Lowy Institute

There is no sugar coating it. This year’s budget will see Australia’s foreign aid reach the lowest levels of generosity in our history. But there are some silver linings within the budget allocations and process. Bilateral programs, which were savaged last year, have been by and large protected. And DFAT looks to be maturing in its role as custodian of Australian aid, with aid transparency and budget documentation vastly improving.
 

A run through the numbers provides a bleak picture of the aid program. When adjusted for inflation, the $224 million cut this year amounts to a 7.4% cut to the program. This is the sixth-largest cut in any one year in our program’s history, a painful fact the aid community is no doubt numb to after last year, when the program was slashed by 20%. After four consecutive years of budget cuts, the aid program is now 30% smaller in real terms than it was at its peak under Labor in the 2012-13 budget. Our aid generosity, as measured by aid expenditure as a proportion of gross national income, has also dropped from 0.34% to 0.23%. This is the lowest in our nation’s history and well below the OECD average.

Growth in the aid program is now pegged to inflation over the forward estimates period, meaning the cuts have finally come to an end. Sadly, that doesn’t provide much solace when the aid budget is at rock bottom.


Figure 1: Australia’s new norm of aid generosity

The Government has been quick to argue that the overarching budget situation made tough decisions necessary. Shrinking the aid budget might indeed be justifiable in times of austerity. However,  total government expenditure has actually increased by 9.3% over the same period that aid has been cut by 30%. Over that same period, aid as a share of government expenditure has dropped from 1.32% to 0.85%. It seems the tough decision taken has been to prioritise other expenditure over foreign aid.

So that’s the bad news. What about the good?

Let’s start with how the cuts have been managed. Last year, Australia’s bilateral programs bore the brunt of the 20% cut to the aid budget. This year, they have been protected, with most bilateral programs remaining the same in nominal terms and the inflation-inflicted pain will be felt across the board. Instead, DFAT has implemented some crafty accounting to delay cash payments to multilateral agencies. We were assured in the lock-up that all commitments to multilateral agencies will be upheld, and the aim is to plug the gap with the small incremental increases the aid program is expected to receive over the forward estimates. The only downside to this approach is the jettisoning of the Coalition’s commitment to performance-based allocation of Australian aid, as discussed in detail at Devpolicy’s aid budget breakfast. Naturally this would have been much more palatable with a program that is scaling up rather than bottoming out.

Some other good news is the way the budget was delivered, with a lot more information and transparency. Since 2001-02 the budget had always been accompanied by an aid ‘blue book’, which provided invaluable information down to the country level. With the merger of AusAID into DFAT the blue book disappeared. We were assured that all information previously found in this resource would be put online but it wasn’t. Now, after a two year absence, the book is back (though it's now orange), allowing more detailed analysis into areas such as sectoral expenditure. It’s a relief to have it back, and even better that it is accompanied with the (still green) statistical annex that is invaluable for aid researchers like myself.

Another interesting point to note is that departmental costings to the aid program remain quite high. As a proportion of the total budget, staffing takes up 6.35% of expenditure this year. This is down from its 7.42% peak in 2013-14, but much larger than the 3.5% reported when the budget was at a comparable (inflation adjusted) level to today’s, back in 2007-08. With this increased level of staffing, and no future scale-up on the horizon, one would hope that the aid program would have more resourcing at its disposal, even with the blended roles many aid staff must now be working in DFAT. An adequately staffed aid program should mean we will be able to do more with less.

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Overall what could be controlled by DFAT has been controlled well, all while giving back to the sector a lot of the transparency that was taken away in the AusAID merger. Perhaps this is in response to the sector's demands, or it could be because the aid program has found its feet within DFAT. Whatever the case, it’s good to see DFAT taking the first steps to being a mature custodian of the aid program, and we should all hope to see this continue.

Despite these silver linings, it’s hard not to drown in the negatives of a budget that sets the least generous aid program in our history as the new norm. Now that we are in this new reality it’s important that the sector as a whole continues to reflect on exactly how we got here. The government must bear the most responsibility for picking on the aid program so severely. But it's also on all of us, the supporters of aid, who have allowed this to happen. When in government, Labor should have better communicated why a scale-up of foreign aid was good not only for the world’s poor, but also good for Australia. Aid campaigners, who had a huge role in the bipartisan commitment to a 0.5% aid/GNI target back in 2007, should have kept the pressure on Labor as it continued to delay funding commitments (which in turn allowed the Coalition to walk from the table completely). The NGO community, which has the greatest advocacy resources and mobilisation power, has been too focused on its own funding and failed to effectively unite behind a cause that would lift all boats. Lastly, researchers and commentators like me tended to focus too much on the negative and overlooked the good work that Australian aid continues to deliver.

We should all be taking a look in the mirror.

A comprehensive dataset of all budget figures and assumptions in this piece is available here.

Photo courtesy of Flickr user DFAT

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The People's Liberation Army released a new 'action-packed rap' recruitment video a couple of days ago. A couple of the lines in the video have gained some attention such as: 'Are you afraid? No! Are you afraid? No! Just need the order to kill kill kill!' and 'always think about the mission; the enemy forever in your eyes.' Catchy.

It's a pretty slick ad. Although it could be slowed down from its eye-watering, Clockwork Orange-esque pace. What is included in the video is interesting though. While most of the shots are of seemingly smooth infantry manoeuvres and hostage rescues, there is a big focus on 'informationised' warfare: satellites, space launches, global positioning systems and AWACS planes. Also featured is a large segment of China's mobile missile force, the main part of its growing anti-access and area-denial capabilities.

By and large, the image of a modern, highly trained and mobile military force largely represents the direction and intention of the recent organisational and doctrinal reforms instigated by President Xi Jinping. Interestingly, the one thing missing was a feature on China's cyber forces. The US Air Force started recruiting ads for its cyber division as far back as 2008. Can't be long before China follows suit.

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11 of 11 This post is part of a debate on Do embassies still matter?

By Dr Greta Nabbs-Keller & Dr Hadianto Wirajuda

In the debate over the relevance of diplomatic missions in a globalised and networked world that's been sparked by the Lowy Institute's Global Diplomacy Index, it is important to consider how diplomacy is both perceived and conducted by non-Western states.

Indonesian President Soekarno at a function in 1965 (Photo: Flamini/Express/Getty Images)

Consider Indonesia as a case study. For Indonesians literate in their country’s political history it would be quite unthinkable to question the contribution of diplomats and diplomatic missions in advancing Indonesia’s national objectives. Moreover, the stakes of diplomacy historically have been much higher for Indonesia, and the political imperatives more compelling, than in a Western democracy like Australia.

Indonesian diplomats were midwives to the birth of the independent nation-state. And although the role of armed struggle against repeated Dutch police (military) actions in 1947 and 1948 is rightly acknowledged in Indonesian history, the work of Indonesia's nascent diplomatic corps and the influence of individual ambassadors and emissaries kept Indonesia's nationalist struggle on the international agenda resulting in eventual Dutch capitulation.

The battle for Dutch West Papua New Guinea

But the vital role of diplomacy in achieving statehood was not moribund upon the formal transfer of sovereignty from the Netherlands in 1949. For Indonesia, the Republic remained incomplete without the incorporation of Dutch West New Guinea. Through a combination of US pressure on the Dutch and Indonesia’s intense diplomatic lobbying at the UN and through the Non-Aligned Movement, the UN instituted an interim administration arrangement in 1962 prior to handing administration to Indonesia. Leveraging off geopolitical tensions and a large Soviet arms build-up in Indonesia, Indonesian politicians and diplomats played on America’s Cold War anxieties about monolithic communism and Soviet influence in Asia. The protracted decolonisation process in West New Guinea had served only to empower Indonesia’s Communist Party (PKI); a fact made increasingly obvious to Washington.

During the same period, President Soekarno’s revolutionary politics were impacting on Indonesia's foreign ministry and the country’s regional diplomatic posts, revealing the high stakes game in Jakarta. Soekarno's political embrace of the PKI and the feverish discourse around NEKOLIM (Neo-colonial) and OLDEFOS (Old Established Forces) fuelled the politicisation of both the foreign ministry and Indonesia’s overseas diplomatic missions. Diplomats who served during this period, for example, recall the preferential treatment reserved for members of Deplu's leftist Youth Movement in First and Second Secretary appointments. Scholarships and study experience gained in the West increasingly became a career liability.

As a result of the Konfrontasi campaign (1963-66) against the new Malaysian Federation, Indonesia’s regional relations deteriorated markedly. Indonesia closed its diplomatic missions in Singapore, Penang and Jessselton (Kota Kinabalu) in protest against not being consulted on such an important regional development and suspicions the Federation was a neo-imperialist plot designed to contain Indonesia.

The apex of Indonesia's revisionist foreign policy was manifested in the closure of Indonesia’s permanent mission to the UN in January 1965 and subsequent announcement of a political axis with Peking. To date Indonesia remains the only state to have withdrawn from the supra-national body.

The turbulent times for Indonesian diplomats did not cease with the political demise of President Soekarno, however. As the military consolidated its power, Indonesia's foreign policy apparatus was 'cleansed' and 'purged' by Army authorities. In 1966, foreign minister Dr Subandrio and departmental Secretary-General Garis Harsono were both arrested and sentenced to death. The Suharto-led New Order government later commuted the death sentence against Subandrio (a former ambassador to London and Moscow) following British intervention.

At Indonesia’s missions, meanwhile, military officers known as 'Special Executives for Foreign Affairs' (Laksus) were installed to oversee the 'mental development' (pembinanaan mental) of Indonesia's overseas students and screen staff to 'remove extremist and subversive elements'.

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Reflecting the military’s broader dual socio-political role (dwifungsi) and its institutionalisation across Indonesia's bureaucracy, the Suharto-led New Order regime increasingly appointed senior Army officers as ambassadors to Indonesia's strategic missions then classified as 'D1' posts. As the end of the Cold War led to an increased focus on human rights by Western states, Indonesia's choice of diplomatic appointments on occasion fuelled bilateral spats. In 1995, for example, Jakarta's choice of General Herman Mantiri as ambassador to Canberra was rejected by the Keating Government, exacerbating differences over civil and political rights.

Following Suharto’s political downfall in 1998 and with Indonesia subsequently eager to project a new, democratic identity, career diplomats, entrepreneurs and former politicians increasingly replaced military officers as Heads of Mission at key posts. This trend coincided with important shifts in Indonesia’s civil-military relations, enhancing civilian authority over foreign policy and providing the space for renewal within Indonesia’s foreign policy bureaucracy and at Indonesia’s missions.

The reforms instituted by foreign minister Hassan Wirajuda [2001-2009] required greater accountability of Indonesia's ambassadors, consul-generals and consuls, and greater efficiencies in the management of personnel and resources at post. The democratic state's duty of care to it citizens overseas, meanwhile, comprised mainly of young female domestic workers, was reflected in institutional changes in Jakarta and enhanced consular services for Indonesian expatriates.

Today former military and police officers are installed at ambassadorial posts where there is a key security dimension or hardship component. Retired Marine General Safzen Noerdin, for example, served as Indonesia's ambassador to Iraq from 2012-2015. Whilst, former Police Commissioner General and Head of Indonesia's Criminal Investigations Agency (Bareskrim), Ito Sumardi, heads Indonesia's mission in Myanmar.

Whilst the political influences shaping the work of Indonesian diplomats are now driven less by radical politics, internal stability concerns or democratic norms, Indonesian diplomats now work within the ideational context of President Jokowi’s revolusi mental and Nawacita. A continuum of early Soekarnoist ideology, revolusi mental aims to improve both the integrity and productivity of the Indonesian people, whilst Nawacita articulates nine aspirational goals or principles of state.

These ideational influences combine with the practical imperatives for Indonesian diplomats to facilitate trade and investment critical to Indonesia’s infrastructure priorities. The need to finalise land and maritime boundaries, moreover, is made more urgent by China’s increasing assertiveness in Indonesia’s Exclusive Economic Zone.

Although the protection of Indonesian citizens and legal entities abroad has remained a core foreign policy priority in the post-authoritarian era, diplomats now express this through the conceptual terms of revolusi mental and Nawacita.

In summary, Indonesia’s diplomats and overseas diplomatic missions remain indispensable, as they stand at the intersection of Indonesia’s nation building project with the broader international community. The nuances of this project may have shifted over time, but the fundamentals remain similar: diplomacy for the development of a cohesive national identity, diplomacy for economic growth and prosperity; diplomacy for defence of Indonesia’s sovereignty and territorial integrity. Yes, embassies still matter; for Indonesia at least.

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On 9 April, Egypt's cabinet announced it would transfer sovereignty over the strategic Red Sea islands, Tiran and Sanafir, to Saudi Arabia. The deal has sparked widespread anger in Egypt. Many Egyptians consider the transfer — announced during a five-day visit by King Salman to Egypt — as payment for continuing Saudi financial support for Egypt.

Protesters outside the Press Syndicate building in Cairo, 15 April (Photo: Anadolu Agency/Getty Images)

Shortly after the decision was made public, Twitter users started expressing ire towards President Sisi under the hashtag #AwadSoldHisLand, a reference to an Egyptian folktale about a man named Awad who brought his family shame by giving up the family farm. On 15 April, 2000 people protested the decision in front of the Press Syndicate building in downtown Cairo in the largest anti-government protests since President Sisi took power in 2014. 

Much has been made of the significance of these protests. Indeed, the 15 April protests were bigger and more diverse than many had anticipated, and touched a raw nerve even among Sisi's staunchest supporters. Large pro-Sisi media outlets, such as the private Egyptian daily al Watan and the state-owned Al Ahram paper, expressed rare criticism. 

The regime went to great lengths to limit further protests announced for 25 April, Sinai Liberation Day. Dozens were arrested by the security forces in synchronised raids across Egypt in the lead up to the protests, and the locations of many planned demonstrations were cordoned off by the military who deployed across the country. The crackdown was successful; there were no sizeable demonstrations on the day other than those organised by the regime celebrating the liberation of the Sinai.

But mostly, the protests merely confirm what we already know. Discontent with the Sisi Administration has grown over the past year and the president's broad support structure has been shrinking. Crucially though, the security establishment remains firmly behind Sisi while many Egyptians who are not normally politically engaged — the so-called 'sofa party' — continue to accept his regime's transgressions.

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A survey carried out by Baseera, an Egyptian polling organisation, showed that 30% of respondents believed the islands were Egyptian while almost half were unsure or even unaware the islands existed. But in a country where public opinion polls are notoriously unreliable and political engagement remains low, an important measure of the public mood will be the level of parliamentary resistance. According to the Egyptian constitution, parliament will have to vote on the deal. Egypt expert Michael Hanna has rightly argued that 'if a legislative body that is often seen as little more than a rubber stamp chooses to assert itself on such a highly contentious and sensitive matter, it will be a major setback for the Sisi regime.'

Sisi chose closer Egyptian-Saudi relations at a time of considerable economic distress for Egypt. The coinciding territorial concessions were always going to be controversial. Yet, it was the administration's handling of the case — the 'absence of politics' and the lack of transparency as Egyptian journalist Maged Atef called it — that has done much of the damage to its reputation at home.

Crucially, the anger over the islands deal has obscured scrutiny of the pay off; a package of 21 economic agreements worth US$25 billion. Contrary to previous installments of Saudi aid, the current package no longer includes direct financial assistance and is generally thought to be no longer free of political charge. Saudi analysts have argued that 'any aid Riyadh offers is to be repaid either by political support for Saudi positions at the Arab League and the Organization of Islamic Cooperation against Iran and Hezbollah or by military backing, such as Egyptian participation in the Saudi-led Islamic Military Alliance to Fight Terrorism'.

If true, this would further increase the political costs at home for the Sisi Administration.

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Most people understand what is involved in a ceasefire.  Fewer would be familiar with the term 'cessation of hostilities', and there would not be many at all who would know what a  'regime of calm' means. This melange of terms reflects the challenges involved in brokering any kind of reduction in fighting in the confused and confusing environment that is Syria.

Syrian kids protest against Assad Regime forces air attacks targeting Aleppo

The confusing terminology largely reflects the fact that military action was allowed to continue against the two proscribed terrorist groups, Jabhat al-Nusra and Islamic State.  On the face of it, this sounded like an imperfect — but feasible — diplomatic outcome.  Syrian forces used the opportunity to shift their weight of effort to attack Islamic State targets and retake the symbolically important, and operationally useful city of Palmyra/Tadmur.  Coalition aircraft, both alone and in concert with Kurdish ground forces, have kept up the pressure against Islamic State in the northeast.

And while the 'cessation of hostilities' has more or less held and led to a reduction in deaths, a golden thread has started to unravel the cessation; Aleppo.  This is not only because Aleppo has been a strategic focus of the regime since the introduction of Russian airpower allowed Syrian and allied forces to resume offensive operations, but also due to the fact that Jabhat al-Nusra operates within it.

And therein lies the rub.  Unlike Islamic State, Jabhat al-Nusra has been a much more Syrian-focused group, and much more collaborative with on-the-ground partners.  It is far more respected by locals than is Islamic State, so groups regularly form local alliances and fight with it.  More respected doesn't mean wholly respected, as indicated by protests in Idlib, and concerns about the group's renewed interest in Aleppo reported by Lebanese media.   The more cooperative environment on the battlefield though means it can be difficult to separate Jabhat al-Nusra from other, non-proscribed groups.  The Russians and Syrians don't really care, and view anyone working with Jabhat al-Nusra as fair game.  The US and its allies think the Russians and Syrians overstate the areas within which Jabhat al-Nusra operates so they can take over more territory in Aleppo.  Hence the difficulty in reconciling areas that are fair game for targeting and those that aren't.  This dilemma has resulted in a rather extraordinary proposal; a joint Russian/US violation monitoring centre,  extraordinary in its concept and extraordinary if it works.    

With the Geneva peace talks currently moribund (Germany and France are trying to perform CPR), and the cessation of hostilities hanging on by its fingernails, Aleppo has become the last hope for the reduction of fighting to stay.  But, with a regime that sees Aleppo as 'winnable', Washington which has warned Damascus against thinking this, and an opposition who continues to cooperate with a proscribed terrorist group on parts of the battlefield, the prospects for anything other than a temporary respite to the fighting appears bleak.

Photo by Stringer/Anadolu Agency/Getty Images

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A first look at the 2016-17 budget for foreign affairs, aid and defence yields few surprises. For an unsurprising budget, this is a long post, but it’s worth looking deeper at how each of the agencies fared, particularly after the comparatively controversial efforts of the last two Coalition budgets.

Source: Lowy Institute Global Diplomacy Index

Foreign affairs and aid

One of the surprises is a pleasant one for those of us who’ve long argued for a larger diplomatic presence for Australia, with a $42 million budget measure to expand Australia’s overseas diplomatic network by adding a new post in China, presumably in the vast and booming inland. The location is yet to be announced.

This builds on last year’s foreign affairs budget which, if you are partial to surprises, was the big one. It heralded an unprecedented investment of $100 million to increase Australia’s overseas representation, adding five new posts in Doha (Qatar), Macassar (Indonesia), Ulaanbaataar (Mongolia), Phuket (Thailand) and Buka (Bougainville). The Buka post idea has now formally been abandoned, scotched by an awkward communications problem between the Australian and PNG governments. 

In its place is a new post in Lae, as well as the post in China announced yesterday. This makes a total of six new posts for Australia’s still-underdone overseas network, bringing our total to 115 posts. The planned additions will lift our position in the global rankings and OECD nations’ diplomatic networks from 27th to 26th; ahead of the Czech Republic but behind Belgium (117 posts) and Portugal (123 posts).

Overall, the appropriation for DFAT is $1.4 billion this year, up $53 million (4%) on last year’s budget. This doesn’t include the aid budget, which is an administered expense and not included in the department’s operating costs. The bitter pills in the foreign affairs and aid budgets came earlier in the term of this Coalition government: in late 2013 there was a 10% reduction in staffing over the foreign affairs and aid portfolio with the ‘integration’ of AusAID into DFAT, and last year a 20% cut ($1 billion) to the aid budget.
 
This year's $200 million cut to aid is small by comparison, and it was also expected. As Devpolicy’s Stephen Howes put it today, ‘we’ve got used to aid cuts’; and besides, the average Australian isn’t that fussed: in our polling on the aid cuts last year, 53% were in favour of last year’s $1 billion budget cuts, with only 35% opposed. When it comes to easy budget savings, it appears the aid budget is now low-hanging fruit.

Among the other measures in the foreign affairs budget are:

  • $9.2 million over four years for the government’s people-smuggling prevention program.
  • $2.4 million to bring forward the opening of two new ‘landing pads’ in Singapore and Berlin under the government’s Innovation Strategy, adding to the existing pads in San Francisco, Tel Aviv and Shanghai.
  • $46 million to meet the increased costs of producing passports, which will be more than offset by an additional $173 million in revenue for the government over four years raised by upping the cost of a passport by $20 ($10 for children and seniors).
  • $48 million in revenue from increasing notarial service fees (though sadly this also goes to consolidated revenue, not to the departmental budget).

One of the persistent problems for the foreign affairs and trade portfolio is the relentless demand for efficiencies. Read More

These are always styled by government as ‘business as usual’, with periodic reviews conducted across the whole of the public sector to identify potential cost savings. This year, the ‘efficiencies’ generated by DFAT’s last Functional and Efficiency Review amount to the single biggest budget item for the portfolio, with savings of $74.5 million over five years. These will come from a variety of areas including:‘streamlining business processes’; ‘changing overseas posting arrangements’; and ‘removing consular assistance for dual nationals and permanent residents in the countries of which they are citizens’. This last one was bound to cause consternation, even though it was foreshadowed in the Foreign Minister’s review of consular assistance leading up to its recent Consular Strategy. It is also the practice of like-minded countries such as the UK and New Zealand.

Adding to this efficiency drive is the ongoing public sector ‘efficiency dividend’. This is a government-wide initiative, introduced back in 1987, to reduce the annual costs of departmental operations by a fixed percentage. Some agencies (but not DFAT) are exempt. The dividend has ranged from 1% to a high of 4% in 2012, and now sits at 2.5%. For a department the size of DFAT, with an operating budget of around $2 billion, this means $50 million in savings must be found each year. The 2015-16 budget promised to reduce it to a more manageable 1% in 2017-18; this budget overrides that, maintaining the 2.5% for the next two years, winding it down to 1.5% in 2019-20.

This is all very well for government departments and agencies which have enjoyed ‘historically strong public expenditure growth’ over the last 10-15 years. However, as we’ve argued in the past, DFAT was not one of them. Its share of total government expenditure actually fell from its ‘high’ of 0.43% in 2000-2001 to an historic low of 0.28% just before the AusAID integration. Over the same period, its budget in real terms was almost stagnant. The public sector as a whole grew by 57% between 1998 and 2013, while DFAT grew by only 7%. It did not experience the boom the public sector enjoyed, but it is expected to wear the continuing punishment. The 2010 Incoming Government Brief prepared for the Gillard government by DFAT noted that:

...limited gains are achievable after more than a decade of having to offset the eroding effects of the 1.25 per cent cumulative efficiency dividend... Having exhausted opportunities for reprioritisation and efficiency gains, meeting the challenge of a more complex diplomatic world will require additional funding, with a particular focus on growing the overseas network.

Six years later, that additional funding is materialising, albeit painfully slowly. But if the opportunities for further efficiencies were exhausted in 2010, they must surely be almost non-existent by now.

Defence

Defence is of course a different story.

Defence gets $32.3 billion this year and $142 billion over the next four years, in line with the Coalition’s 2013 commitment to reach 2% of GDP by 2020-21 . This is up just 3% up on last year’s budget, but a very substantial 22% increase on the pre-Coalition 2013-14 budget.

This year, Defence operations gets over $616 million for additional operations funding (around half of DFAT’s entire operations budget), and a similar amount over the forward estimates. This funds the continuation of our existing operations in the Middle East, with Operations Accordion, Highroad, Manitou, Okra and Resolute all getting additional money.

It’s full steam ahead on Australia’s naval shipbuilding strategy, with $90 billion over the term of the White Paper invested in the 12 future submarines, offshore patrol vessels and future frigates projects.

Our friends over at ASPI have dissected the Defence budget story, and called it a ‘no surprises budget’. 

In sum: no surprises in a good way for the Defence budget, no surprises for the aid budget which has endured its share of jarring shocks under the Coalition, and a small surprise for the overseas network in an otherwise unexceptional budget.

Onwards.

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Later this month, President Obama will attend the 42nd G7 Summit in Ise, Japan, about half-way between Tokyo and Hiroshima. Following John Kerry's visit to Hiroshima in early April, the first ever by a sitting US Secretary of State, many speculate that Obama will do the same and could in fact apologise for the atomic bomb drop of August 1945. Kerry apparently found his Hiroshima visit harrowing, and it fits with Obama's less blustery approach to US foreign policy that he would consider an expression of remorse, perhaps akin to his address to the Muslim world in Cairo in 2009.

But if the politics of that speech were contested, this would be worse, as almost no one wants it.

US Conservatives

It is a populist article of faith in the US that the bomb-drop was necessary; I do not remember this even being controversial in any textbook I read until my senior year of college. Veterans groups and public opinion were powerful enough to shut down a major exhibit on the 50th anniversary of the bomb drop in 1995, and no serious public figure I can think of talks about this. Hiroshima is even less controversial than Dresden.

So it is not hard at all to imagine the huge backlash Obama would face at home from Republicans, neoconservatives, talk radio, Fox News, veterans groups and so on. That this is an election year only worsens the calculus. Donald Trump has fractured the Republican party, but if there is one thing all Republicans agree on, it is that Obama is 'weak.' A favorite conservative critique is that Obama apologises for the US, and a Hiroshima apology would be easily spun as another stop on Obama's 'apology tour.' Were Obama to do this, it would be an election season gift to the struggling GOP, and Hillary Clinton would find herself answering questions on this for weeks. Honestly, this alone is probably enough to derail any Obama effort.

China and the Koreas

Similarly, it takes little imagination to see how badly this would provoke China and the two Koreas. Memories of the Pacific War run deep, and resistance to Japan in that conflict are central legitimising narratives in all three countries. The communist parties of both China and North Korea were tested in the crucible of that war, and the nationalist credibility both earned from having fought the Japanese justified their post-war take-overs. Even today, both continue to use Japan as a villain for nationalist and state-building purposes, with their constant insistence that Japan must remain disarmed and that any military build-up on its part is a precursor to renewed Japanese imperialism. The standard World War II narrative suits these two just fine; indeed, it is still quite alive for both of them today.

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An apology to Japan by the major contributor to its defeat would throw the moral economy of North Korean and Chinese post-colonial anti-Japanism into doubt. Not only would it suggest that anti-Japanese forces in the war did awful things too, a US apology would explicitly recognise how far Japan has come from the Axis imperialist of the 1940s to today's liberal, human rights respecting, global governance cooperating democracy. China and North Korea are none of those things of course. It suits neither Pyongyang nor Beijing to see Japan rehabilitated; ghosts of the 1940s are preferred as politically useful strawmen.

Worse, the anti-Japanese struggle narratives of the North Korean and Chinese communist parties are highly exaggerated. Kim Il Sung and Mao Zedong did far less to defeat the Japanese in their countries than, respectively, Chiang Kai Shek and the Red Army of the Soviet Union. Mao and Kim were quite content to free-ride on these forces, which of course can never be admitted. So any major re-examination of the war's end, which such an apology would provoke, is unwanted.

Given that South Korea is a democracy, one might have expected a different course. But there too, Japan-as-villain is deeply politically inscribed. The issue of who collaborated with Japan during the colonial period is hugely divisive and continues to roil the country 70 years later, as does the fate of the comfort women. South Korean analysts too tend to see Japanese re-armament as a pre-cursor to imperialism, and there is deep resistance to seeing Japan as rehabilitated or deserving of apologies for wartime events. That Japan cannot quite seem to admit to itself that it started a truly awful conflict only hardens the resistance to apologies to the erstwhile colonialist and imperialist.

Japanese conservatives (yes, really)

One might imagine the nationalist community in Japan to most seek such an apology, but as Jake Adelstein notes, there is little interest there too. A US apology would have domestic ramifications Americans are likely unaware of, but for the Japanese conservatives trying to make Japan a more 'normal' partner of the US, the apology would only help the domestic left's effort to hold onto Japan's unique pacifist, semi-isolationist foreign policy.

Specifically, an Obama apology would revive discussion about the conflict from which the Japanese pacifist position draws its political and moral strength. Japanese conservatives want to look forward to tension with China or North Korea to justify a more robust military, not back to a time when the Japanese military rampaged around the region. And an apology by the war's victor only strengthens pacifist arguments on the futility of the use of force: even in WWII, the 'good war,' the good guys acted badly, suggesting that the use of state violence always leads to immorality. 

This, curiously enough, aligns with America's long-time interest that Japan carry a greater burden in the alliance and generally do more, leading to the bizarre outcome that an American president doing this to show America's maturity would be acting against US interests.

Reconciliation vs zero-sum politics

Obama's impulse to apologise is morally laudable. As a student of Martin Luther King and Nelson Mandela, he sees that reconciliation and trust-building are achieved in part through the mutual recognition of error and inappropriate violence. Obama, unlike so many Americans, seems willing to recognise that even the US has done some pretty awful stuff (if he wants an even greater challenge, consider how the US should reckon with the fate of Native Americans). There is in fact a pretty good case that the bomb drop was unnecessary.

But humility is rare in international politics, intellectually dominated as it is by nationalism, grievance-pandering, prestige-seeking, and demands for recognition. While US and Japanese elites may embrace this post-modern, post-national ethos, that does not apply in modernist, nationalist East Asia where an apology will be read as just another turn in enduring regional competition.

Photo courtesy of Flickr user The White House.

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US presidential race 2016

Those wondering how Donald Trump became the presumptive  Republican party presidential nominee should have a look at this video, and listen to the short comment below. In a case of remarkably fortunate timing,  the Lowy Institute, publisher of The Interpreter, today hosted a lunchtime lecture from renowned US journalist, author and one time presidential speech writer James Fallows. Fallows, speaking just a few hours after Trump rival Ted Cruz  bowed out of the race, told the capacity crowd he was honoured to be delivering the first speech of the Trump political era. In his lecture  Fallows explained why he thinks Trump will be the end of the GOP, why Trump has emerged triumphant from the once-crowded field vying for the GOP nomination, and why Trump is very, very unlikely to win the election. (You can listen to the full lecture here.)

On the second point, Fallows said it was a strange confluence of events that has allowed Trump to pull ahead and one of these was the fact the primary race had become 'indistinguishable from an American reality TV show' and 'a lot like pro-wrestling which is full of phony, histrionic, tough-guy performances'. Fallows urged the audience to look the wrestling video, recorded back in 2007 in one of Trump's many past lives as a pro-wrestling promoter. Fallows said the video was both 'primal and Lord of the Flies like';  a good description for the Republican nomination race of 2016.

In this quick comment, Fallows elaborates on his views on Donald Trump's campaign success to date and what is says about the US.

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By Alastair Davis, an Intern in the Lowy Institute's Melanesia Program.

  • Following the unanimous ruling by the Papua New Guinean Supreme Court that the detention of people at the processing facility on Manus Island is illegal, the question of responsibility for the 850 asylum seekers and refugees is under negotiation. The time frame for these negotiations is unclear, as the Australian Federal Budget has allocated AUS$55.4 million in funding for Manus Island and Nauru according to Sky News.
  • The Economist ran a useful explainer on the regional processing issue last week.
  • Lisa-Marie Tepu argues that the PNG Supreme Court decision provides an opportunity to reform the legal framework for the treatment of asylum seekers and to reassert the primacy of the Papua New Guinean constitution. A copy of the Supreme Court's decision can be found below.
  • Also, Lowy Institute Non-Resident Fellow Sean Dorney discusses the enduring strength of the Papua New Guinean constitution in extraordinary times.
  • The uncertainty around Papua New Guinea's police anti-corruption unit continues, with the Supreme Court ordering the Police Commissioner to reopen the unit as the closure is affecting criminal cases before the courts.
  • The 2012 election victory of Don Polye, leader of the opposition in Papua New Guinea, has been stayed by the National Court. Polye has since stepped down as opposition leader.
  • The much anticipated Leaders' Summit of the Melanesian Spearhead Group has been postponed, leaving the issues of leadership of the Secretariat and potential Indonesian and West Papuan memberships unresolved.
  • The nature of the Pacific Islands Forum could change significantly with the drive for full membership for New Caledonia and French Polynesia gaining support from New Zealand. The two French territories would be the first non-independent entities to attain full membership.
  • Vanuatu Infrastructure Minister Jotham Napat is to travel to China to negotiate further Chinese assistance in road construction.
  • Allan Bird writes for The Interpreter on why many Papua New Guineans are occupied with issues other than Manus Island.

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It's an Oliver Stone film, so it's no surprise to see a trailer that reflects the paranoid-conspiratorial strain in Stone's political views.

Stone has ideological enemies who made much of the director's historical over-reach in JFK (1991). The problem for those critics now is that Stone's wild theories about an unaccountable national-security establishment which secretly runs the country (and can even assassinate a sitting president) look slightly less fanciful in the age of XKeyscore.

Stone is a fringe figure these days, but JFK was a major success in part because it tapped into Americans' sense that the system was rigged (The X-Files was big in the early '90s too). In the age of Trump and Sanders, it is hard to argue that that feeling has diminished. Maybe Snowden is a film for the times.

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The PNG Supreme court ruling last week that the detention of asylum seekers at the Manus Island was illegal did not come as a surprise. The PNG judiciary has always been fiercely independent and it proved so once again.

It is also not unusual in PNG for governments to do the wrong thing and only correct their actions when ordered to by the Supreme Court. And sometimes not even then; the illegal ousting of the Prime Minister in 2011 has still not been rectified even after several Supreme Court decisions on the matter.

However the detention of asylum seekers (or illegal immigrants depending on which side of the fence you sit), has hardly galvanised sentiment in the PNG public except among politicians and lawyers and those on Manus.

In fact, most Papua New Guineans could not care less about the whole issue.

In my hometown of Wewak, the entire population is focused on simply getting on with life in these hard economic times. Next door in Madang, they are just recovering from an ethnic clash which shut the place down. Similar stories can be found all around the country.

This is what happens when you are ranked 158 out of 170 odd countries in the United Nations Human Development Index (Australia is ranked 2). We are very much inward looking and worried about our own problems.

Politically, PNG will always stand ready assist Australia in whatever way it can, this is the Melanesian way. We stepped in to help Solomon Islands, Vanuatu, and Fiji, and we will continue to step in as required. At home though, most folks are worried about medicines in the clinics and teachers in the classroom and hoping there may be a job opening down the road.

The court decision will not affect the politics of PNG. We will continue to vote for the people who promise to bring home the most freebies. Our politics is not determined by doctrine or conviction but by very basic human needs.

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As harsh as this sounds, it is the hard truth. Perhaps this is the reason why the majority of the so-called asylum seekers on Manus island refuse to be settled in PNG. They have probably figured out this is a much more difficult place to put down roots than the countries they left behind.

I suspect that if PNG were further up the human development ladder, if it was a place bounding with opportunities, then asylum seekers would choose to stop here and not keep going to get to Australia.

That prospect might warrant more significant investment on the part of Australia's leaders if they want a more effective — and legal — buffer between Australia and boat people.

Photo courtesy of Flickr user: Tanaka Juuyouh

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Budgets are always pretty boring. Any controversial issues have been leaked (and spun) beforehand. Last night's was no exception. But it does provide an opportunity for a stock-take on longer-term debates about how the economy is travelling.

In a world which has been 'too slow for too long', the Australian performance has been pretty good, especially considering the collapse of commodity prices since 2011 (the graph below shows just how big this terms-of-trade shock has been). On the usual aggregate GDP measure, Australia has grown 22% over the eight years since 2007, just before the crisis. This compares with 10% for the USA, 7% for the UK and 12% for Canada, a rather similar economy. This looks even better against the dismal performance of Europe, where France is up just 3%, Germany up 7% and Italy down (yes, down!) 8%. Among the mature economies, New Zealand is closest, with 16% expansion. (all data from IMF WEO April 2016 database).

If we look at per capita GDP, Australia is less of a stand-out, with an increase of 7% over these eight years. On this measure the out-performance narrows: even Japan is up a couple of percent. But Australia still has twice the growth of the US.

RBA Chartpack

It's too early for a definitive assessment of how the transition from the resources boom is going, but so far the cautious optimists like John Edwards are ahead. There is now a wider acceptance that the impact of the resources boom was exaggerated. Half the increase in resource investment was spent on imports rather than in the domestic economy; the calculation of the terms-of-trade impact on income left a lot of room for different interpretation; and so much of the resources sector is foreign-owned that the big swings (both up and down) are felt more by foreign investors than by locals. Coal miner Peabody is now in Chapter 11 insolvency and Xstrata-owner Glencore is restructuring its balance sheet, but these are wholly foreign-owned.

None of the predicted disasters has come to pass. The banks were said to be vulnerable because of their dependence on foreign funding but this was given a real-life ultimate stress-test in 2008 and they came through untroubled. Anyone predicting a repeat of the freezing of the New York money markets hasn't noticed what prudential supervisors have been doing since then. Another popular alarmist prediction was a house-price bust (with the knock-on effect this might have on the banks' mortgage-heavy balance sheets). Again, so far so good: asset-prices seem to be levelling out and even if they drop back, the biggest exposures are with well-placed borrowers. Unless there is a big rise in unemployment, all this seem a case of scare-mongering — or commentators without enough real issues to talk about.

Moody's has put the government on notice that it must do more to get the budget into surplus. It's a puzzle why anyone would take any notice of the credit-rating agencies after their pre-crisis performance in handing out AAA securitization ratings on demand. Certainly the markets didn't take any notice of past down-grading of Japan and the US. But Australian politicians have made a rod for their own backs here, by using the threat of downgrading as an impetus for budget stringency.

In the global context, this pressure for a quick return to budget surplus has been the driver of austerity in the crisis-affected countries. This macro-economic mistake is perhaps the main explanation for 'too slow for too long'. The crisis expanded deficits, more because of the economic downturn rather than the need to support failing banks. Winding these deficits back greatly weakened the recovery: even with a conservative estimate of the fiscal multiplier, each percent reduction in the deficit-to-GDP ratio takes a percent off the growth rate. Look at this graph to see the contraction applied by austerity in 2011-13 and weep.

Source: IMF WEO April 2015 Figure 1.7

Australia had the same debate, with successive governments vying with their opposition in promising faster return to surplus. This was, in fact, unnecessary here. With no recession or bank failures to cause a huge deficit blow-out, moderate government debt levels and time-bound fiscal stimulus, there was no pressing need to return quickly to surplus. Fortunately, the austerity needed to achieve a surplus was never applied. The promised surplus has progressively receded into the future. We were saved by prevarication.

Long-planned resources projects (including LNG) have kept the level of investment from dropping precipitately, and housing investment has helped fill the gap. Total investment has fallen from 28% of GDP in 2007 to 26% in 2015, still strong by international comparison. Unemployment is fairly low, thanks to wages restraint. The slowing has been softened by exchange rates and interest rates. The real (inflation-adjusted) exchange rate is more than 20% lower than its peak in 2012 (the largest fall among mature economies). Interest rates are low in historic terms, but the RBA has not had to resort to the desperation-driven near-zero (and even negative) rates prevailing overseas. Ross Garnaut's advocacy for still-lower rates to get the exchange rate down further seems misplaced in an inflation-targeting regime which has served Australia well.

Of course further structural transition is still needed. While productivity is notoriously hard (maybe impossible) to measure, there is not much doubt that Australia is mimicking the global weakness. At some stage, the budget has to be brought back to surplus.

The valid criticism of past policies is not that they have been seriously wrong, but that the political process has not only failed to take desirable options: it has also blocked them off in the future. The government ignored the main lesson of the successful reforms of the 1980s: when your political opposition advocates good policy, you should seize it as your own. In the current context, trimming back the excesses of negative gearing is an example. Labor's total hash of a resources super-tax in 2010 has put that option off the agenda for as long as memory lasts. Combined with a sovereign wealth fund, this would have been a powerful automatic counter-cyclical instrument for Australian's chronic problem of commodity cycles. The current government botched sensible climate-change policies just as decisively. A carbon-tax was labeled as a 'big new tax' and scuttled forever, ignoring the opportunity it provided to lower other taxes which distort, rather than offset a distortion, as a carbon tax would have done.

Economic reform requires patient gathering of support through rational argument and sensible compromise, not the now-standard point-scoring negative politics. Parties pander to their constituencies. The modest cut in company tax this budget responds to vested interests, ignoring the fact that Australia's imputation policy fully offsets company tax for domestic shareholders. Foreign multinationals are the target of a potentially budget-fixing 'Google' tax, with the actual collection being a problem conveniently in the future. South Australia's political blackmail on ship-building succeeds brilliantly, as industry policy disappears down a dead-end.

Economists, for their part, should be ready to offer compromise second-best solutions, rather than incomprehensible optimality (as was Treasury's proposed resources super-tax).

The key issues for the economy's future are not to be found in last night's door-stop of budget documents. Far-sighted initiatives (such as an infrastructure fund, financed outside the budget) were left for another day. Tinkering has prevailed over structural reform. The strategy which will in due course return the budget to surplus remains uncertain.

On the resources debate, John Edwards' measured assessment of the not-too-disastrous impact of the resources boom is proving correct, but Ross Garnaut's somber message of lost opportunities resounds. With all the advantages of resource endowment and proximity to the globe's fastest-growing region, we should do better than just muddling through. The overall assessment is: 'Lazy: could try harder'.

Photo by Stefan Postles/Getty Images

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We face 'extraordinary' times, 'very sensitive' times, international headwinds and fragility. But the overarching message we are meant to take away from this year's Budget with is a positive one.

In his 2016-17 Budget speech, delivered tonight, Australian Treasurer Scott Morrison stated that the Turnbull Government understands the economic challenges Australia faces. And indeed there is a comprehensive range of measures and policy announcements intended to assure us that the government is responding to our challenges and successfully navigating the transition away from the mining boom.

Unfortunately, the Treasurer's words have been undermined somewhat by his extremely light treatment of the global challenges and risks that are materially important to the Budget figures.

The avoidance of international context is particularly worrying on the back of the Treasurer's decisions not to attend the IMF, World Bank and G20 meetings in Lima last October and in Washington last month, as well as other recent international gatherings.

The scant international content in the Treasurer's remarks is particularly striking in light of the 0.25% interest rate cut announced this morning by Reserve Bank of Australia Governor Glenn Stevens. In justifying the interest rate decision, the key factors cited by the Reserve Bank Board were primarily global in nature. Weighing on the Board was a confluence of downgrades in global economic forecasts, uncertainty about the economic outlook, difficult conditions in emerging-market economies, and the divergence in monetary policy settings.

The Treasurer cited precisely none of these factors in his speech.

He had much to work with. Digging into the details of the Budget papers suggests a prudent, middle-of-the-road set of estimates about the global economy, awareness of the risks, and broad alignment with the international economic discourse and the Reserve Bank Board decision.

The US, Japan and Euro area are expected to grow at modest rates or remain subdued out to 2018 the forecast years. As for our emerging-market trading partners, the ongoing Chinese transition means moderating growth and ongoing risk to the global economy, India's title as fastest growing major country in the world will continue to present opportunities, and other East Asian countries are expected to grow slowly relative to history.

The overall picture is one of moderating global growth, reflecting unresolved crisis legacies, low productivity growth and unfavourable demographics.

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Table 1: International GDP growth forecasts

Given the Budget papers’ claim that risks to growth are broadening and are evident in both advanced and emerging economies, it is also worth paying attention to the uncertainty around the estimates. For interested wonks, Budget Paper 1, Statement 7 details forecasting performance and scenario analysis and is worth a read. It is technical but rich in detail about the uncertainty of numbers.

I’ve produced, with a couple of tweaks, an Aussie version of the ‘most depressing chart in the world’, an honour bequeathed to a chart from the 2016 Economic Report of the US President which explains the succession of World Real GDP growth forecast downgrades by the IMF.

Australian Major Trading Partner GDP forecast, 2010-2018 

Source: Various Australian Budgets and Mid-Year Economic and Fiscal Outlooks (MYEFOs)

The graph explains how well, or rather how poorly, Australia has forecast the performance of our major trading partners – those of particular importance to domestic economic activity – in recent Budgets. We have gotten into a routine of projecting a rosy recovery, which has failed to materialize by the time forecasts become actual, known figures. 

It is an observation entirely consistent with the experience of other forecasters, such as the IMF, and is unsurprising given the tendency for Australian forecasts of the international economy to benchmark our international projection, for very understandable reasons, against credible global and national forecasts. But it means we inherit their mistakes, and this has meant downgrades so far this decade.

What continued downgrades in the international economy means is a very real thing for the Budget. It is a material contributor to the ‘parameter and other variations’ (changes in Australian economic conditions not associated with policy) that are collectively responsible for around $13.5 billion in net tax receipts downgrades since MYEFO out to 2018-19, a smaller downgrade than in recent budgetary documents. In comparison, though, the net impact of policy decisions on the budget bottom line across the same four years (which admittedly covers a range of actions that impact on the budget bottom line) is just $1.2 billion.

In all, this is very much the Budget of a salesperson, one that allows Morrison to distance himself firmly from his predecessor and the highly optimistic tone on the global economy that was a hallmark of last year’s Budget.

A side effect, though, is that when it comes to the big picture, the impression is that Australia’s Treasurer is completely focused on a fraction of the change that drives our nation’s bottom line.  The action by the Reserve Bank, and what it implies about the trajectory of the Australian economy, is therefore likely to steal some of the headlines away from this unusually early Budget.

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Australia is sending one of its submarines, the HMAS Rankin, to Japan this week for joint training and to promote the bilateral relationship, following news last week that the Japanese company Mitsubishi Heavy Manufacturing lost its bid to build Australia's 12 new submarines. Some commentators in Australia have criticised how the government treated Japan during the bidding process, but what’s the view in Japan?

The Japanese media has taken an active interest in the submarine saga, particularly now that the bidding process has concluded. Japan had enacted reforms to allow for the export of military hardware, and building Australia's submarines would have been the first big project under these reforms. Furthermore, building submarines collaboratively was emphasised in the context of closer strategic Australia-Japan cooperation and Australia-Japan-US cooperation.

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Japan expected that its bid was going to be successful. One Yomiuri Shimbun commentator likened the government’s surprise at the outcome to a fall from heaven to hell. Writing in The Australian, Greg Sheridan's recent article based on interviews with Japanese politicians and foreign affairs commentators, paints a stark picture of how Japan now sees Australia as a strategic partner, particularly in the context of Australia's relationship with China. 

While elements of that view are expressed in Japanese media, by and large Australia's acceptance of the French company DCNS' bid is viewed independently from the broader Australia-Japan strategic relationship. However, it should be noted that the Japanese media tended to focus on why Japan lost the bid, rather than the resulting implications. 

Lack of enthusiasm and experience

One of the most prevalent views in the Japanese media is that Mitsubishi Heavy Industries lacked experience and did not commit to building the submarines in Australia until it was too late. Whereas the French and German bidders actively lobbied the defence and political community in Australia, the Japanese bid was promoted by the Japanese ambassador to Australia. Reluctance by some in the Japanese Defense establishment to export sensitive military technology was a reason given for Japan's apparent lack of enthusiasm. 

Domestic politics 

A majority of articles surveyed identify domestic politics as being a factor in the Japanese bid’s rejection. Some reference is made to former Australian Prime Minister Tony Abbott's decision in early 2015 to introduce the 'competitive evaluation process’ but there is arguably greater emphasis on the impact from changing prime ministers from Abbott to Malcolm Turnbull in late 2015. 

The China factor 

Roughly half of the articles surveyed questioned China’s influence on the bid outcome. [fold] For instance, the Yomiuri Shimbun stated that 'if Australia had paid undue regard to China and rejected that Japanese bid, that cannot be overlooked'. The Nikkei Shimbun stated that the view that Australia did not want to irritate China will spread in the Japanese government. An article published in Newsweek highlighted the short period of time between Turnbull’s trip to China and the submarine announcement, as well as his familial and business ties in China. 

Implications for the Australia-Japan Strategic Relationship

While there is little commentary on the broader implications for the bilateral strategic relationship, a few articles do consider the issue. 

The Sankei News warns that a split in Australia-Japan and Australia-Japan-US cooperation could spur on China’s militarization of the South China Sea. The author considers that joint maritime patrols in the South China Sea are worth considering if it both Australia and Japan want to deepen security ties, and advocates that Japanese Prime Minister Shinzo Abe should maintain and strengthen the bilateral relationship with Australia, as to avoid the perception that Australia-Japan and by extension Australia-Japan-US cooperation is faltering.

The Yomiuri Shimbun notes that 'Abbott recognised the importance of Australia-Japan-US cooperation. The Turnbull administration must explain what kind of role it will play in the stability of the Asia Pacific region'. 

What the future holds

While the media expressed shock and disappointment at the result, there was no overt criticism of Australia’s handling of the bidding process. Although Turnbull’s policies towards Japan and China were viewed in Japan as being largely consistent with Abbott, who was regarded as very pro-Japanese, the Japanese media will likely see this decision as a point of departure and this view will be reflected in future commentary.

Photo courtesy of Getty Images/JTB Photo

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It is timely to consider the legal implications of last week's ruling by the  Supreme Court of Papua New Guinea which held the detention of asylum seekers at Manus Island Processing Centre (MIPC) breached their constitutional rights to personal liberty and freedom.

The Supreme Court also found that the purported Constitutional Amendment to legalise the detention of asylum seekers was invalid and of no force and effect, and ordered that:

both the Australian and PNG governments take all steps necessary to cease and prevent the continued unconstitutional and illegal detention of the asylum seekers or transferees constitutional and human rights.

So what are the legal implications of this ruling?

1. Compliance with Supreme Court order

The Australian government may argue that it is not a party to the proceeding, and therefore should not be subject to the court orders made. This situation can be remedied by an application to join the Australian government as a party to this proceeding. If such an application is made and granted, specific orders may be sought outlining what steps need to be taken by the Australian government to end the ongoing illegal detention of the asylum seekers.

Although no timeframe was set by the Supreme Court for these orders to be complied with, the PNG Government has already started to take the steps necessary to end the illegal detention. Last week PNG Prime Minister Peter O’Neill said the centre would be closed and released a statement that said his government would immediately ask the Australian government to make alternative arrangements for the asylum seekers. While the Australian Government has suggested the PNG Court decision is not binding on Australia, it has also indicated would provide assistance to resolve the situation. 

Given the serious nature of the matter, and taking into account the initial procedural delay by the State in settling the agreed and disputed facts, any  delay in resolving the illegality may attract the wrath of the Supreme Court.

2. Reinforced that constitutional amendments should not be made on a whim 

One of the first things PNG law students learn is that the PNG Constitution is the mama law (mother of all laws), because it is the foundation upon which all other laws are built. It should not be amended on a whim.

In contrast, however, the majority of Papua New Guineans fail to appreciate the importance of this document. Therefore, when proposed constitutional laws are rushed through parliament without proper debate or public consultation, it is only the knowledgeable few who take issue and try to rally the masses to protest and question the proposed amendments.

How then do we keep our government accountable, when so many do not understand enough about their constitutional rights and the parliamentary process?

At present, it is our judiciary which has continued to act independently, and kept the other arms of government accountable. This decision serves as an important reminder that the judiciary will continue to uphold the PNG Constitution, and will not bow to external pressure to legitimise rushed, illegal arrangements made by parliament. 

Drawing from a healthy body of PNG case law on constitutional amendments, the Supreme Court was able to summarise the criteria that needs to be met for a law that purports to regulate or restrict a qualified right under the Constitution to be valid.

In this case, the 2014 Constitutional Amendment failed to meet the full criteria set out under s.38 of the constitution. The amendment failed to specify the purpose of the amendment and the rights it purported to restrict, and failed to state that the restriction was 'reasonably justifiable in a democratic society having a proper respect for the rights and dignity of mankind', as the constitution requires.

It is now imperative that the knowledgeable few, which may include civil society, legal professionals, and political experts, create avenues to communicate the importance of this decision to every Papua New Guinean and advocate that they also have a major role to play in keeping their government accountable. 

3. Opportunity for legal reform in PNG 

It seems obvious from the Supreme Court’s judgment that PNG has insufficient legal framework in place to address the treatment of refugees seeking asylum. Read More

  Having identified these deficiencies in domestic legislation, and depending on PNG’s political relationship with the Australian government, two scenarios could follow:

i.  Short term: The PNG Government could quickly draft up new laws, and remedy the flaws highlighted in the decision that rendered the asylum seeker arrangement unconstitutional.

ii. Long term: The PNG Government may take the view that this is an opportunity to consult all stakeholders, and develop a considered policy to address how refugees seeking asylum are treated during detention and processing in the future, and then draft and enact the appropriate legislation to give effect to the rights and freedoms guaranteed under international conventions and the PNG Constitution.

The PNG judiciary and legal profession have gone through some challenging times in the past few years, so this well-considered landmark decision was a welcome event. We should all stand and applaud the ruling of the Supreme Court and its fearless defense of our constitution and the human rights enshrined in it.  Let us hope that our nearest neighbors will respect PNG’s sovereignty and abide by the decision handed down by the highest court in our land.  

Photo: Recep Sakar/Anadolu Agency/Getty Images

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