Australia in the Asian Century

The Australian Prime Minister Julia Gillard Sunday released a long-awaited white paper, Australia in the Asian Century, which has mostly been praised extravagantly by the Australian media. The white paper basically affirms that Australia's future lies with Asia and that consequently immense economic opportunities exist to grab.

The paper hinges the nation's strategy of becoming a competitive force within the region through skills development, innovation, infrastructure, the tax system, regulatory reform, and environmental sustainability.

However, before a nation can become a competitive force, it must have an accepted place in the region. On this key strategy the White paper does little more than make a rally call to Australians to come out and make it happen. The paper also reeks of Austrocentrism, in which most of the points made are written with the expectation that Australia will win from closer ties with Asia without necessarily giving much back in exchange - such as Australia having closer ties with Asian universities in order to attract students and skilled workers. Rather one-way to say the least.

The Australian China-US dilemma

Not surprisingly, the document still reaffirms Australia's loyalty to the United States. This could be seen as Premier Julia Gillard's metaphoric statement of "all the way with LBJ".

Historically the US is seen as a savior from invasion by the Japanese during WWII and consequently there has been a total commitment to US foreign policy from successive Australian governments through the cold war until the present time. The ANZUS Treaty that embodied these commitments has brought many foreign policy mistakes to Australia and probably cost Australia its own persona in Southeast Asia.

In addition, although Australia could be considered a richly multicultural society today, many Asians still have a negative impression because of the old white Australia policy, its treatment of indigenous people, the race-baiting politician Pauline Hansen and the latest policies on boat arrivals of asylum seekers.

In contrast, although China is now so important for trade, investment and tourism that Australia is unconsciously niggling China with its staunch loyalty to the US. China saved Australia from a deep recession with demand for minerals whereas the US brought the Australian government nothing but headaches over involvement in Iraq and Afghanistan. In addition, it appears the US had a different rule for Australia from other allies. The Australian government has been expected to follow US foreign policy unquestioningly. Each prime minister since John Curtin during World War II has kowtowed to the US, seeking a close presidential relationship in the belief that this was in the best domestic and foreign interests.

Certainly a close personal relationship with the incumbent US president has been regarded important. Conversely, Kevin Rudd's prowess at speaking Mandarin was not good enough to develop the China relationship, as the relationship is much more complex than mere small talk.

China would prefer to deal with an Australia with a mature and independent foreign policy rather than an enthusiastic supporter of US foreign policy. Precedent shows that China does not necessarily expect blind allegiance but would like to see Australian decisions more in line with its own realities rather than someone else's. However looking today at both major parties in Australian politics this is highly unlikely. In addition the punishment dished out by the US government to the David Lange government in New Zealand in the mid-1980s is a deep lesson about what happens to the disobedient.

From the US perspective, Australia is a nice ally to have, one it can rely upon on the international stage, which will be important as Australia takes up a temporary security council seat at the UN. With the Obama visit to Canberra and Darwin last year and the stationing of troops in Australia, the country has some importance to the US until it can establish more substantial bases closer to China.

China as an ally presents less of a dilemma than the US, as China has historically always allowed some deviation from official Chinese foreign policy. For example China does allow Australia and other nations to have separate relationships with Taiwan and different approaches to regional issues without making these differences major. Maybe Australia can learn from the Indonesian approach of dynamic equilibrium, a doctrine in which Washington and Beijing would agree to co-exist rather than compete for supremacy in the region.

Australia is also finding it difficult to accept that there are other views in the world other than the occidental position on detente and human rights that it expects within the region. Many Australians cannot understand why so many Chinese so strongly support their government’s position on many issues like Tibet, and how people can accept a communist system.

Australia's relationship Asia

After decades of successive government foreign and trade policy, Australia still does not have an embedded position within Asia. It has been historically viewed as occasionally condescending and arrogant with its attitudes towards human rights when its own practices in matters like the detention of boat people are regarded by some as hypocritical.

The influence of Australian business and financial institutions in the region is minor, nowhere near the critical mass needed to become a competitive force. Australia at this time has only a very low profile in the Asian banking and finance sector. The only exception is in the mining sector, which to all intents and purposes has made the Australian economy very dependent upon Asian demand, particularly China.

Back in the 1990s, the then Prime Minister Paul Keating stated that Australia is part of Asia and together with the then foreign minister Gareth Evans made a concerted effort to embed Australia within the region. This had some positive effect with Indonesia, Cambodia, Laos, and East Timor with Australian policy working towards enhancing peace and prosperity. But they had their setbacks over remarks about Malaysia's former Premier Mahathir Mohamed which soured relations with that country for years. However perceptively, all these gains were lost when John Howard came to power in 1996, reaffirming the Canberra-Washington link, earning the label for Australia as the US's deputy sheriff in Asia.

Australia needs the region more than the region needs Australia. The Australian market is small compared to other markets and of little interest to regional exporters who prefer to put their efforts into the larger markets of China, Japan, EU, and the US. Other hubs in the region are more conducive to becoming corporate HQ hubs than Sydney or Melbourne. The only real interest Australia has for Asian investors been in rent-seeking activities like real estate. Australia is the gateway to nowhere, so cannot play the role as a hub like Singapore and Hong Kong have done. Although the concept of Darwin as a gateway to Asia has been formally recognized it remains to be seen what will actually be done about it.

With the rapidly changing nature of the region and the shifting balance between the US and China within Asia, the Austro-centric view of the region needs urgent revamping. Though the country has deeply historical links with many parts of the region due to heroic actions during the Second World War and the Malayan Emergency after that, tragically these opportunities to further develop relationships were not capitalized upon. White papers aside, it will be action and not words that are important and China and the region will be surprised to see any real change, although the intention and realization of the need is present within the foreign policy Australian agenda.

However with Australia, old habits die hard. It will take much more than a massive investment in skills and education to be able to engage the region, let alone be competitive. One of the paramount barriers Australia has to overcome is the deeply-set belief that its own cultural values are not necessarily universally accepted across the region. It's not about learning Asian languages but about understanding different points of view, approaches and mindsets. Austrocentrism must take a back seat in relationships around the region for Australia to be seriously considered. Currently it's not.

The white paper is still haunted by Australia's past. Maybe it's time for Australia to release the US security blanket a little and become a mature and independent nation. However one fears with the promise of a rise in real incomes from the Asian Century initiative that the whole thing is just a pander to the domestic electorate. As the report itself aspires, Asia is seen only as a means for Australian incomes to become one of the top 10 per-capita ones in the world.

Rather, Ken Henry, the principal author of the white paper appears to have placated the government's wishful thinking for a positivist instrument that could be sold to the electorate, which he may have done well. The paper has turned it into a promissory note for a better future within Australia based upon the misconception that internal capacity building will make Australia more competitive in Asia, being too "fuzzy" about developing a real strategy to engage the region. Building up capacities are only building capabilities. They are not strategies within themselves.

On initial reading of the 312 page report there appears to be little new in it, and one could argue that existing policy was used as a template. If this is correct then it will be difficult for this white paper to garner bipartisan support, and it may be fated to become another relic of a former government tossed out of office.

Presence and accommodation of Asia to what Australia really has to offer is the vital key. This implies showing the region that an independent Australia is truly willing to put its lot in with Asia and not with the US. It is highly doubtful if anybody in the region is looking at Australia with any more interest today.

(Murray Hunter is an associate professor at University Malaysia Perlis and author of a number of books on agriculture, economics, and entrepreneurship.)