Rory Medcalf

The Diplomat’s Harry Kazianis sat down with noted Australian Lowy Institute scholar and new Flashpoints contributor Rory Medcalf to discuss the “Indo-Pacific”, Australia’s budding relations with India, its complex relations with Washington and Beijing and future defense plans.

Harry Kazianis

In a recent piece for The Diplomat you mentioned a term: The “Indo-Pacific.” Could you please define this term and explain its significance to our readers who maybe unfamiliar with it.

The Indo-Pacific, or more precisely Indo-Pacific Asia, is a credible new way of defining the global center of gravity in economic and strategic terms. It includes the United States and is focused on Asia’s key powers, especially China and India.  This is a principally maritime strategic environment in which the acute dependence of major East Asian nations plus India on seaborne energy and resource supply lines features prominently. Those sea lanes extend across the Indian Ocean to Africa as well as to other parts of the Indo-Pacific littoral, notably Australia, helping to make this an integrated strategic system. Of course, this definition is still a work in progress, and some security challenges like North Korea’s nuclear weapons and rocketry will remain at one level sub-regional, even though it still engages the interests of Indo-Pacific giants like China and the United States.

But it is really quite striking that the United States, Australia, India and some other countries have become increasingly comfortable with thinking and talking in terms of Indo-Pacific in their policy pronouncements in recent years, and this makes sense to those of us in think tanks who have been advocating for the Indo-Pacific concept for some time. The big challenge now is to socialize the concept with China, which may see its own role diluted in this wider strategic context but which is in fact the quintessential Indo-Pacific nation, owing to its energy dependencies and active, far-flung diplomacy and security interests. Indo-Pacific is not code for containment, but some in Beijing will need convincing of this.

You have recently commented about the importance of India-Australia relations. Over the next 10 years, what issues do you see defining this growing partnership? What challenges could limit cooperation?

Within the Indo-Pacific, one of the key relationships to watch is between India and Australia, including in the context of both nations’ closer ties with the United States and their ambivalence about China. These two very different democracies are starting to find all sorts of commonalities and mutual interests, from a highly complementary energy relationship — Australia digs and exports, India desperately needs — through education, labor, defense and security. For the first time since Indian independence in 1947, this relationship faces no fundamental obstacle to trust and growth, as my co-chair on the Australia-India Roundtable dialogue, C. Raja Mohan, has pointed out. We are moving past the nasty phase in 2009-10 that involved misperceptions and policy lapses over the safety and welfare of Indian students studying in Australia. Indians are beginning to realize what a dynamic, open, and multicultural country Australia is, and the great prospects Australian institutions hold for educating India’s huge number of aspiring youth. A few outdated misperceptions about supposed “White Australian” racism linger, of course, but these are receding. For Australia’s part, we need to acknowledge there are pockets of prejudice in every country. Meanwhile, the key political obstacle — an Australian ban on uranium sales to India — is becoming a thing of the past, with both sides of Australian politics now supporting exports in principle. There may yet be bumps ahead. Australia will need to work hard to compete with other suitors’ for India’s attention. And there are serious constraints on India’s ability to engage with any foreign country and forge real strategic policy, owing to the gross underfunding of India’s external policy bureaucracy. These could slow things down but I anticipate progress in Indo-Pacific maritime security dialogue and cooperation, perhaps even with third countries such as Indonesia and, in time, possibly Japan or the United States. And this in turn will need parallel reassurances towards China.

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Turning to U.S. – Australia relations. Some have said that Australia is presented with a choice: China or America. With many scholars and pundits predicting that China’s economy will surpass America’s in terms of output in the near future, and with China already being Australia’s largest trading partner, has Australia in fact already voted in an economic sense? Can Australia have a robust defense and national security relationship with America and a dynamic trade and economic relationship with the People’s Republic?

The claim that Australia needs to make a stark choice between the United States and China makes for a neat argument and a good catalyst to policy debate, but the reality is much more complicated in any situation other than a direct U.S.-China military confrontation, and we are certainly not there yet. If Australia can be said to have voted economically for China, given that it is indeed our largest export market, then the fact remains that Australia voted for America long ago in the strategic sense — the alliance began in 1951 and has been strengthened in recent years, including with President Obama’s 2011 announcement about the rotation of Marines through Darwin. In any case, I do not think that my country has made a simple China choice economically either. Australia’s investment relationship with the United States is far larger than with China, and in many sectors — iron ore may be the exception — Australia relies on a vibrant mix of trading partners, from Japan, South Korea and Europe, to India, Southeast Asia and the United States. To be sure, the relationship with China is multi-faceted, as it should be, including societal links. Chinese Australians make an enormous contribution to this country and along with Indians, are one of its largest and fastest growing communities. Furthermore, Australia can and should improve its already considerable defense and strategic dialogues with China. But thoroughgoing political trust between Canberra and Beijing is always going to be difficult, and I doubt that China’s key thinkers and leaders privately harbor any illusions that Australian can be pried away from an alliance with Washington that more than three quarters of Australian voters support.

There has also been a heated debate in Australian defense circles concerning a replacement for the Collins-class submarine program. Some have advocated a nuclear powered sub (leased or purchased from America or the UK), while others have argued for a European or domestically created submarine. What are your thoughts on this issue?

It is no secret that Australian defense policy is drifting into a mess, with the bold force modernization promises from the previous Kevin Rudd Labor government in 2009 not being followed through upon under his successor, Labor Party Prime Minister Julia Gillard. Oddly, the Australian government this year retreated from its forward-leaning attitude on defense and cut defense spending to its lowest levels as a proportion of GDP since 1938, which I know sounds perhaps unduly ominous. This is in large part about achieving a budget surplus but it means that there is a large credibility problem about the government’s professed intention to retain the ambitious force structure from 2009 — which includes 12 new submarines. Currently Australia has six Collins-class submarines, the world’s largest diesel boats supposedly tailor-made for Australia’s vast maritime strategic environment while getting around the population’s aversion to almost all things nuclear.  In reality, these are technically troubled boats — there have been times that only one or two could be put to sea.

But replacing them is turning out to be an even bigger headache. Politically, there are those in government who would prefer a new domestically-created sub, either a “son of Collins’ or a new domestic design, supposedly to improve strategic self-reliance but also incidentally built in Adelaide for the jobs and votes. The estimated cost of this is reportedly enormous — a newly designed and built Australian model might cost upwards of U.S.$36 billion — whereas off-the-shelf or modified foreign designs could cost a fraction of that. And even if their range and capabilities were somewhat more modest, at least we’d have a certain confidence that they’d work. Most controversially, some voices, including in the conservative Opposition, have advocated leasing Virginia-class nuclear-powered subs from the United States instead. Of all these options, the completely home-grown project strikes me as the worst — unless Australia was serious about putting strategic autonomy above all other considerations including cost and political sensitivities. And if that was the case, then why not at least begin acquiring nuclear submarine know-how and putting that option on the table? In the near term, the most practical and realistic approach should be for Canberra to look at foreign diesel subs with an open mind. A creative step would be deepening a conversation with the Japanese about their impressive sub technology, which may no longer be completely an export no-go zone.

Harry Kazianis
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Harry Kazianis

Harry J. Kazianis serves as Managing Editor for The National Interest.

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