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I know, I know, we’re all over hearing about COVID-19, but amid growing global competition, mounting domestic economic challenges, and increasing levels of economic competition, have we really learned our lessons?
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Despite the ongoing debate around the global handling of the COVID-19 pandemic, for many nations, the pandemic served as a form of divine intervention, revealing foundations of sand and the vulnerability of over-dependence on the lowest cost proposition and globally, interdependent “just in time” supply chains.
The reality of this vulnerability has only been reinforced as the post-pandemic world has given way to an era of renewed great power competition and the emergence of an increasingly multipolar world defined by further constraint on globally, interdependent supply chains, mounting grey zone warfare, and a myriad of national security challenges impacting the security and sovereignty of many nations, including Australia.
The global shift towards multipolarity is only reinforced by the increasing multipolarity of the world beyond the “main event”, that is the US-China competition, as the increasing prominence of the BRICS member states, namely Brazil, Russia (albeit somewhat limited), India, South Africa, and the emerging list of BRICS “partners” or “adjacent” states eager to hasten the collapse of the post-Second World War order.
With each of these nations nailing their respective flags to the mast of this new era of great power competition, they have taken action to align their domestic and international policies behind a unified, yet nationally-focused strategic intent: the collapse of the post-Second World War economic, political, and strategic order and the rise of a contested, autocratic-heavy, deglobalised, and multipolar world.
All of this combines to form one absolute and uncomfortable realisation: Australia’s record period of economic stability and prosperity, buoyed by the immense mineral and resource wealth, coupled with the benevolence of the post-Second World War political, economic, and strategic order is at an end, and it is time to respond accordingly.
The last time Australia’s public policy community was called upon to respond to such a predicament was the combined challenges of the Great Depression and the Second World War, both of which had a dramatic impact on the national psyche and the post-war period of rebuilding and expansion.
Yet where do we stand and why haven’t we truly responded to the challenges presented by the COVID-19 pandemic and the emerging global paradigm?
We have some components
While the often-central planning approach taken by these authoritarian, or authoritarian-adjacent nations stands anathema to the broadly individualistic nature of nations like Australia, embracing the whole-of-nation response and using it as a guideline can begin to tip the scales back in our favour.
That is where initiatives like the Defence Strategic Review (as broad brush as it is) and the National Reconstruction Fund can begin to play a role in preparing the nation to weather the coming economic, political, and geostrategic challenges on the horizon.
However, while the individual parts, in this instance, the Defence Strategic Review and the National Reconstruction Fund, serve as a good foundation, the whole is still lacking a coherent, considered plan for the nation. Furthermore, these individual platforms, at least publicly, appear to be light in detail and high on optimism.
Arguably, both the Albanese government’s Defence Strategic Review and the National Reconstruction Fund, respectively, represent two of the most ambitious, and to paraphrase the government, “consequential” policy initiatives of the Albanese government, rhetoric and action seem to be mismatched.
In the case of the Defence Strategic Review, we see: “National Defence must be part of a broader national strategy of whole-of-government coordinated and focused statecraft and diplomacy in our region. This approach requires much more active Australian statecraft that works to support the maintenance of a regional balance of power in the Indo-Pacific.
“Key to successful outcomes in implementing National Defence will be: national leadership, statecraft and diplomatic proficiency; accelerated military preparedness; economic stewardship; scientific and technological prowess; and climate change action and domestic resilience. It will be challenging to effect ... Australian statecraft now requires a consistent and coordinated whole-of-government approach to international affairs and the harmonisation of a range of domestic and external national security portfolios, from trade and investment to education, minerals and resources, clean energy, climate, industry, infrastructure and more.”
This is further reinforced by the rather light on National Reconstruction Fund, which is, according to the Albanese government, designed to “provide finance for projects that diversify and transform Australia’s industry and economy”.
Yet in spite of this lofty rhetoric and the ambitions identified by the government, there seems to be little in the way of actual progress, and where can we look to draw inspiration or successful models?
What has worked before?
Aussies have long prided themselves on never shirking their responsibility or being afraid of a bit of hard work, well, we certainly have our work cut out for us, whether it is facing down the economic headwinds of a burgeoning global recession and a global shift away from the post-Second World War economic order (read the US dollar), mounting domestic political and socio-economic tensions, and of course, the geostrategic competition between the world’s great powers.
Despite the aforementioned individual components, we still seem to be missing a broader plan, idea or even conceptualisation of what and where the nation will be in 5, 10 or even 15 years.
Equally important is avoiding the failures of the past and avoiding defaulting to Australia’s modus operandi of constantly reinventing the wheel and taking the hard route learning lessons that have been learned by comparable nations before us.
One such nation is South Korea, one of the world’s major industrialised nations, a driver of scientific innovation and rapidly evolving economic power, which in the aftermath of the devastating Korean War, approached the need for post-war reconstruction and economic growth with gusto, leveraging public policy, political commitment and direct national investment to build national resilience, sovereignty, and a world-leading industrial base.
In doing so, South Korea leveraged a “combined arms” strategy of national development post-war which has seen the nation rapidly industrialise, with world-leading industrial powerhouses like Hyundai and Samsung leading the path forward, driving technological innovation and millions of jobs to grow the economy and the middle class.
South Korea’s foundation of industrial and economic development, an economic concept called “Export Oriented Industrialisation” (EOI), which focused upon export-led growth designed to speed up the rate of national industrialisation by focusing on the sectors in which the nation has a comparative advantage.
One thing that is often overlooked in the debates about the implementation of such a policy is the fact that prior to its implementation, Korea was still a largely agrarian society and economy, with little-to-no major modern industrial or manufacturing capacity, thus requiring significant government investment in education and training to establish said comparative advantage.
Much like Australia, the fall out of the COVID-19 pandemic and the simmering global great power competition have dramatically impacted South Korea and its position, resulting in the South Korean government embracing the opportunities presented and setting clear expectations for what its plans will achieve.
Korea’s “New Deal”, first championed in mid-2020, highlighted a number of key focuses for the structural transformation of the national economy and shifting focus as the nation, like many others, including Australia, seeks to navigate the “severe economic recession”, particularly as it faces two major challenges.
“The unforeseen shock of the pandemic has resulted in the worst economic downturn that the world has seen since the Great Depression. Border closures and travel restrictions have affected economies and job markets around the world, and the Organization for Economic Cooperation and Development (OECD) has predicted that the income loss by the end of 2021 will exceed that of any previous recession over the last 100 years outside wartime,” the plan articulates.
Expanding on this, the Korean New Deal articulates three simple objectives, namely:
- First: The Korean New Deal aims to minimise the economic shock by creating jobs. It creates not only government-supported jobs for low-skilled workers but also jobs that support the structural transition towards a digital and green economy.
- Second: This strategy supports the Korean economy’s quick return to its normal growth path by building the necessary infrastructure for a digital and green economy that will restore investments and support job creation.
- Third: It sets the groundwork for Korea not only to adapt to the structural changes but also to lead the global community in the post COVID-19 era.
The Korean model leverages the full breadth of national power, with a growth focused design, focused on building a robust, competitive, and resilient nation and economy for the next century, not one simply focused on the next election cycle as is so often the criticism of many of Australia’s political leaders.
Perhaps most promisingly, this model provides an opportunity for Australia to learn the lessons of the economic impact of COVID-19 and prepare the nation for the future in a similar way.
Final thoughts
Despite the opportunities to learn from comparable nations, it appears as though Australia is falling back into its default position of “she’ll be right”, while nations across the globe, and in particular in the Indo-Pacific double down on the disruption wrought by the COVID-19 pandemic and have actively begun to marshall their own national power and cohesively coordinate in preparation for the post-COVID-19, multi-polar world order.
With this in mind, it is critical to understand that perhaps unlike almost any other nation, Australia is at a precipice and both the Australian public and the nation’s political and strategic leaders need to decide what they want the nation to be: do they want the nation to become an economic, political, and strategic backwater caught between two competing great empires and a growing cluster of periphery great powers? Or do we “have a crack” and actively establish itself as a regional great power with all the benefits it entails?
While contemporary Australia has been far removed from the harsh realities of conflict, with many generations never enduring the reality of rationing for food, energy, medical supplies or luxury goods, and even fewer within modern Australia understanding the sociopolitical and economic impact such rationing would have on the now world-leading Australian standard of living.
Equally, we have to begin to confront the question of “What sort of region and world do we want to live in and hand down to our children?”, for if Australia does not embrace the opportunities presented by the Indo-Pacific and more broadly the era of competition that is coming to characterise the 21st century, we will have the world created for us by nations that hold their national interests as sacrosanct and put them before all other considerations.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
