Nearly a decade on and Australia’s ‘Asian Century’ dream appears to have run aground

"As the global centre of gravity shifts to our region, the tyranny of distance is being replaced by the prospects of proximity – Australia is located in the right place at the right time – in the Asian region in the Asian century," then prime minister Julia Gillard's celebrated Asian Century white paper promised the nation an easy, conflict-free ride on the back of the rapidly industrialising neighbours to the nation's north and a broad promise that the economic growth of the region would serve as an insulating factor against potential conflict. 

Fast forward to today, across the Indo-Pacific, competing economic, political and strategic interests, designs and ambitions are beginning to clash – driven by an unprecedented economic transformation, propelling once developing nations onto the world stage, the region, the globe and its established powers are having to adjust to a dramatically different global power paradigm.

For example, since the white paper was released, China's share of global GDP has risen from 15 per cent to 20 per cent, based on purchasing power parity. India, the region's other emerging economic and industrial powerhouse, has seen its share of the global economy double from around 4 per cent to 8 per cent since the beginning of the 21st century, however the economic rise has given way to growing geo-strategic designs and competition throughout the region and is serving to unpick the fabric of the post-Second World War order.

From the South China Sea (SCS) to the increasing hostilities between India, Pakistan and China in the Kashmir region of the Himalayas, the Indo-Pacific's changing paradigm, and growing economic, political and strategic competition between the US and China, continued sabre rattling and challenges to regional and global energy supplies travelling via the Persian Gulf, and an increasingly resurgent Russia all serve to challenge the global and regional order.   

For Australia, a nation that has long sought to balance the paradigms of strategic independence and strategic dependence – dependent on strategic relationships with global great powers, beginning with the British Empire and now the US – and a rising economic dependence on the developing nations of the Indo-Pacific who are now emerging as some of the world's largest economic, political and strategic powers.

This delicate balancing act served the nation well while the US remained the world's pre-eminent economic, political and strategic power – however the rise of China and India, combined with the increasing prosperity and assertiveness of other Indo-Pacific powers ranging from Indonesia and Pakistan to traditional regional powers like Japan, is serving to undermine both the economic and strategic foundations that the Australian strategic and economic policy communities and government have based advice and policy upon. 

The growing period of economic, political and strategic competition that has come to characterise the relationship between the two great Eastern and Western linchpins of the Indo-Pacific – the US and China – has had marked impacts on the cohesiveness of the region and the enduring stability of the global economic, political and strategic order, as allies like Japan and South Korea turn on one another, rekindling ancient rivalries and enmities, driven by contemporary economic and strategic concerns. 

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Australia is consistently told that as a nation we are torn between our economic relationship with China and the long-standing strategic partnership with the US, placing the country at the epicentre of a great power rivalry – but what if it didn’t have to be that way?

Economic slowdown v economic diversity

Repeated attempts to stimulate Australia's economy through tax relief and interest rate cuts appears to have done little in the way of stimulating domestic consumer and economic confidence, despite a turn around in the nation's trade surplus on the back of mineral exports resulting in a larger than expected surplus of$5.8 billion, as was recently announced by Prime Minister Scott Morrison and Treasurer Josh Frydenberg.

Undeniably, China is an immense economic, political and strategic power – with a voracious appetite driven by an immense population and the nation positioning itself as the manufacturing hub of the world – however, beyond the 1.4 billion people, Indo-Pacific Asia is home to approximately 2.5 billion individuals, each part of the largest economic and industrial transformation in human history. 

While successive Australian governments of both persuasions have sought to expand Australia's integration and participation in the economic miracle that is the rise of the Indo-Pacific – China has continued to dominate the nation's economic narrative from the housing sector to agriculture and resources and energy – often to the detriment of relationships with regional nations that approach Beijing with a degree of caution. 

Furthermore, Australia's insistence on pursuing 'free trade agreements' with nations who have additional layers of legislative and bureaucratic industry protections, combined with successive governments presiding over the death of Australia's manufacturing sector and a reluctance to invest in advanced manufacturing techniques, has prompted Australia to become little more than a mine and farm for the rising powers of Indo-Pacific Asia and the very embodiment of the lazy country moniker, which author Donald Horne originally intended the Lucky Country to be known as. 

Like every nation, the advent of the fourth industrial revolution is effectively resetting the global manufacturing balance of power, where comparative advantages are diminished, combined with the continent's unrivalled resource wealth and Australian's willingness to "have a crack" positioning the nation well to benefit from the demands of the Indo-Pacific with additional strategic benefits in support of government industry policy.

As a 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 does Australia "have a crack" and actively establish itself as a regional great power with all the benefits that entails? Because the window of opportunity is closing.

These competing interests were recently highlighted by former SASR officer, turned government MP and chair of the influential parliamentary intelligence and security committee, Andrew Hastie, who identified: "Australia must now, somehow, hold on to our sovereignty and prosperity. We must balance security and trade. But most importantly, we must remain true to our democratic convictions while also seeing the world as it is, not as we wish it to be."

Australia's need for strategic independence 

As Australia’s traditional strategic benefactors continue to face decline and comparatively capable peer competitors, the nation’s economic, political and strategic capability are intrinsically linked to the enduring security, stability and prosperity in an increasingly unpredictable region.

Hugh White’s focus on and underlying belief that Australia seriously committing to a sustained and focused effort to develop a true regional power is too difficult continues to perpetuate a black and white approach to developing strategic policy, thus limiting Australia's capacity to assertively and proactively intervene to defend its own national interests should the nation's larger allies become increasingly distracted and limited in their ability to do so. 

White's approach, like many others within the Australian strategic policy community fail to adequately and appropriately articulate the very real geopolitical, economic and strategic challenges facing the country – what they do focus on is ensuring that Australia's strategic capability fits within the neat confines of agreed-upon force structure, capability development, manpower and acquisition models first developed during the mid-to-late 1980s. 

This doctrine focuses largely on isolating Australia from any form of direct responsibility or role within the Indo-Pacific, entrenching further dependence on larger great powers for key capabilities and support despite their own unique tactical and strategic responsibilities – it is important to recognise that while Australia does comparatively "punch above its weight", the nation has since the end of the 1990s continued to reduce its capability to actively and assertively project sustainable, tactical and strategic presence in the Indo-Pacific, thus limiting Australia's capacity to act independently. 

Despite these abject failures, this thinking does somehow manage to identify key areas for the nation’s political and strategic leaders to focus on if Australia is to establish a truly independent strategic capacity, which focuses largely on:

• Australia’s continuing economic prosperity, stability and industrial competitiveness and the role the economy plays in supporting defence capability;
• the economic, political and strategic intentions of Australia’s Indo-Pacific neighbours; and
• the rapidly evolving technology-heavy nature of contemporary warfare.

Responding to these challenges requires an approach that recognises that each of these factors are all part of national security policy. This includes a dedicated focus on developing a robust economic and industrial capacity, devoid of dependence on any single source of economic prosperity, while focusing on developing a robust and independently capable tactical and strategic military capability, supported by Australia’s enduring diplomatic goodwill and relationships in the region.

These responses do not hinder Australia’s economic growth or strategic stability, rather, if developed, communicated and implemented correctly, they support the economic growth, diversity and development of the nation, building on a record period of economic growth and prosperity, providing flow-on benefits for Australia’s strategic capacity to act as an independent strategic benefactor.

Andrew Hastie has reinforced the nation's need to focus on dictating its long-term future, developing and implementing a cohesive plan outlining direction and an end goal of reinventing itself, and its position within the rapidly evolving regional and global order, lest potential adversaries begin dictating those terms of engagement for us: "Right now our greatest vulnerability lies not in our infrastructure, but in our thinking. That intellectual failure makes us institutionally weak. If we don’t understand the challenge ahead for our civil society, in our parliaments, in our universities, in our private enterprises, in our charities – our little platoons – then choices will be made for us. Our sovereignty, our freedoms, will be diminished."

Your thoughts

The nation is defined by its relationship with the region, with access to the growing economies and to strategic sea-lines-of-communication supporting over 90 per cent of global trade, a result of the cost-effective and reliable nature of sea transport. Indo-Pacific Asia is at the epicentre of the global maritime trade, with about US$5 trillion worth of trade flowing through the South China Sea and the strategic waterways and chokepoints of south-east Asia annually.

For Australia, a nation defined by this relationship with traditionally larger, yet economically weaker regional neighbours, the growing economic prosperity of the region and corresponding arms build-up, combined with ancient and more recent enmities, competing geopolitical, economic and strategic interests, places the nation at the centre of the 21st century's 'great game'.

Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability serves not only as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia. Shifting the public discussion away from the default Australian position of "it is all a little too difficult, so let’s not bother" will yield unprecedented economic, diplomatic, political and strategic opportunities for the nation. 

Get involved with the discussion and let us know your thoughts on Australia's future role and position in the Indo-Pacific and what you would like to see from Australia's political leaders in terms of shaking up the nation's approach to our regional partners, and the avenues Australia should pursue to support long-term economic growth and development in support of national security in the comments section below, or get in touch with This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..  

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.

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