As Australia’s strategic environment changes, foreign policy funding must change too (part 1)

Australia’s strategic environment has changed dramatically over the past decade. The Indo-Pacific is an increasingly complex place to call home and we must be able to more rapidly reshuffle our limited foreign policy resources towards new and emerging issues. This will include engaging with issues in which we currently have little domestic expertise—and limited evidence to inform our policymaking.

The Covid-19 pandemic, particularly the Delta variant, is ravaging countries in the South Pacific, Southeast Asia and South Asia. The region is witnessing a rise in authoritarianism and military rule that is becoming more entrenched. US–China tensions are accelerating technology, data and now stock market bifurcation, bringing economic, national security and social consequences that will reverberate for decades to come.

Governments in the region now regularly run disinformation operations targeting their own populations, including through the use of commercial ‘influence for hire’ actors. Some states have taken advantage of Covid-19 to experiment and take their increasingly sophisticated information capabilities global. As cyber-enabled foreign interference becomes more routine, it’s worth asking whether we’re set up to monitor and counter these threats (hint: we are not).

Intelligence communities around the world find themselves at Covid-19-, technology- and data-induced crossroads that will advantage the proactive and forward-leaning and disadvantage those that stick to the status quo. With intelligence diplomacy more important and valuable than ever, for example, how do states maintain and build international relationships during Covid-19 with restricted travel and limited options for secure communications? And as open-source intelligence and data capabilities become increasingly crucial to inform both long-term and crisis policymaking, how can communities build up these capabilities to keep up with adversaries and to ensure they don’t get left behind by the investments being made by key and larger intelligence partners?

Xinjiang—which few policymakers were working on just a couple years ago—is not just a human rights crisis; it’s now a geopolitical and economic flashpoint. Developments in Xinjiang will continue to consume more whole-of-government policy resources, including in Australia, where, unlike the United States, Britain and Europe, we’ve failed to invest in policy-relevant research to inform decision-making.

One illustrative development in this area, which will soon attract more global attention, is that concerns about forced and coerced Uyghur labour are now quietly driving the rerouting of billions of dollars of supply chains and investment, particularly in the manufacturing and electronics sectors, giving us a real-time example of how the Chinese Communist Party prioritises internal party security over its own economic interests.

The importance of sovereign capability, particularly in strategic and critical technologies, is being reprioritised as governments recognise how vulnerable they are in a crisis. Many states, including Australia, have failed to invest in their (currently shallow) technology research and development bases, or to identify where they need to invest. States that avoid making post-Covid capital investments in critical technologies will get left behind.

And this is just a snapshot of some of the new and emerging issues parliamentarians and policymakers in Australia, and all around the world, are grappling with.

The only way governments can stay on top of these issues is through leveraging policy-relevant analysis and research. Such work provides the crucial evidence base on which good and informed policy can be built, and which enables it to stand the test of time.

While it’s not attracting much public attention, it’s timely that the Senate Committee on Foreign Affairs, Defence and Trade is quietly digging into the issue of funding for public research into foreign policy issues.

Australian research institutes have a more limited pool of potential funding than their North American, UK and European counterparts. Very few foundations in Australia provide funding to foreign-policy-focused research institutes. And the large US- and Europe-based foundations that provide significant funding to think tanks rarely if ever fund policy work outside of those regions. Foreign governments do provide funding to research institutes in Australia, predominantly to universities, and also on occasion to think tanks through competitive grants. But the Australian government and the business community remain the primary sources of funding for research institutes in Australia, and that won’t change anytime soon.

The funding base we have built up for ASPI’s International Cyber Policy Centre over the past few years, for example, is broad and involves a mix of research and capacity-building grants from the Australian government and foreign governments (the US, the UK, Japan, Canada and the Netherlands), as well as annual corporate or government sponsorship. Fundraising is a role of the seniors in our 30-person centre to help support the teams they manage and the projects they want to work on. Funding is raised year to year and most grants are for six to 12 months, which limits planning-time horizons.

While Australia has a rich pool of foreign policy talent, spread across the government and nongovernment sectors, it currently lacks a think tank sector of sufficient size and breadth to provide the diversity and depth of perspective and analysis which is critical to robust policymaking. The 2020 Global Go To Think Tank Index Report recorded 2,203 think tanks in the US, 515 in the UK and 45 in Australia (many of which, it should be noted, are tiny). On a per capita basis, that’s approximately one think tank per 149,000 people in the US, one per 129,000 people in the UK and under one per 500,000 people in Australia.

The relatively small size of the sector is a product of several likely factors. They include the different Australian tax treatments of philanthropy and the lack of the philanthropic tradition that characterises the US think tank sector, in which some of the oldest and most respected institutions were established with large endowments from industrialists early in the 20th century.

This parliamentary inquiry will have to consider whether enough money is being spent on foreign policy research in Australia. But this isn’t just a case of funnelling in more government money—though, if done well, that would help and would allow organisations to sustain multi-year programs of work instead of scraping together dozens of small grants to make it through the year. But additional resources would not, in and of themselves, generate better public policy outcomes, or a stronger public policy discourse.

There are a number of ways Australia could optimise the potential for high-quality, policy-relevant output, especially in our small think-tank sector. We’ll deal with those tomorrow in the second part of this post.