More to be done to secure Indo-Pacific prosperity: UTS academic

There can be no doubt that Australia, unlike almost any other developed nation, has benefitted the most from the post-Second World War economic, political, and strategic order established and maintained by the United States. 

In putting an end to the often-ancient rivalries between varying imperial powers and containing enmities and competing ambitions, the United States, through its post-war might, guaranteed the freedom of the seas and promoted an explosion of free trade across the globe paving the way for the modern, interconnected global economy unlocking a period of truly transformational prosperity, innovation, and stability. 

At the core of this was the utter dominance of the US in terms of traditional concepts of hard and soft power — unrivalled industrial, economic, and strategic capabilities combined with the intoxicating optimism and romantic storytelling of the golden age of Hollywood, all served as the foundation for America’s “strategic umbrella” we have all benefitted from to this day. 

However, as the 21st century has unfolded, particularly the undeniably disastrous adventures in the Middle East and Central Asia which have weakened the US global reputation and prestige, while mounting economic instability and crippling levels of sovereign debt, have dramatically impacted the attraction of the US-led world order, the wheels appear to have come off the wheels for the post-Second World War order. 

This epochal end was reinforced by comments made by US Secretary of State Antony Blinken on 22 December 2022, when he stated: “When it comes to Russia’s war against Ukraine, if we were still in Afghanistan, it would have, I think, made much more complicated the support that we’ve been able to give and that others have been able to give Ukraine to resist and push back against the Russian aggression.”

Ready or not, this new paradigm presents new challenges for Australia’s geostrategic policy community and the planning surrounding the Defence Strategic Review (DSR) as for the first time in lived memory, both we and our great and powerful friend, the United States, face an increasingly contested and competitive world.

However, equally to these challenges, this new paradigm presents new opportunities for Australia to entrench itself as an economic, political, and strategic leader, benefactor and critically, beneficiary in the fastest growing region of the world. 

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Highlighting the dual edges of the opportunities and challenges facing both Australia and the Indo-Pacific is Professor James Laurenceson, director of the University of Technology Sydney-based Australia-China Relations Institute, who has highlighted this new paradigm in a piece for the Guardian Australia titled, AUKUS isn't enough to secure the region's prosperity - there is still much more work to be done. 

AUKUS isn’t nearly enough  

At the core of Laurenceson’s argument is the continuing economic ambitions of China and the Chinese people, that are also equally to be balanced by those of the emerging regional and global powers of India, Indonesia, Vietnam, the Philippines, and Thailand for example, when he states: “Neither Beijing, nor the general Chinese public, would accept being told their economy cannot keep growing, or that they must forever content themselves with inferior living standards. Current per-capita income levels in China are still less than 30 per cent of those in the US. 

The Sino-centric focus of Laurenceson expands to the new economic powers, particularly in the post-COVID-19 era, which is highlighted by global consulting powerhouse McKinsey, which highlighted in a report titled, Five windows for opportunity for post-pandemic Asia, where they unpack the growing economic power and opportunity developing throughout the vast populations of these emerging nations, stating: “Asian consumers are expected to account for half of global consumption growth in the next decade, equivalent to a US$10 trillion opportunity. However, Asia’s consumer landscape is changing and diversifying as the result of demographic and technological shifts, and companies need to be cognisant of three major shifts.”

Going further to Laurenceson’s China emphasis, McKinsey adds further colour to the broader transformation of the Indo-Pacific, stating: “Economies have been recovering at different speeds. The economy of China had surpassed its pre-COVID-19 level in the second quarter of 2020, while the economy of Vietnam reached that milestone by the third quarter of 2020, and those of South Korea and Australia by the first quarter of 2021. Other Asian economies — including India, Indonesia, Japan, Malaysia, Philippines, Singapore, and Thailand — remained below their pre-pandemic levels at the time of writing.”

Australia, like all of the major established and economic powers, depends on the unmolested access to the critical sea lines of communication that traverse through Southeast Asia, and more broadly, the wider Indo-Pacific for key industrial and economic inputs, as well as the outflow of raw materials, energy, agricultural produce, and finished products which is at the core of Australia’s own pursuit of nuclear-powered submarines. 

Laurenceson explains, “AUKUS is meant to be about acquiring a deterrent that will limit China’s ability to exercise its immense power in a way that hurts Australia’s interests. This is, of course, prudent.”

This however goes hand-in-hand with greater diplomatic efforts to reassure both China and by extension, our other regional neighbours, of Australia’s benevolent designs and ambitions for the region, something Laurenceson highlights, stating, “Deterrence must be matched with reassurance — reassurance to Beijing that, irrespective of what the US (or the UK) might do, Australia is not interested in containing China’s economic rise, nor abandoning its One China policy.

“Delivering this suite of reassurances will be difficult, not least of all because Beijing has paranoid tendencies, such as seeing ‘foreign forces’ behind domestic unrest everywhere from Xinjiang to Hong Kong. But it is not impossible,” he adds. 

Laurenceson goes further to highlight, “AUKUS isn’t nearly enough to secure Australia’s or the region’s prosperity and security.”

Australia has a record of benevolence, even when comparatively stronger

Central to understanding Australia’s role as a true strategic benefactor in the Indo-Pacific, we need to clearly identify our primary area of responsibility.

Many analysts, commentators, and political decision makers continue to place growing emphasis on the South Pacific as Australia’s historic primary area of responsibility, largely due to recent decades of Australian intervention, neglecting the shifting dynamics across Southeast Asia and through to the Indian Ocean.  

Despite the recent emphasis on the South Pacific, the radically different power dynamics between these disparate areas presents real challenges and opportunities for Australia’s strategic policymakers to grapple with and plan for accordingly, particularly as rival great powers and emerging middle powers compete for resource access and work to build spheres of influence throughout the region.

Accordingly, the growing economic importance of the nations bordering the Indian Ocean and throughout Southeast Asia up to the Philippines, combined with the well understood strategic importance of these areas require expanded and significant focus for Australia moving forward.

While costly, the benefits of establishing Australia as a benevolent, strategic benefactor and “offshore” balancer provides immense benefits in the face of mounting strategic challenges. 

Something, Laurenceson seems to agree with stating, “The one big advantage Australia can parlay is its track record, which contrasts significantly with America’s ... The diplomatic challenge then will be to convince Beijing that AUKUS is simply a continuation of Australia’s long-term practice of welcoming China’s rising prosperity and pursuing economic engagement, while simultaneously hedging in the security realm. Beijing may not like this, but it is hardly surprising or exceptional.”

Tactical and strategic realities, largely the nation’s dependence on a “great power” benefactor, have ensured that Australia and its regional neighbours have enjoyed the stability afforded to them by the strategic umbrella of the UK, prior to the Second World War, and the US in the aftermath.

Despite this, the nation has at times exercised a degree of tactical and strategic independence within the confines of this umbrella, which empowered Australia to directly engage in regional strategic and security affairs, actively deterring aggression and hostility in Malaya during the Konfrontasi and communist aggression in Korea and Vietnam as part of the “Forward Defence” policy.

Growing domestic political changes following Vietnam saw a dramatic shift in the nation’s defence policy and the rise of the “Defence of Australia” doctrine. This shift in doctrine resulted in a departure from the hard-earned lessons of the pre-World War II years, with Australia abrogating its responsibilities and interests through Southeast Asia and the broader Indo-Pacific for the safety and security of a larger role for the United States.

Today, the regional geopolitical and strategic situation is eerily similar to the decade preceding the Second World War with serious questions raised about Australia’s preparedness, resilience and capacity to resist a rival great power with limited input from its primary security benefactor.

However, unlike the decades preceding the Second World War, Australia has lived experience of both living under a strategic umbrella and operating one as it did in large part during the decade immediately following the end of the War in the Pacific, providing a unique understanding of the benefits of establishing such a structure in concert with regional partners led by Australia.

Such a shift in Australian doctrine requires a dramatic shift in thinking, relationship building and most importantly, policymaking across domestic, industrial development and competitiveness, defence, and foreign affairs — with massive potential benefits for Australia’s economic prosperity, national security, and resilience in the face of mounting geopolitical competition.