Fiji’s Prime Minister Frank Bainimarama put it bluntly at the weekend when he tweeted that “Fiji is not anyone’s backyard”, a direct reference to the lazy and colonialist shorthand too often used by Australian leaders, including former prime minister Scott Morrison, to describe the Asia-Pacific region.
He was speaking after a “wonderful” meeting with Foreign Affairs Minister Penny Wong, and added: “Our greatest concern isn’t geopolitics — it’s climate change.”
For decades, Australia’s attitude to the Asia-Pacific has been far too much about us and what we want. Paternalistic in nature, it has largely overlooked countries’ differing needs, views and wants. This has been exacerbated by problematic and outmoded bureaucratic structures and practices in the Department of Foreign Affairs and Trade.
Wong, Prime Minister Anthony Albanese and other senior cabinet ministers have a significant opportunity that can set Australia up for a more productive future in the region if they can affect real change in attitudes and practices among Canberra’s well-paid diplomatic and trade elites.
Australia’s attitudes towards our neighbours extend to both strategic and economic ties — and of course the two are linked. South-East Asian countries do not generally see strategic positions with major powers as a binary choice between the US and China — as Australia does at present. Russia and India are in the mix too along with — particularly on the economic front — Japan and South Korea.
Our neighbours, as well as Asian countries farther afield, see and live in a multipolar world, reflected in varying attitudes to the Russia/Ukraine conflict, as a case in point. Indonesia has emphasised neutrality, Vietnam has long held close ties to Russia — as its own China buffer — and others have tried to say as little as possible about the war. Singapore, the only First World country in the Association of Southeast Asian Nations (ASEAN), has joined European countries and Australia.
Wealthy Australia, obsessed with geopolitics, fails to grasp that the bottom line for these developing countries is their economies. They want to improve the standard of living for their citizens and develop industries and business skills. Whether we like it or not, China will continue to be in that mix for most countries. It’s in that context that Australia’s recent megaphone diplomacy with one of the region’s biggest investors has not gone unnoticed.
Instead of railing against China or Russia at the upcoming G2O meeting in Jakarta this November, Australia should focus on what we can do rather than say. Economic success for our neighbours should be an explicit and central tenet of our foreign policy. The building blocks are there in the shape of a string of free trade agreements with Thailand, Malaysia, Singapore, Indonesia, Vietnam and ASEAN (along with New Zealand). Then there is the 15-nation Regional Comprehensive Economic Partnership (RECP) that took effect on January 1 but whose inclusion of China is increasingly problematic, for Australia at least.
Australia has long seen the region as an opportunity to make money. Australian companies have been peripatetic in their South-East Asian investments, making good progress and then abruptly pulling out when new CEOs decided to change strategy. Prime examples are ANZ and Commonwealth Bank, which worked hard to build their businesses in the region, only to later desert it. This reflects badly on Australian businesses generally — a fair-weather friend when it comes to developing Asia’s business capitals.
This is borne out by the lack of Australian investment in South-East Asian nations. Not one ASEAN country makes the top 20 list of investee nations, a list that includes tax havens Caymans Islands, Bermuda, Ireland and Luxembourg. This is despite Singapore, Malaysia and Thailand being in our top 10 trade partners. Still, Australia’s two-way trade with South-East Asia in 2020 was $125 billion, less than that with Europe ($127 billion) and on a population basis far lower than with Japan ($88 billion).
For all the headline free trade agreements and regional trade groupings, Australian trade and investment policy remains confused and badly structured. Austrade remains something of a laggard among its global peers, particularly its mimicking of diplomatic policy by rotating its officers from country to country every three to four years — the time it takes them to create their own network and gain a deeper understanding of local practices and conditions.
And there is long-term tension between the Foreign Affairs division and its trade policy group that works up free trade agreements and Austrade.
Australian chambers of commerce in Asian cities — vital for people on the ground doing business — are too often glorified social clubs. Some fault lies with Canberra that, unlike most Western governments, has a hands-off attitude to funding such organisations that work more effectively when properly funded and knitted into government policy in the way the US and most European countries do.
Many seasoned observers say the Australian government needs to work more closely with business and Asian governments on genuine joint ventures that will lock in success for both sides and deep, lasting relationships. This would require significant cultural change from Canberra, but Japan and its fast follower South Korea have shown the way forward.
Japan is the largest infrastructure investor in the region — it had US$259 billion invested in unfinished projects in Indonesia, Malaysia, the Philippines, Thailand and Vietnam — compared with China’s US$157 billion. With other industrial countries, it has leveraged and helped build the manufacturing base in places like Thailand, Malaysia, Vietnam and Indonesia.
It’s not just North Asian nations but also the US and many European countries led by France, Germany and Italy that understand the business/government nexus better than Australia.
Such investments breed more friendly strategic conversations and relationships and are in Australia’s best interests. A tweet yesterday from Treasurer Jim Chalmers was encouraging, saying his first international call as treasurer was to Jakarta “about the important friendship and shared economic interests between our two countries”.
A good start, but actions speak louder than words.
