The compass of Australia’s Asia strategy
9 Mar 2021|

The pandemic has geopolitical and geoeconomics equivalents. Disruption all around, amid the end of the old global order.

The central truths that set the topography of Australian grand strategy in Asia—the four compass points—haven’t fallen, but their alignments are shifting. New navigation is needed.

The first compass bearing is a major trend that’s tough for any Oz politician to talk about in public: the long-term decline of Australia’s relative power. Call this our Going South star.

When a bunch of development, diplomacy and defence leaders got together for a foreign policy rethink in 2019 (ah, how long ago that seems), their statement pinged relative decline first up: ‘Australia’s weight in the world is declining. Primarily, this is driven by two factors: firstly, the fall of Australia’s relative economic weight to other nations and secondly, the fragmentation of the international order from which Australia has benefited.’

In Asia, our waning weight is striking because once we were heavy. Back in 1990, China’s GDP was US$360 billion, while Australia’s was US$310 billion. From that point, the World Bank graph has China’s economy soaring up a mountain while Australia’s gently streams.

Close to the end of the 20th century, the Australian economy was larger than the economies of all ASEAN members combined. No more. It’s a given that the shift of economic and strategic power means Australia faces a ‘disruptive Asia’—a truism heavy with significance.

In a book on Oz foreign policy, 21 years ago, my starting point was Australia’s relative economic and military decline: ‘This core reality has shaped Australian assessments. It is a key trend often hinted at but rarely stated in blunt terms. In the phrase “relative decline” the important word is relative. Decline does not equate with decadence or internal failure. Australia can keep getting richer and ever more affluent.’

The still-happy-and-getting-richer message of ‘relative’ suffers because of Edward Gibbon’s great title: any Oz leader who says ‘relative decline’ knows what the voters will hear is ‘decline and fall.’ To avoid nasty headlines, the polity deals tacitly and tangentially with Australia’s relative loss of power.

Much easier to talk about is a related compass point: Australia’s Great Asia Project. The compass metaphor means this is our East star.

Asia is ‘fundamental to Australia’s future,’ a Canberra consensus that former prime minister John Howard expresses in his 2010 memoir, starting his Asia chapter with this sentence: ‘For more than 40 years, every serious political leader in Australia has been committed to the belief that close engagement and collaboration with our Asian neighbours was critical to Australia’s future.’ On the next page, Howard makes clear that the leader at the head of this line is Gough Whitlam. While the term ‘Great Asia Project’ is mine, see 1972 as the start date, as tacitly embraced by Howard.

Howard often hammered the debating point that Australia didn’t have to choose between its history and geography. Yet in embracing (or recognising) geography, the Great Asia Project is a defining choice. Obvious, even unavoidable. But still a choice. The consensus is set and Australia’s political unity ticket on our Asian future approaches its 50th birthday.

Australia knew Asia existed before 1972, but didn’t want to have to translate geography into policy. The importance of the project is the acceptance that Australia must function as part of Asia, not apart from Asia. The Commonwealth of Australia spent its first seven decades seeking security from Asia; since then we’ve sought security in and with Asia.

The get-with-the-Asia-strength sentiment complements the North point on our compass (our axis of rotation): the reordering of the way Australia operates as a democracy with an open economy and open society.

The march to a multicultural identity started in 1966 when the Coalition government of Harold Holt quietly began to inter the White Australia policy; full burial with loud fanfare was delivered by the Whitlam Labor government after 1972. Both sides of Oz politics did the big deed.

Remaking the nation’s face with a new non-discriminatory immigration policy, we remade political traditions, junking the original ‘Australian settlement’ mindset (white Australia, industry protection, wage arbitration, state paternalism and imperial benevolence). The term ‘Australian settlement’ was coined by Paul Kelly in one of the great works of Oz journalism as history, a magisterial tome with a superb title that resonates anew, The end of certainty.

The only time Oz leaders have broadcast the relative-decline reality was during that era when Australia was tearing down tariffs and casting off the protection mentality (most memorably with Paul Keating’s 1986 warning about Australia becoming a ‘banana republic’).

An open society, in and of Asia, is why ‘our ethnic face has made a decisive shift from Anglo-European to Eurasian,’ as George Megalogenis writes, turning Sydney and Melbourne into Eurasian cities: ‘Australia’s identity is undergoing epic transformation. In seventy short years, we have shifted from the most insular rich nation on Earth to being a global role model for diversity. It took fifty years to get from white to Anglo-European, but only another twenty to cross the threshold to Eurasian.’

Looking north, east and south, Canberra ponders what a Eurasian grand strategy will mean. And how that relates to the fourth point on the compass, the leader of the West, the United States.

The US alliance came through Donald Trump’s presidency unscathed. Canberra worked the bilateral relationship with success while quietly horrified at Trump’s multilateral mayhem; Malcolm Turnbull called Trump a ‘natural isolationist’ and ‘thoroughly dystopian’.

The US has bounced back before, and Canberra offers President Joe Biden a fervent welcome. The Western point of our compass, though, has lost much ‘credibility and influence,’ as Biden acknowledges.

As the pandemic fog clears, we can take some compass sightings across tough topography. Our stars do not align.