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ASPI raises an important question: Who is leading the Indo-Pacific?

At a time of heightened global and regional competition, Rod Lyon and Aakriti Bachhawat, writing for ASPI, have asked the critical question that should be on every Australian policy maker’s lips: “Who is leading, and where are we going?”

At a time of heightened global and regional competition, Rod Lyon and Aakriti Bachhawat, writing for ASPI, have asked the critical question that should be on every Australian policy maker’s lips: “Who is leading, and where are we going?”

For both the Australian public and its policy makers, the rise of Indo-Pacific Asia is serving to exacerbate Australia's long-term identity crisis. 


While many comparable nations, ranging from liberal democracies to more autocratic regimes, have embraced their geographic position and the wealth of the nation to chart a path towards a clear, concise and considered plan for national development and prestige. 

In contrast, Australia has sought to hitch its 'wagon' to the 'work horse' nations of the UK and US, emerging from the Second World War as a middle power, essential to maintaining the post-war economic, political and strategic power paradigm established and led by the US.

This relationship established as a result of the direct threat to Australia replaced Australia's strategic relationship of dependence on the British Empire and continues to serve as the basis of the nation's strategic policy direction and planning.



Now for the first time in nearly a century, Australia's benevolent 'great power' benefactor, the US, is being challenged by a series of ascending and resurgent peer and near-peer competitors.

These competitors appear hell bent on eroding the global order and undermining the economic, political and strategic stability the US, UK, Australia and other allies established throughout the Cold War and into the new millennium. 

Australia finds itself, along with many other 'middle powers' at the epicentre of the growing economic, political and strategic competition between the US and China – a competition that either positive or negative will come to shape the 21st century and for Australia, it's prosperity, stability and security. 

Further compounding this issue is the increasingly distractable economic, political and strategic focus of the US, drawn towards repeated incursions in the Middle East, a resurgent Russia stalking a declining Europe and the ever present threat of radical religious extremism, the question of global leadership is a poignant one. 

Recognising this in a timely piece for the Australian Strategic Policy Institute, titled "Who's leading, and where are we going?", both Rod Lyon and Aakriti Bachhawat start with an important scene setting and relevant comment:

"Global leadership works best when liberal great powers embrace a shared, inclusive vision of global order, jointly manage the challenges to that order, and fund the public goods that underpin it. Lately, things haven’t been going so well. Liberal great powers are distracted by domestic priorities, and rising autocratic powers are pushing disruptive agendas.

"The two dominant powers – China and the US – find themselves locked in an accelerating strategic competition. And a range of countries – including India, Japan, Germany, Indonesia and Brazil – find themselves struggling with a set of leadership expectations they aren’t well placed to meet."

As Lyon and Bachhawat ask, who's leading, and where are we going? 

The leadership conundrum 

While the Western world looks like a gaggle of squabbling, self interested and tired old men, both China and Russia look like youthful, bountiful, focused and ambitious Wall Street high flyers with their eye on the prize.

This culture shift and resurgence has caught many in the West off balance and like any skilled Muay Thai fighter will explain, now is the time to sweep the leg and finalise the collapse of the opponent – something that doesn't bode well for regional liberal democracies like Australia, Japan, South Korea and New Zealand.

Each of these nations, alongside their broader global partners like the UK, France, Germany and other European powers are used to a certain degree of certainty provided by the economic, political and strategic stability of the US – this has changed. 

Lyon and Bachhawat articulate this shifting paradigm, explaining, "China and the US are easily the two largest economies. But the US, well used to global leadership, has apparently – wearied of the task. In brief, experience is strong, but motivation is weak. By contrast, China in recent centuries has been unused to global leadership, but is driven by a strong sense of entitlement, as compensation for the century of humiliation. Experience weak, motivation strong."

The rise of China has served as a major catalyst in the shifting global and, for Australia, regional balance of economic, political and strategic power, with a significant impact on allies like Japan and South Korea.

This raises an important question for the Indo-Pacific region: who is going to serve to complement the US leadership role in the Indo-Pacific? 

Pax Australis with a slowing economy and limited strategic capacity? 

Australia 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.

However the rising economic inter-dependence of both Australia and the developing nations of the Indo-Pacific who are now emerging as some of the world's largest economic, political and strategic powers – seemingly positions the nation well within the region. 

Despite this, a slowing economy, the growing potential of an economic slowdown in China and mounting domestic debt issues hinder Australia and it's capacity to act in a cohesive, robust and respected leader in the Indo-Pacific. 

Australia's economy is largely defined by exporting natural resources – buoyed by the voracious demands of the Indo-Pacific, namely China, has prevented the nation from spiralling into a recession and reinforced the nation's balance sheet for nearly 30 years.

However, this focus on raw resources, flanked by agriculture and services diminishes the complexity and competitiveness of the national economy, as the abysmal growth announced by the Prime Minister recently reveals. 

The ABC spoke with economist and UTS industry professor Warren Hogan, who outlined his thinking behind Australia's dependence on raw resources exports, saying, "One of our great strengths in this country is our significant natural resource endowment — partly a result of our size and also our geology.

"The flexible Australian dollar has been very useful cyclically to help take some of the heat out of the economy and to help it when it's soft, but that high level of it, because of the resource exports, has probably hurt some industries."

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. 

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. 

Australia's insistence on pursuing 'free trade agreements' with nations that 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. 

Recognising these factors, Australia is never going to have to be a global power in the way that the US, UK, France, Russia or China are – however, unlike the reluctant former global powers Germany and Japan, Australia will need to embrace a more robust leadership role in the Indo-Pacific.  

This realisation is something Lyon and Bachhawat articulate clearly: "At the top level of the international system, China presses for greater influence. India, Indonesia and Brazil are under pressure to do more, and to assume leadership roles befitting their larger economies.

"And at the secondary level, a range of regional middle powers press forward into the vacuum of the US’s contracting leadership role.

"It’s possible that the US might yet resume that role under a different president. But at the moment we seem to be sliding into an acephalous world. What would that look like? Well, order typically arises from both power and law. A leaderless world would have less of both. It’s likely to be a more disordered world – without a shared vision, with lower levels of international co-operation to manage common challenges, and with fewer public goods."

Your thoughts

Australia's position and responsibilities in the Indo-Pacific region will depend on the nation's ability to sustain itself economically, strategically and politically.

Despite the nation's virtually unrivalled wealth of natural resources, agricultural and industrial potential, there is a lack of a cohesive national security strategy integrating the development of individual, yet complementary public policy strategies to support a more robust Australian role in the region.

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 provide unprecedented economic, diplomatic, political and strategic opportunities for the nation. 

Former South Australian governor and retired Rear Admiral Kevin Scarce has built on the subtle calls made by Lyon and Bachhawat, saying, "If we observe that the level of debate among our leaders is characterised by mud-slinging, obfuscation and the deliberate misrepresentation of the views of others, why would the community behave differently ... Our failure to do so will leave a very damaging legacy for future generations." 

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.

We would also like to hear your thoughts on 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..

ASPI raises an important question: Who is leading the Indo-Pacific?
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