On Point: Embracing the possibilities of Australia’s relationship with SE Asia

At the end of the Cold War, Australia, like much of the victorious US-led alliance, believed that the “end of history” was upon us, that the era of great power and nation-state competition had forever been relegated to the pages of antiquity.

We now know that to be wishful thinking. Australia, like many nations, embraced the potential of this new era, lured by the promises of prosperity, globalisation and stability in a monopolar world, dominated by the unrivalled economic, political and strategic hegemony of the US.

However, the rise of many nations throughout the Indo-Pacific, and in some cases, re-emergence of great powers, buoyed by increasing levels of economic interdependence with the West is serving to exacerbate regional tensions driven by historic enmities under the guise of conflicting ambitions, economic, political and strategic designs.

It is now clear that even in the hands of skilled diplomats, politicians and strategic minds, the threat was minimised in favour of the economic prosperity and growth provided by the rising superpower, often to the detriment of national security and resilience, something, in the aftermath of COVID-19's devastating impact, we are now all too aware of. 

Australia, in particular, is vulnerable to these efforts and has been for some time, with Chinese foreign direct investment worth approximately $16 billion at its peak in 2016 and the superpower's voracious appetite for raw resources, financial and education services, and quality agricultural land the foundation of the now strained relationship between the two nations. 

This new reality comes as a shock, particularly as Australia has enjoyed relative geographic isolation from the flashpoints of global and regional conflagration of the 20th century.

Blessed with unrivalled resource wealth and, despite public commentary, an immense industrial potential, the nation has enjoyed the benevolence of the post-Second World War order, caught up in the promise of easy wealth generation through unfettered globalisation, economic neo-liberalism and the "end of history".

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More importantly, how will Australia, a nation that has for better or worse abdicated its own strategic, economic and political interests in favour of supporting the objectives of 'great power' benefactors, like the US and British Empire, respond to a world where its traditional partners and the post-war order it is dependent upon no longer exists? 

In this issue of On Point, Defence Connect speaks to Ben Bland, director of the Southeast Asia Program at the Lowy Institute, to deep dive into the emerging regional power dynamics of south-east Asia and the opportunities that exist for Australia.

Defence Connect: South-east Asia is one of those often-overlooked regions, what are the key focus points for you?

Ben Bland: I think things have changed rapidly. If you look at how much China, for example, has grown in the last 20 years, it's really been such a rapid transformation, which obviously had a big impact within China, but clearly has impacted the region around, of course, all the way down to Australia, but particularly in south-east Asia where these countries, really for hundreds, if not several thousand years have been struggling to learn to live with the giant to the north.

There's obviously a lot of opportunity in China's rise, there's threats, there's tension. And so it's more important than ever, I think, for people in Australia to try and get a better handle, not just on China, but on these other countries that separate us from China, which really have a lot of their own domestic issues going on as well as this great power game.

I guess my interest has always been in how the domestic politics of all these countries impact their foreign policy, because I think for so many nations, and this is true for Australia, too, foreign policy at the end of the day is an extension of domestic politics to a great extent.

Of course, countries adapt to the changing strategic environment around them, but it's really the domestic politics, particularly in democracies, that's driving leaders to take certain courses of action and not take others.

Defence Connect: One of the common stories we're told is that China is too big for Australia to ignore, what other opportunities are there?

Ben Bland: I think Australia is lucky in a sense that to be so far away from everything, and it's surrounded mostly by smaller, friendlier nations. Indonesia, obviously there is the big giant, but in a way what's so surprising about the relationship between Indonesia and Australia is how underdeveloped it is in economic terms and in many other respects.

Lowy Institute does these surveys of public opinion on foreign policy every year in Australia, and we find there's always a very low level of literacy about Indonesia. So a very small number of Australians understand that Indonesia, for example, is a democracy, which is a bit of a shame.

I think there's an economic reality here. So, China is a really important trade and investment partner for Australia, whereas Indonesia isn't even a top 10 trading partner. Actually, it's not true of the whole of south-east Asia.

Malaysia, Singapore, Thailand are really important partners. In south-east Asia as a whole, I think it's the second or third biggest trading partner for Australia, but I think it's partly framed by that economic reality. So much of the politics here, like in many developed democracies, is about the economy, people's livelihoods, so I think there's a natural connection.

I think it's also just a familiarity question. The Indonesian diaspora in Australia is quite small. Indonesian immigration to Australia is quite small, and not a lot of people are familiar with Indonesian food and culture and everything else.

Then there's this wider question of government funding for research and education on Indonesia. We know the Indonesian language study, for example, which used to be quite widespread in Australia in schools and universities has really been pared back over the years. So there's a lot of data showing that the funding and the number of people studying Indonesian has really reduced.

Studying the language isn't necessarily a perfect way to understand the country, but it's a pretty good start. And I think you can pretty much guarantee that if you're withdrawing funding from the studies of these countries, you're going to get less and less interest over time. So what is interesting is, as you say, parties on all sides or politicians of all flavors in Australia often like to emphasize this relationship with Indonesia as being so important, but the funding doesn't necessarily follow, unfortunately.

Then when you add that on to the economic reality, that China is a much bigger player economically in a much more important partner for Australia in that respect, then I think it's inevitable, frankly, that it's going to be lower down in people's imaginations.

Defence Connect: Building a robust and viable regional environment is often tricky, how does SE Asia stack up in that respect?

Ben Bland: It is a complicated picture, obviously, south-east Asia has the Association of Southeast Asian Nations, ASEAN, which has been a relatively successful regional organisation within certain limits. It's not trying to be the European Union for south-east Asia, there isn't pooled sovereignty, it's an interstate organisation.

ASEAN has been negotiating this code of conduct with China on the South China Sea, which is on the way, and that is a commune effort to draw up some rules of the road or rules of the sea, I should say, to try and ensure there's reduced risk of incidents that could flare up into conflict, etc. but that's not really a dispute mechanism.

When it comes to the disputes over territory and over rights to exclusive economic zones, you find that the countries take a much more unilateral approach.

For Indonesia itself, I think it's quite lucky to be pretty far away from China. So there is a small area of overlap between Indonesia's exclusive economic zone in the North Natuna Sea and China's nine-dash line, but Indonesia says it's not disputed because it doesn't acknowledge China's nine-dash line claim, which China has never fully clarified, although as you say, they've been sending their fishing fleets and their coast guard to try and enforce some like suppose you'd call it, over these waters, but China's never really clarified what it means by this.

Indonesia is lucky that there is no islands, there's no features at that contest area, it's just a small overlapping zone. But the good thing I think in the last year, we have seen Indonesia and others make stronger statements in defence of international law and supporting eventually this ruling that came out of the Hague Tribunal that the Philippines brought. 

But I think countries are reluctant to be seen to be ganging up on China, which seems funny given the size of China relative to the size of the south-east Asian nations. But I think it speaks to the fact that a core principle of ASEAN is not to interfere in the internal affairs of others.

I think all the countries are reluctant to be seen to be ganging up, and they also don't want to jump into bed with others in case China says, "Well, if you do that with Vietnam and whoever else, we're going to do such and such with Laos and Cambodia." So I think that's the concern.

This is a very careful calibration, but of course, if these countries can't collaborate more, China wins in a sense because they can divide and conquer. If it's facing a united front, as it were, from south-east Asia, I think it will be in a much weaker position.

You can listen to the full Defence Connect podcast with Ben Bland, director of the Southeast Asia Program at the Lowy Institute here.