Australia’s Place in the “Asian Century”

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Australia’s Place in the “Asian Century”

Prime Minister Julia Gillard’s government has developed a bold plan for embracing the “Asian Century.” Can words be turned into deeds?

The Asian century is rich, restless and already 12 years old. And, of all nations, Australia stands to be profoundly affected by this era of rapid change – whether the region resolves into a golden age of prosperity and human development or collapses in strategic turmoil.

So it is extraordinary that it has taken so long for Australia to come up with a comprehensive and publicly-articulated plan for dealing with the opportunities and challenges of finding itself close to the world’s new center of economic and strategic gravity.

The good news is that the Australian Government, under Labor Prime Minister Julia Gillard, has at last done that, launching an ambitious policy white paper titled Australia in the Asian Century on October 28th.

To understand this project, where it has come from, and where it may take Australia, first consider what an anomalous nation this is.  Australia has distinct strengths, but vulnerabilities as well.

It is the only nation to occupy a whole continent, yet that land, while rich in mineral wealth, is largely arid and can sustain only a small population. It is a developed economy and a huge supplier of resources. Its chief trade and investment relationships are all in Asia, or more precisely the wider Indo-Pacific including the United States.

Australia has a special proximity to Asia. With its unique two-ocean geography, it is well-placed for what is increasingly being recognized as an Indo-Pacific era, in which the Asia that matters globally is not only East Asia but India and its maritime environs as well.

Australia has Western cultural origins and alignments which sometimes continue to hamper its image in Asia. It relies increasingly on Asian immigration, especially now from China and India, to ensure its economy and society keep thriving. Over a quarter of Australians were born overseas, making this country truly a nation of immigrants, much more so proportionately than the United States. Australia increasingly – and proudly – wears an Asian face.

It has vast security interests in its territory and maritime zones, yet only a small population – 23 million – and an advanced but small defense force. It is a U.S. ally yet has close economic and increasingly societal ties with China, its top trading partner.

It has a multicultural society with a stable if lively democratic system. And its federal, democratic and partisan style of politics sometimes struggles to marshal and mobilize national capacities and will to deal with new challenges – an exception being its earlier waves of economic reform in the 1980s and 1990s.

Finally, it is fair to say that many Australians – while well-travelled – have tended to be complacent about the rise of Asia and what it means for their economic and strategic future.

Against this muddled backdrop, the new white paper is, if nothing else, a wake-up call. It correctly urges Australia to get its own house in order as a first step towards flourishing in the Asian era, including through a competitive and diversified economy, education, innovation, social cohesion, infrastructure, environmental management, security and diplomacy.

The document states many sensible aspirations to reshape the nation, including through giving every Australian child the chance to learn Chinese, Japanese, Indonesian or Hindi, with Korean, Vietnamese and Thai as other important options.

The bad news is that there is little evidence so far of a serious or sustained government commitment to funding these goals. Indeed, in recent years some of Australia’s chief instruments of international engagement – notably its diplomatic network and defense force – have found their budgets in relative decline.

Moreover, parts of the white paper have unfortunately been crafted in such a way as to diminish the prospects of active bipartisan endorsement – even though this should be an essential ingredient to any enduring national strategy.

For instance, the text identifies Australia’s successful Asian engagement overwhelmingly with many of the values and domestic policies of the Labor party (currently holding power despite its lack of an outright parliamentary majority). The conservative Opposition – which has a strong chance of winning the election due next year — has broadly welcomed the paper but questioned its lack of funding, and suggested it is largely a repackaging of sensible ideas that have been around for some time.

No doubt a document like this is better late than never. But Australia could have done with this kind of blueprint four or five years ago, when there was a solid budget surplus to help pay for the national transformation that will be necessary.

So in a sense the responsibility for the delayed and under-funded nature of this white paper can be laid at the door of the previous governments, of the conservatives under John Howard (1996-2007) and Labor under Kevin Rudd (2007-2010). The fact is, Australian politics in recent years has been plagued by short-term thinking, bitter partisanship, rhetoric without follow-through, personal power-plays and policy paralysis. It will be a major test for the Gillard Government to transcend those problems in its execution of this grand Asia plan.

The other chief problem with the white paper is about realism and balance.  The document says much about how to seize the economic opportunities of Asia. But it ventures less about the perilous flipside — how to manage what could become great strategic uncertainty and turbulence.

Indeed, at times its strategic assessments pull their punches beyond the requirements of diplomacy. For instance, its description of tensions in the South China Sea implies that these are merely a continuation of what has gone before, rather than a worsening situation which could yet become a perfect storm of competing nationalisms, resource insecurities and U.S.-China rivalry.

Within Australia, the report is commanding broad support and respect from the many constituencies and sectors that see a need to deepen engagement with Asia – ranging from business to education to the former political leaders and officials who have dedicated themselves to regional diplomacy for decades. Former Prime Minister Bob Hawke, who drove the Asia Pacific Economic Cooperation process in the late 1980s, was notable among the luminaries at the paper’s launch.

To be fair, the report is to be commended for its many sensible aspirations and what it terms ‘pathways’ to getting there.

It rightly emphasizes China, India, Japan, Indonesia and South Korea as Australia’s constellation of key Asian partners – a geo-economic Southern Cross for navigating this altered world.

It thankfully recognizes that any ‘Asian’ century is really an Asia-Pacific or even Indo-Pacific age. The United States remains the indispensable strategic player and the region’s trade and energy arteries span the Indian Ocean as well as the Pacific.

In other words, with this white paper Canberra has made it clear that it does not see the Asian century exclusively as China’s century. This should help neutralize voices that have claimed Australia was falling into China’s geopolitical orbit at the expense of its other relationships.

A real highlight of the paper is its emphasis on the goal of ensuring that all Australian schools offer Asian languages. This is a smart aspiration, and would not just equip new generations of Australians for business and engagement in Asia, but demonstrate a certain cultural respect for the new realities of Asia’s rise.

The fine print, however, is that this outcome will need to be negotiated with state governments – many of which are composed of Labor’s opponents, and are under tight funding constraints of their own. Moreover, critics are already noting the gulf between rhetoric and reality, the fact that government support for Asian languages has been declining for years. More Australians learned Indonesian in the 1970s than now.

Additionally, there are shortages of language teachers, and no immediate initiatives to address this through skilled migration. Indeed, the paper is largely cautious on migration – countenancing nothing like the (then European) migration and population growth revolution that was crucial to the country’s nation-building in the 1950s.

Another plus is that the white paper pointed to thousands of scholarships for Australians and Asians to build professional and cultural connections, a kind of two-way Colombo Plan.  The critics, though, are beginning to point out that most or all of these seem to be from existing programs.

An additional intriguing idea promoted by the new paper is to set quotas for Australia’s business leaders and senior bureaucrats to become Asia-literate. For instance, the report proposes that one-fifth of the members of Australia corporate boards should possess Asia skills or experience. It would have been nice to see something similar required of parliamentarians – for instance, requiring them to focus their taxpayer-funded travel on Asia, and to make visits to, say, Europe in summer the absolute exception.

Still, for anyone who cares about Australia’s links with its Indo-Pacific neighborhood, the new document is a worthy vision.

The main areas of disappointment and skepticism are about money, timing and the paper’s lopsided assessments of strategic risk.

The white paper rightly says that adapting Australia to the Asian century – economically, strategically and at the level of society – will be the work of a generation.  The problem, though, is that the clock has been ticking for years.

The Howard, Rudd and Gillard governments – and their oppositions – all share blame for the country’s too-often delayed, uncoordinated and underfunded responses to a changing Asia, even while each can claim credit for elements of the new paper’s strategy.

The hard work lies ahead. That is something Australians might yet take in their stride, except that girding a nation for a radically changed world will not be cheap.

And, like Kevin Rudd’s 2009 Defense White Paper – with ambitious force structure proposals that seem to be fast disappearing down a political memory hole – Canberra’s Asian century white paper is bold on vision and shy on costs.

There is little acknowledgement that Australia simply will not be able to hold its own in a fast-changing Asia without greater investment in less fashionable instruments of policy like its diplomatic network and defense force. And observers of the Australian defense debate are well aware that the nation’s military faces currently relative decline in its budget, to the lowest proportion of GDP since the 1930s, around 1.6 percent.

Indeed, the Asian century white paper is at its weakest when coming to terms with the nation’s deeply uncertain strategic environment.

Admittedly there is some sound strategic analysis, politely worded so as to avoid needless offense, about how Asia’s future may end up much less rosy than the white paper’s economically-driven optimism would suggest.

The possibilities of confrontation or war between China and the United States, China and its neighbors or India and Pakistan are considered real. But because we all have so much to lose, and governments are presumably rational, a strategic breakdown is deemed unlikely. And the role of deterrence in maintaining stability is not really stated.

To be sure, there are some sensible security recommendations. An emphasis is placed on building diplomatic architecture like the East Asia Summit. Prudently, the paper recommends Australia do more to build the infrastructure of communications and cooperation among the region’s defense forces to stop an incident somewhere like the South China Sea from getting out of hand.  The Australian navy can play a useful role here, given its traditions of defense diplomacy with all the region’s powers.

But the paper does little to countenance the prospect that the very economic virtue of the Asian century – the rising wealth, influence and expectations of the massive middle classes in China and India – could prove its strategic undoing.  The role of overconfident middle-class nationalism in driving tensions among Asia’s strong states gets scant play.

There is also little hint at plausible strategic shocks from the Chinese polity’s one-party brittleness, India’s potential failure to meet the needs of its 600 million citizens under the age of 25 or a feasibly unpleasant shift in Indonesian politics.

In the end, Australia would be well-advised to do almost all the things the white paper calls for and more – and the more is to properly resource its diplomats and defense force. These steps make sense regardless of whether the Asian century turns out for better or worse. It is odd that Canberra’s new Asia plan was not more forthright in saying so.

Whatever else, Prime Minister Julia Gillard has set some very high benchmarks by which her own and subsequent Australian governments will be measured in coming to terms with a changing Asia. Now the real test begins.

Rory Medcalf is director of the international security program at the Lowy Institute, Sydney, and a Fellow at the Australia-India Institute.