Great power competition in the twenty-first century will be different because of the depth and extent of the dependence of national economies on the global economy. National economies are now less self-sufficient and more vulnerable to the disruption of trading and investment relations than at any time in history. What stops great power confrontations getting out of hand these days is not so much the fear of nuclear annihilation as the fear of global economic ruin – and the resulting national ruin.

This dynamic has changed the nature of strategic competition towards a competitive manipulation of interdependence. Moscow, in that very Russian way, has made this explicit by trying to perpetuate Europe's reliance on Russian gas. The flip side of Pax Americana is the threat of a crippling blockade against those with whom Washington is displeased.

The countervailing impulse is to try to reduce one's rivals' ability to manipulate one's own interdependence. Witness Europe's witless attempts to construct an internal energy market, America's quest for energy independence, and China's decade-long diplomatic campaign to avoid possible containment.

There are two regions that have become the focus of this strategic dynamic. Both are vital strategic thoroughfares and resource basins. Both are shatter-zones of smaller, internally fragile states wedged among the Asian giants. They are Central Asia and Southeast Asia. And given where they are located, the stability and independence of these sub-regions is a global public good.

The danger is that in the heat of the competition, the great powers will lose sight of this fact. This is why instability and weakness in Afghanistan is so dangerous – because in the fog of proxy war, intensely jealous great powers will assume their rivals have the upper hand and redouble their own efforts to exert influence and control.

China and Russia realised this danger in relation to Central Asia's northern tier in the mid-1990s and eventually created the Shanghai Cooperation Organisation. The SCO is founded on a shared fear – the emergence of either Western-leaning democracy or Muslim theocracy in the 'stans – and a shared hope – that Moscow and Beijing can mitigate their strategic competition and collectively reap the gains from Central Asia's resource holdings while directing their strategic attention away from their Central Asian frontiers.

But Central Asia's southern tier has benefited from no such clear thinking. Beijing's support for Pakistan has kept India strategically bottled up under the Himalayas for decades, while Indo-Pakistani hostility has led Islamabad to seek strategic depth in Afghanistan. India's response has been to try to deny that strategic depth, and China has every reason to try to block the recent countermove by New Delhi into Afghanistan. This is a complex and dangerous dynamic made chronically unstable by its cyclical structure.

To avoid the worst possible outcome, all three rivals must be engaged in the process of building a stable Afghanistan – and collectively guaranteeing it. The most realistic route is to actively involve the SCO in the future of Afghanistan while broadening that organisation to include India and Pakistan. This solution ties the stability of the northern and southern tiers of Central Asia to each other, thereby broadening the stakes of those involved. The one hope and one fear that bind China and Russia together are also remarkably relevant to the SCO's proposed new members.

This leaves Southeast Asia. This region has nowhere near the dangerous dynamic or instability of Central Asia, but this does not mean we should take the prospect of great power rivalry to our near north lightly. This is why the engagement of North and South Asia's great powers – and I see the US as a great power in North Asia – in Southeast Asia's institutions of stability and mutual guarantee should be taken so seriously.

Photo by Flickr user rob7812, used under a Creative Commons license.

A resurgence of Taliban rule in Afghanistan would not be a strategic disaster for Australia and its allies. Nor would a continuation of warlordism, tribal warfare and instability. There is no logical progression between these outcomes and a resurgence of catastrophic terrorist attacks against Australia or its allies.

The fact that there hasn't been another terrorist event as complex and ambitious as 9/11 or the Bojinka plot is only partly related to the toppling of the Taliban; by far the greatest contributor has been the turbo-charging of the domestic security and intelligence efforts of most countries since 2001. These efforts will not lapse if the Taliban re-takes Kabul; indeed they would redouble.

The real threat in Afghanistan is that it will lapse back into its historic role as a strategic vacuum once the Coalition leaves.

If the Coalition concentrates just on building domestic institutions in Afghanistan, ignoring the competing strategic interests of regional powers, it is inevitable that it will become an arena of competition between China, India, Pakistan and perhaps Iran and Saudi Arabia.

Not only will such competition destroy any domestic institutions so painfully constructed by the Coalition, it risks spreading and embedding a complex and entrenched strategic competition across the southern tier of the Asian landmass. Considering the economic dynamism and resource holdings of this region gives one a flavour of the scale of the strategic disaster this could bring.

This means we should refocus our strategy in Afghanistan away from counter-insurgency and state-building and towards removing Afghanistan's potential as a strategic vacuum.

We have a recent example as a roadmap. Between the 1960s and the 1990s, Cambodia was a strategic vacuum in Southeast Asia, drawing competing powers into its instability and thereby destabilising the entire region. The solution that emerged was to treat the strategic competition surrounding Cambodia as an integral part of the problem, and then to slowly mitigate competition, building institutions and confidence measures that over time have permitted the emergence of an accepted, non-provocative equilibrium.

The problem with the Coalition's diplomatic strategy in Afghanistan is the assumption that the Coalition, the Karzai Government and the Taliban are the only interested actors. It ignores just how central Afghanistan is to the competition among regional powers. Pakistan's tentacles into Afghanistan are well known, but China and India have been quietly investing, building and infiltrating as well.

Fortunately these interests can also be the building blocks of a solution. A new peace conference on Afghanistan should be convened, confined only to the powers directly interested: the US, China, India and Pakistan. The agenda should focus on just two questions: what eventual order in Afghanistan will be acceptable and non-threatening to all concerned powers? And how do we get there from here?

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

Beijing couldn't be less interested in exercising leadership, and remains determined simply not to be isolated on international issues. None of the existing or rising powers have any clear conception of what the world should look like, or how it should differ from the one we are currently living in. As Dominic Moisi recently observed, China and India are less interested in the shape of world order than in their position in it.

2009 has demonstrated that America remains the global decider – because it is still powerful, and because it is still willing to lead and credible as a leader. It remains the country that sets the agenda on Afghanistan, Iran, North Korea and Iraq. Its post-Copenhagen climate change policy will set the agenda for progress on that issue. Its decision to invest the G20 with the status of the premier global institution on financial matters was enough to make it so.

Yes, China and the other powers are gaining on America's material strength. Yes, America's moral authority has been bruised by Bush and the GFC. But what the world is left with is a choice between the leadership of a tarnished America, and a leaderless world. In 2009 the world has chosen. America's primacy is tattered, but intact.

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

So the ability to intimidate through sustained, unconventional, unpredictable and indefensible attacks is foregone in pursuit of terrorist spectaculars – bombings, highjackings, shootings. Such attacks are expensive, take planning and preparation, and hence are more prone to detection and disruption by authorities – but that's the price of celebrity terrorism.

This suggests we will also see more of the the drawn-out, reality-TV style terrorist events of a kind with the Moscow theatre siege in 2002, Beslan, and most recently in Mumbai. The recent foiled plot by al-Shabaab to storm Holsworthy Army Barracks is another example. The objective of these attacks is to extend out the horror over hours or preferably days, and make sure that every random, pitiless act of violence is captured by the blanket media coverage.

Our most vulnerable sites are those where large numbers of people congregate, and which can be sealed off and defended from attempts by the authorities to break the siege. The bad news is that there are innumerable such sites in our society. The good news is that such plots also require substantial planning, financing and casing of targets. The more of this there is, the better the chances that the authorities will detect and disrupt the plot.

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