Lowy Institute non-resident fellow Alan Dupont has issued a challenge to Prime Minister Scott Morrison, calling on the government to make a concerted effort to balance our economic and security interests and the relationship with the US and China.
Across the globe, the post-Second World War economic, political and strategic order appears to be in tatters. The impact of COVID-19 exposing over-dependence on global supply chains, asymmetric security threats, and political warfare, combined with myriad challenges, are all serving to impact the security and sovereignty of many nations, including Australia.
Australia's economy and its public face a seemingly insurmountable series of challenges that threatens to leave the nation floundering amid a sea of emerging regional and global giants, each of whom are at various stages of strategising their way to prosperity and stability in the post-COVID world.
This new reality comes as a shock, particularly as Australia as both a continent and a nation is unique in its position, has enjoyed relative geographic isolation from the flashpoints of global and regional conflagration of the 20th century.
Blessed with unrivalled resource wealth and, despite public commentary, an immense industrial potential, the nation has enjoyed the benevolence of the post-Second World War order, caught up in the promise of easy wealth generation through unfettered globalisation, economic neo-liberalism and the "end of history".
Amid this flurry of economic transformation propelling once 'developing' nations onto the world stage, the world's established powers, including Australia, now face a new paradigm, one committed to undermining and influencing the very fabric of Western democracies and the economic, strategic and political order they are built upon.
As Australia has sought to push back against a rising level of economic, political and territorial expansionism at the hands of President Xi Jinping's rising communist China, the nation has drawn the ever-growing ire of its "primary economic partner" as it seeks to exert its influence and "manage" the public perception through economic, political and societal coercion on a massive scale.
Meanwhile, the increasing disruption of the Trump administration and the growing limitations of the US as Australia's "primary security partner" places Australia's political and strategic leaders at an increasingly concerning crossroads as they seek to navigate an era of economic turmoil and mounting great power competition.
Re-entering the public conversation, Lowy Institute non-resident fellow Professor Alan Dupont has issued a challenge for Prime Minister Scott Morrison, calling for him to "balance" the nation's relationships between the two antagonistic superpowers.
"Australia’s political debates are dominated by arguments about economic management and prescriptions for a speedy and lasting recovery. But how successfully we emerge from the trauma of the pandemic will be largely determined by Scott Morrison’s ability to manage external events," Professor Dupont explains.
A period of adjustment is necessary
Australia is not confronting the period of global and regional turmoil in isolation, however, its almost total dependence upon China's economic growth for our own growth has placed the nation in a precarious position, particularly as the war of words between the two nations continues to unfold and Beijing resorts to blatant economic coercion to force compliance with its view of the COVID-19 pandemic.
In responding to these challenges, it has now been firmly established that Australia needs to take greater responsibility for its own economic destiny, diversifying its trading relationships to better support and nurture economic competitiveness and growth over the long-term.
For Professor Dupont, this is an essential part of the nation's response to the global turmoil, explaining, "Adjusting our foreign policy, trade and security settings will be crucial to determining our place in an emerging world order that will be far less favourable than the last. Disruption to global supply chains is intensifying.
"Most countries want to lessen dependence on China-centric value chains, especially for strategically important goods and commodities deemed essential for national resilience. Trade protectionism and strategic tensions are on the rise. A recrudescent nationalism is leaving 'anywhere' internationalists and the Davos crowd lamenting lost power and influence."
This is part of a broader paradigm shift influencing the global economic, strategic and political balance of power Australia has been dependent upon for the best part of a century and for Professor Dupont spells only one thing, increased great power tensions, competition and animosity.
Responding to 'great power' competition
The term 'great power' competition was supposed to have gone the way of the dinosaur following the end of the Cold War, however, as the aftermath of COVID-19's devastating economic, political and strategic impact have revealed, it is very much alive and well in the Indo-Pacific.
Explaining this, Professor Dupont states, "Driving much of this change is escalating great power rivalry, which is particularly unsettling for Australia because the US and China are crucial to our economic wellbeing and national security.
"Although divorce is still unlikely, separation is well underway. It threatens to be messy and cathartic because decoupling poses hard questions about the required balance between autarky and over-dependence. Getting this balance right has special relevance for Australia as a country long accustomed to relying on great and powerful friends, a category that looked like including China until the great falling-out.
"Historically, critics on the left decried our supposed over-dependence on the US, asserting that whatever the security benefits, they are far outweighed by an unforgivable loss of sovereignty. The caricature of craven subservience to the US was given further life by Malaysia’s outspoken ex-prime minister, Mahathir Mohamad, who in 2002 controversially portrayed Australia as a stalking horse for the US-led West, determined to keep Asians down.
"Now, in a modern-day twist, Beijing is recycling the refrain that Australia is under America’s thumb and no more than a cipher – a useful tool for the Trump administration’s anti-China crusade.
"But our differences with the US on issues such as the trans-Pacific trade partnership, the World Health Organisation and the efficacy of the World Trade Organisation should have dispelled the notion that we are too dependent. Even on defence, where the US and Australia have traditionally been close, the government has resisted pressure to join the US in freedom-of-navigation operations in the South China Sea."
However, paramount to Professor Dupont's thesis is the growing need for Australia's policymakers, particularly the Prime Minister, to navigate the turbulence with increased nuance and direction to better clarify the nation's position, but also balance its relationships with the two heavyweight contenders.
"Policy differences with China are more obvious because they are contentious and manifest. Headline disputes with China are a weekly occurrence and a major break – inconceivable a year ago – is now a distinct possibility unless a circuit-breaker can be found," Professor Dupont said.
"Morrison’s determination to assert distinctively Australian positions in foreign, trade and national security policy means there will be no return to the halcyon days when there seemed no end to the China bounty or the equally valuable security goods provided by the US at little cost."
In light of this, it is time for Australia to plan for the next 15 to 20 years, not the next term of state, territory or federal government, providing policy consistency, vision for the public and surety in a period of global and regional turmoil.
Each of these contribute to the nation's sovereignty and security at a time when many of the principles that Australia's post-Second World War public and strategic policy is based upon coming under threat – serving to make Australia a more reliable economic, political and strategic partner amid a period of great power competition.
Furthermore, it serves to make Australia more resilient to man-made and natural shocks, resistant to coercion, economically competitive and robust at a time when the Australian public are calling for leadership, forward planning and vision.
Australia is defined by its economic, political and strategic relationships with the Indo-Pacific and the 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 21st century’s era of great power competition and 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.
Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability serves as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia.
Australia is consistently told that as a nation we are torn between our economic relationship with China and the longstanding 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?
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.