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Not the Asian Century White Paper

Tomorrow the Prime Minister will launch the Australia in the Asian Century White Paper. This document, which will plot a way forward for Australia in what is already considered to be the “Asian Century”. It will act as the government’s version of a SWOT analysis. The paper will examine the real internal strengths of Australia and external factors that lead that do contribute to our strengths as we continue to engage in the region. The paper will also look at our weaknesses in terms of trade in particular, but also security. The paper will look at the opportunities for Australia in the Asian century, with whom we can engage more to our benefit. Finally, the document will also look at the threats in the region.

In a way, the Asian Century White Paper is behind the times. Trade with Asia already makes up about 70% of Australia’s international trade. This makes it appear clear, as do public statements, that the blueprint is more about the rise of China and to a lesser extent India, than it is about looking at the strengths, weaknesses, opportunities and threats that exist in the Asia-Pacific area. As such, the possibilities of greater relations with the “Asian Tigers” and rapidly growing Asian economies will likely not receive much press.

This examination will look mostly at the bilateral activities Australia undertakes currently, could enhance or could begin to participate in and less at the specific domestic policy directions necessary to cope with living in a strong and prosperous Asia.

Undoubtedly, the Asian White Paper will say that China is the country, above all others to focus our energies on. You would be hard-pressed to find many who would say otherwise. We need China and they need us. Our commodities are prized by China and we source cheap goods from the Asian powerhouse, now the second biggest economy in the world after overtaking struggling Japan. To this end, concluding Free Trade Agreement negotiations with China is an absolute must.

Some will have you believe that China also serves as one of the great uncertainties of the Asian Century.  “Reds under the beds” is not a worry that should be occupying the mind’s of our people. China’s continued growth will almost certainly be one of peaceful empire. Their growth is because of the embrace of market economics and China is communist in name and some aspects of internal behaviour only. The military build-up in China is entirely consistent with the growth of the country as a world power and countries like the United States of America have nothing to fear except for loss of economic dominance. 

In terms of Japan, our second largest trading partner, the future of the economic relationship at least is not as certain. The economy of Japan has been battered by high levels of debt, natural disasters and unstable economic leadership. In saying this though, the relationship with the nation of islands should be maintained with caution and buttressed by increasing economic cooperation with other nations in the region. However, it is in our interests to continue to proceed with free trade negotiations with the Japanese.

Trade relations with South Korea continue to be strong with the nation, as of 2011, being our 3rd biggest export market. We have commenced Free Trade Agreement negotiations with Korea, but the discussions have hit the final hurdle. The agreement was supposed to have been concluded by now, but negotiations are ongoing.

Our next biggest market, is also our second biggest opportunity as the growth of Asian economies explodes. That nation is India. This is a nation with economic growth to rival that of China. While India is not in a position to rival China in terms of the size of her economy, India does provide opportunities. This includes, somewhat contentiously, uranium exports which are now being negotiated and also the restoration of Indian confidence in Australia’s safety for the large overseas student and tourism market the nation of the subcontinent can and has provided. Finalising the Australia-India Comprehensive Economic Agreement is also a necessary step in continuing to open up India to Australia and vice versa.

There are other nations of Asia in the list of our top 10 training partners too. In fact, Asian countries make up more than half of those nations. Also in the top 10 is Taiwan, Singapore and Thailand. With both Singapore and Thailand we have established Free Trade Agreements. However, in the case of Taiwan, there is no economic agreement being negotiated, awaiting approval or in force. Perhaps an opportunity lies there, perhaps we are frightened to pursue one for fear of causing China offense or perhaps our priorities are not mutual.

There are also other Asian states that are outside of the 10 biggest Australian trading partners with which we have already or are in the process of negotiating or approving FTA’s. There is an ASEAN-Australia-New Zealand Free Trade Agreement which includes Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Singapore, the Philippines, Thailand and Vietnam. This includes nations such as Singapore, Thailand, Indonesia and Malaysia with whom we either have individual FTA’s or are in the process of either negotiating or seeking domestic approval for.

In a broad sense, continuing to pursue the recently commenced negotiations over the Trans-Pacific Partnership Agreement is also a must and will only enhance economic relations with both Asia and other parts of the world.

So in terms of economic cooperation in the Asian region and into the Asian century, the task is not really to establish new markets, but rather to consolidate and build upon those already available to Australia. In the case of the services sector in particular the task is returning it to the vitality we know. Particularly in the case of tourism this will be a lot easier when the price of the dollar lowers and economies recover.

In terms of economic engagement with Asia and the focus that it is given, it is a positive but has the potential to be a negative from time to time. Putting too many eggs in the Asian basket might expose us to regional shocks. So far, with the economic activities we undertake in Asia though, we have managed to avoid major damage to our economy when other countries in the Asia-Pacific have not been spared. But the possibility of exposure to risks should still be in the front of the mind’s of our policy-makers.

New Zealand and the other Pacific Island nations must also factor into the Asian equation. They are as much a part of Asia as we are. New Zealand is our greatest ally in the Asia-Pacific region, a long-term friend and economic partner and we will continue to share and grow our economic relationship and broader bilateral relations with her.

In terms of security, the most volatile place in the Asian region, the place that has the potential to most impact on our security, is Indonesia. Enhancing current cooperation with Indonesia on counter-terrorism efforts is a must. However, this must not be at the expense of combating homegrown terrorism on Australian soil.

It is certain that we will be seen to be deeply connected with the USA . We can, will and should make clear that our actions in the region will be peaceful and aimed at trade and our ongoing security, rather than offensive actions and manoeuvres that constitute a threat.

In terms of China, as stated earlier, it has been quite easy for some to classify the economic growth and consequential militarisation of China as a threat. This eventuality though, as stated before, appears hard to fathom. On the other hand, disputes involving China and her nearer neighbours, currently festering, do have the potential to develop into problems for those nations. By and large, these are conflicts Australia can remain independent of.

With regard to people movements, Indonesia as well as Sri Lanka and Malaysia will remain central to our efforts in cutting down on irregular people movement. We would be foolish to ever imagine that we as a country or even the wider Asian region could solve the complex issue that is asylum seeker movements.

Later on in the Asian century it is also reasonable to keep in mind the potentially significant movement of people in our region brought about by climate change. The scale of this is hard to calculate, but the prospect must be factored into equations. Australia as a rich and prosperous country would be expected to take up the majority of the resettlement burden in such circumstances.

Overwhelmingly the opportunities for Australia in the Asian Century are good. The positives far outweigh the negatives. We must however be careful of too much dependence on the region and too much nation specific interaction within the Asia-Pacific.

We must think, for the century ahead, well beyond commodities and to sources of renewable energy. An ongoing and healthy services sector is also a must as resources begin to diminish.

There is the possibility of regional instability, but much of that should not have consequences for Australia. The major threat will continue to be terrorism with hatred fomented and potential non-state actors trained in Indonesian camps in particular.

We will be seen as one of America’s deputies in the Asia-Pacific, along with South Korea and Japan as well as New Zealand to some extent. In reality though, this should not colour the way we interact in our geographical region nor the way in which our peaceful advances are received.

People movement will continue to be something Australia experiences for as long as there is security and economic concerns in nations around the world. Later in the century this will probably be exacerbated by climate change, particularly in the low-lying areas of the Asia-Pacific.

Australia must not be happy with the status quo. Moving towards greater engagement and cooperation not just in Asia, but the world, is the answer to making the most of the opportunities and the threats that we and the region already experience and may encounter in the future.

Engaging Again With Fiji Not a Case of Too Much Too Soon, Might Help Democratic Transition

Fiji is not a very stable country politically. The Pacific islands nation has endured no less than four coups over the past 20+. The ethnic divide in the country is stark with Fijian’s of Indian descent, Chinese descent and native-born Fijians living together in a nation in not so much harmony. But it is not just about the ethnic divide. Indeed the latest coup in particular, in 2006, when Commodore Frank Bainimarama wrested power stemmed out of a conflict festering between the then civilian government and the military which was not just about ethnicity.

This latest coup d’etat had its origins in the previous uprising, with Prime Minister at the time, Laisenia Qarase wishing to introduce legislation which would have pardoned the coup leaders involved. Frank Bainimarama was almost killed during that period of political instability.

Overnight Australia, New Zealand and Fiji agreed to somewhat of a restoration of ties between the three nations. The agreement will restore full diplomatic relations between the nations with the reciprocal reinstatement of each countries respective high-level diplomatic missions in Australia, New Zealand and Fiji.

Travel restrictions for members of the Fijian Government will also be eased and restrictions were lifted to allow a representative of the Fijian administration to travel to the meeting at which the change in policy was agreed to.

In 2009 our High Commissioner in Fiji was expelled by the Fijian Prime Minister Bainimarama in a move that was closely followed by the Australian Government expelling the top Fijian diplomat.

It is an interesting move given that the previous deadline for free and fair elections, in 2009, was not met. Indeed since then, a further crackdown on the press and other authoritarian moves have pointed to a far from certain transition to democracy, due to occur in 2014. Indeed, such a positive step at this point seems almost fanciful.

Speaking on ABC News 24, the director of the Australian National University’s Centre for the Contemporary Pacific, Brij Lal said that “It’s important to measure words against deeds.” And this is a correct reflection of how to judge the political situation in Fiji at present.

The words coming out of the mouth of the Fijian Prime Minister’s mouth speak for great hope of a return to democracy and less internal conflict in the trouble-prone Pacific nation.

But Bainimarama’s deeds tell a different story. Freedom and democracy have been going the other way in Fiji since the 2006 coup when the Commodore took power from the civilian government of Mr Qarase. His deeds tell a story of grand but broken promises as well as a crackdown on those opposed to him from within and outside of the country he rules over.

But is the reinstatement of diplomatic relations a case of jumping the gun too early? Is Australia at risk of finding it “very difficult for it (Australia) to disengage and take a more objective stance”? Would it have “been prudent on the part of Australia to see some of the fruits of those initiatives (toward elections and democracy) before going as far as it has done”?

The answer on all counts is likely no. No material progress has been made toward democracy since diplomatic relations broke down badly in 2009. Australia and New Zealand while disengaged from Fiji diplomatically have been unable to, with objectivity, influence the transition toward an at least somewhat stable and democratic government. And if the two nations had waited before entering into political relations with Fiji again until they had seen some of the benefits of promises made by the Fijian Government, well, they would likely have been waiting a mighty long time. Chances are they still might, but frank yet friendly engagement is much better.

Helping the Fijian Government restore their economy which is heavily dependent on tourism and exporting sugar will be an important diplomatic step which could result in the knock-on effect of being able to persuade Fiji to return to some form of democracy.

While the economy is stalled it is the Fijian people, already under authoritarian rule that begin to suffer further from the political isolation of the Fijian regime. Combine that with the recent devastating floods and the level of hurt because of a weak economy is high.

Australia and New Zealand, in restarting diplomatic relations could place incentives for economic development assistance based on real outcomes in the transition toward democracy with more assistance provided as progress is made to free and fair elections and more democratic government.

It’s certainly not to early to again engage with Fiji and the re-engagement with the island nation may well help rather than hinder some form of transition toward democracy. But only if the relationship is managed with Australia and New Zealand offering help for change. The restarting of diplomatic relations does not automatically equate to too much too soon

If We Get a US Military Base Our Trade Partner China Will Not Dislike Or Attack Us

Over the last few days there has been growing speculation that there will be an announcement of a US military base in Darwin. This prediction/speculation/possible truth comes ahead of the visit of US President Barack Obama this Wednesday and Thursday to Australia, which includes a stop in the Northern Territory.

This increasingly likely announcement has attracted largely positive talk and the usual criticism from the Australian Greens, along with calls for parliament to debate the issue. Further, there have also been claims that US military presence in Australia would annoy our trading partner, China.

So is a US military base a good thing for Australia? Should we let forces from other nation’s base themselves on our shores? Do we really need to debate it in parliament? Will it really annoy China?
First things first, the Greens under leader Bob Brown are calling for parliament to debate the issue if it is indeed formally announced by the US President and the Gillard Government this week. This is not an altogether bad idea to debate the issue and get on record in Hansard the opinion’s of parliamentarians. However, it must be acknowledged that this may largely be a waste of time as it is likely the Greens would be the only party against the move.
Picture this: If, heaven forbid,  Australia comes under attack in the future from a rogue state (we likely won’t) and we had to invoke ANZUS, wouldn’t it be easier if at least one of our partners had a permanent presence here, from facilities as strongly equipped as a base?
Would our relationship with China really suffer as a result of a US military presence on Australian shores in the future?
Firstly, the level of anxiety between the USA and China to me seems well and truly overstated in terms of the militarisation of China. It seems much more reasonable to me to say that most of the anxiety from the United States toward China has more to do with the rapidly gathering economic strength of China, which holds a large amount of debt bonds for nations around the world, than with the concurrent military build-up in China.
It is not likely, in my view that having a US base on Australian shores will hurt the trade or diplomatic relationship that our two nations are growing to mutually enjoy. After all, it is just a base and last time I checked, a simple military base was not necessarily an outward act of aggression. If it was, with the sheer number of US bases around the world, we would have seen more major conflicts well and truly before now. Just think of the places around the world where the United States of America stayed behind post World War II.
So really, what is all the fuss about? Is it perhaps about the uneasy feelings which the Greens seem to have toward the US in all matters of defence? Is it a fear of the tiniest of possibilities which creep into the minds of conspiracy theorists? It could be. The base can happen, and should happen if announced. It won’t hurt our trade our diplomatic relations with China, especially not in a lasting way and it will provide for bolstered defense of our nation in the unlikely event of an attack on our country. So let’s do it and do it right. We can be friends and trading partners with China as well as military allies with the United States of America, we were a long time before we traded with China on such a large scale and the Chinese never seemed to mind…
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