Speech
Speech to the Australian Institute of International Affairs and the Harvard Club of Australia
20 April 2010
Mr Duncan Lewis AO, Associate Secretary (National Security Adviser)
“Charting a Future for Australia in the World”
The topic of my speech tonight – “Charting a Future for Australia in the World” – is, I’m sure you’ll agree, an ambitious one.
But I do not think it is possible to talk about Australia’s position in the world, and what we are trying to achieve, without being ambitious.
Indeed, if I were to seize on one word to best characterise the Government’s approach to foreign policy, it would be to describe it as ‘ambitious’.
Ambitious for Australia’s future security and prosperity.
Ambitious for the role Australia can play in constructing and shaping the international environment.
Ambitious because unless Australia steps-up to be a player internationally and influence events in our interests, then all Australians lose at home.
Tonight, I wish to discuss both the rationale for Australia’s active international engagement and the steps we are taking to pursue our national interests – the “why” and the “how” of our ambitious foreign policy.
Why Foreign Policy Matters
From the very early days of European settlement, Australia has recognised a fundamental truth about our strategic position.
This truth is as follows: that Australia’s security and prosperity is highly sensitive to the international environment.
If you look back over Australia’s early history, it was this judgement – sharpened by a sense of vulnerability and isolation – that was the primary driver of our strategic policy.
We were a small population occupying a large and resource-rich continent.
We occupied a challenging geo-strategic environment, distant from our traditional security partners, and lacked membership of any significant regional security alliance.
Access to overseas goods and capital markets was essential to our prosperity, living standards and national development.
Throughout our early history we were engaged much further afield, and more intensively in the affairs of the world, than our size, wealth and location would have suggested.
Today we are a more confident nation, but the factors that underpin this judgement remain as true as ever.
In fact, the forces of globalisation, and the progressive liberalisation of the Australian economy, have only sharpened this sensitivity to the international environment.
Australian exports of goods and services account for 20% of our GDP and one in seven Australian jobs.
One in every five Australian workers is involved in trade.
Access to foreign capital continues to allow Australia to enjoy higher rates of growth, employment and living standards than our relatively small domestic savings pool would provide.
Access Economics estimates that foreign-owned firms operating in Australia account for around 1.3 million – or one in seven – jobs.
As Treasurer Wayne Swan pointed out in a recent speech, if Australia was to seek to limit the inflow of new foreign investment and instead rely solely on domestic savings, the immediate impact would be a 25 per cent reduction in business investment, a contraction of GDP of around 3 per cent, and the loss of some 200,000 jobs.
Australia today is a highly open economy, and our people amongst the most mobile in the world.
Around 1 million Australians are living, working or travelling abroad at any one time.
In February of this year alone, some 554,000 Australians departed for overseas.
We run – in per capita terms – one of the largest migration programs amongst developed countries: one in four Australians was born overseas.
In sum, our prosperity as a nation is integrally dependent on our linkages with the outside world.
In turn, our security as a nation is critically linked to the maintenance of global and regional peace and stability.
Our region faces particular challenges.
It is where the interests of five major powers – the United States, China, Japan, Russia, and India – intersect, and as these power relationships change, so too do the strategic contours.
It has large and growing militaries: Asia is home to seven of the ten largest standing armies in the world. Five of these countries have or are attempting to acquire nuclear capabilities.
It has unresolved territorial disputes and a number of regional flashpoints, whether it is on the Korean Peninsula, across the Taiwan Straits, in the South China Sea or in Kashmir.
And it has large and growing populations but limited resources.
Today, the region is largely stable and at peace.
It is this stability – underwritten in large part by the forward US strategic presence – that has allowed commerce and trade to flourish.
It has facilitated the phenomenal growth in development and prosperity that Asia has experienced since the end of the Second World War.
But history has taught us that peace and stability can never be taken for granted: that we must act to shape the future we want if we are to avoid one we may regret.
And the modern age has taught us that there are an increasing range of threats that no single country can deal with alone. They are global challenges requiring global solutions and increased international cooperation – combating terrorism and addressing climate change being two critical examples.
In sum, Australia is a huge beneficiary of a stable, peaceful and rules-based international order and the prosperity and security this brings.
Our future security and prosperity depend on the maintenance of this order.
This is why it is so important that Australia engages actively and seeks to shape the international system in a way that protects and furthers our interests.
In going about this, we should not sell ourselves short.
We are the world’s largest island nation, the 6th largest country by land mass, and are rich in natural resources.
Our military budget is the 12th largest in the world.
And our Defence White Paper will ensure that the Australian Defence Force has the reach, weight and capabilities to meet the national security challenges of the future.
We are the 15th largest economy in the world.
Our capital market is the world’s 8th largest and the Australian dollar is the 6th most traded currency.
We also have significant ‘soft power’ assets.
We are a modern, democratic, well-governed and tolerant country.
Our population is highly mobile and educated.
Our economy is competitive, innovative and resilient.
Internationally, we are widely respected for our ideas and our actions.
So we should be – and we are – making a positive difference in the affairs of the world.
Australia’s Approach
The Government is committed to Australia exercising “creative middle power diplomacy”.
This is a commitment to Australia being an active international player.
Not for the sake of it, but because it is manifestly in our interests.
It is a recognition that we have interests at stake across the world, and the capabilities to make a difference in the world for the better.
It is not a conception of Australia as some sort of honest broker between great powers. Aside from being unrealistic, that would sell our own interests short.
Rather, it is a view that we should engage with the world with a view to improving it, rather than seeking to isolate or insulate ourselves from it.
That we should not recoil from confronting the difficult global challenges and contributing to solutions.
That, whilst being mindful of our limits, we should not sell ourselves short or allow modesty to thwart ambition.
And that we must be self-reliant, not reliant upon others to look out for our own interests.
This is the prism through which the Government is prosecuting Australia’s interests internationally, supported by the three central pillars of its foreign policy: a strong US alliance, stronger engagement in the Asia-Pacific and revitalising Australia’s multilateral engagement.
Shaping the International System
Today’s world is characterised by a new and rapidly unfolding global order and a transformed geopolitical landscape.
This new order is rubbing up against a global architecture that has not changed fundamentally in two-thirds of a century, and that obtained its legitimacy from an entirely different power balance.
Increasingly, this is leading to global dysfunction and stalemate.
We saw this with the global financial crisis and the inability of traditional institutions to deliver a response to a potential systemic collapse.
We saw this in Copenhagen.
And we are seeing this with threats to the global non-proliferation regime.
The challenge for countries such as Australia – custodians and beneficiaries of the post-World War Two settlement – is to adapt and renew the institutions of global governance to accommodate new power realities.
The alternative is an eventual breakdown of the rules-based global system, as rising powers opt out, and an increasingly Hobbesian world order.
Such an outcome would seriously threaten Australia’s security and prosperity.
We have a responsibility – to our people and to Australia’s future – to grapple with this challenge, reform the system and make it work.
Australia’s response to the global financial crisis was driven by just such a sense of responsibility.
Existing multilateral bodies and groupings were unable or unwilling to coordinate the world’s response to the crisis, because they lacked either the effectiveness or the legitimacy.
In partnership with like-minded countries, Australia seized the opportunity to convene the G20 – originally a meeting of finance ministers and central bank governors – at the level of leaders to coordinate the global response to the crisis.
By bringing together the world’s largest developed and developing economies, spread across regions, we created a forum that was large enough to be legitimate yet agile enough to be effective.
The G20 drove the global response to stabilising the world economy – “breaking the fall of the global economy”, as the IMF put it – and is now working to put in place the right polices for a sustained economic recovery.
This has been no small achievement.
It required the most ambitious and coordinated global economic response in history.
It required vision and ambition.
The G20 is now entrenched as the premier forum for international economic cooperation.
It was not our achievement alone, but Australia – and I must give particular credit to the Prime Minister’s personal diplomacy here – played an instrumental part.
The result is that Australia now has a seat at the top global economic decision-making table.
It is a remarkable achievement, and a superb example of Australia actively engaging to shape the international system in a way that promotes our interests.
The Prime Minister’s Asia Pacific community initiative is in a similar vein.
Our starting point here is that the Asia Pacific is undergoing significant change, as the centre of economic and strategic gravity shifts to this region.
Its dynamism and growth, coupled with its history, are likely to generate new challenges and exacerbate existing tensions.
While the region is largely at peace and on a positive trajectory, we cannot take this for granted.
We need to actively shape our regional future, and lay the foundations now for dealing with future challenges.
We need to build and inculcate the habits of cooperation and consultation to ensure that we avoid future conflict.
At present, there is no institution in the Asia Pacific that has either the membership or mandate to address the full spectrum of issues confronting the region.
While not being prescriptive, we are seeking to generate a discussion about how regional institutions should evolve and adapt to best meet regional needs.
This discussion is now in full flight, with recent contributions by the United States, Japan and a growing focus in ASEAN on the need to build the right architecture for the future.
This is creative middle power diplomacy at work.
Tackling Difficult Issues
I touched earlier on climate change and nuclear non-proliferation.
Both are examples of significant global challenges.
For all the difficulties and complexities they pose, we must not allow them to languish in the ‘too hard’ basket and simply hope for the best.
The stakes are too high.
2010 will be a critical year for nuclear non-proliferation and disarmament.
Iran and North Korea are threatening the integrity of the nuclear non-proliferation framework.
The Nuclear Non-Proliferation Treaty (NPT) Review Conference is next month.
Serious effort and resolve are needed to strengthen the NPT regime.
Australia is playing its part in this challenge.
With our close partner Japan, we established the International Commission on Nuclear Non-Proliferation and Disarmament (ICCND).
The Commission’s report has made an important and valued contribution to the debate.
We made a constructive contribution to the Nuclear Security Summit in Washington earlier this month, which Defence Minister Faulkner attended.
And we are supporting international efforts to address the nuclear programs of Iran and North Korea.
On climate change, Australia was a major player at Copenhagen and helped deliver the Copenhagen Accord.
Not a legally binding agreement, as we’d hoped, but nonetheless a significant political commitment to limit global average temperature increases to no more than 2 degrees celsius.
A commitment to which, for the first time, developed and developing countries have signed up.
To date, 103 countries have associated themselves with the Accord, including India and China.
73 countries – accounting for nearly 80 per cent of global emissions – have submitted mitigation targets and/or actions.
Copenhagen revealed the limitations and frustrations of the multilateral system.
It also underscored the emergence of new centres of power, with countries such as China, India, Brazil and South Africa playing major roles.
These are some of the new realities with which Australia must actively engage.
In the year ahead, Australia will be working bilaterally, regionally and multilaterally to move the climate change agenda forward.
It will not be easy.
But it is not a challenge we can shirk. The stakes for all Australians are too high.
Contributing to Regional and Global Security
Australia takes seriously its responsibilities to promote regional and global peace and security.
In Afghanistan, Australia is the largest non-NATO contributor with around 1500 personnel.
Our Special Forces are doing hard yards, day in and day out.
We are helping to build a more peaceful and stable state, so reducing the risk of that country once again becoming a safe haven and training base for terrorist organisations with global reach.
In Iraq we have changed the configuration of our commitment, but remain committed to that nation’s future, including through a significant development assistance program.
The recent successful elections there were a powerful indication of the positive progress being made by Iraq, and an equally powerful symbol to the wider region of the potential for positive change.
Closer to home, we have made major, long-term commitments to resolving conflict in Solomon Islands and East Timor.
The Regional Assistance Mission to Solomon Islands, or RAMSI, has been in place since 2003. Australia is the largest contributor.
We currently have some 380 civilian and police advisors in-country to help lay the foundations for long-term stability, security and prosperity.
In East Timor, Australia has led the International Stabilisation Force since 2006. Our development assistance program is helping to improve governance and capacity.
Further afield, we have ADF and AFP officers deployed as far and wide as Cyprus, Sudan, and the Sinai desert, making contributions to multinational operations there.
Strengthening Key Partnerships
We are at the dawn of the Asia-Pacific century.
Our relationships with the major powers in our region, and the relationships of these major powers with one another, will determine the strategic environment in which we operate.
Of these, our alliance with the United States remains Australia’s single most important and highest-priority relationship.
The strategic stability of our region will in large part depend on the continuing strong presence of the United States.
We have intensified our cooperation with the United States and are working together on any number of regional and global issues: from global financial architecture through to climate change, nuclear non-proliferation, the Doha round and regional developments.
Japan has been and remains our closest partner in East Asia. It is still our largest export market. We share values and interests.
Australia is committed to strengthening relations with Japan.
We are working to enhance defence and security cooperation in maritime security and combating organised crime.
We are building on our respective alliances with the United States through the Trilateral Strategic Dialogue.
Former foreign ministers of Australia and Japan co-chaired the International Commission on Nuclear Non-Proliferation and Disarmament.
In forums such as APEC, the East Asia Summit and the G20, Australia and Japan work closely together.
India is gradually assuming greater strategic weight and influence, and making its presence felt in the Asia Pacific.
The Government is committed to elevating the relationship with India and putting it in the front rank of our international partnerships.
In many respects we are natural partners, sharing common values and interests.
Following the Prime Minister’s visit to New Delhi in November 2009, our two countries announced the establishment of a strategic partnership. This was a significant milestone in the relationship.
We are now cooperating in the areas of defence, security and science to promote shared interests, and our trade and investment relationship with India is growing rapidly.
The growth of China is re-shaping the Asia Pacific region and global power dynamics.
Its growing economic and strategic footprint will increasingly be felt around the world.
Today, it is difficult to think of a single international issue – from global economic re-balancing, to climate change or Iran – that can be resolved without China’s support or acquiescence.
For Australia, our relationship with China is becoming one of our most important, complex and challenging.
We share strong and growing economic complementarities and common interests on some issues.
We are committed to a productive and mutually beneficial relationship with China. This is unambiguously in Australia’s national interests.
As is working with China in support of the current international system, of which China has been such a significant beneficiary in recent decades.
We are keen to grow our ties, at the government, business and the people-to-people levels. And this is happening.
But we acknowledge that there will be tensions and differences from time to time. We will not always see eye-to-eye on issues.
Where we do not, as recent events have shown, we will work through our difficulties. This is how mature relationships operate.
As our neighbour and the largest country in Southeast Asia, Australia’s relationship with Indonesia is pivotal.
Indonesia’s remarkable democratic transformation and economic success over the past decade has been a highly positive development for regional stability and for Australia’s strategic outlook.
Indonesia is now one of our closest and most trusted partners, and the relationship is a strategic asset for Australia.
On climate change, the G20, the promotion of regional values and the combating of people smuggling and terrorism, our two countries are working hand-in-hand.
The warmth of the reception towards President Yudhoyono when he visited Australia last month, and his address to Parliament, a first for an Indonesian leader, demonstrated how far the relationship has come.
Promoting Trade
In the trade and economic sphere, Australia remains a committed activist in support of free trade.
Throughout the global financial crisis, Australia was at the forefront of efforts to resist protectionism – an effort that was largely successful.
With the crisis passed, we are now in the vanguard of efforts to conclude the Doha round.
This would provide a tremendous boost to the world economy, and to Australia’s prosperity.
At the same time, we are also pursuing regional and bilateral free trade agreements (FTAs).
We already have six bilateral or regional FTAs in place. We are negotiating a further seven, and two more are under consideration.
We have just concluded the ASEAN Australia New Zealand FTA.
We are one of eight countries participating in negotiations for an ambitious FTA that would span the Pacific – the Trans-Pacific Partnership Agreement.
We have bilateral FTA negotiations underway with China, Japan and Korea, and others under consideration with India and Indonesia.
Conclusion
Australia faces a challenging external environment.
Our tasks are many and difficult: to reform the international system; confront global systemic threats; contribute to peace and security; maintain an open world economy; and get the big relationships right.
Globalisation and the nature of today’s security threats will only intensify this over-arching challenge.
Our security and prosperity – the lives and livelihoods of all Australians – depend upon our ability to influence the emerging world order, so that it reflects our values and interests.
In this, we do not have a choice. It is a necessity.
Framed this way, the task before us may sound daunting.
But I think there are good reasons to be optimistic about Australia’s long-term prospects.
Our population is growing and will remain relatively young. Continued migration brings with it new ideas and dynamism. We are not facing the sorts of demographic challenges that are looming over much of Europe.
We have a highly flexible and resilient economy, built on significant structural reforms carried out over the past quarter of a century. We continued to grow throughout the global financial crisis, outperforming other advanced economies. A decade earlier, we came through the Asian financial crisis unscathed.
We have a highly educated and mobile workforce.
We have strong institutions and the overall quality of our governance is high.
And we have a political culture and tradition that allows us to tackle difficult issues and undertake genuine reforms.
So while charting a successful future for Australia in the world will require all the ambition, assets and energy we can bring to bear, we should not doubt for one moment our ability to do so.
We have good reason to be confident about Australia’s future.
Thank you.