The Australian Academy of Science has long argued that Australia's international scientific engagement must be strengthened through strong government support, as global scientific endeavour ramps up and shifts towards Asia. Enhanced strategic ties to international knowledge production are essential if we're to capture benefits and advantages for Australia.

Australia has some geographic (and linguistic) advantage in Asia but other leading scientific nations are responding to the same shifting dynamics. For example, there are about 50 US Foreign Service staff located in US embassies and consulates around the world designated as Environment, Science and Technology and Health (ESTH) officers.

In China, for instance, the US has ESTH officers in Beijing, Shanghai, Chengdu and Guangzhou. These diplomatic positions are supplemented by more than 20 employees of US technical agencies like the National Science Foundation, National Institutes of Health, Centers for Disease Control and Prevention, Food and Drug Administration, and Department of Energy, who foster collaborative efforts with China. They are supported by about 150 additional staff from the US State Department's Bureau of Oceans and International Environmental and Scientific Affairs.

The US State Department's 2010 Quadrennial Diplomacy and Development Review confirmed that, in a world of increasingly fast-paced change, 'science and technology must be enlisted in an unprecedented fashion.' In November 2009 US Secretary of State Hillary Clinton announced the appointment of three prominent US scientists as science and technology envoys to bolster collaboration with Muslim communities around the world. Professor Bruce Alberts, a former President of the US National Academy of Sciences, has just completed his term as a Science Envoy focusing on Indonesia.

By contrast, Australia has two Minister-Counsellors, one in Brussels and one in Washington DC, to provide support for the Commonwealth's Innovation, Industry, Science, Research and Tertiary Education portfolio. Reflecting the export value of tertiary education services, we do have an international education network which has a dozen officers. Mostly in Asia, they manage bilateral and multilateral education and training engagements. With resources widely acknowledged to be insufficient, the Department of Foreign Affairs and Trade undertakes excellent but small science diplomacy projects, such as providing speaking opportunities in Asia for eminent Australian scientists.

Australia's international engagement efforts have been diminished in the wake of recent federal budget decisions. One unfortunate consequence of the 2011 termination of the productive 10-year International Scientific Linkages program is the lack of strategic international guidance and support to direct our national research effort. Without national coordination we are not able to make the most of the 96% of high-citation research that occurs overseas.

Without doubt, a strategic effort to engage scientifically in the Asian Century should be a national priority.

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The India-China dynamic – a troubled history leaning against so much promise – is an excellent reference for pondering Canberra's effort to create a White Paper on Australia in the Asian Century. Note that the century will not merely centre on Asia, but will be Asian. Perhaps this means that decisions as well as the direction – the ownership as well as the onus – will be Asian. This is real if you-name-it-you-own-it stuff.

As an Asian Century unrolls through coming decades, there might well come a time when it is China and India that meet to make the big calls, as Deng prophesied. That is a new world for Australia as much as for everybody else in Asia. Such a thought explains why Australia is a recent convert to the term Asian Century; it has really only blossomed as a defining term for Canberra in the last two years.

By launching a White Paper process 12 months ago on Australia and the Asian Century, Julia Gillard supercharged the concept. Having knocked off the eminently Asia-literate Kevin Rudd, Gillard was reaching for her own Asian colours.

To add a bureaucratic perspective to the process, the fingerprints on the language shift all belong to Treasury, not to Foreign Affairs. It was Treasury that really started using the phrase Asian Century, putting it in the Treasurer's mouth in the budget speech last year and using it to predict internal changes for the Australian economy. And it is not some foreign affairs nerd but the former head of Treasury, Ken Henry, who is running the Asian Century inquiry.

This is not just inside Canberra tea-leaf stuff. When the White Paper was launched, this column argued that, if there was a real conceptual shift on display, it was Australia starting to abandon its firm attachment to the construct of the Asia Pacific. The country that invented APEC (well, co-invented it with Japan) was readjusting the settings. 

Australia and Japan and plenty of others built the Asia Pacific model because it gave an explicit role to the US. It aligned Australia's strategic and economic interests.

To shift from the Asia Pacific Century to the Asian Century is to re-frame the power equation and the hierarchy. All this matters for politics and government, for bureaucracy and the chattering classes. It tells us something of Asia's impact on Canberra's perceptions; call it the power of economic gravity. To be precise, this tells us something about how China is messing with a lot of minds in Canberra, colouring the thinking even if the actions seem all to be directed at a more fervent embrace of the US alliance.

The use of Asian Century phraseology is one point where Australia is diverging from the US, even during the pivot moment. No Asian Century for the Americans. Both President Barack Obama and Secretary of State Hillary Clinton proclaim that we are in the Pacific Century, which builds naturally on the American century we have just emerged from.

As an example of the point, see Hillary's Hawaii speech last November, entitled America's Pacific Century. The thought was given its most emphatic expression by Obama's declaration in his speech to the Australian parliament: 'The United States is a Pacific power, and we are here to stay.' Obama's speech in Canberra was notable, though, for his repeated reference to the Asia Pacific; even for the Americans, the Pacific Century nomenclature might have to stretch a bit.

As the previous column noted, the Australian Defence Department lines up with Obama in its affection for the Asia Pacific as a descriptor that explicitly embraces the US.

The Defence Minister's Lowy speech last week gave plenty of play to the Asia Pacific. Indeed, Defence likes to spell it as Asia-Pacific. The hyphen is just one more example of a fundamental tenet of Australian policy: anchor the Americans in Asia. Stephen Smith encapsulated Defence's view of the Asian Century with this line: 'In this century, the Asia-Pacific and the Indian Ocean Rim, what some now refer to as the Indo-Pacific, will become the world's strategic centre of gravity.'

With Defence's new affection for the Indo-Pacific, we are nearly back with Deng Xiaoping in 1988. The one big change made to Deng's Asian Century perspective is to make it a three-way not a two-way partnership. In the Defence rendering, it will be the US along with China and India that define what the century becomes.
 
 Photo by SXC user lusi.

Peering to the second half of the century, Defence simplifies things by seeing only three great strategic powers: the US, China and India. The Defence demotion of Japan to middle power status is a fascinating call. Interesting to see if that view of Japan's future gets a tick from the eminent economist, Dr K Henry.

Note also that Defence has not surrendered completely to the Asian Century; the Asia Pacific is still popular because that construct makes the US role explicit. The big China speech the Defence Minister gave in June was entitled, 'Australia and China – Partners in the Asia Pacific Century'. Mark that title as a bit of cheekiness from Russell directed up Kings Avenue towards the Prime Minister's Department.

The vision of the Asian Century Ken Henry is brewing in PM&C is going to have to convince diverse audiences. And some of the sceptics, residing close to hand, will get a chance at their own White Paper next year.

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Across the areas of analysis in the White Paper a single word keeps cropping up - it’s the word ‘integration’. Integration within the region is what is happening on a daily basis. Integration does not mean creating some great homogenous society or imposing the values and culture of any country upon the people of another. What’s happening in the region is largely an economic integration — building on the progress made in the post-war period. That integration has to be taken further.

The prescription Hawke offered in the 1980s was complex and controversial at the time; in the second decade of 21st century, the Hawke choices look relatively low risk. Hawke's enmeshment was a more neutral vision than Henry's integration. Equals can enmesh. The course Henry is plotting, by contrast, assumes Australia will be doing the integrating. This is the 'all change for Asia' message expressed by the head of the Prime Minister's Department, Ian Watt, in predicting that Asia's rise will impact on all aspects of Australian society and institutions.

Grappling with such thoughts explains why the Henry word count would rise. A big document always has bureaucratic benefits, even if the wordage weighs down the messages.

The Asian Century White Paper also has to be broad enough so that it can touch the conceptual edges of the Defence White Paper that will come out in the middle of next year. More on that in a follow-up post.

Photo by Flickr user Alvin K.

Asian states face huge challenges in constructing and maintaining their internal orders. Necessarily, many countries are going to prioritise the task of internal construction over creating an external state system. And we're looking at countries that are going through very rapid urbanisation and that are simultaneously industrialising and coming to terms with a post-industrial world. China today spends more money on internal security than it does on international defence.

We're likely to see in many Asian countries that the question of internal stability and order is the question that keeps rulers up at night. The question of the international security structures in Asia is going to be a secondary one. And because the internal struggles and upheavals through which Asian countries are passing are so dramatic and far-reaching, the ability of leaders to build strong external organisations and durable institutions is going to be limited. It's hard to imagine anything that looks like the EU being useful to countries trying to manage this set of pressures.

China, for example, can't make big concessions in the South China Sea without creating a crisis of domestic legitimacy for the government. And given the balance of risks that the government sees, it's going to choose domestic peace over international harmony.

At the moment, Asia doesn't even have a code of conduct for managing maritime disputes in the South China Sea. To leap from this situation to imagining a hypothetical future Asian international framework requires a little bit more confidence in my prophetic powers than I feel like I can summon.

The main quality that a society of states would have to have is the ability to avoid settling disputes through war. More than anything, Asia needs a generation of peace so that each Asian country can develop and concern itself with its internal social and political growth. The question is whether states think they can improve their condition by a mix of cooperation and competition without war, or whether they think violent conduct is the only way to provide for what they consider to be the minimal security and dignity they require. I doubt we'll ever see a world in which every country is completely satisfied with its place. But being unhappy is not the same thing as planning a war of revenge.

Flexibility may be the most important characteristic of any Asian international structures that do get built. China doesn't want a war over the South China Sea, especially not a war with the US, but the government also doesn't want to risk its power domestically by being perceived as weak and unreliable. Vietnam, the Philippines and other countries involved in these territorial disputes face some of the same issues. So we're looking at tentative small-scale flexible arrangements that over time might grow into something else.

Personally, I'll be happy if we find a way through the difficulties of the next ten years, and then we can start thinking about what we need to do next.

Photo by Flickr user MrTopher.

Now we turn to Asia, where we see asymmetrical power balances between the US and China. The US may be dominant at sea, but no one is expecting the US to invade China, or fight another land war in Asia. So in that sense it doesn't seem so entirely different from the situation with the Soviet Union. But the thing to remember is that China has enormous economic clout in the region and this is likely to keep growing. So the US and China may each end up having certain kinds of supremacies in the region, and the economic interdependence between the US and China is so great that both countries would be very reluctant to break their relations or head into a military confrontation.

So I don't see the US, for example, as seeking to marginalise China economically or to block Chinese investment in other countries. And there are clear political consequences for countries for which China is both their largest market and their largest source of foreign investment. So when I think about a new order in Asia, I'm thinking about a kind of three-dimensional chessboard, and while the US and China may dominate on different levels, overall I'm not so sure you could describe this picture as total American domination.

And furthermore, I don't think it should be America's goal to try to be dominant on all three levels of that chessboard. The US is likely to seek some kind of balance.

The other big difference between Cold War Europe and Asia today is that there were no powers in Cold War Europe comparable to India and Japan today. The geopolitics of Asia today has more moving parts than the geopolitics of Europe during the Cold War. And that also points toward some kind of balance, rather than some kind of unipolar domination, either by the US or by China.

In the long run, I don't think the barrier to Chinese military domination is simply one-on-one competition with the US. Other countries like India, Australia, Japan and Vietnam, to name only a few, would respond to a Chinese military buildup. So we're not really talking about a one-on-one, China versus the US, bipolar competition. We really are talking about the emergence of an Asian society of states. And the US goal is not to overpower China by its own military might, but to promote the emergence of that wider Asian order.

Photo courtesy of Wikipedia.

One is that many public servants have become fearful of campaigns against corruption which sometimes verge on witch-hunts. Senior officials fear being noisily charged with corruption over even trivial misdemeanors and have thus become extremely risk-averse. Many government approvals – including many quite reasonable business approvals – are now often badly delayed because officials are reluctant to sign anything with the faintest whiff of risk.

The second problem is the way that the growth of democracy in Indonesia has led to an expansion of 'money politics'. As Stephen Grenville notes, the election campaign for the governorship of Jakarta has been accompanied with all sorts of expensive populist activities. Somebody has to pay for all of this fun. Fund-raising is now a major challenge for any aspiring politician in Indonesia.

It's not clear what to do about the huge problem of money politics in Indonesia. In fact, the international development commentariat hasn't come up with many answers to the key question of how to fund democracy in developing countries.

The operations of a vigorous political industry cost money. In Indonesia there are now over 20,000 politicians in central, provincial and district parliaments. All of them need to run offices, keep supporters happy, and support frequent campaigns. The major political parties often hold big jamborees in grand Jakarta hotels with up to 1000 delegates flown in from all parts of Indonesia. The delegates attend dinners for several days and spend up big on generous expense accounts.

There is now widespread agreement in Indonesia that the high cost of politics is a major problem. The former deputy head of the Corruption Eradication Commission recently said that 'the commercialization of authority for the sake of winning elections and building and sustaining power and wealth' is causing great harm. He pointed out that, among other things, this problem contributes to the 'rampant issuance of mining concessions' because regional politicians find it easy to raise the money they need by selling mining and plantation concessions.

Nobody disagrees that democracy is flourishing in Indonesia or that the campaign against corruption is a vital part of good governance. But it would be a useful step forward in the international development debate if it was more widely recognised that democracy and anti-corruption measures bring new challenges.

One of the major challenges is that, in some important ways, the management of government becomes much harder. The old ways of cutting corners were an unacceptable way of running a country, but they were fast. When modern ideas about good governance bring ever-growing layers of bureaucracy, the system clogs up. Purists wouldn't be happy but there is a lot to be said in favour of Merilee Grindle's practical idea of focusing on 'good-enough governance'.

Photo by Flickr user Shanghai Daddy.

In 2010, China became Australia's biggest inbound tourism market, and is now the most rapidly expanding market. Over 500,000 Chinese visited Australia in 2011, an almost 20% increase on 2010. By 2020, Chinese visitors are projected to inject up to $9 billion into the Australian economy, double their present contribution.

No other sector of the Australian economy has tried so hard to understand this emerging market. As part of its China 2020 Strategy, Tourism Australia conducted research not only in the primary cities but also the secondary. It showed there were big opportunities for Australian operators in places one would expect — Beijing, Shanghai and Guangzhou — but also in secondary cities like Chongqing, Nanjing, Shenyang, Shenzhen, Tianjin, Wuhan and Xiamen. As a result, Tourism Australia will expand its marketing from 13 cities to 30 by 2020.

The research also revealed the strength of the Australian brand in China. In the global ranking of 'must visit' holiday destinations, Australia comes out on top, beating Hawaii, the Maldives and France. When it gauged global responses to its new 'There's Nothing Like Australia' advertising campaign, the most positive reaction came from China. In the upper echelons of Chinese society (the people who can afford to travel to Australia) there is clearly both a curiosity and a prevailing sense of goodwill. Time, distance, and cost were the three main reasons for not visiting. But Australia has a bucket-list allure.

Tourism Australia has also been good at Chinese networking. Since Australia gained 'approved destination status' in 1999 (prior to the introduction of ADS status in the early 1990s, travel abroad was allowed only for business and government-approved purposes) TA has built up a 5000-strong infrastructure of 'Aussie specialist' agents in China.

Independent operators have made major inroads. Sovereign Hill, an outdoor museum in Ballarat that recreates the feel of the mid-nineteenth century gold rush, now has four staff in China. It first set up shop there 20 years ago to attract Chinese visitors keen to learn how their forebears chased fortunes in Australia. Sovereign Hill has Mandarin-speaking guides and even a bespoke China tour. It has now attracted over a million Chinese visitors.

State governments are also playing catch-up. The Victorian Government is running a Chinese cultural awareness program aimed at tourism operators and it's spending $8 million on marketing Victoria in China. Chinese visitors are asked to complete exit surveys at Melbourne Airport.

The Chinese influence looks set to change the character of Australian tourism away from the traditional backpacker model. For a start, Chinese visitors tend to head to urban destinations. In New South Wales, 90% of Chinese visitor nights are spent in Sydney. Research shows that visitors are keen to eat Chinese food, especially at breakfast time. Gambling is also an attraction, which is likely to increase pressure on state governments from hoteliers and the entertainment industry to license more casinos.

Asia-themed events are also increasing in importance. Chinese New Year celebrations in Sydney have become so colourful and exuberant that they have been dubbed 'Mardi Gras goes to China.' It is also the biggest Chinese New Year festival anywhere in the world outside of China.

For the tourism sector, there is a downside to China's growth. The resources boom is exacerbating skills shortages, as bus drivers take the wheel behind Haulpak trucks and hotel chefs head to mine canteens, where they can double their salaries. There are now thought to be 36,000 vacancies in the industry.

This is already having a policy-altering effect. Recently, the Australian Government approved a three-year trial that will allow tourism operators to employ seasonal workers from Pacific countries and East Timor. Increasingly, these guest workers will be tending to the needs of Chinese visitors.

China Airborne served as a terrific title for James Fallows' book. It also works as a heading for the latest chapter in the story of Australian tourism at the beginning of the Asian century.

It's about the mix of foreign and domestic concerns that influence policy abroad. I don't actually think that much of international life is as cut-throat as it is in Game of Thrones. And most diplomats I know aren't as good looking as the show's characters. But in helping people understand the importance of power and influence in international life, this is not a bad example. There are lots of different autonomous power centres. It's not a binary competition between two superpowers. It's a world in which smaller states are pursuing their own goals and interests. Asia is like that — polycentric. The Asian political system is not bilateral or unipolar.

On American decline: I don't see much evidence. In the '90s it seemed to me that people were overestimating the unipolar moment. But it wasn't unipolar in the '90s. In the next decade, people swung too far the other way, hyping America's decline. These are mood swings among the commentariat rather than changes in American power.

In Asia and the Pacific, the situation is broadly favourable for key American concerns. Rising prosperity is not a zero sum game. A richer Asia is a richer America. The US goal in Asia, as in Europe, is not to dominate a region but to promote the emergence of a peaceful order which meets the needs of the people in the region but offers good economic opportunities to the US and keeps security threats from emerging. Though Asia is very complicated, difficult and dangerous, it looks to me like all those objectives are reachable.

The current elections for the governorship of Jakarta illustrate the populist pressures democracy has brought, with candidates out-bidding each other to offer free public services not just to the poor, but to everyone. The trade-off seems painfully clear. If candidates compete to buy votes at the expense of revenue-raising, Jakarta's nightmare traffic congestion will worsen, the city's regular floods will deepen and public services will remain seriously sub-standard.

Populism and the influence of vested interests show their influence in broader economic policy-making. The rise in import protectionism and a more nationalistic attitude to resources investments are not enough to dampen the current rise in foreign investment, but bode ill for the presidential election in 2014, when these issues will play well with the voters. It is true universally that the public has never been convinced by the economists' belief in the benefits of free international trade. But while most countries (including Indonesia, until recently) have been moving in the right direction, Indonesia is now back-sliding. The prospective candidates for 2014 are all more nationalistic and less economically-rational than the incumbents.

Corruption, a 'one-stop-shop' in the Soeharto days, seems undiminished but more widely spread, creating uncertainty about who should be paid and how much. Just as seriously, the (many) non-corrupt officials are reluctant to make decisions (particularly on government procurement and tendering) for fear of being caught up in a corruption investigation, where the Corruption Eradication Commission has an almost-perfect record of convicting all those brought to trial.

Sitting in Australia and observing the incapacity of our own mature democracy to make sensible decisions on mining taxes, climate change, refugees and a myriad of other issues, and noting the incapacity of governments in Europe and the US to come to grips with their heavy economic challenges, we should of course  not be too harsh in our criticism of Indonesia's nascent democracy.

But to simply praise the trappings of democracy without also examining its performance in the areas that matter most — making good decisions — leaves a gaping hole in the analysis. And good economic policy matters more for Indonesia because there is more at stake. India is at present demonstrating that good economic performance can quickly be undone by democratic dithering.

It may well be that there is a price to pay for democracy in terms of slower growth (and perhaps less-well-distributed growth) and that Indonesians are ready to pay this price in return for the many benefits democracy has brought. Also relevant is Churchill's aphorism that democracy is the worst system, except for all the others.

Democracies evolve over time. There will be politicians who can use the parliamentary process to resolve vexed economic issues in ways which reflect public consensus, informed by rational debate. The balance between what is decided by parliament and what is in the mandate of the government can change, reflecting the skill of the participants. Such evolution holds out the prospect that the dead-weight costs of democracy on economic policy making can be lightened.

Photo courtesy of Wikimedia Commons.

In just the last 15 or-so years, India's international reputation has been completely overhauled. 'The old stereotype of Indians as snake-charmers or fakirs lying on beds of nails has been replaced with images of software gurus and computer geeks', notes Tharoor. As the world has watched the emergence of its hi-tech and outsourcing sectors, a condescending orientalism has been replaced by something nearing awe. Just read Thomas Friedman's The World is Flat.

This projection of soft power has been largely inadvertent, and 'emerges despite the government', notes Tharoor, the former External Affairs Minister. 'International goodwill has not been systematically harnessed as a strategic asset by New Delhi.' Any strategic advantages, he notes, have been 'unplanned.'

Tharoor is vague on what precisely those strategic advantages have been. But soft power has been particularly useful in Afghanistan, where the Indians have trained much of their recent diplomatic efforts on making the Karzai Government more Delhi-friendly (and more Islamabad-hostile).

India's 'likeability', for want of a better word, has also helped with Washington. Successive presidents, from Bill Clinton through to Barack Obama, have been charmed by India. Such was the mutual affection demonstrated by George W Bush and his hosts during his visit in 2006 that it looked to your correspondent, who was posted in Delhi at the time, like a Bollywood remake of the Hollywood movie of the moment: Brokeback Mountain.

Certainly these new friendships helped when it came to signing the US-India Civil Nuclear Agreement. Soft power here helped nourish the idea that an emergent India would meliorate the world rather than destabilise it.

That agreement also came about because of the trustworthiness and all-round decency of Manmohan Singh. In diplomatic circles, Brand India is linked inextricably with Brand Singh. Barack Obama has praised him as 'a wise and decent man.' He is portrayed as a global elder. So that is one of the major downsides of this week's rash of negative headlines, and the personal attacks on Dr Singh. India's soft power has come to be linked with its soft-spoken Prime Minister.

Photo by Flickr user timparkinson.

Photo by Flickr user valhse.  

Photos by Flickr users JanneM and SnippyHolloW.

Photo by Flickr user MyMapOfJapan.

Photo by Flickr user St Stev.

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Photo by Flickr user Clint Koehler.

The 'all change' whistle is being blown by Australia's top public servant, the head of the Prime Minister's Department, Ian Watt, who predicts that Asia's rise will impact on Australia in all sorts of realms: 

The opportunities and challenges that accompany this rise are being and will be felt across all aspects of Australian society and our institutions, not only the economy. Asia's growing weight and influence will bring dramatic changes and dramatic opportunities.

When Dr Watt uses words like 'dramatic' something is afoot. His conclusion is that the Australian public service is one of many institutions that will have to transform to become more outward looking and 'genuinely Asia capable'.

Australia is entering a new phase of the Great Asia Project that has obsessed every leader since the 1972 (the starting date is John Howard's, the title is mine). Australia knew Asia existed before 1972, but didn't want to have to translate geography into policy. The importance of the Great Asia Project is the acceptance that Australia must function as part of Asia, not apart from Asia.

The current shift is that discussion is now about what Asia will do to Australia, rather than what Australia will offer to Asia. The positive in this is that Australia's ability to shift has long been evident, even if in the past our leaders didn't always want to talk about it too loudly as they were turning the wheel.

The previous column noted that Australia has already traveled a considerable distance over the last half century in responding to the demands of the Great Asia Project. The factors and the actors that have driven us have been the subject of outstanding books recently, from Peter Hartcher and George Megalogenis. (See Pollytics for an admirable account of the sweet economic numbers that have given rise to talk of Australian exceptionalism.)

Naturally enough, these explanations about sweet spots and Oz moments offer well-woven tales of politics and economics. Yet it is the social and cultural mix of Oz that will be at the heart of an Australia that shifts and reshapes to respond to the promised dramatic growth of Asia's weight and influence. On that front, the sociologist John Carroll offers a succinct reading of the cultural conditions that have set Australia up as a can-do nation:

• Australia, as the fourth most urban country in the developed world, 'has a talent for modern cities that is rare'. Australia's ability to create liveable cities and suburbs, he argues, is on par with our agricultural productivity and post-war multicultural immigration.
• Civic culture combines a practical democratic temper with inclusiveness and scepticism which are excellent traits to foster economic inventiveness and creativity.
• Australia has developed a 'local version of the Protestant work ethic' which has contributed to the nation's economic exceptionalism.

Professor Carroll mixes this with 'the sense of the Australian way of life' – an ability to be both relaxed and serious – to produce economic dynamism and a broad culture. That sounds like a country with the ability to adapt to the Asian Century. 

Photo by Flickr user State Records NSW.

The discrepancies are particularly obvious at board level. Women hold an average 6% of board seats across the 10 markets studied compared to 15% in the US and 17% in Europe, says the report entitled Women Matter: An Asian Perspective. Australia's 13% was the region's highest rate of female board participation.

The worst offenders were South Korea with a paltry 1%, Japan with 2% and India with 5%. Interestingly, countries influenced by Chinese cultures showed relatively high levels of female board participation. Hong Kong, for example, fills 9% of its board positions with women, followed by mainland China at 8%.

By far the main barrier to advancement was what McKinsey calls 'the double burden' of working while caring for families. It detects a cultural influence here, especially in countries like India, South Korea and Japan, where women are often solely responsible for household duties. The report also identified the reluctance of women to promote themselves and an absence of female role models.

The resulting disparity represents 'a huge waste of talent' that could otherwise be tapped to fill the senior management void across the region. The report draws a positive correlation between financial performance and the presence of senior women, attributing this to supposedly female behaviours such as people development and collaboration.

On the Asian street, some economies are feeling the pinch of their failure to promote women.

In South Korean cities, 61% of jobs are held by men, according to a report in the Chosun Ilbo citing data from Statistics Korea. The report said the number of employed women in their 20s fell 26,000 in May from the previous year. In rapidly-ageing Korea, continued failure to replenish a shrinking labour pool with female workers could spell serious economic difficulties ahead.

Can Asian companies lift their gender game? 'Girl power' is gaining ground elsewhere in the region — witness the recent protests by women in burka-like robes decrying sexual harassment on Shanghai's subway trains and the metro's entreaties that they dress modestly.

McKinsey believes it will be an uphill struggle, given cultural norms against gender equality. It suggests a three-pronged approach: management commitment to diversity and targets for senior women, development programs to equip women with skills and networks, and enablers like childcare to ease the double burden.

Asia shook off the global financial crisis with relative ease. Tackling a problem so rooted in its own cultural biases will take longer.

Photo by Flickr user diloz.

As I warmed to my task, things looked especially promising when I retrieved my copy of The Lucky Country (it is usually close at hand) and noticed that the chapter 'Living with Asia' had hardly any notes in the margin. Could it be that Horne had little of lasting note to say on Asia?

Suffice to say, he does. Indeed, I had forgotten that his prologue begins on the terrace of the Carlton Hotel in Hong Kong, with whisky in hand, discussing the White Australia policy with his Chinese host. 'Be careful of the Chinese', his host warned.  In his chapter on Asia, phrase after phrase, now daubed with ink, leaps from the page. How about this for modern-day resonance?

Australia's problem is that it now exists in a new and dangerous power situation and its people and policies are not properly reorientated towards this fact.

Or this?

If the impressions has been given that no in Australia ever thinks of Asia, it should be pointed out that this is now far from true. There has been a huge shift in attitudes. Sensations burst into the newspapers, seminars are held, articles are written. But the interest is sometimes that of someone momentarily attracted to an idea.

He warns against viewing Asia as a monolith: 'The lumping of all Asians together can create a mindless panic.' He reminds us, with foreboding, that the 'history of Asia is a spectacle of rampaging power just like the history of any other continent. And the attitudes of modern Asians to power are those of human beings. Some of them love it.'

He identifies a strand of thought 'not widely represented in Australia outside intellectual and left-wing groups', who would have it that 'Australia will never be trusted by "Asia" unless it withdraws itself from its alliance with America and declares itself to be non-aligned.'

Horne also urged his fellow Australians to accept the reality that 'we're all Asians now.' Then comes another passage that deserves to be pondered anew:

To take our ideology of fraternalism seriously and apply it to Asians could lead to a creative awakening among Australians...And it carries obligations greater than expressions of goodwill...’We’re all Asians now,’ does not relieve one of decision-making; it simply beings to define the problem.

Substitute the word 'opportunity' for 'problem' and this 50-year old statement still sounds as if it could have been written this week.

So Horne has thwarted me, and so has Graeme Dobell. If you want to understand Australia's role in the Asian Century, heed Graeme's advice. Brush the dust from your copy of The Lucky Country, as much an adornment to Australian post-war life as Utzon's glorious shells.

Photo by Flickr user magical-world. 

Our politics, and for that matter American and British politics, may at the moment be driving us all to distraction, but at the very least they are much more transparent and accessible than the manoeuvrings within the opaque leadership of the Chinese Communist Party, which when it comes down to it is a self-selecting clique. And, if recent events are any guide, it is a bitterly divided one, and also one with many members very ready to take advantage of the opportunities for personal gain that political position provides.

Of course China is enormously important, and we and others must make a major effort to understand it and engage with it. But in doing that we should not overlook the fact that our political and economic systems are very different, however engaging and impressive Chinese interlocutors may be.

Five of Australia's top ten overseas countries of birth are now located in Asia, with China and India coming in third and fourth after the UK and New Zealand respectively. The growth of migrant communities is particularly evident in our cities: 66% of Australians live in capital cities compared with 82% of the overseas born population, and over a third of the residents of Sydney, Melbourne and Perth were born overseas.

Of particular significance is the growth and consolidation of the Indian community in Australia. The number of Australians born in India more than doubled since 2006, and Punjabi became Australia's fastest growing language with an even more impressive 207.5% increase. Hinduism has experienced the fastest growth of any religion, with adherents almost doubling since 2006.

We can expect that these migrant communities will find their own unique political voice. Their expertise, language skills and people-to-people contacts will also be vital in securing Australia's interests in the Asian Century, allowing the pursuit of business and trade ventures with Asia's emerging giants.

Australia's relations with its regional neighbours must come to reflect the significance of our domestic Asian communities. This most recent census data makes a clear case for a renewed focus on Australia-India bilateral ties. We must be careful not to neglect our relations with India in favour of expending disproportionate diplomatic and political capital on China.

The increasing influence of Australia's migrant communities will mean that a place for Australia in the Asian Century is unavoidable. What we now need is a clear strategy to fully realise the opportunities and advantages presented to us by our demography.

Photo by Flickr user rubenerd. 

Remembering that time gives some sense of Horne's vision in headlining his prologue 'Peopled from all over Asia'. The title draws on a Filipino prediction offered to Horne during a lunch at the University of the Philippines: 'We are all interested in Australia. It is a huge continent. In a hundred years' time it will be peopled from all over Asia.'

We are nearly half way along the course of that century journey and the view from Manila is being rendered accurate by the census figures. The census results just released show that Mandarin is now the most common language in Oz after English; others in the top ten languages spoken at home include Arabic, Cantonese, Vietnamese, Hindi and Tagalog. Lucky – and smart – is the country that can work changes like that in 50 years.

Horne charted some of that journey in the 1990s in his prologue to the fifth edition of the book, noting the shift over three decades from the age of Menzies to that of Howard. He wrote that many had missed the deep irony in his description of Oz as The Lucky Country, ignoring the loud warnings he sounded: 

It was essential to accept the challenges of where Australia is on the map, the need for a revolution in economic priorities and the need for a bold redefinition of what the whole place adds up to now. These three warnings can now simply be replayed with the amplifying knobs turned up. The first need has been met by many Australians: greater engagement with some of the countries in Asia has helped Australia move into the second chapter of its history.

Horne's most important point for the Asian Century inquiry is one he continually returned to; the thing, he thought, that might save a lucky land that was starting to run out of luck as Asia arrived. Donald Horne knew the hard-headed pragmatism and adaptability of Oz. He closed his work with the thought that those Australian traits of pragmatic improvisation mingled well with non-doctrinaire tolerance, an egalitarian sense of fair play and a courage that could be stoic. These were qualities, he concluded, that could constitute the beginnings of a great nation.

The words Horne penned in 1998 for the fifth edition are still apt: 'In contemplating our present leaders we come face to face with a paradox that became a leitmotiv of The Lucky Country: there are times when the only pragmatic course is to be visionary.'

Many Australians will no doubt think it craven to suggest that this is a central question in the future of our relationship with China. That just shows how little we understand the realities of power. We are neophytes in this because for 234 years we have been on the side of the rich and powerful against the relatively poor and weak. Now our position is much more complex. To a degree greater than we have ever known, the boot is on the other foot. 

That is why the questions Linda poses are so hard. We lack a relationship of political trust with China not only because we do not have the right forums and meetings, but because we fundamentally do not accept China's view of its strategic and political role in Asia. John Howard got away with sweeping this under the carpet, but his model for managing the relationship, and for balancing it with our alliance with Washington, is over a decade old now. It is not working any more.

Photo by Flickr user bildungsr0man.

In the Washington embassy when the Carter Administration had taken office in 1976, at a time when I was acting minister, we received Canberra's advice that we would like the US to regard us as a source of advice on our region. Excellent. But, so typically, this was followed soon after by a cable from Canberra to say, 'We are thinking about ASEAN policy, what do the Americans think. [Full stop, no thoughts from us experts]'. I confess now to having immediately confected a mirror message in reply, claiming that the State Department was reviewing ASEAN policy, what did Australia have to offer? The general level of dumb was exhibited when, at a lunch for him at the embassy, Carter's National Security Advisor Zbigniew Brzezinski was asked to express views on ASEAN, which he did so more than willingly, at inordinate length as he still tends to do, but concluded: 'By the way, is Australia a member of ASEAN?'

I digress, but to point to broader problems of policy development and management. We may think we are smarter now than 35 years ago, but imagine what they will say 35 years from now about present policy muddling.

China policy drifted, early. Stephen FitzGerald as our first Ambassador to China was hated by the Foreign Affairs establishment as a dangerous young outsider come among Jesuits, his thoughts opposed, his departure welcomed. Whereafter, also during a strange and difficult period in China, darkness fell on China policy-making among officials, though much happened at the top of government after Vietnam occupied Cambodia, China attacked Vietnam and the USSR occupied Afghanistan.

I found on my return to the department from elsewhere in 1980 that the standing departmental briefing of objectives for the China relationship was to encourage China towards positive engagement with international institutions and with the region, just as we had so broadly put it five or seven years earlier. It was something that by 1980 had already happened. I thought it dangerous that we were intensely engaging with China (and the United States, but the China embrace was real and enthusiastic) at the highest political level in what the Chinese would call a 'united front' against Vietnam and the Soviet Union. This, to me, constituted a very narrow and potentially fragile base for the political relationship in both countries. The economic relationship was growing, already 40% of Australia's exports went to North Asia. But in the Canberra world, with its separate trade and foreign affairs departments, Foreign Affairs tended still to ignore the economic and the Trade Department sustained ignorance of and hostility towards broader relations. Despite the combining of the two departments in the late 1980s, I have the impression from outside that we don't have a coherent overview in government.

Before the visit of the then Chinese Vice-Premier Li Xiannian in April 1980, the Fraser Government adopted a large number of recommendations in a cabinet submission which were intended, in the language of the decision, to build a broadly based mutually beneficial relationship valued by any future Chinese government. We also broke through old systems, hostile expectations and absurd rules, such as we should not give the Vice-Premier a visa for many weeks because every Chinese official's visa application required a security check which, had we waited, would of course have revealed that he was nothing less than a member of the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China.

In following years, the 20-plus recommendations adopted by cabinet in 1980 saw programs to connect with China in most areas of government such as law, audit, tax and courts. Of enormous importance (now as then) for a country embarking on the construction of an entirely new way of governing and opening its economy were such things as 'profit and loss'. This program to build the relationship was endorsed and added to by the Hawke Government soon after it took office in 1983. When Hawke went to China in 1984, with Ross Garnaut as adviser, a major step was taken to support China's modernisation with the decision that we would help them rehabilitate steel mills. China's first joint venture abroad, several years later, was in the Pilbara.

I think the money thing unbalanced thinking over time, with the importance of supporting China's reform process less visibly embraced, certainly at the political level. Also, though, there is a problem we have in general at the highest political levels: that our leaders do not want to say difficult things to foreign leaders. This in part reflects a lack of sophisticated thinking about strategic and international issues. Too much of our posture is still determined by leaders' feelings for those they deal with. Talking to China about relations with Vietnam, beginning back with that 'united front' entanglement, talking about the human dimensions of our relationship, has been fraught with apprehensions. It has, psychologically, been easier to talk about the money. And easier for the strategic stuff to retreat to where it was in the 1960s: big speeches and unwise military adventures with Americans.

We do not know, nor do the Chinese know, how they will develop their long-standing foreign policy principles and apply them through the era of their great power. We do not know the extent to which China's great power, along with the decaying quality of governance in the West, will see alteration of what the 'state' is in the world generally. My own expectation is that much good could come from the Chinese principles of equality and non-interference. But we cannot influence Chinese policy, any more than we can influence American policy, so long as we simply endorse adventurist and interventionist American policy and say nothing much to the Chinese. The 1974 Barnard-Schlesinger Memorandum, between the then Australian defence minister and the US defense secretary, established a right of strategic consultation between the two governments because we aligned ourselves with US strategic interests by accepting joint defence installations in Australia. The specific consultation process vanished down a secret departmental rabbit hole and the general concept got lost in the alliance's Australian political nonsense and our leaders' love of mateship over succeeding decades and in futile wars.

Jakobson is right to link the management of the US relationship with the China relationship. We can't solve one problem without the other being solved. There remains then a huge drag factor of old Australian thinking and timidity about the alliance. Also, there is a problem of the alliance being so heavily shaped by the defence forces' desires for world's best equipment to be fully interoperable with US forces, at far higher unit cost than the US faces, even when this fantasy posture is increasingly looking broke. Realistically, a good ally should be trying to help the Americans down from an unsustainable posture and pattern of behaviour. Tough love, politically focused, not confined to discussion of the deployment and use of force, the great alliance error of 1914. It can and must be done, the level of liquid in the creek is dropping.

Whatever China does, whatever Chinese do, there is always a streak of racial and anti-communist comment in Australia. Have we not accepted British, American and other white investment for a long time? Get the race factor out and we can deal with the big issues sensibly. To deal with the race issue, leaders have to talk about it openly.

China and other countries in the region deal with enormous issues every day. Australia gets excited about bottom pimples every day, metaphorically and comparatively speaking. Who would know we rank number two on the UNDP's Human Development Index?

Too much public and some political discussion seems still to be driven by colonialist, superior mindsets for which we will pay. We must grow up. 

Photo by Flickr user SpecialKRB.

In the Policy Brief, I recommend establishing an annual, intensive exchange study program for Australian and Chinese mid-career political leaders focusing on politics and strategic thinking. The vice governors  and deputy party secretaries of today will be the ones who rise to the pinnacle of power in China in 2022. It would unquestionably be in Australia's interest that one of China's most influential leaders in the next decade has an intimate knowledge of Australia and personal relationships within the Australian political establishment.

In his book about Australia and China, David Uren describes Bob Hawke asking then-Premier of China Hu Yaobang in 1985 who would be an influential leader in twenty years time. Hawke then sent Ross Garnaut, Australia's Ambassador in Beijing, to far-off Guizhou to extend an invitation to the man Hu Yaobang recommended, Hu Jintao, then a Party Secretary in this impoverished province.

Subsequently, Hu came to Australia as part of the Senior Visitors Program in 1986. More than fifteen years later he became head of the Communist Party of China and President of the People's Republic of China in 2002/03.

According to a Chinese interlocutor who was part of the delegation traveling with Hu when he paid an official visit to Canberra in 2003 and addressed the Australian parliament, Hu referred repeatedly to his fortnight spent in Australia seventeen years earlier. Australian officials who met Hu during his 2003 visit recall that Hu displayed an unusual level of knowledge about Australia's resource industry and enthusiasm for the potential of establishing robust Chinese and Australian economic ties.

Hawke laid a stone in the foundation of the flourishing Australia-China economic ties which exist today. Now Australia needs a leader (and the initiative) to lay a few stones to cement the basis for meaningful political ties in the next decade. It's a far more complex challenge today than it was thirty years ago.

Photo by Flickr user joachimtraun.

'Will India be the first BRIC fallen angel?' asked a report last month from Standard and Poor's. The question was left unanswered, but the hard-hitting report would have made for unhappy reading in South Block, Delhi's version of the West Wing, not least because its focus was on politics as much as the economy.

Coalition government is part of the problem. Prime Minister Manmohan Singh's Congress Party-led administration had to reverse its plan to raise the cap on foreign investment in retail, which would have opened the way for US giants like Walmart, because of opposition from its coalition partners.

Allegations of corruption in sectors like mining and communications, an old Indian bugbear, have undermined public confidence in the economic reform agenda. Ministers also fear greater deregulation, not because of ideological qualms but through fear of relinquishing political power.

However, the overriding problem, according to Standard and Poor's, is the dysfunction at the top of government, and the separation of powers between Dr Singh and his political patron, Sonia Gandhi, President of the Congress Party. Singh, who as Finance Minister in the early 1990s started liberalising the economy, cannot choose his cabinet. Nor can he make it bend to his will, because he lacks a power-base of his own.

The irony is that Singh enjoyed far more power as Finance Minister in the Rao Government twenty years ago than as Prime Minister today.

Now, following Pranab Mukherjee's decision to step down as Finance Minister to run for the largely ceremonial position of president, Singh will perform both jobs himself. His aim is to revive the 'animal spirit' of Indian economic growth. It helps that India has a strong private sector, a thrusting middle class and foreign exchange reserves worth some $250 billion. But Singh's 'animal spirit' comments have been roundly lampooned, because the mild-mannered leader rarely, if ever, shows his teeth.

Nor is he likely to when it comes to confronting the central institutional problem: the impoverishment of Congress Party politics.

Photo by Flickr user snapper san.

Australian diplomats are generally highly regarded and form relationships with official counterparts, foreign media and broader elite audiences easily. But what they do is traditional diplomacy, which is about reaching decision makers and those who influence opinions, and it is often is around single issues (eg. a trade negotiation, or an arrested Australian). 

Public diplomacy differs because but it has a broader reach, it goes beyond the influential few to the masses, to those indifferent, ignorant or not seeking to know. It seeks out a new audience and encourages communities to adopt a positive and open outlook towards Australia.

My concern is that ediplomacy, such as the Australian Embassy’s Facebook page, is a diversion from the real business of public diplomacy, the kind that gets out into regular Indonesian communities (outreach). The public affairs and cultural sections in DFAT are constantly being squeezed of resources; and the Australia-Indonesia Institute’s funding has barely changed over the past decade.

In Indonesia, there are less than a handful of successful programs remaining. They being the Muslim Exchange and Youth Exchange programs from the Australia-Indonesia Institute; and the BRIDGE and Australian Scholarships promotion strategies, interestingly funded by AusAID but developed and managed by the Education Attache.

These programs, and I applaud their incredibly positive impact, do not and cannot reach 245 million Indonesians. But they are all that remains after years and years of substantial funding and program cuts. Australia once had in Indonesia what was arguably a more extensive education and culture presence than any other country.

The Australian Education Centres (AECs) in Jakarta, Surabaya and Medan annually generated over 300 newspaper and television news items. In any given year, this was between a third and a half of all stories generated by the entire Australian Embassy in Jakarta. 

And the AECs communicated directly to tens of thousands of young people every year, delivering presentations in classrooms or to school assemblies, answering questions at education fairs and exhibitions, working directly with teachers and local governments. For example, annually they delivered career-oriented My Future workshops to almost 5000 students and their parents.

 I have elsewhere described in detail what happened, but the AEC Network was shut down by the Government in 2010 and overnight the Australian Embassy lost practically half of its public diplomacy profile and capabilities. And the Government made savings of $200,000, the annual cost of running the AEC network.

Australia became the only country with a significant relationship with Indonesia that doesn’t have an educational or cultural presence in Jakarta. The Americans, the British, the Dutch, the Germans, the Italians, the Japanese, the French and a host of other countries are now much more visible than Australia.

What Australia does right now as public diplomacy is piecemeal, there is much less of it than before, and there is no coordination. Take for example Tourism Australia and AusAID, who both recently put out tenders for their campaigns in Indonesia. 

Tourism Australia sought an agency to provide 'marketing of Australia as a destination for leisure and business travel'. AusAID sought an agency to 'increase the profile of Australia and its [$500 million a year] contribution to Indonesia’s education sector through a concentrated public diplomacy strategy' with a budget of $2.2 million a year.

How they each went about it is interesting. AusAID, simply because its tender process is complicated and bound in red-tape (the RFT was 179 pages long with hundreds of pages of attachments), received tenders from its regular development assistance contractors. Tourism Australia, because its tender process was simple (a one-page RFT), received tenders from public relations firms. 

Tourism Australia will get public relations expertise. AusAID will get another managing contractor, when what they really want is an AEC network!

Photo courtesy of AusAID.

You don't have to be an old Maoist Marxist to believe that the only way to think about economics is to pair it with a heavy descriptor so that it becomes a discussion of 'political economy'.

It was striking that after the Obama-Gillard Marine basing announcement in November, everyone put the focus on the military/diplomatic reaction from Beijing – it duly came and was duly negative, as rendered by various Party mouthpieces. What happened next, though, seemed to be the truly important reaction. It came just a week after Obama and Gillard had their Canberra presser on 16 November: Beijing announced that for the first time its currency would be exchanged directly for the Australian dollar. The effect was to remove the need for deals to be run via an intermediate transaction using (trumpets please) the US dollar. The Oz dollar became just the seventh currency to achieve this status as China ever-so-slowly edges towards making the yuan convertible on international markets.

Was it merely a coincidence that Beijing made the shift so shortly after the Obama-Gillard basing announcement? Currency issues are intensely political for Beijing. So mark the shift as one that had more to do with judgment and message-management than any happenstance of timing. China brought forward a change that would give Canberra a gentle elbow in the ribs and point to the shape of things to come.

At the moment, all Oz mineral contracts with China are written in US dollars. Will that still be the case a decade from now when China, in parity pricing terms, is overtaking the US to become the number one economy in the world? As of today, 23 cents of every dollar of exports goes to China and three-quarters of those are for commodities. Big integrative effects and policy implications are in view when Australia confronts the demand to cash those contracts in yuan rather than US dollars.

The mandarins of the Australian Treasury and Reserve Bank will need to do much of their thinking in Mandarin. As then-private citizen Bob Carr blogged on the eve of the Obama visit last November, Australia should not side with the US in any dispute over the value of China's currency. On the yuan, Carr advised Gillard: 'Tell the president politely we are not signing up to a mindless anti-China campaign. The alliance does not require it.'

Ah, the judgments involved in acknowledging Chinese prerogatives.

The structures are not always quick to adapt to the way power is shifting. And some new structures try to resist the coming tide. Australia is happily pushing the accelerator to try to realise the US vision of a Trans Pacific Partnership. This would be an exclusionary preferential trade system for the Asia Pacific with labour, environmental and copyright standards that China would not be able to stomach. A decade after the major and sustained effort China made to get into the WTO, Beijing sees not reason why it has to grapple with a fresh set of US demands.

As argued previously, a key question for Australia in the TPP is how much it is prepared to shut out China. Even posing the question in such terms suggests what a diabolical choice it could become.

The Japan experience is important in considering how Australia's preferences and understandings are reforming. Japan took centre stage in Australian regional thinking in the 1970s, 80s and early 90s. The cumulative effect was that Australia could not conceive of being in any trade deal aimed against Japan. Keating made that pledge in 1992, a statement notable for being as obvious as it was important. 

When Keating made that point, Japan had stood at the top of Australia's trade table for nearly three decades; that was three decades of growing importance as Australia's policy and interests realigned to reflect an understanding of what Japan meant. The fact that Japan was a US ally made it that much easier, but nevertheless the reshaping and reordering of Australian preferences from the 1960s to the 1990s reflected a significant Japan influence.

In the 1960 and 1970s, it was almost inevitable that Australia would abandon the century-old mindset of the White Australia policy, yet Asia demanded that of us. It was Japan that exemplified this reality in economic and diplomatic terms that were as important as the social or immigration policy elements. This is a point with a lot of history. Recall that at the Versailles negations after World War I it was Billy Hughes' passionate defence of White Australia that caused a disastrous clash with Japan, with echoes that resounded through the coming decades.

Having Japan as our number one partner for three decades altered many Australian assumptions; two to three decades of the same with China will surely have an equal impact. And just over the horizon, there is India.

Photo courtesy of Wikipedia.