Less Geneva, More Jakarta? Assessing Australia’s Asia Pivot

The history of Australia’s engagement with Asia is littered with debates about identity and destiny. Settled in 1788 as a British colonial outpost, Australia’s federation did little to alleviate anxiety about being a European entity situated in an Asian region. The first legislation passed by the Australian Parliament—the Immigration Restriction Act—entrenched what became known as “the White Australia Policy,” which made it all but impossible for Asians to settle in Australia. Inhabiting a sparsely populated large landmass a long way from Britain, the dominant narrative for Australians was that Asia posed a threat, both in terms of usurping Australia’s claims to racial homogeneity, but also in strategic terms whereby “wide brown lands” were regarded as a particularly attractive target for external powers.

From the outset, Australia felt vulnerable in relation to Asia. Yet, many Australians also saw Asia as a region of limitless opportunity. As one recent account has noted, “Australia’s enthusiasm for Asia is as old as its anxiety.”¹ This enthusiasm revolved largely around commercial opportunities, but it also related to a genuine fascination with Asian culture and society among Australia’s more cosmopolitan elites. Indeed, a notable feature of Australia’s engagement with China in the nineteenth century was the high proportion of Australians traveling to live in China. Just as many Australians sought to resist Asia as a geographical reality, many others embraced the region and believed that Australia’s geography was essentially its destiny.

The formal abolition of the White Australia Policy in the early 1970s was a critical first step in Australia jettisoning its historical baggage in Asia. This occurred at the same time multiculturalism was embraced as a domestic policy by the Whitlam Labor government (which came to office in 1972) in tandem with an effort to align Australian foreign policy with the aspirations of countries in the developing world. Serious steps had been taken in the 1950s and 1960s to develop closer ties with Asian countries, but it was not until the Whitlam government came to power that serious efforts were made to integrate Australia into the region. Formal recognition of the PRC, acceptance of Australia as the first official Dialogue Partner for ASEAN, and greater advocacy of regional interests on the part of Australia in global institutions including the United Nations, all formed part of the strategy.

It was around this time that the notion of “Asian engagement” became a hallmark of Australian foreign policy, with successive governments appreciating that the onus was on Australia to reach out to the region to become more deeply integrated in an economic and political sense. Leverage by successive governments of Australia’s increasing clout as an influential middle power underpinned the country’s approach to Asia-Pacific engagement throughout the 1980s and 1990s.²

This was not motivated simply by an abstract attempt to make up for lost historical ground; far more important was a hard-nosed pragmatic set of considerations. Foremost among these was that Australia’s economic interests were increasingly located in Asia. In the 1960s, Japan had overtaken Britain as its most important trading partner. By the 1970s, it had become clear to policy makers that Britain was looking to Europe for its economic future. The high degree of complementarity between the Australian and Japanese economies—Japan’s growth demanded raw materials and commodities, and Australia possessed these in abundance—underpinned a bilateral relationship that went from strength-to-strength. This included deepening cultural and political relations as enshrined in the landmark 1976 Nara Treaty.³ The view increasingly among policy makers in the 1970s was that while Australia’s security alliance with the United States provided the foundation of strategic policy, economic growth in Asia would fuel demand for Australian exports and investment into the future. Japan was central to this calculation, but even as early as the mid-1970s some Australian analysts were forecasting that China could overtake Japan as the region’s biggest economy by the turn of the century.⁴ These predictions did not gain much traction among the policy establishment in Canberra, but they did speak to a growing optimism about Asia’s central place in Australia’s future.

The second driver of Australia’s increasingly pro-active foreign policy in Asia at this time was awareness among policy makers of the need to cultivate a stable regional security environment in the long term. This became especially apparent in the wake of US defeat in Vietnam, with anxiety among some of America’s Asian allies that it might pull back from the region as a result. The Fraser and Hawke governments worked hard to maintain strong US engagement in Asia, but they also strove to improve bilateral relations with countries towards which Australia had historically felt some hostility. Jakarta and Beijing were especially emphasized. This manifested itself in Australia formally accepting Indonesia’s 1975 annexation of East Timor and siding more openly with China against the Soviet Union. Despite private misgivings, governments exhibited growing enthusiasm for regional architecture—Australia led the negotiation of the 1986 South Pacific Nuclear Free Zone Treaty—, but were careful to balance this with US sensitivities about multilateral security institutions in Asia.

By the 1990s, the idea of Australia as “an Asian engaged country” was generally accepted in the nation’s foreign and domestic policy discourse. Indeed, despite expressing its discomfort with the Keating government’s rhetoric about Australia’s place in Asia, the conservative Howard government (1996-2007) oversaw a period that witnessed deeper regional engagement—measured across economic, political, and security indices—than at any point in the country’s history.⁵ The meteoric rise of the economic relationship with China was crucial to this trajectory. In 1980, China accounted for a paltry 3 percent of Australia’s total export volume. By 2007, nearly one quarter of its exports were heading for China every year, and that year China overtook Japan for the first time as Australia’s largest trading partner.⁶ While still important to Australia’s economic growth and wellbeing, the Japanese economic relationship was complemented increasingly by China’s massive growth and by the rise of South Korea, which today is Australia’s fourth largest trading partner behind also the United States. More than half of Australia’s exports are destined for Northeast Asia alone.

The Asia “Pivot”…Down Under

The Obama administration’s announcement of a “pivot” (back) to Asia in 2010 occurred in a context where many US allies in the region perceived that Washington had become excessively preoccupied with the Middle East at the expense of US engagement in the Asia-Pacific. This perception was reinforced by the view that China had made significant inroads diplomatically, particularly in Southeast Asia, during a period when the Bush and early Obama administrations appeared detached from day-to-day developments in the region. This was acknowledged by Secretary of State Hillary Clinton in an influential article published in October 2011, where she conceded that: “In Asia, they ask whether we are really there to stay, whether we are likely to be distracted by events elsewhere, whether we can make—and keep—credible economic and strategic commitments, and whether we can back those commitments with action.”⁷ This was reinforced by Obama’s speech to Australia’s Parliament in November 2011, where he outlined the thrust of the pivot; deepening the commitment to economic and political relationships in the region as well as reassuring allies that the United States would fulfil its security commitments into the future. A key feature of the speech was the announcement that 2,000 Marine Corps personnel would be rotated through Australia’s northern port city of Darwin as part of a closer bilateral defense relationship.⁸

While attention has been devoted to analyzing the consequences of the US pivot or rebalance to Asia, Australia has sought to define something of its own regional pivot in recent times. One month before Hillary Clinton’s Foreign Policy article in September 2011, Prime Minister Julia Gillard announced the commissioning of a White Paper on “Australia and the Asian Century,” whose focus would be “on opportunities to increase the economic and other net benefits to Australia from the global, economic and strategic shift to Asia, in the short, medium and long term.”⁹ The government was motivated in large part by the perception that it needed to burnish its foreign policy credentials, particularly those of the prime minister, who was aware that her predecessor and leadership rival Kevin Rudd’s recognized strengths were in this domain. The final report, released in October 2012, painted a linear path of economic growth for the region and argued that Australia could exert considerable influence as a middle power to achieve core economic and political goals.¹⁰ A major shortcoming of the report, however, was its refusal to engage seriously with the question of additional resources required to enhance diplomatic reach in an era where the budget of Australia’s foreign ministry was dropping, Asian literacy in schools had stalled, and defense spending was declining in real terms.¹¹

For the Abbott coalition government which came to power in September 2013, one of the standout slogans of its electoral campaign was Australia needed “less Geneva and more Jakarta.”¹² International observers may have found this a strange slogan given the previous government’s attempt to reboot Australia’s Asian engagement. Like many election slogans, however, this was carefully designed to denigrate political opponents while promising real change if elected, conveying the message that the Rudd-Gillard governments had overinvested valuable diplomatic resources in international organisations and underinvested in the Asia-Pacific region. This had dovetailed with an argument that the Labor government had lost sight of Australia’s economic and strategic priorities in its own region in pursuit of more abstract recognition on the world diplomatic stage. Australia’s victory in October 2012 in securing a two-year, non-permanent seat on the UN Security Council had met with an ambivalent response from then opposition leader Tony Abbott and his foreign affairs spokesperson, Julie Bishop. Abbott and Bishop had been critical of the extent to which Australia had feted African countries in particular with large-scale aid and investment commitments during the Security Council campaign. Ironically, although the Abbott government would quietly shelve the “Australian in the Asian Century” White Paper on coming to power in September 2013, Julie Bishop had echoed the report’s central theme of economic engagement three months previously: “Our foreign policy assets—military, defense, economic, trade, diplomatic and foreign aid—will be focused not exclusively but unambiguously on our region, and our focus will be on economic diplomacy.”¹³

Along with Japan, China and Indonesia are the most important countries in Asia for Australia for economic ties and security considerations. These are the “Big Three” Asian countries that Australia puts most of its efforts into engaging bilaterally. The Australian embassy in Jakarta has become the country’s single biggest overseas post. While India continues to grow in significance to Australia, and notwithstanding occasional references to the “Indo-Pacific,” economic and strategic ties with India remain limited. Australia still plays an active role in multilateral institutions—APEC and ASEAN are the standouts—, but increasingly the focus has been on bilateral relations, as the G20 has tended to overshadow the role of APEC and ASEAN’s appetite for driving regional security and economic reform has dissipated. Indeed, Australia’s more recent track record in attempting to lead region-wide multilateral initiatives has been mixed. Kevin Rudd’s endeavor in 2008 to create an Asia-Pacific Security Cooperation mechanism quickly foundered, not least because of a perception among ASEAN states that Australia was not qualified to lead such a region-wide initiative. The preference for bilateralism over multilateralism in dealing with the region has traditionally been stronger under coalition governments, and the Abbott government is no exception.¹⁴ In office for one-and-a-half years, it has encountered mixed success in its efforts to reboot Australia’s engagement with Asia. This can be appreciated by examining bilateral relationships with each of the “Big Three.”

China

Since formalizing their diplomatic relationship in the early 1970s, Australia and the PRC have established wide-ranging connections across political, economic, and strategic domains. In 2007, China overtook Japan as Australia’s largest trading partner, reflecting unprecedented Chinese demand for iron ore and coal to power economic growth. In 2013, Australia and China signed a “Strategic Partnership” agreement, vaunted by the Gillard government as a watershed in the relationship. While it did not constitute a security agreement, for supporters of closer ties it represented a major step forward.¹⁵ The 2013 initiative seemed to confirm a strong link between a close economic relationship with China and the prospect of developing a closer security relationship, strengthening the argument of those who believe that Australia cannot have continuing strong economic ties with China without developing a more intimate political and strategic relationship. This maps closely to the belief that Australia must do all it can to accommodate China’s rise as a great power in Asia, including seeking to persuade the United States to negotiate a power sharing arrangement with Beijing to avoid conflict.¹⁶

The Abbott government inherited an Australia-China relationship characterised by increasing engagement on non-economic issues, but one still largely defined by Chinese demand for Australian natural resources. Senior Abbott government ministers appeared to believe that it is possible to quarantine the economic side of the relationship from the political side. The political relationship, however, took a major hit shortly after Abbott entered office. Beijing’s declaration in November 2013 of an Air Defense Identification Zone (ADIZ) in the East China Sea provoked major unease among regional states, and led the United States to immediately challenge the zone by flying two B-52s through it without first informing Beijing.¹⁷ While Australia was not directly affected, the Abbott government quickly condemned the decision and publically called in the Chinese ambassador in Canberra to make its views known. Beijing’s response to this was swift and to the point: it saw no reason why Australia was interfering in an issue that was none of its business. Australia had, in the words of Foreign Minister Wang Yi, “jeopardised bilateral mutual trust and affected the sound growth of bilateral relations.”¹⁸ China’s stern reaction may have also been linked to the strong signals that the Abbott government had decided to tilt towards Japan in the incendiary Senkaku/Diaoyu Islands dispute. As Linda Jakobson points out, this was undoubtedly not helped in Beijing’s eyes by Abbott’s reference to Japan as an “ally” in his justification of Australia’s position on the ADIZ declaration.¹ These comments had been preceded in October by Abbott’s heartfelt (if ill-advised) observation that “Australia has no better friend in the region than Japan.”²⁰

Despite the Abbott government’s tilt towards Japan in Northeast Asia, relations with China improved markedly in 2014. Australia’s leading role in the search for the missing Malaysia Airliner MH370 (the majority of passengers were from China) elicited genuine expressions of gratitude during Abbott’s visit to Beijing in April. Most significant of all was the conclusion in November 2014 of a landmark FTA with China. This followed the Australia-South Korea FTA, signed earlier in the year, and took place the same month that Australia concluded a bilateral FTA with Japan. The China FTA was particularly significant for the Australian economy. While much of the focus has been on the massive scale of resource exports to China, the FTA was crucial in opening up new markets in major growth areas, including financial services and agriculture. It essentially invalidated the argument that Australia cannot oppose Beijing on political issues in the region and enjoy an intimate economic relationship with China. As James Reilly has argued, as Australia has become increasingly dependent on China economically, successive governments have been successful in strengthening balancing mechanisms against China, including bolstering the bilateral security alliance with the United States.²¹

Indonesia

Historically, Australia-Indonesia relations have gone through peaks and major troughs. At the official level, the two remain close. Indonesia is the single largest target of Australian ODA, many Indonesians study at Australian universities, and the two countries cooperate closely at the diplomatic level. Most recently, Australia and Indonesia joined with South Korea, Turkey, and Mexico to form ‘MIKTA’, a group of self-defined middle powers intent on collaborating in international fora to build a bridge between the developed and developing worlds.²² Yet, the relationship has an edginess to it. Recently, the pending execution of two Australians convicted of drug trafficking into Bali has triggered renewed tensions. Sustained criticism of the Indonesian government and legal system among Australians has featured strongly, and reports of sharp exchanges between the two countries’ foreign ministers underscore the difficulty of containing the fallout from the planned executions.²³ Economic ties between the two countries have also suffered as a consequence.²⁴

While historically elites in both countries have managed to navigate around periodic tensions in the relationship, there is mutual wariness at the grass roots level in Australia and Indonesia, which at times borders on distrust. In part, this can be attributed to the period of high bilateral tensions during the 1960s when Australian and Indonesian military personnel exchanged gunfire over the formation of Malaysia. It can also be attributed to popular caricatures of the other on both sides. Many Indonesians perceive Australia as haughty and inclined to interfere in Indonesia’s internal affairs. Some even believe that Australia harbors a secret desire to divide their country in the long term, and point to East Timor’s transition to independence and the activity of Papuan activists on Australian soil as evidence of this.²⁵ Many Australians see Muslim Indonesia as a potential security threat, with terrorism usually topping the list of perceived threats, and as possessing features that are “alien” to Australia’s predominantly Western culture. Tellingly, public opinion polling regularly demonstrates that views from both sides are characterised by a high degree of ignorance about the other country.²⁶

Almost as soon as it entered office, the Abbott government found serious turbulence due to leaked details that an Australian intelligence agency had spied on President Susilo Bambang Yudhoyono, Indonesia’s first lady, and a number of the president’s cabinet colleagues. For Abbott and his colleagues, this was a legacy issue; the spying had occurred under the Rudd government. Despite an angry public reaction from the Indonesian president the new Australian government was unapologetic, with Abbott stating blandly that the purpose of Australian intelligence activities was “to help our friends and allies, not to harm them.”²⁷ This incident occurred in a context of resentment in Indonesia over the Abbott government’s hard line policy of turning back asylum-seeker boats transiting through Indonesia from arriving on Australian territory, but by the time Abbott and Yudhoyono met in June on the Indonesian island of Batam, they were keen to put the boats issue behind them and confirmed that a joint code of conduct on intelligence activities was being negotiated. By August, this had been signed, and the Abbott government said farewell to Yudhoyono, widely acknowledged as Indonesia’s most pro-Australian president in living memory.²⁸

Japan

Until the conclusion of the Joint Declaration on Security Cooperation (JDSC) in 2007, relations between Japan and Australia had, for most intents and purposes, been one-dimensional. Japan had been Australia’s single largest trading partner since the late 1960s and networks of investment between the two had accelerated during the 1980s and 1990s. In the shadow of a rising China it was easy to forget that Japan remained far and away the single largest Asian investor in Australia and a massive consumer of Australian coal and iron ore in particular. The JDSC represented a watershed in the sense that it signalled a broadening of the relationship during a period when concerns about the strategic implications of China’s rise were getting traction in Tokyo and Canberra. Greater intelligence cooperation, deeper defense ties, and a statement of shared values and worldviews signalled a shift in direction in the relationship.²⁹ The period under Labor from 2007 to 2013, while distinguished by tensions over whaling, nevertheless witnessed continued cooperation on security as well as agreement in 2007 to commence negotiating a bilateral FTA.

The Abbott government signalled a desire for an even closer relationship, and the prime minister’s comments citing Japan as an “ally” and Australia’s “closest friend” in Asia—comments incidentally not reciprocated in Tokyo—confirmed an ambitious agenda. The political timing was seen as auspicious in Canberra, with the return to the prime ministership of Abe Shinzo, who had outlined a vision for a more muscular Japan in the region, including revisiting Article 9 of the constitution. The two leaders established strong personal rapport early in Abbott’s tenure, underlined by reciprocal high profile visits. Abe spoke to the Australian Parliament (Xi Jinping and Yudhoyono were accorded the same honor in 2014), and Abbott was the first foreign leader to attend a meeting of Japan’s newly established National Security Council.³⁰

The headline achievement for the relationship under the Abbott government has been the conclusion of the Japan-Australia Economic Partnership Agreement (JAEPA). This was the third in the troika of FTAs concluded with Australia’s main Asian economic partners and reflected a comprehensive lowering of trade and investment barriers featuring surprisingly positive access to the Japanese markets for Australian agricultural products.³¹ The agreement was accompanied by growing speculation that the Abbott government intended to bypass a competitive tender process for Australia’s next-generation submarine, purchasing Japan’s Soryu class platform to replace the Collins-class fleet.³² It encouraged such speculation by talking up the attractions of the Soryu publically and talking down other options. This included talking down the option of the Australian Submarine Corporation (ASC) building the new submarines. In November 2014, in an extraordinary intervention, the Defense Minister, David Johnston, claimed that “the ASC couldn’t build a canoe.”³³ Yet, by early 2015, the Abbott government had changed its position. Confronting the prospect of being deposed as prime minister in a party room leadership ballot, Abbott reassured his colleagues concerned over potential Australian job losses that the ASC would indeed be part of a tender process. According to informed government sources in Tokyo, Japanese officials felt this was a breach of commitment and took the view that “for Japan to go through a formal selection process and lose—possibly revealing more secrets about its submarines than it wants to—would amount to a loss of face.”³⁴

Conclusion: More Pirouette than Pivot?

When we think of an appropriate metaphor for Australia’s self-declared turn towards Asia under the Abbott government, pirouette is probably more appropriate than pivot. Despite claims by Abbott and Bishop, previous Labor governments were never really distracted from the Asia-Pacific. It is true that Australia’s campaign for a non-permanent seat on the UN Security Council entailed more high profile diplomatic and economic engagement in Africa in particular, but there is little evidence this detracted from Canberra’s ability to achieve policy goals in the Asia-Pacific. Under the Abbott government, Australia has certainly been assertive in the region; the conclusion of separate FTAs with three of its four most important trading partners within fourteen months of coming to office has been a significant achievement. Serious efforts on the part of high-performing Trade Minister Andrew Robb to accelerate FTA negotiations with India may see the conclusion of another FTA before the government’s first term expires in September 2016. Moreover, initiatives like the “New Colombo Plan”—to facilitate combined Australian university student exchanges and work placements in the region—and a clear priority accorded to ODA to the South Pacific have also reinforced the apparent Asia-Pacific turn in Australian foreign policy under Abbott.

However, the track record overall of the Abbott government in the Asia-Pacific has been mixed. In particular, Abbott’s tendency to issue statements that are not well thought through have at times confounded regional interlocutors. The submarine issue with Japan and the reference to Japan as Australia’s “best friend in Asia” alienated both the Chinese and the South Koreans. Recently, Abbott’s somewhat ham-fisted attempt to link Australia’s large ODA program to Indonesia with the fate of two convicted Australian drug traffickers angered many Indonesians at the elite and grass roots level.³⁵ Indeed, Foreign Minister Bishop and Australia’s diplomatic community have been kept busy trouble-shooting in the region on behalf of the prime minister. Australia has won a number of plaudits in the region under the Abbott government—leadership of the ongoing MH370 retrieval operation stands out—, but as always, Australia needs to guard against a tendency to exaggerate its influence in regional capitals, something the Rudd government found out the hard way when its Asia-Pacific Security Cooperation initiative imploded in 2008.

Australia faces an increasingly complex environment in Asia in the years ahead. China’s rise has been far from seamless, and America’s predicted relative decline is nowhere near as straightforward (or inevitable) as some have assumed. The future of Japan’s role in the region remains uncertain, despite growing assertiveness in strategic policy and keenness to engage more closely with like-minded states, including Australia. The Korean Peninsula appears relatively stable for the time being, although North Korea’s nuclear weapons arsenal and capriciousness mean that a future crisis could be just around the corner. Given its mammoth domestic challenges and mixed record in overcoming structural economic inefficiencies, doubts will persist about India’s ability to reach its potential as a great power. For Australia, exploiting market potential rather than any putative strategic partnership with India will be the guiding aim underpinning its approach. In Southeast Asia, while the opening up of Myanmar presents real investment opportunities and Australia’s relations with most other ASEAN states are growing, Indonesia will remain the priority. Maintaining productive relations with Jakarta is arguably the toughest foreign policy challenge confronting Australia. No other bilateral relationship in Australia’s diplomatic portfolio is subject to as many swings and roundabouts. “More Jakarta” in Australian foreign policy is no doubt a good thing, but the Abbott government will need to work hard to ensure that the quality of engagement with it going forward is at least as positive as the quantity.