates poorly with national power (per capita wealth providing a better indicator of surplus wealth available for broader national purposes); conclusions are often based on static single-year snapshots rather than trends over time; and China is often compared with itself (at an earlier time), rather than with America (which is itself not standing still).
  • The US is not like Britain and other eclipsed hegemons but holds a unique geopolitical position owing to an unprecedented combination of material advantages; as a result it exercises 'structural power' – an ability going beyond the use of force or coercion to set global agendas and shape the range of choices open to other countries.
  • America has its problems, including public debt and a fractious polity, but suggestions of imperial overstretch and decline are premature. Past hegemons succumbed after fighting wars against major powers on multiple fronts and spending anything between 10% and 200% of GDP on defence to do it; by contrast, the US spends a relatively modest 4% on defence and confines itself to knocking off the odd rogue regime or occasional humanitarian interventions.
  • Rather than operating neutrally to close the gap, globalisation – and particularly globally networked production – may be an active political process shaped by the US to serve its interests (yes, that's right – the conspiracy theories may be true!).
  • Wealth, innovation and (conventional) military capabilities are the most vital elements of power in the contemporary international system.
  • Yet, for all China's double-digit economic growth, massive investments in education and research and rapid military modernisation, today the US is wealthier compared to China than it was in 1991, China continues to lag behind America in innovation, and (despite some asymmetric advantages) the US-China military gap is growing, not shrinking.

Not everyone will agree with Beckley's methodology or with all of his conclusions. The relative contributions of wealth, innovation and military capability to national power, for example, are debatable. Nor is it to suggest Australia or the region should be complacent. Even if Beckley is right, misperceptions of the balance of power in Asia – on either side – can be dangerous.

Nonetheless, he has done us a considerable favour by questioning some of the glib assumptions that underpin much of the Australian debate – in particular by cautioning against the idea that raw economic power necessarily translates directly into global clout and by highlighting significant shortfalls in China's ability to innovate (some of which Fareed Zakaria has also documented).

At least one of Beckley's conclusions could almost have been written with Australia's White Paper in mind:

The best that can be done is to make plans for the future on the basis of long-term trends; and the trends suggest that the United States’ economic, technological and military lead over China will be an enduring feature of international relations, not a passing moment in time, but a deeply embedded condition that will persist well into this century.

'Whose century?' indeed.

Photo by Flickr user Jennikokodesu.

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Not long after the 2010 election I wrote an article warning that Labor seemed blind to the political risks of pursuing expediency over principle and getting into bed with the Greens. Maybe if Julia Gillard paid more attention to the nether pages of The Spectator Australia she wouldn't have formed her unholy alliance with Bob Brown, we wouldn't be the only country in the world with an expensive carbon tax, and Labor's primary vote would be substantially higher than 30%. Maybe.

Now it seems the PM is belatedly waking up to the danger. Perhaps she has drawn inspiration from her new best friend Barack Obama's much-vaunted American 'pivot' from the Middle East to Asia. We might be seeing the start of Gillard's very own pivot, away from the progressive siren-song of the Greens towards something much more akin to a hard-headed Labor foreign policy in the Hawke tradition.

After all, taking on the Greens is the ALP's only hope of regaining the political centre after Australia's aspirational voters decamped en masse from Labor to Tony Abbott.

A few weeks ago, Gillard directed Australia's diplomats to vote against Palestinian membership of UNESCO, reportedly overriding Kevin Rudd's cynical advice that this might undermine Australia's UN Security Council candidacy. This week we are seeing her stand up to the unions on free trade, pick a fight with the Greens and Labor's left over uranium exports to India, and throw out the carpet to US military forces in northern Australia.

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After her predecessor's China policy gyrations, Gillard had earlier reverted successfully to the measured, hard-headed Howard approach. This week we've even heard the PM described as John Howard in a dress!

These episodes may yet prove to be passing cloud-breaks of sense, islands of good policy. But perhaps they will add up to something more. If Gillard is serious about carrying through with her pivot, she will vote against Palestinian statehood should the issue arise in the UN General Assembly. She will quarantine defence spending from any budget cuts and push through the FTA with Japan (which should be easier now Tokyo looks like coming on board the Trans Pacific Partnership).

Above all, for her own credibility and for the sake of Australia's national interest she will make sure her position on uranium prevails at Labor's national conference in December.

Photo by Flickr user Rantz.

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Earlier today, Dennis Richardson, Secretary of the Department of Foreign Affairs and Trade, gave a Lowy Institute Distinguished Speaker address on the topic, 'DFAT: Who are we, and what do we do?'. A full podcast and video should be up on the Lowy website in the next day or two.

Before he spoke, I took the chance to interview the Secretary about how diplomacy has changed and some of the major challenges facing Australia. 

You can listen here.

 Photo courtesy of DFAT.

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In our report released today, Alex Oliver and I argue that, despite some positive developments since the Institute's Diplomatic Deficit report in 2009, Australia's diplomatic network remains severely overstretched, jammed between rising demands and two decades of cuts. Australia benefits greatly from being one of the most globalised countries on the planet, but it also exposes us to risks. These risks are growing because of global economic instability and uncertainty created by power shifts in Asia.  

In a more complex, multi-polar world, Australia needs to be able to anticipate, interpret and influence the course of events. Diplomacy is the most cost-effective policy instrument to promote and secure our interests in a fast-changing world. Our overseas network has been neglected and run down over decades. Time is running out for government to reverse the disrepair and take meaningful, sustained action to rebuild Australia's diplomatic infrastructure.

The Government likes to talk up Australia's status an active middle power and is throwing everything at the bid for a seat on the UN Security Council in 2013–14. Views differ on the merits of seeking a seat on the Security Council. But there should be no arguing that it needs to be properly funded and should not come at the cost of our key foreign policy priorities. Frankly, the bid looks like something of a luxury considering that Australia has one of the smallest diplomatic networks of any of the OECD nations, and the smallest of all G20 nations — despite having the world's 13th largest economy.

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Among our conclusions:

  • Australia's network of 95 overseas missions is far smaller than the OECD average of 133. Australia, with its population of nearly 23 million, has fewer missions than Norway (population 4.8 million), Finland (population 5.3 million), Sweden (population 9.3 million) and Belgium (population 10.8 million). These are all far smaller countries located in a much more stable part of the world. (See graph above.)
  • Funding and staffing for the Department of Foreign Affairs has stagnated at a time when our economic and security environment is becoming more, not less, challenging.
  • While the Australian public service grew more than 60% since 1997-8, Defence grew 40% and AusAID almost doubled in size, DFAT staffing almost flat-lined. Of even more concern, the size of our overseas diplomatic corps has shrunk by more than a third since the late 1980s.
  • At 24%, Australia has the lowest proportion of its diplomats serving overseas (compared with those at Canberra headquarters) of any of the 13 foreign services we reviewed in our study — the average is around 40-50%.
  • Many of our diplomatic missions are too small to effectively carry out core diplomatic tasks other than basic administrative and consular functions.
  • While DFAT has increased its investment in foreign language training over the last two years, only 10% of DFAT staff have a working-level proficiency in an Asian language.
  • With the explosion in international travel, Australians are now taking more than seven million trips abroad every year, and passport applications have surged 16% just in the last two years. More Australians are being caught up in political uprisings, natural disasters and terrorist attacks, yet DFAT actually shed staff in the consular section between 2008 and 2010. 

Our recommendation in Diplomatic Deficit that Australia should open 20 new missions over the next decade remains equally cogent today. We also need to get more of our existing diplomats overseas and review the way consular services are delivered and funded, to prevent further erosion of DFAT's policy and diplomatic capacity. Our poorly-resourced and uncoordinated public diplomacy needs a major overhaul to enable Australia to reach and influence important new international audiences, with a focus on e-diplomacy and taking a far less risk-averse approach to media and public communications.

Despite the constrained fiscal environment, DFAT requires a major, ongoing boost to its funding base. The Government should consider creative solutions such as delaying the scale-up of development assistance spending and redirecting the resulting resources to DFAT. Shaving just 6% over the next four years off the projected increase in aid expenditure would free around $200 million — not enough to rebuild the overseas network, but a good start.

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I've just finished reading Ian Kershaw's Fateful Choices. It's a compelling analysis of ten decisions by war leaders in Britain, the US, the Soviet Union, Germany, Italy and Japan during 1940 and 1941 (a comprehensive review here). It should be compulsory reading for statesmen, diplomats and generals in 21st century Asia.

This is not to draw clumsy parallels between the most devastating war in human history and the contemporary Asian security outlook. In particular, the extent of economic integration (reinforced by the absence so far of any serious lapse into protectionism following the global financial crisis) and the absence of serious ideological conflict distinguish 2011 from 1941. Nonetheless, Kershaw offers much food for thought.

Against the backdrop of today's forecasts of China's inexorable rise and of US decline, Kershaw does us the invaluable service of reminding us that history is fluid, messy and, crucially, shaped by the choices states make. He drills down to examine the other options available to each leader, the reasons they made the decision they did and the way their future options were shaped by previous choices — and also by the choices of other leaders.

By the time it is written, history looks like it was always going to turn out that way. But as my colleagues and I pointed out in Power and Choice, there is nothing preordained about Asia's security future, good or bad.

Here are a few of the other insights I took away from Fateful Choices:

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  • It not international institutions but the interactions between great powers that shape the international order. Their choices define and circumscribe the choices available to lesser powers. Australia is experiencing this now, as we seek to balance our economic interests in a more assertive China with our security interests in the US alliance system.
  • The importance of human agency — and in particular leadership — in accelerating, channeling or resisting historical forces and sometimes changing the course of events. There are many examples, but Churchill's crucial rallying of British resolve in the early days of May 1940 is one stand-out (and the subject of another great book, John Lukacs' Five Days in London). 
  • Democracies may not always act as decisively as authoritarian states. But they are less likely to make catastrophic strategic blunders and are better able to recover from errors. Much to Churchill's frustration, isolationist sentiment constrained Roosevelt from bringing the US formally into the war against Germany until Hitler unwisely declared war on America after Pearl Harbor. By contrast, once Hitler and Japan's elite resolved on expansion only total and disastrous defeat could turn their nations from that path.
  • A tendency not to understand others' choices and their implications for one's own strategy. Hitler made his fatal decision to invade Russia in almost complete ignorance of the strategic intentions of Japan. Nor did he have any idea that the other member of the Tripartite Pact, Italy, was planning its ham-fisted attack on Greece, complicating Operation Barbarossa.
  • Intelligence and good process can make a difference. Stalin had enough information to have known that Hitler was about to attack Russia and to take defensive measures. But his absolute power meant he was blinded to impending reality by overconfidence in his own judgment, which he bullied Soviet intelligence and military officers into sharing. By contrast, US code-breakers gave Roosevelt a good handle on Japan's strategic intentions (albeit insufficient to avert Pearl Harbor).
  • The choices a state makes today can radically constrain its future options. Stalin's brutal purge of the Soviet officer corps in 1937 virtually decapitated the army when national survival would depend on it just four years later.

Worryingly, Kershaw's book also reminds us that energy insecurity, mercantilism and competition for great power prestige lay at the heart of the war in the Pacific. On that occasion, the interaction of the great powers' decisions produced a cataclysm.

Let's hope the region's statesmen make better choices this time round. An open international trading system, a healthy balance of power and freedom of navigation have to remain the foundations. More on that in due course from the Lowy Asia security team.

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8 of 11 This post is part of a debate on Greens foreign policy

It's nice that the Greens are happy to provide readers of The Interpreter with more details of their policies. But isn't that what pre-election policy documents are for?

Apparently not, because after convincing more than one million Australians to vote for them, we now learn that the Greens will be undertaking a comprehensive policy review in 2011 which will include 'looking at' their 'current' international policies. Presumably that's meant to signal they aren't really serious after all about pursuing the various foreign and defence positions I outlined the other day.

We are meant to believe that the Greens, suddenly sobered by their new-found power, have succumbed to a fit of responsibility and will temper some of their more extreme positions and evolve into something more like their German namesake.

There are two ways to interpret the evidence: either the Greens intend to use their newly-gained power to implement their policy agenda (which is pretty scary), or they don't (which is pretty cynical). I'm not sure which is worse.

Maybe Tim McMinn and Anna Reynolds have belled the cat, and the real answer is that, for the Greens, the purpose of pre-election policies is to differentiate themselves from Labor, attract gullible disenchanted voters and serve as bargaining chips to be traded away. The problem is, we don't know which policies are in earnest and which aren't.

The double standard is breathtaking. Surely a political party should be accountable for all its policy commitments. That's certainly the expectation for the major parties. When they do break their promises – as Kevin Rudd did with the ETS, for example – it's a big deal and they suffer real consequences. Why should the Greens be held to a different, and much lower standard of accountability – particularly now they have emerged as a political force? So much for the brave new world of Australian politics.

Voters may have given the Greens the balance of power in the Senate from next July. But they aren't mugs. Hopefully they won't fall for the same bait-and-switch routine twice.

Photo by Flickr user connerdowney, used under a Creative Commons license.

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1 of 11 This post is part of a debate on Greens foreign policy

As the horse-trading continues to see whether Labor or the Coalition can form a government, one thing about this election is clear: the Greens have emerged as a big winner. Bob Brown and friends will wield the balance of power in the Senate from July and have emerged as a serious force in Australian politics.

What are some of the implications for Australian foreign and defence policy?

Over 1 million Australians voted Green, but somehow I doubt many of them read the fine-print. While masquerading as an environmental party to woo inner-city sophisticates – evidently a successful ruse – the Greens are merely the latest incarnation of the Loopy Left in Australian politics. Here's just a selection of their campaign 'principles' and commitments:

  • Reinvigorate 'peace research' in Australian universities and 'peace education' in schools  (the next phase of Building the Education Revolution?).
  • Close the Lucas Heights reactor (which provides medical isotopes to treat cancer patients, support for research on the environment and climate change, and expertise so Australia can contribute to international non-proliferation efforts).
  • End uranium exploration, mining and exports (and with them, masses of jobs, much-needed revenue and a major contribution to reducing global carbon emissions).
  • End the ANZUS Treaty (which, according to the 2010 Lowy Poll, is regarded by 86% of Australians as either very important or fairly important for Australia's security) 'unless Australia's membership can be revised in a manner which is consistent with Australia's international and human rights obligations'. I guess we'd have to check with the UN Human Rights Council.
  • Support the right of ADF personnel to conscientiously object to particular military actions (military service a la carte).
  • End foreign military training in Australia (presumably that would include peace-keeping and disaster relief exercises).
  • Reduce Australian defence spending; after all, 'climate change represents the greatest threat to world peace and security' (just ask South Korea or Israel).
  • Close Australia's ports and waters to nuclear-powered or nuclear-armed vessels. Of course, this doubles as another handy way of ending the US alliance – as the Kiwis can confirm. Maybe this would be for the best though, as 'Australia's reliance on the US nuclear weapons umbrella lends our bases, ports and infrastructure to the US nuclear war fighting apparatus'.
  • Increase aid to 0.7% of GDP in a ridiculously short time-frame – irrespective, it seems, of the reality that AusAID is already struggling to deliver the ambitious bipartisan commitment to increase aid to 0.5 per cent of GDP by 2015.

This sort of wackiness may be OK in a fringe party that can luxuriate in its irresponsibility, safe in the knowledge it will never influence national policy or be held accountable for the results. But on Sunday morning, Australians awoke to a very different political landscape. The implications are still sinking in. But they are real.

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The vast majority of new Green votes came from Labor. The ALP will be increasingly vulnerable to pressure from the Left. A minority Labor Government facing a rampant Green bloc in the Senate would, for example, find it even harder than Kevin Rudd in his halcyon days to face down the ideologues and overturn the nonsensical ban on selling uranium to India. And Labor's enthusiasm for the 'good war' in Afghanistan will come under greater strain, particularly as the combat toll rises, public support wanes and more European countries start to head for the exit.

As Opposition Leader, Tony Abbott has rightly extended firm bipartisan support for the deployment in Afghanistan (in contrast with Labor's opportunism over Iraq). If a minority Abbott Government is formed, it will be interesting to see whether Labor maintains the principled position it has taken on Afghanistan in government or reverts to form in opposition.

Photo by Flickr user ianmunroe, used under a Creative Commons license.

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Most political experts reckon the election is still too close to call. Not all of them, though. Apparently Kevin Rudd reckons it's already in the bag.

The word in Canberra circles is that he is sounding out potential staffers for when he becomes foreign minister. I wonder how many takers he's had?

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With the election looming, Australia's focus is mostly inward. But developments in our region point to significant changes – changes which could reshape Australia's future security and prosperity. As Rory Medcalf has pointed out, few of these are as significant as the great power arm-wrestle playing itself out in the South China Sea and the waters around the Korean Peninsula. More than half of Australia's goods exports navigate these sea lanes.

In the first of a new Lowy Institute series on Asian security ('Strategic Snapshots'), Malcolm Cook and I observe that North Korea's unprovoked sinking of the South Korean warship 'Cheonan' and the responses of regional powers will have lasting effects.

China's lame reaction to its ally's misdeed was a major strategic own goal because it simultaneously strengthened not only US defence ties with South Korea and Japan, but also reinforced the quiet growth of security cooperation between Seoul and Tokyo.

It's not too long ago (albeit under different governments) that South Korea and Japan were at loggerheads over unresolved historical and territorial issues. It is a mark of how much closer they are moving, however, that observers from Japan's Self Defence Force have observed the recent US-ROK anti-submarine exercises held in response to the 'Cheonan' sinking.

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Nor is it a coincidence that, in the year marking the 100th anniversary of Japan's colonisation of Korea, both governments are working hard to manage their troubled past. Under new Prime Minister Naoto Kan, the Japanese Government recently issued a formal statement apologising for Japan's subjugation of Korea. And ROK President Lee Myung Bak's speech on Korean National Day – which celebrates liberation from Japan – was constructive and forward looking, calling on both countries to transcend the past and forge a new relationship.

A recent interaction I had with the Chinese media highlights the acute sensitivity inside the Middle Kingdom regarding Beijing's trouble-prone alliance with Pyongyang.

I was approached by email for an interview by the 'Shanghai Oriental Morning Post', a relatively new Chinese-language newspaper targeting southern China's growing business and financial audience. The Post reproduced most of my answers (see image above), but with some telling editorial licence.

Gone was my factual reference to the US-ROK exercises taking place 'in international waters off Korea'. Gone too was my judgment – supported by US Government statements – that a major aim of the exercises was to deter North Korea from further acts of aggression against South Korea or other regional countries. My phrase 'Cheonan sinking' became Cheonan 'incident'. And, tellingly, this answer to a question about China's security dilemmas was left out entirely:

China’s main security dilemma is the continuing reckless and provocative behaviour of its ally, North Korea...The planned US-ROK naval exercises would not be happening if not for North Korea’s aggressive actions. The best way for China to resolve its security dilemma is to rein in its ally before North Korea further destabilises the region. As an initial step Beijing should accept the findings of the international study into the Cheonan sinking and join the international condemnation of North Korea’s attack. China should also resume full military-military dialogue with the United States, provide more transparency about the longer-term strategic assessments and objectives supporting its military modernisation, and agree to put in place as a matter of urgency an incidents-at-sea agreement to minimise the risk that an accident at sea could lead to miscalculation or even conflict.

Maybe they just ran out of space. But somehow I think there is more to it than that. This was clearly a bit too much to swallow, even for one of China's newer and more outward-looking media outlets.

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Foreign policy commentators have bemoaned that international affairs hardly feature in the election campaign (apart from our suddenly vital relationships with diplomatic juggernauts East Timor and Nauru).

But that doesn't mean the election holds no consequences for our foreign policy. Lost in the hurly-burly was more bad news for DFAT – and I'm not just talking about the near certainty that Kevin Rudd will be foreign minister if Labor wins.

According to media reports, Labor will save $45 million by cutting 'a small number' of Foreign Affairs positions overseas. There's no mention of how many, but it looks to me like about ten. The Treasurer can't even bring himself to fess up and say the 'c' word: according to Swan's newspeak, the positions will be 'returned to Australia' rather than cut.

What a joke. Our overseas diplomatic network is already in a parlous condition, while consular and other demands on our scarce and overstretched diplomats mount steadily. DFAT's ratio of staff in the field versus those administering themselves back at headquarters is already one of the worst among comparable countries. Now our front-line diplomacy faces further cuts. And the cuts won't even pay for half a day of this government's borrowing.

No wonder we are struggling to overcome the diplomatic might of Luxembourg and Finland to win a seat on the UN Security Council.

Photo by Flickr user Antediluvial, used under a Creative Commons license.

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Discussion of the Rudd Government's late and largely unlamented Asia Pacific community proposal reminds me increasingly of Monty Python's famous dead parrot sketch. It is pretty clear that arch-realist and Rudd nemesis Julia Gillard can see this particular parrot won't fly: one of her first foreign policy acts was to put it out of its misery.

So, as Malcolm Cook has pointed out, it's left to a dwindling band to perpetuate the myth that no-one – in Canberra or beyond – was talking about Asia-Pacific regional architecture until Rudd 'started the conversation'.

This is typical of a view of Australian foreign policy history that airbrushes out anything that does not fit the painstakingly crafted fictional narrative: that Australia's engagement with Asia is exclusively a far-sighted Labor mission rather has a decades-long bipartisan endeavour; and that only Labor governments have been involved in the grand project of building Asia-Pacific institutions.

The facts are more mundane. Engaging Asia has long been fundamental to Australian international policy and a priority for both political parties (albeit with differences in emphasis and approach). So too has ensuring that Australia is fully involved in regional arrangements that have the potential to influence our economic, political and strategic interests. Hence it was the Hawke Government that conceived APEC, Keating who elevated it to leaders' level, and John Howard and Alexander Downer who succeeded in gaining Australian entry to the East Asia Summit.

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As I have written elsewhere, as early as 1996 Howard privately challenged the US Secretaries of State and Defense and their Australian counterparts, meeting for annual AUSMIN talks, to consider how the two countries could work together to develop and shape regional security architecture. In January 2005, the Australian Embassy in Washington (a disclaimer: I was posted there at the time) co-hosted a major seminar with CSIS, one of America's leading think-tanks, on 'Regional Structures in the Asia-Pacific'. It was attended by approximately 150 government, academic and business participants from the US, Australia and Asia.

Today, the seminar papers make interesting reading. They noted the development of new regional institutions and frameworks and asked whether they were appropriate to address the strategic and economic issues the region would face in the next 20 years and how regional arrangements should be shaped to meet emerging challenges. Sound familiar?

The participants list is a who's who of former and serving US and regional heavyweights: Stephen Hadley, Paul Wolfowitz and Mitchell Reiss, all senior officials in George W Bush's second administration at the time; Kurt Campbell and Richard Holbrooke, now serving President Obama in senior Asia-related roles; and internationally respected intellectuals of the calibre of Francis Fukuyama and Robert Kagan. Among their sensible conclusions: 'that no single institution could address all of the region's security and other needs'.

Let's get real. This is not a new conversation. With a lot more forethought and preparation – and a lot less hubris – the Rudd Government could have joined in and contributed another constructive chapter in a long and, until now, mostly distinguished bipartisan record of institution-building in Asia.

Photo by Flickr user Sensual Shadows Photography, used under a Creative Commons license.

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New Prime Minister Julia Gillard will have a lot on her plate in coming weeks. Foreign policy probably isn't at the top of her list. But Kevin Rudd's peremptory replacement is an opportunity to get Australian international policy back on track, in ten simple steps:

  1. Make a sustained case to the Australian people that the ADF's role in Afghanistan serves not only our alliance interests but our direct security needs.
  2. Repair the damage done to Australia's international reputation as a reliable and competitive investment destination by the botched attempt to implement a mining tax.
  3. Abandon the Rudd Government's futile and counterproductive legal action against Japan, our staunchest regional friend. 
  4. Announce the commencement of negotiations with the Indian Government on a bilateral nuclear safeguards agreement and that she will move a motion at the next ALP national conference clearing the way for uranium exports to India.
  5. Depersonalise and stabilise Australia's relations with China, our largest trading partner, by putting in place a durable bilateral policy framework that is grounded in Australia's national interest, consistent with our values and provides clarity and consistency, including for Chinese sovereign investment.
  6. Remedy the Government's failure after nearly three years to secure ratification by the US Senate of the Australia-US Defence Trade Cooperation Treaty, which is vital to streamlining both the ADF's future access to critical American defence technologies and two-way defence industrial cooperation.
  7. Abandon a campaign for a UN Security Council seat that is unsure of success, is distorting our foreign policy and aid priorities and is wasting scarce diplomatic resources that could be spent in direct pursuit of our national interests.
  8. Confirm that the Government will no longer pursue Rudd's badly conceived and poorly received proposal for an Asia-Pacific community and will instead work patiently and constructively with our regional partners to improve the way existing institutions operate, including by bringing in the US where it is not presently involved.
  9. Halve the size of the bloated national security bureaucracy Rudd created in the Department of the Prime Minister and Cabinet and use the freed-up resources to send more diplomats overseas.
  10. Re-empower the foreign minister (and, who knows, this could be Rudd himself) by dismantling the cumbersome and overly centralised decision-making apparatus put in place over the past two years.
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Following Hillary Clinton’s successful first international foray – which she wisely chose to make to Asia – Kurt Campbell’s confirmation by the US Senate on 25 June as Assistant Secretary of State for East Asian and Pacific Affairs in the Obama Administration is more good news for Australia and for other US allies in the region. As I’ve said before, Campbell’s formidable CV, influence in Washington, energy and familiarity with Australia make him a big asset.

For further evidence, it’s interesting to read the tea leaves of his nomination statement. Ignore the silly media flurry about whether Campbell dissed Kevin Rudd’s Asia Pacific Community proposal (he clearly didn’t – he’s too smart a diplomat for that). But he had some illuminating – and from an Australian perspective very welcome – things to say.

Campbell ‘gets’ the profound geopolitical changes under way in the region, describing ‘a moment of enormous consequence and opportunity for the United States in Asia’. But there is no whiff of newly fashionable American declinism or of disengagement. On the contrary, Asia is ‘a region that still relies upon strong American leadership...the United States itself is a Pacific nation, and in every regard – geopolitically, military, diplomatically, and economically’. No backward steps there.

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Note the order too in which Campbell lists the different categories of power. He gives a nod to the Obama team’s voguish multilateralism and soft power fetish. But you get a sense of what he really thinks from the book he co-authored with Michael O’Hanlon in 2006: Hard Power. Scratch the surface and Campbell is a hawk Democrat and an old-fashioned, bilateral alliance kind of a guy – which should suit Australia just fine.

There are further signposts in his testimony. He lists bilateral engagement first and hard power before he mentions soft power. His first substantive comments credit the US and its traditional allies in the region with maintaining security and stability in the region for the past half century. His declaration that America’s alliances with Japan, South Korea, Australia, the Philippines and Thailand remain the bedrock of US engagement in the region could just as easily have come from Rich Armitage – another longstanding friend of Australia – speaking from the other side of the aisle.

The first country in Campbell’s regional hierarchy is Japan, ‘a cornerstone of our security policy in Asia’ (a useful pointer for the Rudd Government). He reaffirms the US resolve to defend its allies and makes clear that, in dealing with North Korea, his first priority will be to coordinate positions with Tokyo and Seoul. This is a blunt rejection of the bankrupt approach pursued by his predecessor Chris Hill of directly engaging Pyongyang and Beijing and sidelining America’s most important Asian allies.

It is striking that Campbell leaves it to the end of his statement to deal with America’s vital relationship with China, and then in deliberately nuanced terms: ‘The US-China relationship is complex, it is developing rapidly, and it is one of the most consequential of our bilateral relationships.’ Hardly gushing treatment.

It is not that Campbell is negative about China: he is committed to building a positive, cooperative and comprehensive relationship. But expectations are being kept carefully in check. There’s none of the Clinton Administration’s careless hype about a ‘strategic partnership’ with Beijing. And Campbell puts down markers on human rights, religious freedoms, Tibet and US defence exports to Taiwan. It will be tough to implement – particularly as an assertive Democratic Congress is likely to make tensions over trade and exchange rates harder to manage. But Campbell’s testimony points to a sensible, pragmatic and hard-headed China policy.

Just as welcome from an Australian viewpoint is Campbell’s acknowledgement of the democratic transition in Indonesia and the administration’s commitment to pursuing a comprehensive partnership between the world’s second and third largest democracies. This partly represents the fruit of years of patient Australian advocacy in Washington and will be music to Canberra’s ears.

Photo courtesy of the Center for a New American Security.

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Readers interested in the debate about Australia’s resource-starved diplomacy generated by the Institute’s report on Australia’s Diplomatic Deficit: Reinvesting in Our Instruments of International Policy might be interested in a couple of recent contributions from retired international statesmen.

The first is an article written by no fewer than eight former Secretaries of State from both sides of US politics. Among the points they make are that:

  • Sending diplomats abroad without language skills is like deploying soldiers without bullets (that's one our Prime Minister would agree with).
  • 20 per cent of regular positions in US embassies and in the State Department are unfilled.
  • Despite the pressing need to deploy technical experts in important reconstruction and stabilisation tasks, USAID has fewer staff today than it had in Vietnam alone in the 1970s.
  • Rebuilding these critical US capabilities would cost in the order of $US3.5 billion spread over a number of years; this would equate to less than half of 1 per cent of defence spending (not even including the cost of operations in Afghanistan and Iraq).
  • Avoiding a single war or defusing a major crisis through diplomacy would save many times the increase in funding and relieve strain on the military.

Maybe Alexander Downer, Gareth Evans, Bill Hayden and Andrew Peacock should put pen to paper to throw their weight behind Stephen Smith when he faces the ERC razor gang to argue the toss for the next DFAT budget?

The second is an article by former Canadian prime minister Joe Clark arguing that the running down of Canada’s diplomatic and development budgets is undermining its traditional vocation for middle-power diplomacy and its capacity to address significant international challenges. Sound familiar?

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