Labor sidesteps Trump’s polarising for a new engagement with Asia – October 2017
Chris Bowen’s thoughtful speech to the Asia Society in Sydney on 29 September has helped start an important policy discussion about the future shape of Australia’s engagement with Asia.
The speech examined in detail how a Labor Government would increase Australia’s engagement and how that engagement can be broadened beyond engagement with China, particularly as China’s growth slows as it comes off its current high growth investment trajectory.
The future engagement strategy emphatically does not involve turning away from China, with the Labor shadow treasurer proposing constructive cooperation with China’s ‘One Belt, One Road’ initiative through joint ventures involving Australia’s Northern Australia Infrastructure Facility, a marked contrast to the Turnbull Government’s tentative and uncertain response to the One Belt, One Road plan and its apparent desire to use the NAIF for political pork barrelling and propping up coal developments which financial markets are unwilling to fund.
Bowen’s speech punctured some of Australia’s self-satisfied myths about the extent of its engagement with Asia. “We sell a lot of raw materials to China so we tell ourselves that we are doing something right,” he noted. “Whilst Indonesia, one of our closest neighbours and on track to become the fourth largest economy in the world, is not in our top ten trading partners.
“At the same time, Australia has more foreign direct investment in New Zealand than in China, Japan, ASEAN and India combined. And our level of investment in countries like Thailand and Indonesia is, frankly, embarrassing.
“Now, don’t get me wrong. None of this is to say there aren’t positive things happening. There are good Federal and state government programs. There is good work being done by organisations like the Asia Society and AsiaLink, as well as international chambers of commerce.
“But my point is we need much more, in a more co-ordinated national fashion.”
Mr Bowen outlined a wide-ranging new policy for engagement with Asia, moving away from “gradualism” to whole-of-government economic engagement with Asia.
The policy, which Labor has branded ‘FutureAsia’ placed significant emphasis on encouraging Asian literacy among Australians, both at a school and professional level, fostering deeper understanding between Australia and the Asian region.
He said that a Shorten Labor Government would be open-minded in assessing, on a case-by-case basis, how Australia and China could best collaborate on the Belt and Road Initiative.
A Labor government would recommit to the ‘Australia in the Asian Century’ White Paper policy aim to provide every Australia student with the chance to study an Asian language – a project to be pursued through the Council of Australian Governments. A Labor government would also:
- seek meetings between Asia-Pacific finance ministers in advance of each G20 finance ministers meetings;
- establish annual meetings between Australian and Indonesian finance and trade ministers; and
- provide $3 million to collaborate with the Australian Institute of Company Directors on a pilot program to mentor Asian-capable potential company directors to facilitate more Australians with Asian business experience attaining board directorships;
- restore $1.5 million in funding cut from the Asian Education Foundation, promoting Asian studies in Australian schools; and
· pursue the establishment of an Australia-ASEAN studies centre, comparable to those in the US, Japan and Korea.
(For more details see Labor outlines ‘Asian engagement’ agenda).
The speech was interesting as it came from Labor’s putative Treasurer rather than its would-be foreign or trade ministers, suggesting that the recast Asia push will be an important element of Labor’s economic strategy if it wins Government.
Mr Bowen says he as treasurer would report annually to parliament on the progress of FutureAsia policy implementation and economic engagement.
However Mr Bowen’s speech also made extensive acknowledgement of the work being undertaken by Labor’s foreign affairs and trade shadows (Penny Wong and Jason Clare) and other shadows in developing a strategy for greater economic engagement with Asia.
In the week after the Shadow Treasurer’s speech Penny Wong delivered another important speech on engagement with Asia in Perth, where she developed the theme of engaging across the Indian Ocean and the importance of increased engagement with India.
Both Bowen and Wong commented that the Reserve Bank has noted that Chinese growth is shifting away from investment goods which have driven Chinese demand for Australian resource exports and that future Australian economic engagement with Asia will need to shift towards services and engagement with the rest of Asia.
On the Lowy Institute website The Australian Financial Review’s former deputy editor and sometime China correspondent Greg Earl wrote, “Indeed, the notable thing about the actual policy commitments in FutureAsia so far is the level of attention to Southeast Asia rather than China. This is actually very much in line with the government's own beyond China focus, with a Southeast Asian leaders’ summit next March and then a new Indian economic engagement strategy.”
The speech attracted positive responses from sections of the business community and commentators including former Prime Minister’s department head and now progressive commentator John Menadue; and some predictable criticism from conservative commentators for its failure to frame the entire argument about increased engagement with Asia within the current national security and strategic framework.
The Australian’s foreign affairs commentator Greg Sheridan wrote derisively that “Bowen offers the scintillating insight that Australia should engage more with Asia. Wow! There’s a breathless revelation. But he includes not one speck of the complexity the subject demands nor does he make one serious recommendation. Instead the speech is almost a museum piece of tired tropes trotted out regularly but meaninglessly over the past 30 years and more.”
He said, “The whole of Bowen’s speech is pitched at a level of such irredeemable banality that if anyone in the region should read it, they will conclude that Australian politicians really do know as little of Asia as Bowen claims.”
Earlier The Australian reported that “A push by Labor to engage directly with Beijing’s “One Belt, One Road” strategy by signing up to joint infrastructure projects in Australia’s north has been branded as a “bizarre” move that ignores national security issues and would deepen Australia’s dependence on China.”
The same report said, “Peter Jennings, executive director of the Australian Strategic Policy Institute, said such a speech by Mr Bowen even in 2013 would have been regarded as ‘strange’ in thinking only about economic opportunities, and not strategic downsides. ‘For it to be delivered in late 2017 is just bizarre,’ he said. “’Here we have a speech that does not mention North Korea, the word nuclear, the word missile, or the South China Sea.’”
Elsewhere the response was more positive. John Menadue described it as “the most encouraging news I have read on this subject for many years.”
He wrote, “Chris Bowen has set out a very encouraging agenda, but as he acknowledges, we have a lot of ground to make up. In his speech, he told us that we have been on ‘cruise control’ in Asia for too long and that we give ‘lip service’ to our role in Asia.
“We all need to acknowledge the opportunities that we have lost over three decades since the Garnaut Report in 1989 on ‘Australia and the Northeast Asian Ascendancy’.
In The Australian Financial Review Laura Tingle wrote, “Some of these efforts have been dismissed by some as just more of past Labor policies; the reheating of old rhetoric, or even old policy.
“But it should be seen as something more significant amid the tumultuous international backdrop of this year, splattered at one end by Donald Trump and at the other by North Korea.
She argued, “For it is striking in the major speeches about Asia that Labor frontbenchers have been giving is there is virtually no mention of the United States Alliance, nor, for that matter, the strategic questions involving China.
“Donald Trump has liberated our foreign policy debate from the seeming constraints of an over-simplistic binary choice between China and our long-standing alliance, and into space that allows a clearer assessment of national interests.
“This is particularly important for Labor which, so often over the years, has felt it necessary to overcompensate in its language about the US Alliance, in the same way it has so often felt it had to run twice as fast to establish its economic credentials.
“Labor's reshaped and upgraded focus on the region also comes at a time when the economic dynamics of the region are changing, even if this is being obscured by the strategic developments in North Asia.”
She also wrote, “Bowen is right that there are so many aspects of our economic relations with the broader region that are shockingly non-existent.
“He pointed out, for example, that while there are regular meetings between Australia and Indonesia's military and security ministers, there is no such dialogue between ministers responsible for finance and investment (something he would seek to change in government).
“Equally, more Australian school students studied Bahasa Indonesia in 1972 than do today, he observed.
“Labor's policy pitch – as it has been in the past – will be for greater investment in Asian languages in schools, and in greater Asian business literacy in Australia's boardrooms.”
The program outlined by Bowen and Wong is “not exactly populist policies, or likely to set an election campaign alight. But they are significant. And it is a bit mystifying that the government reflexively slags them off,” she wrote.
On the Lowy Institute website Greg Earl wrote, “Labor is going back to the future with a distinctly economic determinist approach to future engagement with Asia, at a time when the region's economic 'miracle' is facing some of the greatest security challenges in a generation.
“Shadow Treasurer Chris Bowen has underlined the 'butter before guns' approach of the Opposition's new FutureAsia policy by declaring that a Labor treasurer would deliver an annual stocktake on the region, rather than the prime minister or foreign minister, for example.”
He argued that “while Bowen seemed to exert control over the policy direction at the Asia Society last week, the intellectual core was better expressed by the putative future Foreign Minister Penny Wong in a speech to the Australian National University in August. There she declared: ‘The emergence of geo-economic power as an alternative to geo-strategic power rather than its complement challenges traditional mindsets and traditional ways of doing business. Comfortable assumptions that military strength constrains global ambition are challenged by the way in which economic power is being focused and organised.
“In Bowen's punchier style, that translates as: ‘This is not just about Australia exploiting our near neighbours for our own economic gain by selling them more stuff. It's also about deeper engagement to deal with the economic challenges and opportunities of our region together with our neighbours, for mutual benefit.”
He argued, “And if this sounds like Julia Gillard's Australia in the Asian Century white paper redux, that is largely right – minus some of the sunnier rhetoric. It's also, let's not forget, the way Prime Minister Malcolm Turnbull used to talk about the Asian engagement opportunities before elevation to higher office introduced him to cyber security and terrorism.
In an interesting insight into the evolution of a policymaker, Bowen revealed his plan for annual formal finance and trade minister talks with Indonesia was inspired by seeing in a previous life how closely defence and security officials from the two countries could work together on difficult issues. Bowen, of course, had the difficult job of managing refugee boat arrivals from Indonesia in the Gillard years.
“But this inspiration only highlights the question of whether strategic trust and stability between countries such as Australia and Indonesia is necessary before the dollars can flow.
Bowen's speech has also drawn some excessive criticism in relation to China's Belt and Road Initiative (BRI), simply because he broached the idea of some cooperation with the Northern Australian Infrastructure Fund – without any specific commitments to China. This tentative opening to the Chinese infrastructure initiative hardly seems radical, when this Cato Institute policy brief is telling US President Donald Trump to welcome signs that China is playing a serious role in global economic policy.”