Should Australia Engage Asia in Fantasy or Reality?

Since the Australian Government’s last White Paper on defense in 2009, there have been rapid changes within the Asia-Pacific region.  As a consequence, the forthcoming Australian defense white paper will be perhaps the most important that has ever been prepared. With a rising assertive China, the US adopting an “Asia Pivot” doctrine, and a host of rising Asian powers, the Australian Government cannot defer the strategic complexities of the region to the â€™never never’ of 2030 like the 2009 paper did.

Australia has long lost its ability to project military power overseas. The retirement and scrapping of the last Australian aircraft carrier HMAS Melbourne in 1982, and the Hawke Government’s decision not to replace it, and subsequent air squadron decommissioning left the Australian armed forces “land based”12.The country  did not take the opportunity in the 1950s to possess nuclear weapons as a deterrent when it arguably could have. Consequently, today Australia is facing the prospect that some Asian nation’s economies will overtake it very soon, and will develop superior military forces within the region.

Australia is left with small professional military services that would have little impact “on the ground” in any strategic operations. Australia has largely invested in hardware to suit strategic tasks,  like frigates to accompany US task forces, and submarines capable of patrolling the waters of North-East Asia, based on a defense doctrine of supporting the US alliance. Australia’s military forces are configured for different types of threats than are emerging today, based on the assumption that Australia should be a middle power.

In terms of â€™soft power’ where Australia’s needs have already been reflected in the “Australia in the Asian Century” white paper, the country has a mammoth amount of work to do before it can be even think of being influential within the region. As the author discussed in other places, there are obstacles to achieving these ambitions which the Asia White Paper has not even identified as barriers for Australia to overcome3.

Arguably, Australia’s influence  declined in South-East Asia during the Howard years, due to his administration’s focus upon an inherited geopolitical orientation based upon a world view originating during the Menzies era that placed the US alliance as the government’s policy centerpiece4.

Consequently, Australia is now within a region where it no longer has superior military capabilities. The only natural defensive asset at its disposal is the air-sea gap between the Australian mainland and South-East Asia, which must become a major consideration in future defense scenarios.

The new defense white paper is coming out at a very appropriate time where a very objective account of the shifting strategic environment must be honestly portrayed. The 2009 paper missed on this, and in addition presented a flawed asset acquisition plan, with some â€™opportunistic’ purchases. Submarine purchases seem to have been based more on commercial rather than strategic considerations. Financial plans also appeared to be flawed, where some monies were actually returned to Treasury because purchases could not be made in time.

Thus the 2013 paper must be prudent enough to shape Australia’s approach to the emerging new world order, before it happens.  It must very carefully lay out the various strategic options open to Australia and select one. This may mean the continuation of Australia as a follower within the US alliance, seeing Australia as an engager and shaper of a new regional order redefining the meaning and objectives of the US alliance, or formally withdrawing from the regional stage all together, among other options. The coming paper should however debunk the fantasy of Australia being a â€™middle power’ and realistically configure the country’s defense forces according to Australia’s real needs.

However this paper is being developed in the long run up to a national election where both major sides of politics are in full adversarial  flight with little intention of forming any bipartisan for the future. In addition, the Tai Pans of the defense establishment and both sides of Australian politics live within the paradigm of the sacredness of the US alliance, where it has become beyond the reach of objective evaluation.

In addition to this pro-alliance view within its current form, Treasury influence is certainly dominating the paper’s assumptions. The influence of Treasury was seen in the way that the objectives of the 2009 paper were quickly scuttled with 10% defense budget cuts in real terms in 2012-13 budget. Leaked documents show that the coming white paper is being framed within current fiscal constraints where a newspaper quoted from an early draft of the paper that “a return to budget surplus is important to Australia’s defense”5Thus Treasury would prefer the development of the defense forces to take account of other fiscal priorities like increased needs for health care and social services to support an aging population.

Aspiring China

China was always one of the leading civilizations in the world until the 19th and 20th Centuries when  civil unrest, famines, military occupations, and the closing off of the county to the outside world immediately after the communist revolution dramatically decreased its influence upon the world. Since the late 1970s China slowly opened up to the rest of the world and undertook much structural economic reform, leading to a more than tenfold increase in GDP.

China’s economic growth has propelled the country to become the world’s largest exporter, and the second largest economy today. Domestically new cities have sprung up everywhere within China and the country has been linked through modern transport systems. Consumerism is also rapidly rising, which can be expected to take over as a driver of economic growth during the next decade.

Part of this economic expansion has required China to secure sources of oil, minerals, and other raw materials around the world. With the enormous trade surpluses China has accrued, many strategic assets have been acquired, along with many international brands like Volvo. China has also contributed to the development of infrastructure around the world such as a rail linking Zambia’s copper mines to Dar Es Salam as an entrepôt. China has become interested in food production in both Africa and Brazil.

From the Chinese vantage point, its sea lanes must be protected to ensure the continued free flow of raw materials. This makes the Indian Ocean very important as it is a major oil supply line. China also has a number of competing claims with Vietnam, Malaysia, the Philippines, Brunei, and Taiwan on islands and their associated economic zones within the South China Sea, where economics, politics, and nationalism continue to make this area a potential â€™hotspot’ for conflict6. China is still a traditional rival with Vietnam, Taiwan is trying to reassert its status as an independent player in the region, there is a tense relationship with Japan, a stagnant relationship with India (Kashmir) maintaining a militarized boundary, and concerns about a highly militarized Korean Peninsula, with an ally where China’s influence would appear to be waning. The Diaoyu Islands dispute is still going on between China, Japan and Taiwan. The economic rise of South-East Asia is also bringing on a much more  strategic significance to the region.

The People’s Liberation Army (PLA) consists of all the services, land, sea, and air. It is the largest armed forces in the World with more than 2.25 million personnel, of which 1.6 million are ground force personnel. The armed forces has been modernized during the last few years with military spending increasing over 10% per annum over the last decade. The official military budget for 2012 was announced at US $106.4 billion, however this is still less than 20% of the US defense budget of US $662 billion for 20127. An International Institute for Strategic Studies report in 2011 made an assessment that if current rates of spending continue, China’s military capabilities will match those of the United States within 15-20 years8, however China within the Asian region may match US capabilities much sooner than that. This of course will also depend upon China’s economic performance over the next decade.

This doesn’t mean that China won’t have many challenges ahead. China may soon become the largest economy in the world, but may still lag behind the US in R&D and new technology innovation. Per capita income in China will still lag behind the US and many other countries. The environment and disparity between the coastal and inland areas of China still requires some very skilled economic planning and development. An aging population, leading to a shrinking labor force may one day mean that low cost manufacturing will be pressured to move from China to other countries in the future, leading to the question of what industries will replace them.

Although China may have been more assertive of late, in the foreseeable future it will not be possible for China to develop strategic dominance within the region. The US, Japan, India, and growing Asian military forces would make that too much work. So from China’s point of view, power sharing may be the pragmatic option.

China is also developing its â€™soft power’. This approach to the region was intensified with the Beijing 2008 Olympics and Shanghai Expo in 2010. China has developed CCTV as an international news channel competing against the BBC and CNN. China has also funded a number of Confucian Institutes around the Asian region, and perhaps one of China’s best â€™soft power’ assets are its very own citizens doing business around the world. This is one factor that is changing peoples’ impressions of China.

Australia’s economic future lies with China for the foreseeable future. China probably saved Australia from going into a deep recession in 2008. China has been buying Australian minerals at high prices which has led to a favorable terms of trade for Australia. China is changing the structure and nature of the Australian economy much more than is being acknowledged. Chinese influence has enhanced both the tourism and education sectors. It is in Australia’s interests to maintain and enhance these trade ties with China.

The reality is that China is no strategic threat to Australia. Its Australia’s largest trading partner and this trade relationship needs to be supported with a consistent strategic relationship that accepts China’s place and the new roles it will play in the region. China is an integral part of the region and its influence will increase dramatically. There is no logic trying to check China’s growing influence in the region if it is legitimate. It’s only dominance that may be of concern. And this can be extended onto the China US relationship. There are no natural or historical reasons why there should be any strategic competition between these two nations.

Australia’s influence with China will only grow through cooperation. It is the development of forums like the annual leadership talks agreed to between China and Australia during Prime Minister Gillard’s recent visit to China that will dramatically increase dialogue and cooperation in the future9. Any strategic competition under the umbrella of the US alliance would only lead to undesirable consequences within the bilateral relationship, so Australia may have a potential role to play in shaping new possible approaches between the US and China.

The US Alliance

Australia had always been concerned about the defense with Russia and German expansionism in the late 1800s, even before the colonies federated into the Commonwealth of Australia. The fall of Singapore, the subsequent  surrender of Allied forces on the island, and bombing by the Japanese on the Australian mainland, and submarine raids on Sydney drove the point home that Britain was no longer capable of assisting in the defense of Australia10. With most  Australian forces over in Europe, the United States moved into Australia as a base to launch the pacific campaign against Imperial Japan in 1942 after the Japanese attack on Perl Harbor and the US retreat from the Philippines.

Gratitude for assistance at Australia’s time of need and a good working relationship between the US and Australia during the Second World War led to the formation of the Australia, New Zealand, United States Security Treaty (ANZUS) as a three way defense pact, which is still in full force between Australia and the United States. This came at a very convenient time when new nations were forming in the region as colonial powers withdrew, new doctrines and conflicts descended upon Asia with the “domino theory” appearing a realistic scenario to policy makers during the early stages of the cold war. The United States became a very suitable ally to model foreign policy upon.

Annual steering meetings are held between the US Secretary of State and Australian Foreign Minister (AUSMIN) are held to discuss defense matters. Both Australia and the US hold regular joint military exercises, and Australia has followed the United States into every major action since World War II, including Korea, and Vietnam, Afghanistan, and Iraq.

The value of the US alliance to Australia is highly dependent upon US policy and relations with China. However through observation one would believe there has been a slowly shifting policy towards China, accompanied with some deterioration in bilateral relations. This has led to a relationship between the US and China today which seems to be based more on mutual suspicion and rising competition rather than dialogue and cooperation11.

Obama’s visit to Thailand, Myanmar, and Cambodia in November last year could have raised Chinese suspicions about US intentions particularly over the rhetoric concerning disputed islands in the South China Sea, sending the wrong messages to Beijing. At the same time Chinese Premier Xi Jinping is stepping up Chinese military activity in the South China Sea to defend disputed territories12, which is a recipe for heightening tensions.

Chinese power is certain to continue growing in the Asia-Pacific and US power will not decline in the region as many predict due to financial constraints. So there is no natural solution with Chinese and US policy differences on North Korea, Syria, and Iran, etc. The sending of marines to Australia, approaches to Myanmar, shoring up alliances with South Korea and Japan, potentially indicates an aggressive stance. Without a regular and open dialogue this is leading to unnecessary tensions.

From this paradigm, the US could consider changing its military doctrine of treating China as an enemy and not appearing to be “encircling China”. If the US continues upon a strategic competition posture, configuring its forces with the capability to carry out a war in the Western Pacific, this will just cause tensions, which would just cause a cold war scenario. For example in the Hainan Island incident where there was a mid-air collision between a US and China aircraft in 2001 did nothing to lower tensions. Surveillance flights testing air sovereignty add continual stress upon the relationship where any time a small mishap can result in another incident13.

Dealing with China as a rising power is of major importance to Washington. From an Australian view, it would be best for the US to see the potential for power sharing in the region, rather than pursue a strategic competition paradigm. US financial integration with both country’s trade, foreign direct investment, and China as a major holder of US Treasury bonds should be incentives to do this.

However this requires a new strategy to create a new regional order where Australia could play a very constructive role. This requires the policy makers in both Washington and Canberra to define this new doctrine that will embrace cooperation and mutual acceptance of each other’s legitimate position within Asia. This means accepting a Chinese military build-up in proportion to its status as an economic power. China sees the need to upgrade its old military hardware which is 20 years behind that of the US14.

This is a big ask. This would require the US reconsidering the use of trade restriction apparatus as policy instruments against China, more favorable consideration of technology transfer and direct foreign investment by China in the US, etc. This also requires recognizing that US-China relations are multidimensional and that military posturing are manifestations of seeing relations within uni-dimensional contexts. Perhaps this would do a lot to reduce trade imbalances and increase US exports to China.

This may also require the rethinking off the Trans Pacific Partnership (TPP) which is seen by China and even some other Asian nations as means of promoting US exports and undermining the momentum of the East Asian Economic Cooperation that didn’t involve the US. This is not the first time the US has dumped Asian initiatives. The US opposed former Malaysian Prime Minister Mahathir’s proposal for the establishment of an East Asian Economic Caucus in the early 1990s and Japan’s imitative for an Asian Monetary fund during the Asian financial crisis in 1997. The US must grow more comfortable with the notion that not all new ideas will originate from them in the future, but this doesn’t mean that the US will not have a major role to play.

There is some confusion by China about what President Obama is actually thinking and what US policy actually is. US policy towards China will only be really known once Obama sits down with China’s new leader to discuss many bilateral and regional matters.

From the Australian point of view, the value of the US alliance is defense assistance against a military threat which was validated by the 2009 white paper’s concern over China’s Pacific expansion. This assumption until recently has not really been questioned. However, if China is not a threat, then the traditional objective of the US alliance in regards to China is no longer valid in its current assumptions.

This should not mean an end to the treaty, but rather a re-evaluation of the objectives of the treaty through the existing AUSMIN mechanism to redefine new potential directions for the alliance under a new Pacific doctrine. Strategic competition with China is not in Australia’s interest, and a US role that works directly for Australian interests is what should be sort.

Know Thy Neighbor - Indonesia

Indonesia is on its way to becoming a major power in the region. Indonesia’s GDP (PPP) is already larger than Australia at USD 1.212 Trillion, the 16th largest economy in the world15. This growth is occurring through the whole archipelago of Indonesia rapidly transforming the country into a much more advanced economy16. With a consistent annual growth rate of around 6% Indonesia’s influence within the region will grow dramatically.

Former Australian Prime Minister Paul Keating placed great importance upon the Australian-Indonesian relationship in the 1990s, however this failed to evolve under the Howard Government. As a consequence annual ministerial meetings between the two countries has focused on the smaller issues like people smuggling, asylum seekers, live cattle exports, and Australian prisoners in Bali, rather than important regional and geopolitical issues17. As a result the Australian Indonesian relationship has not grown into a mature one, being very little above transactional, with few deep personal engagements between the leaders of both countries. This lack of personal rapport was partly to blame for the situation that nearly led to major clashes between TNI and Australian troops in East Timor in 199918.

Nowhere more could this be seen more clearly was in President Susilo Bambang Yudhoyono’s (SBY) and Prime Minister Kevin Rudd’s respective addresses to a joint sitting of the Australian Parliament in  2010, where Rudd spoke of the achievements of the relationship, while SBY talked about the challenges ahead. Specifically SBY warned of a mindset stuck to rigid old stereotypes, where a lot has to be done to improve â€™people to people’ contact to understand the facets of each other’s life. Most importantly, SBY mentioned that the Australia-Indonesian relationship must be opportunity driven to move onto new issues and bring the relationship to its full potential. SBY went on to effectively suggested that Australia and Indonesia explore the prospects of playing a role in developing a new world order that would be beneficial to all19.

Former Prime Minister Paul Keating in his delivery of the Keith Murdoch Oration Lecture in November 2012 stated “Policy towards our nearest, largest neighbor Indonesia has languished lacking framework judgments of magnitude and coherence. It’s as if Indonesia remains as it was before the Asian financial crisis, before its remarkable transition to democracy, and before the refiring of its wealth machinery”20.

At face value, it appears that Australian policy makers still have a lot of thinking to do about the Indonesian relationship. Although the “Australia in the Asian Century” white paper calls on Australians to learn more Indonesian language at school and more cultural exchanges between the peoples of the two countries, the Department of Foreign Affairs and trade (DFAT) regularly issues travel warnings to Indonesia, effectively telling Australians not to visit Indonesia. In addition the halting of live exports of cattle to Indonesia and stationing of 2,500 US marines in Darwin without first advising the Indonesian Government does little to develop trust and openness between the two countries. Aid is also not the answer. Australia’s relationship with Indonesia must go far beyond aid to build up any much deeper understanding.

Indonesia has a much more sophisticated view of the world than Australian policy makers have given credit for. The Indonesian view of the world sees the issues of energy, food, and water security becoming paramount concerns when the world’s population approaches 9 billion people. SBY speaks of the need for a new global architecture, seeing China and the US as rivals who need each other. Regional powers, of which Indonesia s one must play a role along with both China and the US in promoting and maintaining peace and cooperation21. In terms of the China-US rivalry, Indonesia is pursuing a policy of dual co-existence where the legitimacy of both powers in the region is recognized and respected. Consequently Indonesia doesn’t see itself as having any foreign policy obstacles in dealing with both powers. Indonesia is interested in developing the â€™rules for the road’ in managing conflicts and disputes in the South China Sea. In picking up this role as an indirect conduit between Beijing and Washington, Indonesia sees this as the most productive role it can take in maintaining a peaceful region22.

Ironically for Indonesia, this is seen as a conservative posture, where for Australia this same approach would be seen as a radical shift.

What does the Australian Defense Forces Really Need for What they are Doing Today?

Another important consideration for Australian strategic defense policy is to look at what the Australian Defense Forces (ADF) are really doing. Primarily the ADF has taken on combat and support roles in Afghanistan and Iraq, special operations, been involved in nation building in Timor Leste, tsunami relief in Aceh, Indonesia, some policing work on the Pacific Islands, and responded to domestic emergencies like bushfires.

Defense spending has been allocated towards fighter aircraft, building land based capabilities, warships, submarines, and other items needed to wage war for what there are little prospects for. So from a budgetary point of view, the best spending strategy would be to use limited funds to equip the ADF for what it is actually doing. However this would radically shift Australia’s defense doctrine.

This creates a paradox. If scarce resources are spent wisely and Treasury maintains a major influence upon the fiscal boundaries of Australia’s defense policy, then should the defense policy actually be allowed to change? This would require question coming into the debate like “Can Australia’s spending on strategic military items make any difference to the strategic balance of the Asia-Pacific region?” and further “Does the maintenance of the US alliance in the present form present benefits to Australia?”  If Australian strategic defense policy is to maintain its existing doctrine then Defense will have to override Treasury and new spending formula worked out. The question here is “How much is the current US alliance arrangements worth?”  Conversely, if Treasury in Canberra will continue to dictate constraints on policy formulation, then it is necessary to completely rethink Australia’s defense policy in accordance with the fiscal realities Treasury lays out. And incidentally this would be an excellent way to sell any new radical shift from existing doctrine to the public of Australia. 

However not since the days of the Whitlam Government has Australia had a truly independent outlook on the world. This came with grave consequences. So changing Australia’s strategic direction would take great courage, long consultations with the Australian electorate, and then with friends and allies. This requires a major social shift away from Australia seeing itself not as overseas Europeans residing as a middle power, but as an Asian society on the Asian-Pacific rim, to rid policy formulation from the shackles of history. And remember Paul Keating tried to achieve this once, but was rejected by some of Asia’s more vocal politicians, although circumstances may be very different this time round.

However there is an immense threat from Indonesia which is rarely discussed in terms of Australia’s strategic defense. In the future some form of catastrophic disaster on the Island of Java such as an earthquake, massive volcano eruption, and/or tsunami will occur. Java is located on Asia’s “ring of fire” and has had a number of volcano eruptions over the last century. A massive natural disaster could leave millions homeless in appalling conditions, just North of Australia. This scenario would be an immediate threat to the security of Australia if a mass exodus via anything that could float headed towards Australia, creating a refugee situation Australia would find very difficult to handle.

What are Australia’s Strategic Defense Options?

If the coming White Paper on Australia’s strategic defense policy canvasses options, these could be summarized as follows;

1. maintaining the US Alliance

This option is about maintaining the view that Australia is a â€™middle power’  and aligned to US policy. This is the easiest scenario for the white paper as it requires no fundamental change in Australia’s defense doctrine. However Australia under the scenario of strategic competition, should the Obama Administration pursue this direction will lose independence to form its own policy towards its largest trading partner China. This approach will potentially cause tensions  and hinder the development of the China relationship. If Australia becomes locked into the scenario of strategic competition between the US and China, then its emerging influence within the Asian region will also be weakened with the perception that Australia is not confident of making its own way in the world.

However if the US adopts a much more cooperative approach towards China, then the US alliance will be valuable to Australia. A more cooperative approach would empower Australia within the alliance due to the potentially good relationship that it could develop with China.

The US alliance is the preferred option of the government and would mean a continued emphasis on purchasing strategic assets to perform Australia’s perceived responsibilities within the alliance. There is also a possibility that Canberra may develop the resolve within the relationship to change the assumptions of the alliance to fit the changing realities of the region.

2. Going back to “fortress Australia”

If the US alliance is deemed to be of limited value to Australia strategically in the future, then a withdrawal from the region to develop a tactical self defense capability would be an option. This â€™back to the future’ scenario was the conclusion of the 1976 White Paper on defense under the Fraser Liberal Government. The postulation was that Australia should be able to defend itself from regional powers without the assistance of any other nation.

Australia would need a much larger air force. Joint strike fighter aircraft would need refueling capabilities to keep in them in the air longer and provide the ability to strike forces on their way to Australia. The size of the professional army would have to be larger and the small numbers compensated with very sophisticated equipment. New technologies like the use of drones for surveillance will cut costs. Smaller submarines that can patrol shallow waters would be preferred to the larger submarines Australia is buying. Smaller ships that can patrol, search and destroy other shipping are necessary, rather than large warships. Australia already has assets like JORN over the horizon radar that can view approaching aircraft across Northern Australia.

Sea and air denial would be the key to the Australian defense strategy, taking advantage of the air-sea gap around Australia. This would be a tactical rather than a full strategic defense capability, because a strategic defense strategy is not affordable. The major premise of this tactical defense is to make it too difficult and costly for any enemy to attack Australia.

According to Professor Hugh White of the Australian National University this type of defense capability would cost around 4% of GDP23. This expenditure would take Australian defense spending back to 1960s and 70s levels. However to economize this option, savings could be achieved through decommissioning and cancelling orders for superfluous assets to this strategy. The ANZAC frigates currently configured to escort amphibious forces long distances could be reconfigured for other purposes.  These were all inherited from the Howard Government which purchased them on advice from Defense with little questioning at the time.

The advantage of this option is that Australia becomes independent in terms of defense. Ironically this option actually corrects the situation where Australia with its current military configuration today is technically at risk because it could not defend itself.

Of course this option requires a deep public debate and eventual political bipartisanship. A committed bureaucracy to plan and develop this option is also very essential. Purchase decisions must be made according to specific needs rather than commercial considerations. With the right choice in hardware a sea air denial capability can be achieved.

This option does not automatically rule out the continuation of the  US alliance but would limit Australian participation in the traditional ways it has in the past. Australia could look at the Singapore Defense Force model which has been built around the Israel model of defense, utilizing a small force with a brutally effective defensive power. The paramount question with this option is What forces does Australia actually need?”

It will be Australia’s policies and diplomacy towards its neighbors that will comprise the most effective defense, which leads to the next option.

This option will most probably not be discussed at any length in the forthcoming White paper.

3. Towards Asian Integration

The third option which should be well canvassed in the coming White Paper, at least as a supplementary strategy is developing integration with the Asian region, based upon the old “Thai” adage that “good relations with your neighbors are your best form of defense”.

The integration option is about promoting a stable new regional order using diplomacy and â€™soft power’ options of trade, business investment, cultural, and other social endeavors. This recognizes that Australia can only handle its threats through diplomacy and non-military means. This doesn’t mean that Australia abandons its defense completely.

The major focus in the integration option is finding innovative ways to build a new order that will accommodate China’s new power aspirations and US interests in the region. This is challenging as the US will be very hesitant to give up primacy to accommodate China. However US presence is important to balance between China and Japan, and the situation on the Korean Peninsula. Australia needs to up-talk trade and economic integration over military competition.

This means creating an environment where;

1) There will be no contested geospace,                                                                                                                                                  2) There is shared power that keeps the US engaged and China’s legitimate place in the region is respected to stop competition, and                                                                                                                                              3) There are ways to manage potential conflict among members of the region.

This new order has to be achieved very quickly due to Chinese and US aspirations. If achieved then the region can turn to the issues of financial markets, climate change, trade, oil, food production, and regional security with the production of regional public goods to achieve desired mutually agreed ends.

The one positive force for this option to become a future reality is increasing economic integration between the states of the region.

Both Australia and Indonesia want good relations with both China and the US, and share visions about regional cooperation. Under this scenario Indonesia would become Australia’s best defense asset. Indonesia is a natural geo-buffer between Australia and the rest of the region, and current Indonesian foreign and defense policy is compatible with Australia’s interests. Through Indonesia, Australia would develop an effective forward defense as was Australia’s policy back in the 1960s.

If Australia’s relationship with Indonesia is handled poorly, then Indonesia will become a massive liability from Australia’s point of view, as the Timor Leste incident back in 1999 showed. Where Australia was once able to defend itself against any potential Indonesian threat, this is not the case today.  There is no certainty about how the US would react in any altercation between Australia and Indonesia.

Consequently it is paramount for Australia to build Indonesia into a strong ally. This requires opening up a new chapter in Australian-Indonesian relations. Australian interests are more closely aligned with Indonesia’s than the US, a point still not understood in Canberra today. With the Howard Government in 1999 basically tearing up the security treaty that the Keating Government signed with Indonesia., and many criticisms of the Lombok treaty signed between Indonesia and Australia in 2006, there is still a lot of work to be done.

The integration option still requires an Australian Defense Force that has the capability to go to trouble spots to assist in peace keeping, disaster relief, and special operations in accordance with Australia’s strategic interests. This is particularly important in a region where there are still a number of tensions and potential “flash points” that may arise in various parts of the Pacific, West Papua, and Sabah, etc. There will enviably be some major natural disaster on the Island of Java that Australia will need to assist.

The doctrine of integration requires Australia to become comfortable with different views of democracy and government. Australia should not try to make the rest of the region resemble Australia and will have to accommodate different value sets throughout the region. Australia must focus on both the bilateral and multilateral relationships , independence and succession movements, political Islam, and human rights in a very skillful manner. This requires a deep change in the national psych. The â€™Austro-centric’  view of the region needs urgent revamping24. One of the paramount barriers Australia has to overcome is an understanding that its own cultural values are not necessarily universally accepted across the region.  Australia’s acceptance of the wide array of Asian views within the region is necessary, so that Australia can one day become an equal partner within it.

If there is no enemy to defend against, then this option is best. This option requires Australia to invest in cultural and intellectual infrastructure that will lead to a better understanding of the region, just like the Australian National University (ANU) was established in 1946 to assist in the development of foreign policy25.

4. The ’New Zealand’ Option

Finally something should be mentioned about the New Zealand option, although it is totally unlikely that Australia would ever consider this posture. With the New Zealand Government assessing extremely low level threats within the region of the Pacific where the country is situated, the government decided in 2001 to decommission all combat aircraft within the Royal New Zealand Air Force (RNZAF). This was done by cancelling and order for 28 F -15 fighters and disbanding a squadron of Skyhawks and Aeromacchis26.  Most of these aircraft have been sold off. Today, the RNZAF only flies logistic and support operations primarily involved in peacekeeping missions and natural disaster assistance both domestically and internationally.

New Zealand’s Army consists of 4,500 fulltime, and 2.500 part time troops. It is a small force but well equipped professional force. The New Zealand Navy has 4 frigates, 2 ANZAC class from Australia, and 2 MEKO 200 design from Germany, with eight other vessels in service.

New Zealand maintains a â€™credible minimum force’ where defense expenditure has gone down to 1% of GDP.

New Zealand is still a signatory to the ANZUS Treaty. However Anti-Nuclear legislation passed in the New Zealand Parliament by the Lange Government in 1986 banning nuclear ships from New Zealand ports made the US withdraw its obligations to New Zealand, where ANZUS military exercises are now only bilateral between Australia and the United States. New Zealand retains a close bilateral military relationship with Australia. Nevertheless, the relationship between New Zealand and the US is still close where, where Condoleezza Rice upon her visit to new Zealand called New Zealand “a friend and ally27.

Experience has shown that the â€™credible minimum force’ option has limitations, and New Zealand is undergoing a major defense equipment upgrade. In an ideal world, this would be a good option, however Australia is in a different geographical location, where a major threat could very quickly emerge in a neighboring country where a hostile government emerges through throwing out a friendly government to Australia through a coup.

Conclusion - “How far will the US alliance influence Australia’s strategic defense policy?”

The coming Defense White Paper is certainly the most important strategic assessment that Australia has needed to make. With the massive shifts in the strategic environment , it will be interesting to see if there is any major reconfiguration in Australia’s policy to engage the region, especially in relation to China, the US, and Indonesia.

The odds are from the leaks that fiscal conditions have limited the scope of thinking and response, particularly in a policy area that has little public interest in an election year. Bipartisan political support will be very difficult to achieve with a political opposition looking for issues to attack the government on, although if there is a change of government in September there would probably be very little policy change anyway. 

The paper will most probably be a paradoxical one reiterating the importance of the US alliance, while financially making a strategic withdraw, a scenario that would receive lukewarm support in Washington. The question here is how Australia will handle the future US alliance? Will the Australian Government announce they will seek to update it in line with the evolving regional scenarios and seek the US to pursue a cooperative rather than strategically competitive relationship with China, or will there be a reliance upon the US to determine the strategic direction?.

How China receives the white paper will greatly depend upon how the above questions are answered.  The rhetoric must not be about seeking primacy in Asia via the US alliance, but rather about seeking a sharing and respect for the legitimate right of China to share power in the region. If the concept of strategic competition is changed to strategic cooperation, the Australian policy may garner respect in the region.

The White Paper may pick up on some to the third option and seek an integrated Asian region, utilizing a greater emphasis on a diplomatic and â€™soft power’ approach. However Indonesia has already taken this â€™middle ground’ and it would remain to be seen whether Canberra could work with Indonesia, not necessarily as the innovator, in these initiatives.  This may not be easy for diplomats in Canberra to do, which leads onto Australia’s whole outlook through diplomacy.

Australia’s biggest challenge internationally will be its diplomacy, which has declined in effectiveness throughout the Asian region since its peak in the Keating-Evans days in the 1990s28. The Australian Department of Foreign Affairs and trade (DFAT) must first admit how poor diplomatic relationships really  are in Asia.

Finally, although the White paper will no doubt pick up on Cyber warfare, and terrorism in general, it is likely to be silent on a battleground very rarely spoken about – the war for control of corporate and resource assets. The problem here is no one is really sure whether foreign control of Australia’s assets are a good thing or not. There needs to be a national debate on this issue. This is where a real battle is going on and the China, the US, and Singapore are well advanced in playing this out29.

How the defense Tai Pans frame the 2013 defense white paper will determine whether Australialooks at the Asia-pacific region with a sense of fantasy or reality.

1 Stevens, D., Sears, J., Goldrick, J., Cooper, A., Jones, P., Spurling, K., (2001), In: Stevens, D., (Ed.), The Royal Australian Navy, The Australian Centenary History of Defense (Vol 3.), South Melbourne, Oxford University Press, P. 227.

2 The HMAS Melbourne was eventually sold to China for scrap. It was closely examined with many of the flight deck designs and steam catapult reversed engineered by the Chinese. Reports claim the opportunity to examine HMAS Melbourne made a large contribution to the development of Chinese aircraft carrier program. See: Story, I., & Ji, Y., (2004), China’s Aircraft carrier ambitions: seeking truth from rumors, Navel War College Review, Vol. 57, No. 1, pp. 77-93.

3 See: Hunter, M., (2012), Australia in the “Asian Century” or is it lost in Asia? China & US: Australian Dilemma, The 4th Media, November 4,

4 John Howard in his autobiography “Lazarus Rising” mentions former Prime Minister Sir Robert Menzies no less than 30 times.

5 Uren, D., & Rout, M., (2013), White Paper Backs Defence Cuts, The Australian, February 11,

6 Dawson, A., (2013), No useable oil in disputed areas: US, Bangkok Post, April 7,

7 Ramzy, A., (2012), China Announces 11.2% Increase in Military Spending, Time World, March 5,

8 Apps, P., (2011), East-West military gap rapidly shrinking, Reuters, March 8,

9 Kenny, M., (2013), Gillard Lands a big One with China Deal, The Age, April 10,

10 beaumont, J., (1996), Australia’s War: Asia and the PacificIn: Beaumont, J., (Ed.), Australia’s War, Sydney, Allen & Unwin.

11 Burkitt, L., (2011), China’s Big Threat? The U.S., The Wall Street Journal, January 17,

12 Ng. T., (2013), Xi Jingping call on navy to be prepared for struggle, South China Morning Post, April 12,

13 Blanchard, B., & Stewart, P., (2011), China Protests U.S. Spy Flights Near Its Coast, Reuters, July 27,

14 Reed, J., (2011), China’s Military Tech 20 Years Behind U.S.,, Defensetech, June 8,

15 See:

16 Manurung, N., (2013), Ghost of Suharto Seen in Boomtowns Leading Indonesia Growth, Bloomberg, April 11,

17 Gartrell, A., (2010), Gillard to visit Indonesia, The Sydney Morning Herald, October 20,

18 Farrell, J., (2000), Peace Makers: INTERFETs Liberation of East Timor, Rocklea, QLD, Fullbore, pp. 56-57.

19 Speech by President Susilo Bambang Yudhoyono to a joint sitting of the Australian Parliament, Canberra, Australia, 10th march 2010,

20 Keating Lashes Aust Approach to Indonesia, AM, November 15, 2012,

21 Siregar, A., O., (2013), A new attitude in Indonesian diplomacy, The Jakarta Post, March 28,

22 Nelson, B., (2013), Amid US-China Competition, What are Indonesia’s Strategic Options?, Jakarta Globe, April 2,

23 See: Hugh White, Public Lecture at The Australian National University, “Abandon the Alliance? How China’s rise will shape Australia’s future, 22nd July 2010,

24 Hunter, M., (2012), Australia in “Asian Century” or is it lost in Asia?

25 History of ANU,

26 Review of the Options for an Air Combat capability, The New Zealand Ministry of Defence, 2001,

27 Condoleezza Rice in NZ, Scoop Independent News, 26th July 2008,

28 Gareth Evans as Foreign Minister under the Keating Prime Ministership played a role in creating the Chemical Weapons Convention and Asia Pacific Economic Cooperation (APEC). He developed a UN peace plan for Cambodia, and negotiated the Timor Gap Treaty with Indonesia,

29 See: Hunter, M., (2013), Who Really rules Australia?: A tragic tale of the Australian people, Eurasiareview, March 26,, Hunter, M., (2013), Who Rules Singapore? The only true mercantile state in the world, Eurasiareview,March 24,

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