Lowy Institute

The economic debate in Australia is dominated by the impact of the unwinding of the commodities 'super-cycle'. Australia is having to adjust to substantially worse terms-of-trade (the price of what we export compared with the price of our imports), the slowing of the spectacular resources investment boom and reduced fiscal revenues from resources.

Australia is not, however, the only country which has to undergo this adjustment. In fact, our fiscal dependence on resources is quite low by global standards. It's hard to see on this crowded graph, but Australia is eighth from the right, with less than 5% of budget revenue coming from resources during 2000-2011, according to these IMF figures.

This analysis was delivered at a conference in Jakarta, where Indonesia is fumbling to sort out the mess of its mining legislation. The focus was on our neighbours, with regional data presented in this more legible graph:

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The extreme cases here (Brunei and East Timor) have such huge oil revenue that the current lower prices won't affect budgetary expenditure much in the near future. Timor is accumulating substantial oil revenue in its sovereign wealth fund, rather than spending it all in the budget. But for the other five, the fall in revenue will be painful and immediate.

Indonesia, for example, improved its budget position by cutting petroleum subsidies last year. But lower commodity prices are offsetting much of this improvement. Indonesia also has some self-inflicted challenges. Current Indonesian legislation requires mineral exporters to process ore domestically, which is discouraging investment. The objective sounds reasonable enough: to shift from a simple focus on resource revenues towards a new objective of boosting the wider economy. But this is an illusion. The better way to think about this issue is to see the processing requirement as an imposition, like a tax: if Indonesia didn't impose this obligation, it would be able to collect more mining revenue. This lost revenue is being directed into what are probably low-return investments in ore processing, rather than being available for higher priority budget expenditures, such as infrastructure.

For Australia, there are other elements in this painful adjustment: adaptation to the ending of the investment boom and the lower terms-of-trade. The lower resource revenue requires a policy response, and the IMF argues that a resources-rent tax should be a key element of tax strategy. This is not only a matter of equity: a tax which varies with the commodity cycle would greatly assist macro-economic management.

The resources-rent tax proposed by Kevin Rudd was so complex and confusing that the mining industry pulled off the greatest public-relations coup of all times (combined with political ineptitude of a high order), with super-rich miners winning the debate. The proposed tax was reduced by Julia Gillard and even this tiny vestige was abolished by the Abbott Government. That's not the only reason why Australians now find themselves with an inadequate tax take, but abolishing a tax, no matter how rhetorically attractive, has to be made up by other taxes sooner or later.

There is talk that all elements of taxation will be on the table under Australia's new leadership. Is this one included? Low commodity prices provide the best environment to introduce a super-profits resource-rent tax, because profits are not super in this phase of the cycle, and resistance may not be so fierce. Once in place, the tax is ready to help manage the next upswing, whenever it comes.


Having a Catholic Pope and the General Secretary of the Communist Party of China descend on Washington at almost exactly the same time helped illustrate something important about diplomacy. When staging a high-level state visit, there is a simple choice: emphasise either the head or the heart. This is especially the case if it concerns the US and China, where the relationship evades simple rational descriptions. Almost invariably, despite its risks, appealing to the heart brings better returns. 

Yet President Xi almost entirely missed that opportunity.

Xi Jinping after the White House Rose Garden joint press conference. (Win McNamee/Getty.)

True, in terms of hard political outcomes, President Xi's US sojourn achieved its objectives. There was a solid agreement on the environment, some progress on trade and a little (but enough) on cyber security. But the curious thing about Xi's intensely managed and controlled visit is the way it illustrates just how profoundly conservative Chinese diplomacy is, and how poor it is at conveying one of the most exciting and dynamic stories of our age – China's transformation.

Xi is a better communicator than his predecessor, Hu Jintao. He laced his Seattle speech with nice popular touches, even describing the current anti-corruption struggle in China as 'no House of Cards.' But the promise of this speech, and the expectations in terms of public diplomacy of the visit overall, quickly dissipated.

His meeting with technology companies in Seattle was symptomatic. Sitting prominently on the podium beside Xi after listening to the President's peroration on the importance of technology and creativity was Mark Zuckerberg, the creator and owner of Facebook, whose wildly successful website is famously blocked in China. A picture circulated afterwards of Zuckerberg shaking Xi's hands, while Lu Wei, China's top internet regulator, stood smiling in between. Were Chinese officials trying to convey some point about how even those it paints as threats have, in the end, to come and bid obeisance? This messaging might play well as a display of power in China. For Americans, however, it was portrayed in the press as ironic and controlling, never the best way to an audience's heart.

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Xi did no walkabouts where he might have slightly less scripted encounters with the American public. He had a couple of staple visits to a school and a factory, but there was nothing in these to fire the imagination. For this, we have to look at the master of public appeals, Pope Francis, whose frugal use of a simple Fiat car for transport, and stopping to bless a boy with cerebral palsy, proved stories too good to keep off the US front pages. The Chinese Communist Party propaganda department really needs to look at the skill of this remarkable leader and take some lessons.

Complaining about a biased Western press cuts no mustard here. This press is free. Ways can be found to get China's message across, and the Pope has shown that, even heading an organisation emerging from one of the worst scandals imaginable, he can still get its core messages across. 

The Chinese Government might argue that in the end their main priority is to use the US trip for messaging back home. And there, of course, it saturated the media, night and day. But one has to have the sneaking suspicion that they will be a little disappointed that Xi wasn't able to reach out directly to the American people the way his wife did, just through using decent English when speaking on women's education at the UN. 

Talking directly to the American people through their media, and through a more spontaneous kind of visit, would be a massive asset for China. Like it or not, this is an audience they cannot ignore. American presidents can come to China and reach out over the heads even of managed media, gathering popular plaudits. China's Ministry of Foreign Affairs, by contrast, shows itself once more to be one of the most cautious and risk averse in the world. Management and control remain their main objectives, not trying to reset the attitudes towards their country by more creative visit programs by one of their key assets – their national leader. Symptomatically, Xi's 'interview' in the Wall Street Journal turned out to be responses to queries submitted in writing, raising questions about just how much input the President even had in the answers finally published. 

It doesn't need to be this way. Deng Xiaoping in the early 1980s had extensive interviews with journalists like Oriana Fallaci from Italy and Mike Wallace from CNN. Jiang Zemin did the same. Jiang was even willing to sprinkle his speeches with English, Russian and French. It's odd that President Xi's visit did not take a few more risks.

The visit to the US did have things the wider American public, and in the rest of the world, need to be aware of: huge moves on climate change, and a lot of recognition of common trade and security challenges. But on the whole, the person best placed to speak about these issues and promote recognition of them, Xi himself, was confined behind a wall of minders and protocol. The question impossible to answer now is whether this is because of a failure of imagination by those serving him, which can be rectified by making them think more boldly, or whether it is because of the President himself. That would be a far harder problem to address.


After the coup in May 2015 that overthrew the democratically elected Pheu Thai Government of Yingluck Shinawatra, hundreds of politicians, activists, journalists, and people accused of supporting the deposed government were summoned for 'attitude adjustment'.

A year later and the junta has embarked on a new round of 'attitude adjustments' aimed at convincing opponents about the necessity of the military's seizure of power. Those targeted had continued to defy the junta's authority.

In the days after the coup, names were read out on television and radio listing those wanted for 'attitude adjustment' and setting the time and location for the interrogation. These people, considered by the junta to be opposed to the coup, were brought before a panel of National Intelligence Agency officers and asked their views on the monarchy, the coup and former prime minister Thaksin Shinawatra.

While most complied with the conditions for their release, such as agreements not to criticise the junta and restrictions on foreign travel, others have maintained a low level of dissent, using social media to question the economic and democratic credentials of coup leader and current prime minister Prayuth Chan-ocha and his leadership team.

Two former Pheu Thai politicians, Pichai Naripthaphan and Karun Hosakul, were detained in mid-September. Pichai was energy minister from 2011-2012 in the Pheu Thai government of Yingluck Shinawatra. It was the eighth time Pichai has been detained in the 15 months since the coup. A few days later, well-known journalist Pravit Rojanaphruk (see video) was also picked up. Pravit was arrested hours after tweeting 'Freedom can't be maintained if we're not willing to defend it.' It was the second time he had been detained, the first time being just after the coup.

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All three men had previously been subjected to 'attitude adjustment' sessions but this time the treatment was harsher. At least one was hooded for an extensive period. All were kept in solitary confinement. Their locations were not disclosed and they had no contact with friends or family during their week-long detention.

One week earlier, the military junta revoked the passport of former Pheu Thai politician and junta critic Chaturon Chaisaeng.

Thai officials defended their decision to detain the two former politicians. The junta, known formally as the National Council for Peace and Order (NCPO), said the men were acting against the interests of the country and must stop making remarks contrary to 'national reconciliation.' 'Everyone is entitled to their opinions. However, they should speak their minds in a constructive manner. They are free to offer recommendations but not criticism,' said NCPO Deputy Secretary-General Chatchalerm Chalermsuk.

Coup leader Prime Minister Prayuth Chan-ocha has threatened to use an 'attitude adjustment' program on anyone who speaks out against the junta. 'All those who cause divisiveness or make groundless accusations against the government will face charges of inciting unrest and prosecution,' he said during a routine press conference while the men were detained.

Responding to questions about the detained men, Prayuth said those opposed to him or his government could even have their mouths taped shut. 'And as for politicians and political parties that keep talking these days, I beg you, if you don't slander me with your words, I will leave you alone. But if you still attack the government, let me ask you, who will let you do that? Especially my type of government. No one can speak like that. In the past, I let you talk and write on social media. You can write anything. But you cannot oppose me. No one will let you to do that. I hold that I have given you many chances already.'

Upon his release, Pravit Rojanaphruk, under pressure from colleagues at The Nation, where he worked as a journalist for 24 years, resigned from his position. 'Mr Pana (President of the Nation) told me that if I left, it would help lessen the pressure from all sides,' Pravit said. 'I left, reluctantly, in order to spare this battle.'

According to the Internet Dialogue on Law Reform (iLaw), the NCPO has interviewed at least 751 people since last year's coup. While some were officially summoned, others were subject to harassment outside their homes and offered invitations for coffee or for a meal. Cooperation was obligatory. Of those summoned, 22 were arrested and six charged with lese majeste, the controversial Article 112 of the criminal code which makes it illegal to offend the monarchy. Rights groups have highlighted the increased use of lese majeste to prosecute political opponents and stifle freedom of expression. Since his latest 'attitude adjustment', Pichai Naripthaphan has refused to give interviews and has toned down his tweets and Facebook posts.


In his post of 21 September on Australia's future submarines, Stephen Grenville cautioned against the arguments of regional and industrial lobbyists and challenged those who believe Australia's future submarines should be built at home rather than abroad to make the economic case.

I suggest that readers consider the large volume of studies, commentary and reports already produced. They will conclude that the case for building the submarine in Australia has been subjected to more than sufficient study already.  

Any consideration of this subject should start with this piece from February 2013 on why Australia needs submarines, and the unique capability they offer governments to deal with our increasingly challenging maritime environment. The arguments for 12 long-range submarines were accepted in the 2009 and 2013 Defence White Papers, although media speculation about the 2015 White Paper envisages building eight with an option for four. Our geography requires a large submarine with long range, high endurance and a large payload.  

Given these requirements, successive Australian governments have spent years and millions of dollars to study the options, and all have concluded that there is no off-the-shelf solution to our requirements. Australia, in partnership with an experienced overseas submarine designer, will have to design and build a suitable replacement for the Collins class. In 2014 and 2015, the Senate Economic Reference Committee heard evidence from the Department of Defence, industry and submarine experts, and reached bipartisan agreement on this point. To quote one of the Committee's recommendations:

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Given the weight of the evidence about the strategic, military, national security and economic benefits, the committee recommends that the government require tenderers for the future submarine project to build, maintain, and sustain Australia's future submarines in Australia.

There is no production line; we must pay to set this up, either in France, Germany, Japan or Australia. French and German designers have indicated that they can build 12 suitable submarines in Australia for $18-24 billion.  

Grenville questions the level of self-sufficiency we can achieve. He has a point, but the situation for submarine support is far better than he implies. The majority of Collins sustainment is undertaken using Australian-supplied components, and if push comes to shove, it's easier to air freight components rather than a whole submarine. This happy situation has arisen because the Australian build of the Collins class has resulted in an extensive industry capability spread across Australia (not just South Australia). As the Senate Economics Reference Committee found after industry visits:

Based on the evidence presented to the committee and independent studies, there can be no doubt that Australia has a substantial and solid foundation on which to build a competent and highly skilled workforce for the construction of the future submarines.

Collins sustainment, much improved since ASC began managing the entire supply chain, demonstrates the breadth of Australian industries' capability – over 90% of every dollar ASC spends on Collins sustainment is spent in Australia.

Professor Goran Roos has argued eloquently for the overwhelming economic justification for building the submarine in Australia: 'Sending $20 billion overseas for an off-shore build would remove $20 billion from the economy. In contrast, investing the same amount on-shore would deliver a multi-billion dollar return in terms of innovation, exports and employment.' When the multiplier and spillover effects Professor Roos cites are taken into account, it will cost Australia more to build overseas.  

There are a number of studies to support this conclusion and there is a strong case for building the future frigates and submarines in Australia. The time for a decision is rapidly approaching; indeed we may be too late to avoid incurring the additional expense and a consequent capability gap of extending the life of Collins.

Enough studies – it is time for a decision!

Photo of a US Virginia class submarine under construction courtesy of Flickr user Marlon Doss.


Media reporting from the third summit between US President Barack Obama and Chinese President Xi Jinping was dominated by cybercrime and news of cooperation on greenhouse gases. But observers interested in US-China relations and Asian security matters should also pay attention to a little-noticed accord signed by the US and Chinese militaries on 'Rules of Behavior for Safety of Air-to-Air Encounters.'

The agreement is an annex to the Memorandum of Understanding (MOU) on rules of behaviour for safe military encounters at sea and in the air that was signed at the prior Obama-Xi summit in November 2014. The now completed MOU underscores the commitment by the US and China to reduce the risk of unintended military incidents that could harm the overall relationship.

Reaching agreement on best practices to ensure safe navigation when American and Chinese military assets come into close proximity is a milestone. This landmark achievement was made possible in large part by Xi Jinping's recognition of the increased danger of US-Chinese military accidents and the damage they could do to bilateral ties. The Chinese armed forces also deserve credit for realising the need for the PLA to have a common understanding of operational safety with the international community.

The recently inked Annex of the Rules of Behavior for Air-to-Air Encounters establishes procedures to prevent collisions between US and Chinese military aircraft such as occurred in 2001 between a Chinese fighter and US surveillance plane. Unsafe intercepts have continued, though they have decreased in frequency over the past year, with the most recent incident occurring on 15 September when a Chinese fighter came within 500 feet of an American reconnaissance plane. In 2014 there were at least five incidents. The most serious near miss involved a Chinese fighter that came within 30 feet of a US P-8 Navy surveillance aircraft. A Pentagon spokesman described the Chinese warplane's actions as 'very, very close, very dangerous.' The Chinese fighter purportedly flew above, underneath, and alongside the US surveillance craft, and at one point performed a barrel roll to display its weapons.

The norms of behaviour set out in the Air-to-Air Encounters annex are consistent with the Convention on International Civil Aviation (which contains provisions guiding civilian flights and encounters between civilian and military planes), and the Code of Unplanned Encounters at Sea (CUES; which contains guidelines for encounters of naval aircraft). The agreement breaks new ground in establishing rules of engagement between military aircraft of different countries.

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To avoid mishaps, the two sides agreed that aircraft operators should engage in active communications in the interest of flight safety. This includes clarifying their identity and conveying aircraft maneuvering intentions. Pilots will conduct communications in English, refrain from uncivil language and physical gestures, and use internationally-accepted radio frequencies for air distress.

In addition, the agreement identifies specific actions that 'a prudent pilot' should avoid, including actions that impinge upon the ability of the other side's military aircraft to maneuver safely, approaching the other side's military aircraft at an uncontrolled closure rate, use of a laser in a way that could harm personnel or equipment, and actions that interfere with the launch and recovery of military aircraft by the other side's military vessel.

Especially noteworthy is the section that establishes responsibilities for aircraft when an intercept takes place. According to the agreement, the aircraft commander initiating the intercept should maintain safe separation while the operator of the aircraft being intercepted should avoid reckless maneuvers. The distance between aircraft that constitutes safe separation is not spelled out; rather it is dependent on circumstances. While this is sensible, it leaves split-second decisions up to the discretion of Chinese fighter pilots, who often lack experience.

One missing element is any provision for emergency landing rights. Perhaps it was impossible to agree on a common position, even though 14 years have passed since the US landed an EP-3 on Hainan Island after a Chinese J-8 fighter jet collided with it in flight. In addition, in several places, the text includes the language 'if mission permits,' suggesting that in some circumstances either side can refuse to implement the agreed-upon rules of behavior. For example, a US bomber flying through China's Air Defense Identification Zone in the East China Sea to demonstrate freedom navigation and transit through international airspace would not likely communicate with a PLA Air Force interceptor aircraft.

Unlike US and Chinese surface naval vessels, which have practiced CUES procedures on several occasions since the two nations signed up to them last year, there are currently no plans to practice implementation of the protocols laid out in the new air-to-air encounters agreement. The US and Chinese air forces don't hold joint exercises and are unlikely to for the foreseeable future.

A positive development is that the signing of the MOU has reinvigorated US-China consultations within the Military Maritime Consultative Agreement (MMCA), which was created in 1998, but failed to serve as an effective mechanism for ensuring operational safety. The MMCA was essentially moribund until Xi Jinping's rise to power in late 2012 breathed new life into the US-China military-to-military relationship. Going forward, incidents between US and Chinese ships and aircraft will be discussed in the MMCA.

The now-completed MOU on rules of behavior for safe military encounters at sea and in the air is not a panacea for the US-China military relationship. The PLA will continue, for example, to criticise US close-in surveillance operations near Chinese territory as well as US arms sales to Taiwan, For their part, the US military remains concerned about the possibility that China will use its newly-built artificial islands in the South China Sea to exert control over the air and sea within China's nine-dashed line.

Nevertheless, this confidence-building measure, if strictly implemented by both sides, can reduce the risk of accidents between American and Chinese forces operating in increasingly close proximity to each other.



The US and China have jointly announced their vision for the Paris climate talks and the steps they will take at home. But what took the headlines was China's announcement to introduce a national emissions trading scheme in 2017.

The announcement is no surprise. The Chinese government has been foreshadowing a national emissions trading scheme for years. But its inclusion in this high profile announcement means we can expect that it will in indeed be done. The announcement also makes clear that the scheme will cover electricity generation and heavy industries including iron and steel, chemicals, building materials, paper-making, and nonferrous metals. These are the main sources of emissions and the most cost-effective options to cut emissions using pricing instruments.

But don't expect emissions trading to become the mainstay of China's climate policy overnight. It will take time to become fully effective, and it may not be the biggest factor in China's climate change policy toolbox for some years. One reason is that other policies — such as mandated closures of highly polluting plants, regulations for minimum energy efficiency, and state-directed investment in renewable power — have strong effects. Another reason is that large parts of heavy industry and the electricity sector are still run by state regulation or as state-owned enterprises.

China's embrace of market-based approaches to cut emissions is significant because it is being done in an economy where command-and-control approaches are still highly prevalent, and where market prices are only beginning to play the key role in the energy sector. China has a challenge on its hands making emissions trading work well in that context, but the introduction of emissions trading provides an opportunity to push ahead with faster market reform in China's heavy and energy industries.

If successful, emissions trading can grow into playing a major role in facilitating China's objectives for a cleaner energy and industrial system over coming decades, and for achieving its longer term emissions reductions targets.

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A recent expert survey in China by the China Carbon Forum found that a third of respondents expected major business investment decisions to be influenced by a carbon price in 2016, and over 80% expected an influence from emissions trading on investment in 2020.

However, it is clear that there will need to be energy sector reform, especially towards more market-based settings in the electricity sector, to make a carbon price work properly. This has been extensively researched.

Seven pilot trading schemes have been in operation. Their effect on emissions has been very limited, but that was not really their objective. They have shown that cap-and-trade can be made to work in China. That would have given the central government confidence in moving towards a national scheme. It is also expected that China's provinces will play an important role in the administration of the national trading scheme.

As part of the recent announcement, China also reiterated its target to reduce the emissions intensity of its economy by 60 -65% from 2005 to 2030, announced forestry measures and said there will be low-carbon measures for buildings and transport. It also announced a move to 'green power dispatch', giving priority on the grid to renewable power generation and high-efficiency fossil fuel power plants, which will help make emissions trading effective.

The launch of China national emissions trading scheme will have a major signaling effect globally. The world's largest economy is putting in place a price on carbon emissions, and this will be noted the world over. If China's experience is a positive one, its model will be emulated in many other countries, especially by emerging economies.

The US-China joint announcement, following last year's joint announcement in Beijing, also sends a strong message to other nations: the presidents of the two largest economies are united in their push for meaningful climate policy. It gives support to any nation that wants to see strong global climate action, and helps the argument of domestic constituencies in favour of action. A number of industrialising and developing countries may consider following China's example. In fact, many middle- and low-income countries have already made significant climate action pledges, or Intended Nationally Determined Contributions.

There is also a fascinating aspect to this for the US-China relationship. It is ironic that presidents Obama and Xi are united on the issue of emissions trading even though Obama is unable to implement such a scheme nationally in the US, where cap-and-trade was invented. The Chinese leadership may find some quiet satisfaction in this.

Photo by Flickr user Kaj17.


Thank you to Marie-Alice McLean-Dreyfus for raising the important question of whether China's non-interference policy works in the age of ISIS. She correctly argues that the recent capture of a Chinese citizen by ISIS raises uncomfortable questions, and adds that Beijing will need to re-evaluate its policy of non-interference.

I would frame my thinking differently: China has already significantly adapted its non-interference policy in other parts of the world, so why not in Iraq and Syria? 

Non-interference in the internal affairs of other countries is a long-held official Chinese foreign policy under the Five Principles of Peaceful Coexistence. While the rhetoric of this policy has changed little over the years, its application has transformed significantly. 

This is most clear in China's involvement in UN peacekeeping operations (UNPKOs). Prior to 1989, China did not participate in any UNPKOs. As the UN's interventions have grown in scale and complexity, so has China's participation. As of September 2015, China has 3078 police and military troops participating in UNPKOs including a growing number of combat troops. China's personnel contribution is the largest of any permanent UN Security Council member.

Politically too, Beijing has become more involved in the affairs of other nations.

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In Sudan, Beijing publicly (and privately) pressured the Khartoum Government to accept the presence of a joint African Union-UN PKO, something Beijing has previously been reluctant to do. The Chinese have also facilitated meetings between the Taliban and the Afghan Government. This was part of a significant rethinking in China's Afghan policy – until 2011, 'They just used to send people to read out statements in meetings'.

Chinese Ministry of Foreign Affairs officials also recognise the shortcomings of strict adherence to the non-interference policy. China's special envoy to the Middle East, Wu Sike, said in 2011 that 'non-interference in each other's internal affairs does not mean doing nothing.' Similarly, a Chinese ambassador to Africa was quoted saying in 2014, 'Of course we are increasingly involved in the politics of African countries, we are being pulled in, we have no choice.' 

So why then is China not being pulled into Iraq and Syria? My view is that it is a strategic calculation, not an ideological one. The perceived threats don't justify the risk of significant involvement in Iraq and Syria.

Although China imports significant amounts of oil from Iraq, its supply is not yet affected by the country's turmoil. China's main oil assets are in the relatively stable south, and they are producing record amounts of oil. Perhaps future threats to oil assets would provide sufficient motivation for Chinese involvement (it did in Sudan), but the world is currently awash with oil.

The direct threat from ISIS is seen as more ideological than operational. ISIS and other global terrorist organisations have offered moral support for the Uyghur cause, but this hasn't translated into operational support. In fact, numerous Chinese observers indicated to me that ideological propaganda is the biggest security threat emanating from the Middle East (and Afghanistan/Pakistan too) – extremist propaganda from global organisations influencing dissatisfied Chinese Uyghurs in Xinjiang. It is unclear to these analysts that the degradation or defeat of ISIS would stop the ideological threat. The preferred method instead is to clamp down internally in China and stop the threat there. 

Finally, Chinese questions remain over the efficacy of a military solution in Iraq and Syria. China has watched interventions in Iraq and Afghanistan over the past 15 years and the outcomes have not filled Chinese observers who I speak to with confidence. The risks of involvement do not currently match the perceived threats. So while the capture of a Chinese hostage will likely cause much hand-wringing in Beijing, it is not likely to change China's strategic calculus in Iraq and Syria. Non-interference is simply a good justification. 

Photo courtesy of Flickr user United Nations Peacekeeping.


Over the weekend, the Sustainable Development Goals (SDGs) were ratified in New York, with celebrities and world leaders from Beyoncé to the Pope getting involved. Today's links will bring you up to speed with the achievements of the SDGs forbears, the Millennium Development Goals (MDGs), and what makes the SDGs different.

  • The MDGs were the world's first set of time-bound targets, agreed by heads of state in 2000, which Bill Gates in 2008 called 'the best idea for focusing the world on fighting global poverty that I have ever seen.' The eight goals, with a total of 21 specific targets, were infamously non-inclusive in their design, with legend having it that they were drawn up by a group of men in the basement of UN headquarters.
  • The development scorecard for the MDGs is mixed. Most famously, halving the proportion of the world's people living in absolute poverty was achieved with five years to spare. Most other targets have also been met, mostly thanks to progress in China and India.
  • There is no conclusive evidence that the MDGs had any influence on how developing-country governments spent their money. It is, however, almost universally agreed that the MDG's acted as a lightning rod for collective advocacy and fundraising efforts that has resulted in many additional billions being contributed in international aid.
  • The approach to developing the SDGs has been completely different, with the UN conducting the largest consultation program in its history over the past four years.
  • This process concluded that the MDGs were too narrow in their focus, and the SDGs have now ballooned to 17 goals with a whopping 169 targets that focus on universal objectives for the developing and developed world alike.
  • While we won't know until 2030 what impact the SDGs will have, the pundits are already lining up. The UN and most global advocates see it as an unprecedented success. Many development wonks are taking a cautionary approach, but there is still an underlying tone of optimism. The Economist, on the other hand, went so far as to call them the 'stupid development goals'. The magazine has since taken a more tempered view.
  • Whatever the outcome of the SDGs, they will help to keep development challenges at the centre of the global agenda and are a unifying force for global advocates, which can't be a bad thing. And at the very least, Manhattan got to have a hell of a party.

The silly season has been extended in this US presidential election cycle. All summer long, the press fed on Republican candidate Donald Trump's political posturing through back to back insults and outrages.

At each turn, the political establishment predicted the demise of Trump's candidacy and popularity in the polls. When he insulted Fox News anchor and debate moderator Megyn Kelly, insinuating that she was on her period while thoroughly questioning him during the debate, he was slammed by a number of conservatives and Republicans who expressed outrage over his misogynistic remarks.

Yet Trump's popularity has remained steady. When he voiced the opinion that immigrants from Mexico were mostly dangerous and 'rapists' he may have lost business contracts, but support among the Republican base increased. And most recently, when a voter took the mic in a town hall forum to say, 'We have a problem in this country, it's called Muslims...our current president is one', Trump did not correct him but responded to the man's further question ('When can we get rid of them?') by saying that 'we'd look into that and plenty of other things.' It solicited cheers of approval from his Republican supporters.

Trump's establishment critics continue to dismiss him as a political sideshow, an 'entertainer' who will eventually fade away when the real candidates emerge out of the pack. But this hasn't happened. He has made other more sober Republican candidates either drop out – first Rick Perry and now Scott Walker – or propelled other outsiders, even more popular candidates like Ben Carson, to also fearlessly eschew political correctness, particularly when it comes to Muslims and their place in America.

Carson was asked directly during a Meet the Press interview whether he believed Islam was consistent with the constitution. His response? 'No I do not. I would not advocate that we put a Muslim in charge of this nation. I absolutely would not agree with that.'

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Both Trump's and Carson's public statements on Muslims in American life and politics have brought into focus the views of the Republican base. Despite condemnations from the GOP establishment, which argues that it is 'unAmerican' and unconstitutional to discount a Muslim from the highest office in the land, and that of course Muslims are integral to the multicultural American social fabric and entitled to the same rights as any citizen, the reality is that a sizeable portion of Republican voters agree with these anti-Muslim sentiments.

A survey done in August by Public Policy Polling shows that Trump's pronouncements on Muslims and his 'birther' stance represents the consensus among the GOP electorate, not merely a Tea Party or right wing fringe. Sixty-six percent of Trump's supporters believe Obama is a Muslim, while 61% think Obama was not born in the US. Among the overall GOP electorate, 54% think President Obama is a Muslim and only 29% grant that President Obama was born in the US. (Remember, it was Donald Trump who encouraged the whole 'birther' movement. For years, Trump publicly called on Obama to release his birth certificate, claiming that he was a Muslim from Kenya and not, as is the truth, a Christian born in Hawaii.)

The GOP establishment is doing all it can to distance itself from Trump, rightly worried that he will tarnish the new branding initiative of a more inclusive Republican party, open to women, immigrants and minorities. Yet the polls show that the Republican base is right there with him. As one sharp piece of analysis by Frank Rich in New York Magazine describes it, Trump:

...is calling the GOP's bluff by saying loudly, unambiguously, and repeatedly the ugly things that other Republican politicians try to camouflage in innuendo...Far from being a fake Republican, Trump speaks for the party's overwhelming majority...He's ensnared the GOP Establishment in a classic Catch-22: It wants Trump voters — it can't win elections without them — but doesn't want Trump calling attention to what those voters actually believe.

Ben Carson is another matter. The soft spoken African American with a compelling life story and a reputation as a brilliant pediatric neurosurgeon is not as easy to dismiss as a political buffoon, though he is a political neophyte. Carson has the highest favourability numbers among the GOP candidates. He is a minority candidate, which plays into the GOP establishment's narrative of a more inclusive Republican party, yet he is also an outsider – a good thing in the minds of many Republican voters. What's more, he shares and even exceeds Trump's positions on Islam in America.

Just as in Trump's case, Carson's Islamophobic positions have not damaged him among Republican voters. If anything, it has upped his standing in the polls. Donations to his campaign surged after he publicly remarked he would not support a Muslim in the White House. (This is despite the fact that the first amendment to the constitution prohibits a religious test for public office; the presidency, the very office Carson is running for, is tasked with enforcing the constitution.)

But like Trump, Carson is voicing mainstream Republican thinking on this matter. The latest Public Policy Polling results from 22 September show 'only 49% of Republicans think the religion of Islam should even be legal in the US with 30% saying it shouldn't be and 21% not sure. Among Trump voters there is almost even division with 38% thinking Islam should be allowed and 36% that it should not.'

A sizeable portion of the GOP base unambiguously believes Islam and Muslims present a real threat, that Islam is a religion of violence and that Muslims cannot be loyal American citizens because their religion dictates their politics through sharia law. Trump and Carson both know this and they are unafraid to say it. 

Photo courtesy of Flickr user Gage Skidmore.


Over the weekend Fairfax published a short piece about a new documentary on Hong Kong's Umbrella Movement, the 79-day sit-in protesting changes to Hong Kong's electoral system which were seen to cement Communist Party control over the city.

Strangely, they didn't post a trailer along with the article, so here it is:

The film, which follows the lives of three generations of Hong Kongers at the time of last year's protests, is by accomplished Australian cinematographer Christopher Doyle, and the trailer is indeed visually sumptuous. But it's hard to get any narrative thread from it, and judging by the Guardian's review, this might be true of the film as a whole.

Hong Kong Trilogy has already had a run on the festival circuit and is released in Hong Kong today on the first anniversary of the protests.


Commentary about Senator Marise Payne becoming the first female to be appointed Minister for Defence has been overly influenced by two rather irrelevant perspectives: gender and polarised intra-party politics. The first has either celebrated the appointment as yet another fallen male bastion or criticised it as being more dependent on her gender than her merit. The second reflects Liberal Party factionalism following Tony Abbott's replacement as prime minister by Malcolm Turnbull.

Both perspectives are surely too narrow. They ignore the history of the Defence portfolio and mostly discount Senator Payne's career to date. The key issue is maximising effective governance of the cabinet portfolio with probably the longest-term focus and the most supra-partisan national responsibilities.

Over the last half-century, 21 men have been minister for defence. Eleven served less than two years (with five serving under one) and a further two just over two years. Only five have served longer than three years (with one of them only four days more).

The Defence portfolio has a reputation for devouring its ministers, but four (Malcolm Fraser, Ian Sinclair, Kim Beazley and Brendan Nelson) went on to lead their parties. Another, John Gorton, had already been PM. The real problem is that many ministers have been kicked sideways into the Defence portfolio, often in the twilight of their careers, and then serve a short time before retirement. This occurs because the perceived seniority of the position is misused to warehouse long-serving or perhaps controversial ministers who cannot be appointed foreign minister or treasurer (or have been and must be moved). In recent years we saw this occur with Stephen Smith when former prime minister Kevin Rudd returned to cabinet as foreign minister. It was also the first portfolio mooted by many for Joe Hockey if he had stayed in cabinet following the recent reshuffle.

The unfortunate result is that more often than not, Defence has had ministers with little or no interest in the portfolio (or worse — Stephen Smith's open personal and political resentment greatly hindered his ability to do the job).

Any discussion of who should be appointed Minister for Defence in any government therefore needs to begin with studying the most effective of the 21 ministers over the last half-century. They have shared at least two or three of the following five key criteria (in rough order of importance).

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  • A longstanding and genuine interest in strategic security and defence issues (Kim Beazley), and/or instead, a strong sense of public duty and ministerial responsibility as being more than just a political office (Robert Ray, Robert Hill, Brendan Nelson, John Faulkner).
  • Lengthy periods as Minister for Defence (Beazley – 5¼ years; Ray – 6 years; Hill – 5¼ years).
  • Being a senator (Ray, Hill, Faulkner), not an MHR, because it enables more time to devote to what is not only a complex portfolio but one that involves issues primarily beyond day-to-day party politics or indeed politics at all.
  • Previous service in the portfolio as a junior minister or parliamentary secretary (Beazley, Nelson, Faulkner) provides a better grounding. The British recognise the importance of this by having a career path for potential defence ministers. We should too.
  • Being government leader or deputy leader in the Senate, or having past experience of such a post (Hill, Faulkner, Ray), is an advantage. It denotes seniority in parliament and party and adds gravitas to the role of defence minister. Moreover, if you want a job done well, give it to someone who is already busy. It can even sometimes help if such a senior minister has factional or other differences with their prime minister, such as Hill with John Howard and Ray with Paul Keating.

Some of these criteria on their own do not lead to outstanding ministerial records. Jim Killen and Stephen Smith, for example, had six-and-a-half years and just over three years in the portfolio respectively but come in at number 7 or 8 (Killen) and 18 or 19 (Smith) in the Australia Defence Association's rating of the 21 ministers. Previous portfolio experience on its own is also not enough. Gorton's record as Minister for the Navy (1958-63) is commonly regarded by naval historians as the best ever, but his 7-month period as Minister for Defence in 1972 (after stepping down as PM) has earned a rating of 18.

On the Tuesday of the week the cabinet reshuffle was being formulated I was rung by a journalist dedicated to defence coverage. He naturally asked who the ADA thought would be the new minister. We discussed the most likely options based on the longstanding habit of party-political expediency tending to win out over good governance in the national interest. When my interlocutor then asked me who I thought it should be, I replied that it should be someone actually interested in the portfolio. I suggested that while 'the brave choice would be Marise Payne', I did not think they would be brave.

Since her subsequent appointment there has been much surprise and some criticism. Both mostly result from ahistoric perspectives and insufficient knowledge of Senator Payne's interests and parliamentary career to date. Given she comes from the moderate wing of the NSW Liberal Party, the criticism also seems mainly derived from continuing factional tensions or the loyalty to the deposed PM felt by some public commentators.

While there was an obvious desire to appoint more female cabinet ministers, and Defence offered one of the few opportunities to do so, placing her appointment against the above five criteria provides a better perspective.

First, she is a senator.

Second, she has long been one of the 20 or so (out of 226) parliamentarians genuinely interested in strategic security and defence issues ― and one of the only four females in this group. While her implementation of this interest has been questioned by some, her work on relevant Senate and joint committees has long been recognised by those who keep up with such issues.

One notable and telling example remains her chairing of the Senate committee reviewing the first tranche of reformed counter-terrorism legislation in 2004. The all-party committee was fractious due to competing perceptions of electoral advantage. The bills also attracted irrational opposition from various single-issue fringe groups. Senator Payne adroitly balanced testimony from such a wide range of views.

Third, longevity: if she performs capably in the portfolio, the Coalition wins the 2016 election and she remains willing to serve, Senator Payne should be left there for the next term of government and perhaps longer.

Due to Liberal Party factionalism, it was always likely that Kevin Andrews would be retired to the backbench if Tony Abbott was no longer prime minister. Moreover, even if Abbott had retained the party leadership, a substantial ministerial reshuffle would still have been necessary in the November to February period in order to present a refreshed team for the 2016 election. Given the quality of the emerging Coalition generation, it is likely that Howard-era ministers would have been required to give way to a younger team (as subsequently occurred in the Turnbull reshuffle).

Andrews' argument that he should have been retained for continuity in the Defence portfolio was always problematic, particularly once the party-political aspects are excluded. From the public-interest viewpoint the necessary continuity is instead best achieved in the careful selection of his replacement. Continuity is also enhanced by her junior minister, Mal Brough, a former ADF officer who previously served effectively as a junior minister in the Defence portfolio in the Howard Government. The nearly complete Defence White Paper and the selection process for new submarines, both at the stage where they are effectively the collective responsibility of the National Security Committee of Cabinet, also enhance continuity.

The ADA is optimistic about Senator Payne's appointment as Minister for Defence. That she is the first female to do so is notable but irrelevant to her promotion and her prospects.

Photo by Stefan Postles - Pool/Getty Images


Our most popular post this week was Shashank Joshi's piece on India's incredible shrinking air force:

The IAF presently operates around 37 combat squadrons, expected to fall to 32 to 35 (estimates vary) by the end of the year. Its 'sanctioned strength' was supposed to be 42 combat squadrons by 2022. On present trends, this looks to me to be entirely unattainable. MiG-21s are retiring quicker than other aircraft are coming in. Even if the 90-aircraft 'Rafale gap' is filled, I struggle to see how India gets above the mid-30s in squadron numbers by 2020. And after that point, India will start losing its dedicated ground attack aircraft (5 MiG-27 and 7 Jaguar squadrons). The IAF has shown little interest in procuring dedicated replacements for the strike role, suggesting that multi-role aircraft like the Su-30MKI and Rafale will have to take up the slack – underscoring the problem of numbers.

Malcolm Jorgensen had a strong piece about the differences between new Prime Minister Malcolm Turnbull and his predecessor Tony Abbott on China and the US alliance:

Turnbull's attitude toward the alliance is pragmatic: he has a strong preference for deep US commitment to the region, but is concerned about whether the US will realistically appraise its evolving position in the region and forgo temptations to contain China. The 'pivot' to Asia is welcomed as 'a vitally important, stabilising, reassuring factor in the peaceful development of our region.' Yet the preoccupation with conflicts in distant parts of the globe has compelled Turnbull to remind US leaders to remain 'engaged, aware, committed to the Asia Pacific.'

Turnbull has demonstrated a genuine and long held commitment to engaging in the debate over the shifting Sino-American power balance. He specifically accepts Hugh White's thesis that the trajectory of growing Chinese power makes a rebalance in the Asia Pacific unavoidable. In Washington, the cross-party consensus remains that US primacy must continue as the guiding principle in the region. Turnbull, however, openly contemplates whether Western nations are ready 'to adapt to a very different distribution of global power than that which they've been used to'.

Turnbull's cabinet reshuffle is great news for the Pacific, says Jonathan Pryke:

The new Turnbull cabinet is great news for the Pacific. Julie Bishop will continue to set the tone and policy priorities for the region, while Minister Ciobo can focus on day-to-day implementation in the region. The Pacific is often neglected by Australian politicians; having two ministers focused on the region is a welcome change.

Turnbull's new treasurer Scott Morrison was urged to attend upcoming multilateral talks in Peru. Tristram Sainsbury writes:

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...our economics dictate a focus on international economic issues. As a medium-sized, open economy, Australia has long been influenced by overseas economic developments. We are a capital importing country that relies on foreign savings to finance domestic investment. In the last few decades we have benefited significantly from a long and sustained push to lower tariff barriers and liberalise our financial system.

Our international inter-connectedness gives us great opportunities and exposes us to risks and vulnerabilities. The past seven years have been a tumultuous period for the global economy, and the global financial crisis demonstrated the close inter-connectedness of financial markets. Global norms affect our policy choices too, as the recent shifts in our pledges on climate change have reinforced.

Stephen Grenville came out strongly against the economic arguments for local construction of Australian submarines:

Part of this sentimental attachment to manufacturing has been a nebulous security argument: in the event of war, we need to be self-sufficient. But self-sufficiency in modern defence technology for a small country like Australia is a pipe-dream. Even if the submarines are built here, large key components are going to have to come from overseas. In the event of hostilities, we'll inevitably be dependent on overseas suppliers to keep our submarines operational (same for our military aircraft). 

Those who put forward the canard of defence self-sufficiency should recall the World War II experience of sending home-made Boomerangs up against Japanese Zeros. This did not turn out well. We need state-of-the-art subs, not compromises to boost domestic content.

Peter Layton argued the other way:

Defence can have a multiplier effect across industry, science, innovation, and the economy, if properly focused. Some will argue that defence money should mainly be spent offshore (in Dallas, not Sydney) to get the most bang for the buck. Australian money should fund American science, innovation, and new technology, not be wasted in Australia. This somewhat narrow procurement argument neglects the fact that defence capabilities are much more then just hardware. The equipment needs to be funded by all Australians, crewed and maintained by skilled people and continuously upgraded to stay at the military leading edge. And all across several decades.

Do recent joint exercises suggest an emerging anti-China security quartet in the Indo-Pacific? Abhijit Singh writes:

India's forthcoming naval interactions with Pacific powers, therefore, are likely to focus on contingencies arising from greater Chinese naval presence in Asia's littorals. According to media reports, the India-US Malabar naval exercises later this month will go beyond the traditional ambit of humanitarian assistance and disaster relief to also include anti-air and anti-submarine warfare operations. The fact that New Delhi has extended an invitation to the Japanese navy to participate in these exercises reveals a willingness to expand the framework of maritime engagements.

Did you know New Zealand is debating a change of flag? Robert Ayson surveys the debate:

As this process has meandered towards a stunning anti-climax, some commentary has suggested that it has come to look like a branding exercise and not a thriving discussion about New Zealand's national identity. But it isn't clear that New Zealanders were itching for the latter. One hundred years after the Gallipoli landings, New Zealand is in the middle of a four-year stretch during which much is being made of the First World War centenary (including in its more significant strategic moments). It's an odd time to highlight New Zealand's distinctness from Australia and its independence from the old empire.

But there may actually not be a right time for this debate. New Zealanders seem willing to put up with an unexciting national anthem (even if it has been improved with the practice of singing it in both Maori and English) and an unremarkable national flag. This is probably a healthy sign at a time when the uglier side of nationalism is becoming obvious in other parts of the world.

US congressional negotiations over the Iran deal bode ill for US China policy, writes Jacob Berah:

The controversy over the Iran deal raises the spectre that as key points of contention with China become the subject of politicised debate in Congress and on the campaign trail, the ability of the executive to conduct deft diplomacy in response to tensions with China will be curtailed. In particular, an environment where acts of significant diplomatic compromise, concession or accommodation are portrayed as capitulation will make it increasingly difficult for US leaders to find creative ways to solve disputes and avoid escalation with China. Already the stagnant opposition to US ratification of the UN Convention on the Law of the Sea (UNCLOS) arguably weakens US credibility and limits policy options on territorial disputes and island-building in the South China Sea.

Why is Europe's approach to the refugee crisis incoherent? Former Danish senior civil servant Martin Bresson answers:

The root of the conundrum lies in the constitutional and institutional set-up of the EU and in the cultural and historical heritage of its members.

The EU is constitutionally and hence institutionally a patchwork of what was politically possible at the time of various founding treaties. It is a case of forever balancing the desire (and sometimes the need) for more unified decision-making with the desire (and sometimes the need) for national sovereignty over specific issues. So, although the EU has a common set of rules for persons traveling inside the EU (the Schengen Agreement, of which only the UK, Ireland and Denmark opted out), the EU has no rules on how, at a community level, to handle refugees or immigrants to the Union. It does have FRONTEX, which helps member-state secure their exterior borders and coordinates border guard agencies, though it leaves member states 'of arrival' such as Italy, Greece and Hungary with the financial burden of border management, as well as the burden of handling incoming refugees or immigrants.  

The EU has no rules of common treasury, let alone rules of common economic burden-sharing, except for a scarcely respected set of 'rules' about budget-balancing and the procedural rule that almost any agreement that relies on national treasuries has to be unanimous.

Does China's non-interference policy still work in the age of ISIS? Marie-Alice McLean-Dreyfus answers:

With a Chinese citizen now being held hostage, it seems the Chinese Government does not know how to react. There have only been two statements from the Foreign Ministry, neither of which gave any indication of how China will respond. The spokesman has only said that 'the Chinese side reiterated its firm opposition to any violence against innocent civilians' and that it has launched an 'emergency response mechanism.' There has been next to no coverage of this event in the Chinese media. 

While China prefers to remain on the sidelines when it comes to the fight against ISIS, the kidnapping of one of its citizens may prompt Beijing to seek a more proactive role in the Middle East. The incident could act as the impetus to change its longstanding policy of non-intervention.

Tristram Sainsbury from the G20 Studies Centre writes: 'The question I have been asked most frequently in overseas discussions about the G20 this year is: whatever happened to Australia's Global Infrastructure Hub?' The answer?

At this stage, the Hub remains an experiment.  The only likely deliverable in 2015 is the business plan. However, we should not scoff at what has been achieved so far. As those developing the other new kids on the infrastructure financing block (the AIIB and BRICS New Development Bank) have quickly learned, multilateral institutions take time to set up. It is important to get the right people in key positions.

Ultimately, the Hub will be judged on what it delivers over the next three years. But at a time when the G20 needs to demonstrate that it is delivering outcomes, the Hub still carries the potential to contribute to real improvements in the coming years to global investment financing, and give a compelling reason for an extended mandate. Momentum is beginning to build.

Photo by Flickr user Dongyl Llu.


One of the early decisions new treasurer Scott Morrison will need to make is whether to attend the IMF-World Bank Annual meetings and G20 Finance Ministers and Central Bank Governors meetings in Lima, Peru early next month.

There are strong signals that the Treasurer will prioritise domestic matters at the expense of these international meetings. But there are some compelling arguments to suggest that it would be valuable to book that flight to Lima.

Lima, Peru. (Flickr/James C.)

The first is that our economics dictate a focus on international economic issues. As a medium-sized, open economy, Australia has long been influenced by overseas economic developments. We are a capital importing country that relies on foreign savings to finance domestic investment. In the last few decades we have benefited significantly from a long and sustained push to lower tariff barriers and liberalise our financial system.

Our international inter-connectedness gives us great opportunities and exposes us to risks and vulnerabilities. The past seven years have been a tumultuous period for the global economy, and the global financial crisis demonstrated the close inter-connectedness of financial markets. Global norms affect our policy choices too, as the recent shifts in our pledges on climate change have reinforced.

The second reason Morrison should think about going to Lima is that we should be doing everything we can to contribute to strong, stable, rules-based economic governance. Our commitment to the rules-based order defines the way Australia is perceived. It gives us credibility on the international stage and helps us to punch above our weight in international fora.

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Enter the G20, which has been the focal point of Australia's international economic engagement efforts in recent years. The G20 gives Australia a seat at the table with economic leaders. The G20 faces many problems, including some inherent design flaws, but it is the best the world has for dealing with collective economic challenges. This includes reform of international financial institutions, but is also true for tax, trade, energy and climate change — all global issues that cannot be effectively solved by countries acting on their own.

Rather than disengaging from the G20, Australia should be promoting more effective cooperation. The G20 faces the challenge of recapturing the momentum of the first few leaders' summits, which were geared towards responding to the global financial crisis.

The third argument for Morrison's attendance at the Lima meetings is the politics. Australia needs the G20 more than the G20 needs Australia. Not attending the Finance Ministers and Central Bank Governors meeting due to non-pressing domestic priorities would do more than just disappoint others around the table. Australia would be sending a signal that we are vacating our governance responsibilities. Our host-year obligations did not end at Brisbane. We are still a member of the governing 'troika' which includes Turkey (the current host) and China.

Short of a domestic economic crisis, failure to attend sends a terrible message about our commitment to our responsibilities to support Turkey this year. It may also undermine our capacity to engage with and support China before it announces its priorities for 2016. China's G20 presidency comes at an important time for the forum, and aligns with a crucial juncture in China's economic rise.

A final reason Morrison should go is the benefit of getting the pulse of economic thinking through interactions with the likes of Janet Yellen, Mark Carney and Christine Lagarde. As DFAT Secretary Peter Varghese recently remarked at the Lowy Institute, you can't just read The Economist to understand international economics. Similarly, what is important to Australia cannot be picked up by second- or third- hand information and reading the numbers in Canberra.

A tight cost-benefit analysis on international conferences would likely conclude that there is limited value in attending any given meeting. However, international economic engagement is worth more than the sum of its parts. In fact, it is the collective and continuous engagement over a long period that provides the benefits: relationships pick up over time, ideas are gleaned, and it is morale-boosting to have conversations with others grappling with the same policy challenges.

Rather than skipping Lima, the flight should be a top priority. The meetings provide a valuable opportunity to confirm Treasurer Morrison's worldview about Australian international economic engagement and start building the relationships that will need to endure throughout his tenure as Treasurer.


On Monday, Prime Minister Turnbull unveiled a new cabinet with sweeping changes to the front bench. The most important point for the Pacific is that Julie Bishop retains her position as Foreign Minister, with an improved status in cabinet as one of the kingmakers of the new Government.

Steven Ciobo with Solomon Islands Foreign Minister Milner Tozaka, February 2015. (Wikimedia.)

But missing from most of the media discussion this week is the promotion of Steven Ciobo to become Australia's first Minister for International Development and the Pacific. Speaking to ABC's Pacific Beat on Monday Ciobo, formerly Parliamentary Secretary to the Minister for Foreign Affairs and to the Minister for Trade and Investment, outlined the symbolic importance of his appointment to the region:

This new position really reflects and really does underscore the Government's renewed focus on the Pacific, the importance of the Pacific, the value that we place on our international development, and of course our very strong desire to continue building a strong relationship with our near South Pacific neighbours.

The importance of the message this sends to the Pacific should not be understated. By jettisoning the trade portfolio and narrowing Ciobo's foreign policy remit to the Pacific, the Turnbull Government has elevated the region to a higher, indeed unique, status.

This reflects Julie Bishop's position since her time in opposition that the Pacific is where 'Australia's reputation as a valued global citizen can be made or lost.' Ciobo's promotion is also a unique one for the cabinet reshuffle, with most parliamentary secretaries simply being promoted to assistant minister positions.

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Adding international development to Ciobo's portfolio should also be lauded. It makes good on a commitment Julie Bishop gave in opposition to have a minister for international development, as well as providing an extra level of oversight to an area that has recently undergone sweeping administrative and budgetary changes. It is also something the Australian development community has been crying out for. There will also be plenty of synergy between Mr Ciobo's twin responsibilities, as more than a quarter of Australia's aid is spent in the Pacific region.

But it's not just the message this appointment sends which matters; the new ministerial position will also have practical implications. While Julie Bishop proved to be a more than competent foreign minister in the Abbott Government, her portfolio is incredibly broad. By letting Ciobo take charge of the day-to-day operations of Pacific engagement and the aid program, Bishop frees herself to focus on the bigger picture of Australia's long-term engagement with the region, and other areas of diplomatic importance. 

This isn't to say Minister Bishop should walk away from the Pacific altogether. This is a region where relationships matter, and she has been personally instrumental in reframing Australia's engagement there, particularly with regards to Papua New Guinea and Fiji. As my colleague Jenny Hayward-Jones put it, she 'is Australia's chief "political asset" in PNG'. This notion could easily be expanded to the region as a whole, considering her prolonged and personal engagement. 

Minister Ciobo's appointment, whilst most important for the Pacific, isn't the only one of significance. Scott Morrison has taken over as treasurer and now has ultimate say over the size of Australia's aid budget. Considering that the Pacific was relatively well protected from aid budget cuts made by former treasurer Joe Hockey two years ago, and Minister Bishop's elevated influence in cabinet, it's unlikely we will see any aid cuts to the Pacific in the near future. That said, Bishop and Ciobo's relationship with Morrison will be an important one. Australia also has a new Defence Minister, Marise Payne, who took an active interest in the Pacific during her time as Shadow Parliamentary Secretary for Foreign Affairs and led an observation delegation to the 2006 Solomon Islands elections. Considering Australia's involvement in two theatres of war, the ongoing submarine debate and the impending release of a new white paper, it's unlikely that her engagement with the Pacific will go beyond interest. 

Beyond aid, Pacific Island leaders will be concerned with how the cabinet reshuffle will change big-ticket policy items in the region like Australia's position on climate change and regional asylum seeker processing. While we are likely to see a softening of the language around climate change, as was already evident from Julie Bishop's speech on the Pacific earlier this month at the ANU, Australia is highly unlikely to change the targets it takes to the Paris negotiations late in the year. The same can be said with regards to asylum seeker policy, given that the Coalition holds 'stopping the boats' as one of the major successes of its first two years in office. There may be a change in climate policy if the Government is re-elected and Turnbull is granted a broader mandate, but Pacific leaders shouldn't stake Ciobo's and Bishop's performance to this issue.

The new Turnbull cabinet is great news for the Pacific. Julie Bishop will continue to set the tone and policy priorities for the region, while Minister Ciobo can focus on day-to-day implementation in the region. The Pacific is often neglected by Australian politicians; having two ministers focused on the region is a welcome change.