Danger ahead for Australia as Asia’s long peace ends

The latest volley of North Korean ballistic missiles, one of which flew over northern Japan, has pushed tensions on the Korean peninsula to a perilous tipping point where war is no longer unimaginable. The real prospect of a military conflict between nuclear-armed North Korea and the US and its allies underscores the recent deterioration in Australia’s security environment. It raises the question of whether our foreign policy is calibrated for the challenges ahead in a world that is becoming a far more dangerous and volatile place.

Geopolitics is back with a vengeance after an extended post-Cold War hiatus largely devoid of interstate conflict. According to the Bank of England, geopolitical risk has doubled since 9/11, with the large powers increasingly at loggerheads. US-Russia relations are the worst they have been since the height of the Cold War, highlighted by Russian President Vladimir Putin’s extraordinary July decision to expel 755 US diplomats and technical staff, the largest single mass expulsion of diplomats by Russia or the US.

The early goodwill between US President Donald Trump and China’s Xi Jinping has dissipated as differences re-emerge over North Korea, the South China Sea, Taiwan and trade. On the frigid Doklam plateau adjacent to tiny Bhutan, Chinese and Indian troops engaged in a tense two-month border confrontation that risked triggering a rerun of their 1962 border war with potentially far graver consequences since both states now have nuclear weapons.

What should concern Australian policymakers is that the long peace in Asia is drawing to a precipitate close. The last significant regional conflict was in 1979, when Beijing sent hundreds of thousands of troops across its southern border to “teach Vietnam a lesson” for occupying Cambodia and driving out the murderous China-aligned Khmer Rouge.

In the following three decades, Asia experienced unprecedented prosperity. Regional economies boomed and geopolitical rivalries were muted. To paraphrase China’s former paramount leader Deng Xiaoping, to get rich was not only glorious, it was also infectious. Australia has been a beneficiary, enjoying unparalleled growth on the back of East Asia’s economic ascendancy. Many regarded this lengthy outbreak of peace and stability as the new normal, a signal that the region’s bloody conflicts and fractious past had been consigned to the dustbin of history. However, history’s real lesson is that rising wealth and power eventually lead to increased rivalry, competition and conflict.

Since 2012, regional tensions have ratcheted up as China began to reassert its historical primacy in Asia, the US lost its appetite for global leadership, and the breakdown of the Western international order provided strategic space and opportunities for malevolent, transnational terrorist groups and criminal organisations.

The soon-to-be-released foreign policy white paper must find its way through this difficult terrain to chart a path that best protects our interests and values. To do so, it will have to come to grips with six strategic challenges that are set to disrupt Australia’s once-benign security environment.

1. The escalating danger of North Korea

The biggest challenge is the rapidly worsening crisis on the Korean peninsula illustrated by South Korea’s reported decision this week to occupy Pyongyang, if attacked, and bring down the North Korean regime. This is the most serious threat to global peace since the 1962 Cuban missile crisis because the US and North Korea are nuclear armed. It may be even more dangerous because there were well-established lines of communication between the Ken­nedy White House and Nikita Khrushchev’s Kremlin that, except for one back channel, are notably absent in the confrontation between Washington and Pyongyang. A table-thumping Khrushchev was constrained by more sober colleagues in the Soviet politburo and outmatched in judgment and temperament by a novice US president, John F. Kennedy, who stared down Khrushchev and defused what could have been a nuclear Armageddon.

Capricious and unpredictable, Trump and North Korea Supreme Leader Kim Jong-un are more like Khrushchev than Kennedy. Cool heads are in short supply, which is why most experienced foreign policy observers are pessimistic about a peaceful outcome.

For Australia, the stakes are high. Even a non-nuclear conflict could have devastating economic and security consequences, disrupting trade, sending shock waves through global financial markets and potentially drawing Australia into a second Korean war. Such a war would risk substantial loss of life for our deployed defence forces and the Australian expatriate community in South Korea and Japan.

2. The values gap with an increasingly authoritarian China

China’s relentless rise to regional pre-eminence increasingly challenges our values as well as our interests. Xi’s republic is becoming more authoritarian and illiberal, reversing the previous trend towards greater pluralism. The widening values gap, epitomised by the incarceration and recent death of dissident Nobel laureate Liu Xiaobo, is an issue for Australia because of our large and growing Chinese community and the centrality of China to our future.

Although there are many areas of common agreement and co-operation, and the economic relationship continues to prosper, differences over the South China Sea and North Korea, and concerns about a surge in Chinese espionage and cyber-theft of Australian intellectual property, have affected the relationship.

Public trust has eroded since revelations of Chinese influence-buying in Aus­tralia and the well-documented pressure on Chinese students and the local Chinese language press to toe Beijing’s line. If this values gap widens, it will become progressively more difficult for Australia and China to move beyond the present transactional relationship towards a genuine partnership underpinned by high levels of mutual trust and a congruent world view.

3. The China-India conflict 

The widening rift between China and India, the region’s present and coming major powers, has been poorly covered in the Australian media. The Doklam border stand-off, which has been temporarily defused by Wednesday’s troop pull-back, is symptomatic of a more deep-seated, historical divide between two proud civilisational states that have profoundly shaped the Indo-Pacific’s culture, character, people and trade.

For the first time in many centuries, both are rising at the same time and their growing geopolitical rivalry threatens to overwhelm co-operative impulses. Mirroring Beijing’s claims that the US and its allies are trying to contain China’s power by strategic encirclement, Indian elites use similar terminology to warn about the strategic intent of China’s ambitious Belt and Road initiative.

The construction of port facilities and infrastructure in neighbouring Paki­stan, Sri Lanka and Myanmar, and the unwelcome appearance of the Chinese navy in the Indian Ocean, is particularly confronting for India, which has long seen itself as the dominant power in South Asia.

For Australia, the relationship between the two Asian giants matters a great deal more than during their previous serious confrontation 55 years ago. China is our major trading partner and India has the potential to become a comparable market for Australia. It will be difficult to realise this potential if Sino-Indian rivalry intensifies and further destabilises an already contested region.

Beijing has warned New Delhi not to be drawn into an alliance with the US and Japan. But this is a possibility should relations deter­iorate. Australia then could be faced with a difficult decision. Would we join a reconstituted quad­rilateral alliance of democracies, an idea Kevin Rudd rejected when prime minister for fear of offending China? Or would we pri­oritise our relationship with China and remain at arm’s length from an attempt to quadrilateralise our defence and security co-opera­tion with the US, Japan and India?

4. Uncertainty about the direction of US foreign policy 

This is the most unexpected and consequential for Australia because it concerns the direction of US foreign policy under Trump.

The Australian National Uni­ver­sity’s College of Asia and the Pacific dean, Michael Wesley, identified the core conundrum in an interview with editor-at-large Paul Kelly (Inquirer, July 15-16). Wesley asked: “Does Trump represent an aberration that will be corrected in four or eight years, or does he represent a long-term shift away from liberal internationalism in US foreign policy?”

The problem is we still don’t know what kind of foreign policy president Trump will be and to what extent we may need to reconsider assumptions about US leadership, strength of purpose and commitment to the alli­ance. If a significant trust deficit emerges it will be difficult to sustain public support for an alliance Mal­colm Turnbull has characterised as “the bedrock” of our security.

There are also concerns US military superiority is being steadily eroded by China, Russia, smaller regional powers and the democratisation of lethal weapons that were once the preserve of the big powers. North Korea’s surprisingly rapid nuclear weapons progress is one example. Another is the use of cyber weapons, drones and sophisticated improvised explosive devices by terrorist groups. Congressional restrictions on defence spending have contributed to a steady deterioration of combat capability and readiness in all three services of the US military, particularly the air force.

5. The Islamic State insurgency in The Philippines 

The sudden eruption of an Islamic State-inspired insurgency in the Philippines city of Marawi has been labelled “the most significant extreme Islamist event in Southeast Asia since the 2002 Bali bombing” by prominent Southeast Asia scholar Greg Fealy.

So far, more than 800 people have died in the conflict, including 603 militants and 130 government soldiers. The insurgency is more dangerous than anything yet seen, the fear is that it could spread to other Southeast Asian countries, forming a crescent of instability to Australia’s north stretching from the southern Philippines through Indonesia to Malaysia, southern Thailand and Myanmar’s Rak­hine State where a new Islamist threat is emerging.

Better armed, co-ordinated and funded than the Muslim separatist groups that have long waged war against the central government in Manila, the Marawi militants have been able to hold out for more than three months against the army, underlining the strategic nature of the threat they represent.

To contain and defeat them will require a well-funded and cohesive regional strategy, which is clearly in Australia’s interests to support. The last thing we want to see is the southern Philippines becoming a magnet for returning foreign fighters from the Middle East and fresh recruits from Australia and Southeast Asia.

6. Increasing volatility in unregulated migration, climate change and cyber crime 

There is a raft of transnational, non-military challenges that have the potential to destabilise the region and reverse decades of hard-won economic and social pro­gress. They include unregulated migration; pandemic diseases; food, water and energy insecurity; climate change; and the activities of sophisticated transnational criminal organisations whose activities traverse the grey area between law and order and international security.

Examples abound. German Chancellor Angela Merkel’s decision to allow millions of asylum-seekers into Europe has accentu­ated the continent’s divisions and morphed into a foreign policy crisis for the EU. Climate change is a threat multiplier with the potential to recast the strategic as well as the physical environment. The use of cyber weapons by criminals, terrorists and nation-states to steal intellectual property, compromise state secrets and attack critical infrastructure are already serious national security and foreign policy problems.

The complexity, interconnectedness and rapidly changing nature of these six challenges, three of which have come to the fore in the past 12 months, have important analytical and policy implications for the defence white paper.

Among them are the end of the long peace in Asia; the reduced protection afforded Australia by “the tyranny of distance”; an increase in geopolitical volatility stemming from the unravelling of the old Western-dominated international order; the renewed salience of great-power politics in the Indo-Pacific; uncertainty about US leadership and the resilience of the alliance; the disruptive influence of transnational forces and non-state actors; and the emergence of terrorism as a long-term, systemic threat to Australia’s prosperity and way of life.

None of this mandates a radical recasting of a foreign policy that generally has served Australia well.

But changes are clearly required. The guiding principle must be to adapt our alliance relationships and partnerships to our new strategic circumstances, strengthen them where we can and build new relationships where we must.

Despite uncertainty about the direction of US foreign policy it would be foolish to traduce an alliance that remains a formidable deterrent against external threats, especially at a time of geopolitical flux. Shared values and interests are mutually reinforcing, which is why the US alliance will endure, despite the personalities and preferences of individual presidents.

“More Asia, less America” is a trite one-liner that misrepresents our choices. More Asia ought not to come at the expense of America. In a competitive world, you don’t gratuitously give away your comparative advantage.

We need to keep America and manage geopolitical risk by diversifying and deepening our relationships with like-minded countries in Asia and Europe. The natural and most sustainable partnerships for Australia in Asia are the vibrant democracies of India, Japan, Indonesia and South Korea. These four countries require renewed foreign policy focus and accompanying strategies for deeper engagement.

If we are underdone on Asia’s democracies we are overdone on autocratic China. Australia hasbenefited from the Asian power’s spectacular economic growth. But our economic dependence on China has reached unhealthy proportions, making us more vulnerable to Beijing’s political influ­ence, regulatory whim and fluctu­ations in the Chinese economy.

Critics of the alliance who argue that our foreign policy independence is constrained by excessive reliance on the US ought to ask themselves the same question of our relationship with China.

The broader point is that our preoccupation with the US and China has blinded us to the benefits of foreign policy diversification in a more fragmented and uncertain world. A recalibrated foreign policy, fit for the times, must rebalance towards Southeast Asia.

The problem here is that the Association of Southeast Assian Nations has little real strategic clout and is deeply divided on the South China Sea imbroglio which, together with preventing a regional caliphate, is the most important foreign policy and security issue for Australia in Southeast Asia. So ASEAN-centred multilateralism must be supplemented by a more granular, focused bilateral approach to those countries critical to a successful resolution of the South China Sea dispute and defeating the incipient caliphate: namely Indonesia, The Philippines, Malaysia, Thailand and Vietnam.

Neglected Europe needs a rethink, too. Brexit and a reinvigorated Franco-German partnership provide a once-in-a-generation opportunity to boost our presence, profile, trade and security links with Britain and Europe. Britain is clearly receptive and our historical ties will facilitate a productive re-engagement with London. But we need to look beyond the Anglosphere and elevate the importance of Germany and France.

A slimmed-down EU rein­forces Germany’s heavyweight status in Europe, especially should Merkel succeed in winning another term as chancellor, which seems likely. If recently elected French President Emmanuel Macron can implement the economic reforms that have eluded his predecessor, this will create additional opportunities for co-operation on the back of the $50 billion submarine project and our shared foreign policy perspectives and security interests in the Pacific and Indian oceans.

To recalibrate Australia’s foreign policy for a world that is more turbulent than at any time in the past half century is a formidable task for the government and the drafters of the white paper. But Turnbull and Julie Bishop need to get this right because effective and far-sighted diplom­acy is critical to our security and prosperity, and an essential complement to our defence, national security and trade policies.