Tag Archive for: Australia

Australia must adapt to reduced warning time ahead of conflict

As the regional strategic situation becomes more dangerous, and with threats likely to escalate rapidly, Australia needs to appoint a senior intelligence officer to assess daily the possibility of a surprise attack.

The warning is contained in a new report for ASPI by two of Australia’s most highly respected military thinkers, Paul Dibb and Richard Brabin-Smith, both former senior Defence officials now with the Australian National University.

In Deterrence through denial: A strategy for an era of reduced warning time, Dibb and Brabin-Smith say that in view of the radical contraction in warning time ahead of a conflict from the long assumed 10 years, Australia needs to appoint a national intelligence officer (NIO) for warning.

Possible threats extend from coercion and ‘grey zone’ unconventional attacks with little or no warning through to sustained high-intensity military conflict testing Australia’s sovereignty and security.

Dibb and Brabin-Smith say there may little or no warning of cyberattacks able to disable key elements of society, such as the internet, electricity generation, water supply, air transport and the financial sector. ‘Those are examples of so-called grey-zone threats in which it might be difficult to declare whether we were under deliberate attack or not—and, if so, from which state or non-state entity.’

During the Cold War, when warning of a surprise attack was a critical priority, the CIA had an NIO for warning whose sole task was to scrutinise daily the incoming evidence from intelligence indicators and subject them to critical assessment.

In Australia, an NIO and a national intelligence warning staff, could be located in the Office of National Intelligence or the Defence organisation. The team should include officials from various disciplines including intelligence officers skilled in the interpretation of political, strategic and military warning indicators, and some should have policy backgrounds.

This officer would need access at the highest levels of decision-making—including briefing cabinet’s national security committee in times of impending crisis.

Dibb and Brabin-Smith say Defence also needs to establish a directorate of net assessments to rigorously test conflict contingencies and the capabilities of ‘blue’ (Australian) and ‘red’ (adversary) forces with particular emphasis on Southeast Asia and the South Pacific.

The challenges of short- and medium-term contingencies would be formidable, the authors say, with round-the-clock operations needing to be sustained over months rather than days and resulting in increased demands on fuel supplies, aircrew, munitions and maintenance spares.

‘Ministers need to be left in no doubt about the risks relating to the ADF’s ability to move quickly to higher states of readiness and then to sustain operations, including with respect to timely resupply from the US, potentially at a time when US forces would also be operating at a higher tempo.’

Given the likely maritime nature of those contingencies, priority needs to be given to investing in increased preparedness for the navy and the air force.

The authors say Taiwan requires separate assessment because of the increased military pressure with which China is now threatening it and the raised prospects of conflict with the US.

It’s not credible for Australia to imagine that a military crisis involving China and the US won’t occur in the Taiwan Strait, say Dibb and Brabin-Smith. Nor is it credible for Canberra to believe that Australia can get away without fighting alongside its US ally.

They warn that the prospect of a military emergency in the South China Sea involving Australian warships needs to be seriously analysed with a clear understanding of the risk.

‘While it’s unlikely that China would directly attack our continent, we must prepare for credible contingencies involving Chinese military coercion in our immediate strategic space.

‘That coercion could involve the threatened use of military force, including from future Chinese military bases located to our north and east. Ignoring such probabilities risks strategic surprise involving our key national security interests.’

The directorate of net assessments will need to simulate high-level political and policy decision-making with a real time sense of urgency rather than playing theoretical war games. It must involve a wide range of talent and skills—civilian and military—across all domains of conflict.

Since 1973, such an office at the Pentagon has provided long-term comparative assessments of trends, key competitors, risks, opportunities and future prospects of American military capability to the US government, military commanders and intelligence agencies.

Dibb and Brabin-Smith strongly support the intention in Australia’s 2020 force structure plan to equip the ADF with long-range strike missiles, including anti-ship, air-to-surface and surface-to-surface missiles. ‘We now need to think in terms of missiles with strike ranges in thousands, as distinct from only hundreds, of kilometres.’

These can provide a decisive deterrence edge in the coming decades. ‘We note here that the ADF no longer has F-111 long-range strike bombers and that the new Attack-class submarines won’t be available until well into the 2030s.’

The 2020 defence strategic update says the introduction of additional, longer range strike systems, along with cyber capabilities and area-denial systems, will be critical to the ADF delivering a credible deterrent.

The intention is to be able to hold potential adversaries’ forces and infrastructure at risk from a greater distance to make them consider the likely cost of threatening Australian interests.

Dibb and Brabin-Smith say highly accurate, long-range missiles will provide ‘deterrence through denial’ and lessen Australia’s dependence on warning time.

Acquiring that deterrent capability must now assume the highest priority in the government’s defence planning, they say.

There needs to be an increase in weapons inventory across the ADF to ensure that stockholdings and resupply arrangements can sustain combat operations—including in high-intensity conflict—if global supply chains are at risk or disrupted. A sovereign guided-weapons manufacturing capability would underpin this deterrence.

‘Any credible future enemy operating directly against us will have highly vulnerable lines of logistics support back to its home base in North Asia. Therefore, having the capability to destroy an adversary’s forces and infrastructure directly threatening us would greatly enhance our deterrence posture. Solid deterrence provides a hedge against surprise, raises the costs to an adversary of acting against Australian interests and, if sufficient, makes an enemy’s attack irrational.’

Dibb and Brabin-Smith weigh the concepts of ‘deterrence through punishment’, which is attacking the adversary’s territory, and ‘deterrence through denial’, which is limited to attacking the adversary’s forces and associated infrastructure directly threatening Australia.

‘The bottom line for defence policy is that, as confidence in deterrence by denial goes up, our dependence on early response to warnings should go down.’

They say the idea of Australia being able to inflict unacceptable punishment on a big power such as China is ridiculous.

The great disparity in military power is reflected in Australia’s cautious approach to freedom of navigation operations in the South China Sea.

‘If, nevertheless, Australia were to decide to position itself to be able to make such contributions, it would need to accept that close-proximity freedom of navigation operations could risk the loss of one of our warships and significant casualties.’

In 2013, the architect of Russia’s hybrid warfare, chief of the general staff General Valery Gerasimov, declared a new warfare doctrine in which conventional war between armies would be a thing of the past.

Instead, he called for ‘long-distance, countless actions against the enemy … Informational actions, devices and means … with the information space opening wide asymmetrical possibilities for reducing the fighting potential of the enemy’, and said a perfectly thriving state would sink into a chaos under such an attack.

Dibb and Brabin-Smith say drones and artificial intelligence can be added to Gerasimov’s list as weapons making it difficult to define who the enemy is.

‘So, we must now factor in a new definition of defence warning that has to embrace not only the traditional use of force but grey-zone activities in which the precise moment of attack might be difficult to detect. This calls for a radically new approach to warning and the sorts of intelligence indicators that may—or may not—confirm that we’re under an enemy attack.’

Dibb and Brabin-Smith make a sobering observation about Australia’s reliance on the US.

Traditionally, they say, governments make few intelligence assessments about their allies and it’s been considered improper for Australian agencies to assess the strengths and vulnerabilities of the US.

That has changed.

‘It would be irresponsible, given the recent domestic turmoil and unpredictability in Washington, not to undertake a well-informed analysis of where we think the US is going in its confrontation with China and Washington’s support of allies, including the role of extended nuclear deterrence,’ say the authors.

‘We need to accept in our strategic thinking that America is now a more inward-looking country that will foreseeably give more attention to its domestic social and political challenges. It also needs to be remembered that the US has—from time to time–undergone severe bouts of isolationism. We don’t think that’s likely to happen under the Biden administration, but it could recur under a differently motivated presidency.

‘We need prudent analysis about how the US will react to its own warning indicators of potential military attack and what it would expect of Australia. In our own broader region, we can’t afford not to be fully informed about US contingencies in Taiwan or the Korean Peninsula, so we need to assess US military capabilities as well as Washington’s intentions.’

ASPI’s decades: Eyeing India

ASPI celebrates its 20th anniversary this year. This series looks at ASPI’s work since its creation in August 2001.

Australia’s hope–fear equations on India and China have been through contrasting evolutions during ASPI’s two decades.

At the start of the 21st century, dealings with China were optimistically warm as Australia’s resources sales soared exponentially.

With India, official exchanges were frigid and tetchy, in no way reflecting buoyant trade and the strength of what diplomat-speak calls ‘people-to-people links’.

Engagement with India needed a cautious re-start from the low point of India’s five nuclear bomb tests in May 1998, when venom flowed between Canberra and New Delhi. India rejected the tone, content and vehemence of Australia’s reaction to it proclaiming nuclear-weapons status.

Australia was seen as siding with the US (and even China) in trying to marginalise and pressure India. The Indian arguments to Australia had a familiar tone—part self-righteous, part aggrieved—but they pointed to deeply different perceptions.

In the first decade of the century, Canberra’s cautions about Beijing were carefully coded, hardly shadowing the optimistic vistas. Canberra’s doubts and distance from New Delhi were all too public.

India dismissed Australia as a hypocritical stooge of the US, happy to shelter under America’s nuclear umbrella while wanting to deny India its own nuclear shield. The argument was emblematic of an Australia–India strategic relationship long in zero territory, often in negative mode.

ASPI’s earliest international effort was to help establish the Australia–India security roundtable as the only ‘second track’ security dialogue between the two countries.

Former ASPI executive director Peter Abigail wrote that, from its inception, the institute had been a focus for great Australian interest in India, two nations that ‘have lived in each other’s blind spots’.

Australia had turned to East Asia and the US, Abigail wrote, while India’s eyes had been on the two nuclear-armed neighbours on its borders: Pakistan and China.

As a US ally, Australia’s priorities have tended to be Western in character. As one of the leaders of the Non-Aligned Movement in the Cold War, India’s priorities have traditionally been non-Western. But a new sense of dynamism in the Asian regional security order is drawing the two countries closer together.

After the third Australia–India roundtable in 2003, Jenelle Bonnor and Varun Sahni wrote that the two countries had covered a considerable distance since bilateral defence and security relations were re-established in 2000, after a two-and-a-half-year hiatus.

They described re-engagement involving common security concerns, converging strategic horizons and complementary militaries (Australia’s ‘boutique’ military and India’s ‘mass’ forces). The foundation had been laid ‘for a more substantial and predictable security relationship’ with the opportunity to do much together in the Indian Ocean.

After the fourth Australia–India roundtable, in 2005, Bonnor wrote that the economic realities of the bilateral relationship were not reflected in strategic and defence relations: ‘there is no natural constituency for Australia in India, and vice versa’. Many influential Indians had not forgiven Australia for its reaction to India’s 1998 nuclear tests.

To the mystification of Australians, this remains a fairly large bone of contention that is regularly picked over by Indians. Together with the still present perception that Australia is a ‘stalking horse’ for the United States, this means Australia often does not get the hearing it should in India. For some reason, it has proven difficult to put the past behind us.

At ASPI’s global forces conference in 2005, Sahni said India’s coming great-power role would help change the map of Asia.

There is a continent-wide security architecture that is finally arriving in the Asia–Pacific, perhaps for the first time, certainly for the first time since European colonialism. It’s a continent-wide security interdependence, and this security interdependence is linked clearly to the rise of China. In other words, China makes Asia a region.

The 2006 US–India nuclear agreement ‘made India both a de jure and a de facto nuclear power’, as Amit Gupta noted, pushing along ‘significant strides’ in the two countries’ military relationship. The long-term challenge for India, he mused, was countering the rise of China and its perceived incursion into the Indian Ocean: ‘[R]esisting Chinese pressure will require a greater commonality of interests with the United States, since Indian forces on their own may have less success in deterring Chinese pressure’.

In 2007, Sandy Gordon said underlying many of Canberra’s decisions about India was an awareness of a difficult Asian regional security order: ‘India is currently basking in its emergent large power status and the relationship with Australia is not its top priority. But the relationship has a promising future, and it is likely that the two countries will move towards some form of closer partnership in the coming decade.’

In 2009, India and Australia announced agreement on a ‘strategic partnership’ and a joint declaration on security cooperation. By 2012, Prime Minister Julia Gillard was able to change Labor Party policy to scrap what she called the ‘irrational’ refusal to sell uranium to India. India could source uranium elsewhere, she wrote, but it’d ‘become a question of status and face. Australia’s attitude was received as an insult’.

In 2014, Prime Minister Tony Abbott was in New Delhi with Indian Prime Minister Narendra Modi to witness the signing of a civil nuclear agreement. The agreement was a diplomatic tool to build trust with India and move bilateral ties forward, Kyle Springer wrote:

The uranium deal is first and foremost a diplomatic gesture meant to jumpstart Australia’s broader engagement with India. Both countries share an interest in Indian Ocean maritime security and bilateral military relations can be built around that common interest. We should expect to see strengthened dialogue between India and Australia on security issues. And we can expect that more joint military exercises and military-to-military exchanges will also be announced.

In 2018, the former secretary of the Department of Foreign Affairs and Trade, Peter Varghese, submitted to the prime minister a report on an India economic strategy out to 2035, that also saw it as a geopolitical partner.

Writing for The Strategist, Varghese said India has a deep strategic competition with China, but ‘is not about to become an ally of the US or anyone else’. While maintaining a firm attachment to strategic autonomy, he said, India had a growing level of comfort in strategic cooperation with the US and its allies such as Japan and Australia

Australia’s shift from an Asia–Pacific to an Indo-Pacific framework put India squarely into Australia’s strategic matrix, Varghese wrote:

India shares our democratic bias, but the political character of the Chinese state isn’t its primary strategic concern. For Australia, a democratic China becoming the predominant Indo-Pacific power is a very different proposition to an authoritarian China occupying that position. India’s concerns about a powerful China would exist irrespective of whether China were a democracy.

Stronger together: A US military view of Australia’s strategic geography

For even the most casual of observers, it’s clear that over the past decade the global strategic security environment has become increasingly complex. With a rising and increasingly assertive China, a resurgent Russia and a growing number of capable and unpredictable non-state actors, the US finds itself relying on its allies more than ever. This is particularly the case in the Indo-Pacific, where the US is trying to nurture greater cooperation with partners and allies. The good news here is that while long-time ally Australia isn’t writing blank cheques, it’s both willing and able to work with the US, where the two countries’ mutual interests align.

The geographic location of northern Australia is of significant strategic interest to the US, as the sea lines of communication are open to the broader Indo-Pacific in multiple directions. And there’s space for investment in adequate infrastructure for future expansion. The US and Australian defence strategies and policies are aligned in the Indo-Pacific and the national interests of each country are easier to navigate when our like-minded democracies cooperate.

The US should continue defence cooperation to leverage Australia’s strategic geography and modern defence capabilities to counter the recent corrosive and aggressive actions of China in the Indo-Pacific. This is why, today, ASPI is releasing its latest Strategic Insight, Stronger together: US force posture in Australia’s north—a US perspective of Australia’s strategic geography.

The new report argues why, and analyses how, Australia’s defence force capabilities and strategic geography can enable US force posture initiatives in the Indo-Pacific and promote greater regional cooperation in ways that advance US and Australian national interests.

There are several practical and tangible areas for US–Australia cooperation and growth, which include: expanding the Australian defence industrial base while securing and hardening supply chains; increasing US Army force posture in northern Australia; increasing multinational training opportunities; and, in conjunction with Australia, expanding the defence partnership with Indonesia. These actions should be explored to counter the growing influence of the Chinese state, as part of a broader national strategy.

The report’s first recommendation is that Australia should contribute to the US force posture initiatives with an expansion of its defence industrial base through a US–Australian joint venture to manufacture critical ammunition in Australia. Prime Minister Scott Morrison voiced support for a similar initiative when he stated the Australian government will ‘accelerate the creation of a $1 billion Sovereign Guided Weapons Enterprise, boosting skilled jobs and helping secure Australia’s sovereign defence capabilities’. Investment in the defence industry is part of Australia’s $270 billion, 10-year investment plan outlined in its recently published force structure plan.

An increase to US force posture in northern Australia would be in the strategic interest of both nations. Any force increase in US Army Pacific forces in northern Australia could be rotational, with the capability for rapid expansion during a crisis, to a semipermanent presence if conditions warrant. Such an increase would act as a strong grey-zone deterrent to China during a time when Australia has been subject to economic coercion from Beijing, apparently for Australian decisions made in its national interest over recent years. Australia can enable US Indo-Pacific Command’s force posture initiatives by allowing additional US Army pre-positioned stocks to be stationed in northern Australia, complementing the already planned US strategic fuel storage projects. This kind of investment will also mean more jobs and increased foreign investment for Australia.

A third area in which Australia could contribute to the US force posture initiatives is by offering an expansion of multinational training opportunities for additional US forces and those of other like-minded democracies, such as Quad members Japan and India. An increase in multinational training opportunities that compliment Marine Rotational Force – Darwin seems feasible given the $747 million recently announced as investment in training facilities in the Northern Territory. Through its strategic geography and economic leverage, Australia can be an important part of the connective tissue required to bring Quad members closer together.

The final area of cooperation is the expansion of the strong defence partnership between Australia and Indonesia, a relationship that’s important to the US and the region. A 2018 study from Australia’s Lowy Institute make the case for a recalibration of the Australian Defence Force’s defence cooperation program, with a focus on increased maritime security operations and defence industrial collaboration. Through expanded defence cooperation, Australia will build greater trust with Indonesia, which, together with the changing strategic environment in the region, could encourage Jakarta to re-evaluate its own defence policy.

The US now relies on increased cooperation from partners and allies to regain the initiative from China in the Indo-Pacific. Australia’s defence strategy and policies are better aligned to US defence strategy and policies today than ever before. Military modernisation alone will not effectively expand the competitive space and disrupt China’s grey-zone activities.

Australia can and should use its strategic geography and defence capabilities to enable US force posture initiatives to promote greater regional cooperation and, through greater deterrent posture and capability, reduce the risks of conflict in the Indo-Pacific.

ASPI’s decades: The 9/11 era

ASPI will celebrate its 20th anniversary later this year. This series looks at ASPI’s work since its creation in August 2001.

‘A US decision to invade Iraq would be a clear demonstration that September 11 had changed the boundaries of US policy in fundamental ways, and perhaps even changed the US psyche. The long-term implications for US foreign policy could be profound.’

— Australia’s defence after September 11, ASPI, July 2002

The attacks on New York and Washington transformed US strategic policy. The ‘war on terror’ defined America’s 9/11 decade, swiftly shifting Australia’s understanding of the alliance.

Australia’s shock at the Bali bombings in October 2002 was an echo of what America felt in September 2001. Terrorism suddenly sat at the heart of Canberra’s security thinking.

The US showed its extraordinary military power as it invaded Afghanistan and then Iraq. As a committed ally, Australia played a small role in the taking of Afghanistan and in the ‘coalition of the willing’ in Iraq, earning the status of an occupying power.

Swift military victory could not be translated into peace. What America would come to lament as ‘forever wars’ were launched. Iraq was ‘the first major geostrategic blunder of the 21st century’, Allan Gyngell told an ASPI conference in 2006.

For Australian strategy, new life was injected into old arguments about defence of the continent versus the military expeditionary tradition—how to balance a regional focus against vital interests in the global system?

In mid-2002, the institute issued ‘a public debate initiative’ titled Australia’s defence after September 11, prepared by Aldo Borgu with Hugh White and ASPI’s other program directors.

Reflecting the times, the guide had tentative answers to a cascade of sharp questions:

Five years from now, will we look back on September 11, 2001 as being the start of a new era in global security? Will the ‘war on terror’ involve more major military campaigns? Might terrorists use a nuclear, chemical or biological weapon? Where is the United States heading? Has the US psyche changed? Has the fighting in Afghanistan shown us a new way of war? Do we need different capabilities in our defence force, or a different defence philosophy?

To the question of whether global security had been redefined, the paper offered: ‘Perhaps the long-term significance of September 11 will not be that it is the start of a new era in its own right, but rather that it has shown us more clearly the shape of the post-Cold War world in which we live.’

The problem with President George W. Bush declaring a ‘war on terror’ was the implication ‘that the fight against terrorism will be primarily military. This is not the case.’

Deep US outrage at 9/11 and a determination to deliver punishment had ‘greatly amplified’ the Bush administration’s policy instincts. A US invasion of Iraq would show a ‘fundamental’ change in the US psyche with ‘profound’ implications for US foreign policy.

Hugh White, ASPI’s first director (2001–2004), wrote that within months of the institute being launched, ‘ASPI staff were among those arguing against an invasion of Iraq for which the government was doing all it could to build support. It is worth noting that [Prime Minister] John Howard never, at least to my knowledge, made any criticism of the role ASPI staff played in the debates over Iraq, which is a telling testament to his commitment to the concept on which it was established.’

By the time ASPI issued its first strategic assessment, in November 2002, it reported a public mood in Australia that ‘a war in Iraq might be inevitable’. The effect on Australian strategy, Borgu wrote, was to turn Canberra’s eyes away from its ‘concentric circles’ defence strategy, with the circles radiating out from Australia in priority order:

  •     defending Australia and its direct approaches
  •     ensuring the security of our immediate neighbourhood
  •     promoting stability and cooperation in Southeast Asia
  •     maintaining strategic stability in the wider Asia–Pacific region
  •     supporting the UN and US in maintaining global security.

The strategic assessment questioned whether Australia was turning from ‘concentric circles’ as the conceptual basis for defence planning towards having a ‘global reach’. Australia’s ability to support the US globally ‘will be limited in military terms, as it should be’. Any backing for the US ‘should not detract from our ability to ensure our security in the Asia–Pacific region, particularly in our immediate neighbourhood’. Any global deployments should be ‘specialised in nature, short-term in duration, and small in numbers’.

Australia’s defence minister during ASPI’s first five years, Robert Hill, was dismissive of concentric circles. Stressing the expeditionary history of Australia’s military, Hill told the institute’s 2005 Global Forces conference that strategic policy had undergone a sea-change:

We don’t believe in isolation. We recognise the limitations of self-reliance and the inherent risk of continental defence. In an increasingly interrelated world, even policies of layered defence will not best protect Australians or Australian interests. As I said once before, we see the seas to our north not as a moat but as a highway to the world. The role of the expeditionary force might have changed, but the need to be able to project our military forces in meeting today’s security challenges is as vital as ever—possibly more so.

The Howard government’s thinking ‘moved away from the geographic determinism of the Defence of Australia school’, judged Peter Abigail, the retired major-general who was ASPI’s executive director from 2005 to 2011.

Abigail described a more overtly outward-looking and proactive approach: ‘In many ways this represents a return to our national strategic roots, our strategic culture if you like, which includes preferences for small but capable standing forces, an external focus for the Australian Defence Force, an interventionist approach to threats to our interests, working within a key alliance with the dominant maritime power and defending forward.’

In 2005, a strategic insights paper argued it was time for the Howard government to produce a new defence white paper, to succeed, replace or build on its 2000 white paper. Peter Jennings said the government must consider what had really changed in Australia’s outlook because of 9/11, and where defence policy sat in Australia’s emerging national security strategy.

Jennings said the Defence Department had struggled to come to terms with a fundamental question:

Australia’s strategists continue to debate whether the terrible events of September 11, 2001 changed everything or changed nothing. The answer is far from trivial because it should shape the structure and roles of the ADF. Broadly, there are two schools of thought. Some argue that the threat from terrorism is so pervasive that it has undermined the traditional role of geography in strategy. A contending school argues that, especially in Asia, the potential for conventional war between states remains sufficiently high that we should still focus on the immediate region.

Political and bureaucratic arguments would be raised against a new white paper. Good quality white papers demanded tough judgements, forcing governments to make difficult choices between competing options. By definition, that limited options for political flexibility, Jennings wrote:

White papers also create losers as well as winners—equipment programs forgone, delivery dates delayed, and old programs cut so money can fund new priorities. These tend not to be popular decisions. Barbara Tuchman’s wonderful line from her book August 1914 is apposite: ‘No more distressing moment can ever face a British Government than that which requires it to come to a hard, fast and specific decision.’

The arguments against a new white paper prevailed. Thus, in a dozen years in office the Howard government had five defence ministers but only one defence white paper; the crucial added element is that in all those years the government always had the same uber defence minister, John Howard.

The prime minister/uber defence minister was satisfied with the equipment and structure choices he made in the 2000 white paper, and ensured the promised cash kept arriving in the budgets that followed; job done, no need to revisit.

The formal adjustments to policy settings were done via defence updates (1997, 2003 and 2007), two foreign policy white papers (1997 and 2003), and policy papers issued on terrorism (2004 and 2006) and Australia’s role in fighting proliferation of weapons of mass destruction (2005). The rolling commentary on Australian strategy was a task the uber defence minister shared with each of his five defence ministers.

Australia needs powerful partners if it must go to war

Australia has a highly capable, professional military equipped with small numbers of very complex, extremely expensive aircraft, ships, submarines and land vehicles. Australia could fight other middle powers and win, but Australia should only ever plan to be in a major conflict against a great power if we are in very good company.

The idea that Australia should have a military able to fight alone against China is deeply flawed. Fortunately, the prospects of a neatly bilateral conflict between China and Australia are remote. Australia deciding to fight alone would be an outstandingly stupid act of unilateral disarmament that discounted the value of powerful partners, notably the United States.

While our military has an impressive force, it has large vulnerabilities in being able to sustain itself in combat. It’s been slow to take up the power that comes from low-cost, semi-autonomous systems like armed drones and unmanned systems such as sensors, whether they’re in the air, under the sea or on the ground. And Australia is not taking advantage of our ‘strategic geography’ to support how our military and partner militaries can operate in times of conflict.

Addressing these gaps in a way that fits with the urgency of our darkening security environment is the best contribution Australia can make to deterring conflict in our near region and in the wider Indo-Pacific—and to being prepared if that deterrence fails.

To do this, big changes are needed in how all the ‘consumables’ of conflict are supplied. That’s highlighted in the case of advanced missiles, which Australia has only in small numbers that would be consumed rapidly. And we rely on lengthy global supply chains for resupply. Having the best missiles in your military’s ‘order of battle’ doesn’t matter if you run out of them days or weeks into a war.

Our military’s expensive manned ships, aircraft, submarines and army vehicles are also vulnerable to the new kinds of weapons that other militaries—including China’s—have in numbers and which we have so far been slow to adopt.

This is about missiles, but also the new and lethal semi-autonomous and autonomous systems that are the force multipliers for modern militaries. The Azerbaijanis used cheap but lethal armed drones to destroy Armenian tanks last year. The Iranians used them to put one of Saudi Arabia’s biggest oil refineries out of business in 2019.

In the era of low-cost lethality, our defence organisation is taking the same approach to unmanned systems and missiles that it has to manned systems such as naval ships in past decades: buying small numbers of elaborate, very expensive systems that are hard to get, slow to replace and not made here.

As examples: Defence is buying 12 armed MQ-9B Sky Guardian drones, based on the Predator used against terrorists in Iraq and Afghanistan, for around $2 billion, and four large MQ-4C Triton long-range maritime surveillance drones for $1.8–2.7 billion, and both are made offshore.

This has to change. Defence needs ‘consumable’ weapons that are able to be used, lost and replaced in large numbers during conflict if the Australian government is not going to get some very nasty surprises in a future war. That could include the loss in combat of air warfare destroyers, F-35 joint strike fighters and tanks—together with the men and women operating them. Losing one destroyer’s 180 crew in combat would be 4.5 times the casualties the Australian Defence Force suffered in the entire Afghanistan conflict.

Such sobering possible combat losses are because potential adversaries have understood the implications of advanced missiles and drones operating with their militaries’ planes, ships and submarines—and they’ve gone beyond small-scale experimentation to supplying their militaries in high volumes.

Avoiding such tragic losses will take a radical reordering of thinking for a Defence organisation that’s operated with a peacetime mindset, where ‘attrition’ is about training accidents and equipment wearing out, not brutal contact with another powerful military, where small stocks of missiles are lovingly tended and used very sparingly in training.

Discretionary missions by highly specialised forces with overwhelming technological advantage like those in Syria, Iraq and Afghanistan aren’t Australia’s likely future.

There are some limited but refreshing indicators of change that Defence Minister Peter Dutton can welcome and expand. Rapid development of the ‘loyal wingman’ drone to operate with the F-35 is one. So is Prime Minister Scott Morrison’s plan to manufacture in Australia at least some of the $100 billion in advanced missiles Australia’s military will buy over the next 20 years.

Buying Boeing’s large unmanned Orca submarine now would add to Australia’s undersea capability well before the launch of the first Attack-class submarine in the mid-2030s. This would add significantly to the Collins submarines’ combat power. Four Orcas would come at a fraction of a manned submarine’s cost and be in the water more than 10 years sooner.

Some of these ideas are in the government’s 2020 force structure plan, but on timelines that stretch into or even begin in the 2030s. The shift needs to happen faster and in a much bigger way to give our military considerably more firepower, and for it to be able to survive in a conflict lasting months, maybe years—not days or weeks.

That would give Australia a military force able to exert control of our territory and our near region, most logically working with partners across Southeast Asia, PNG and the South Pacific.

For this additional combat power to be effective in deterring conflict and keeping our near region strategically benign, though, Australia also needs ‘places and bases’ domestically and in our near region that our military can operate from.

Domestically, all roads lead to Darwin as an essential piece of strategic geography to be able to operate naval and air forces from. There’s focus now on how to end the lease of the Chinese port operator, but the bigger picture should be Australia investing in a major expansion of the Darwin port for the purpose of multinational naval operations in the Pacific and Indian oceans.

That fits with the US ‘global posture review’, which is looking to disperse its forces in places other than Guam, Japan and South Korea to make them more survivable in conflict with China. Our Quad partners would welcome this Australian move, which is likely to make more sense over coming years.

In our near region, if our military is going to be able to project power and deter growing Chinese presence, then the Pacific step-up needs a rethink. Right now, its defence aspect is almost a public relations campaign to make the South Pacific less likely to welcome rising Chinese military presence and access at ports, airfields and other infrastructure.

Given the darkening strategic environment, that’s not enough.

Australia needs to take advantage of our near region’s strategic geography, not just seek to deny that advantage to others. One example would be a bigger Manus Island base than planned, with Australian naval vessels based there working with Papua New Guinea’s patrol boats.

That starts with confronting but frank discussions about the emerging security environment with our Pacific island partners, making the case that enabling joint operations and activities with Australia helps bring stability, and is fundamental to regional security.

For those thinking this plan makes Australia so secure we don’t need our alliance with the US, that’s a mistake. Although the US gets considerable value from Australia as an ally, Australia gains much more from the US.

Access to US technology and intelligence, combined with our own research, intelligence and industry capabilities, gives Australia a far more powerful military than we could achieve otherwise. That’s leaving aside the likely enormous advantages through cooperation with the US in emerging areas like quantum computing, artificial intelligence, hypersonics, space and offensive cyber systems.

But can we rely on the US in the world we see emerging? The public debate on this neglects the fact that US strategy recognises its own deep need to act with allies and partners to meet the China challenge.

That judgement has been driven home by the experiences of the Trump administration, which experimented with unilateralism. President Joe Biden’s administration learned the lesson from those four years. But it’s also understood in Congress, the State Department, think-tanks and in the giant US defence organisation.

The development and use of Chinese power under an assertive Xi Jinping will reinforce this strategic understanding.

Australia invests in its own security. That means we’re not just a customer of US security but a contributor to American and global security. Closing some urgent gaps and vulnerabilities in our defence capabilities will make Australia and the world safer, and help deter future conflict.

Australia’s Pacific step-up needs to aim higher

In November 2018, Prime Minister Scott Morrison announced his version of Australia’s ‘Pacific step-up’, which was about taking ‘our engagement to a new level, launching a “new chapter in relations with our Pacific family”’.

Under the step-up, Australian engagement in Papua New Guinea and across the South Pacific has responded to the broad-ranging regional challenges identified by Pacific leaders and communities themselves, including fostering security partnerships; strengthening climate and disaster resilience; sustaining economic growth; and supporting the promotion of healthy, educated, inclusive populations. There’s been a significant package of new activities and programs, including electrification and undersea cable initiatives, as well as assistance in managing the Covid-19 pandemic.

The Australian Defence Force has had an important role in much of the step-up, enhancing partnerships with the region’s forces and increasing its presence and levels of activity, as well as providing critical logistical and planning support for the response to Covid-19.

But the step-up has so far failed to be a positive enabler of regional security and has yet to take advantage of a large asymmetric advantage that Australia has in the new competitive strategic environment described so frankly in the 2020 defence strategic update.

An implicit goal of the step-up, which regional leaders understand well, is to make a standing Chinese military presence in Australia’s near neighbourhood less likely through a clear statement about renewed Australian engagement.

The step-up’s defence goal is certainly about reducing the prospects of a Chinese military base or bases being established in the region and of a more routine People’s Liberation Army operational presence making use of civilian infrastructure like ports and airfields in Australia’s near region.

The approach to date has involved a very defensive, negative mindset, though. And that discounts the advantages that PNG and the South Pacific can provide to Australia in shaping our strategic environment and deterring both coercive military presence and potential conflict. As with Australia’s north, the region’s geography is a valuable asymmetric strategic asset that we can either use well or neglect.

As an example of undervaluing the positive role our region’s geography can play, the step-up includes Australia and the US partnering with the PNG government in rebuilding the Manus Island naval base–something which was announced at the time of the 2018 APEC meeting in Port Moresby.

The plan for Manus is deliberately low-key, though, and will essentially replace the base’s ageing infrastructure with a more functional and comfortable version of what PNG had before. Yet it fails to take advantage of Manus’s incredible natural anchorage and harbour to enable PNG to work more closely with security partners like Australia, New Zealand, France, Japan and the US.

The rebuilt wharf will support the secure and safe berthing of PNG’s four Australian-made Guardian-class patrol boats. But, as currently conceived, it does little to expand the base’s capability to also accommodate, say, forward-based Royal Australian Navy offshore patrol vessels—let alone provide purpose-designed berthing for larger ships, like Australia’s landing helicopter docks, that will need to operate in the region.

There also appears to be no plan for how the nearby Momote airfield—upgraded by China—can be put to work with the naval base for PNG’s and the region’s security purposes.

This example demonstrates the latent opportunity in the step-up as an enabler of Australian military posture and presence.

It’s entirely understandable that there’s a reluctance in the Australian bureaucracy to propose ideas that are challenging to past ways of operating and that might require difficult political and public-policy work and negotiations. Maintaining states’ sovereignty and keeping the Pacific a region that is not subject to military tension are goals for us to pursue with Pacific partners.

Any larger development in a place like Manus needs to be conceived and delivered with sustainable opportunities for local companies and people as a design principle.

But in understanding and working with the multiple interests, sensitivities and tensions present in the region, we shouldn’t be shy in making the active case to our regional partners that their sovereignty is enabled and advanced by having deeper security partnerships with Australia, New Zealand, France, Japan and the US. And we should also make the case that working to enable Australia’s military to operate around the Pacific will be a net benefit to the region’s strategic environment.

This might sound confronting, and in a way it is, because it acknowledges that the South Pacific is part of the larger Indo-Pacific and not immune to the darker trends we’re seeing in the broader region. If it’s hard to think of this more activist Australian approach, it might be easier to imagine a very different scenario occurring.

Imagine an independent state of Bougainville that seeks its financial future through an early and deep partnership with Chinese companies and banks, working in alignment with the goals of strategic programs like the Belt and Road Initiative.

Such a newly formed state would be a logical place for China to grow a military presence enabled by new infrastructure provided through concessional loans and tied financing. The PLA could, for example, help establish Bougainville’s maritime surveillance capabilities, help out with health support, and partner with law enforcement and security personnel in the new government.

Whether a Chinese military base opened in Bougainville as part of the broader relationship, or whether port and air facilities just enabled a routine, growing PLA presence, the challenge to Australian and regional security this kind of development would bring is a stark and credible one.  .

Instead of waiting to see this dark scenario play out, be it in Bougainville or somewhere else in the region, now is the time for Australia to imagine a bigger, better Pacific step-up and be even more frank with our Pacific partners. The region and its geography are unique strengths that we can all use to preserve our sovereignty and boost our security at a time of growing strategic competition.

Cracking the missile matrix: the case for Australian guided-weapons production

Last year’s war between Azerbaijan and Armenia was short, sharp and decisive. By effectively employing precision guided weapons, the former rapidly forced the latter to capitulate and accede to its political demands. The conflict confirmed the centrality of guided weapons to modern warfighting and showed how small states can now master the technologies and techniques needed to use them.

Last year also witnessed the onset of the Covid-19 pandemic and the supply-chain crisis it triggered. That provoked much soul-searching from governments and companies about how to manage the risks presented by modern just-in-time supply chains that span the globe.

When we take those two events together, it’s clear that the Australian Defence Force will not only need many kinds of guided weapons across the spectrum of conflict, but also need to guarantee their availability in times of crisis when supply chains will be under pressure and threat. That will be difficult, since Australia currently manufactures virtually no guided weapons.

The Australian government is also aware of both needs. Its 2020 defence strategic update plans on investing tens of billions of dollars in guided weapons over the next two decades. It also directs the Defence Department to explore the potential for new sovereign guided-weapons production capability to mitigate supply risks. It appears that exploration has determined that the potential can be turned into reality: on 31 March, the government announced that it was ‘accelerating’ the development of a sovereign guided-weapons manufacturing capability.

In a new ASPI report, launched today, I examine two fundamental questions. First, would the manufacture of guided weapons in Australia enhance ADF capability and provide greater self-reliance? Second, is it viable to manufacture guided weapons in Australia? The answer to both questions is ‘yes’. The report also presents some key considerations about how the industry should be established.

No single measure is a panacea for supply-chain risks, but domestic guided-weapons production, combined with greater stockpiling and cooperative development and production arrangements, would greatly reduce those risks.

Australia has the industrial capability to produce guided weapons here. In fact, we have a long and successful living history of doing just that. We can also draw upon ‘missile-adjacent’ sectors such as space and autonomous systems as well as leverage the power of the fourth industrial revolution to accelerate the design and manufacture of weapons. We can also leverage our alliance with the US to establish production lines for US weapons here, to the benefit of both partners.

A multibillion-dollar investment in the local manufacture of guided weapons is also consistent with broader government policy; for example, it supports the government’s modern manufacturing initiative, which is a key element in the effort to wean the Australian economy away from a dangerous over-reliance on the export of commodities and build on some other national strengths.

The government has announced that it’s establishing a guided-weapons ‘enterprise’, although it has released few details. What should that enterprise look like? To maximise the prospects for success, Defence needs to adopt a programmatic approach to its selection of guided weapons and actively manage the ‘missile matrix’. That is, rather than allowing the number of types of weapons that it uses multiply by letting individual projects choose different weapons for different platforms, it needs to make decisions that take all relevant factors into account and choose weapons or families of weapons that will be used across multiple platforms.

That approach will have many benefits. Acquiring more weapons of fewer types will increase the economies of scale of local production. It will also help to contain the overheads of ownership, such as sustainment costs, the logistics chain and integration costs.

A programmatic approach will necessarily involve ‘backing winners’ up front. While some may have concerns about the potential loss of commercial leverage, Defence is already using such an approach with success, for example in the navy’s combat management system, for which the government has decided that all classes of ships must use Saab’s combat system. This will involve seeing industry as long-term partners, rather than simply as suppliers—but that’s already a fundamental tenet of the government’s defence industry policy. Moreover, losing commercial leverage is a manageable issue, as Defence would be a more powerful, larger customer if it procured missiles using domestic co-production and the ‘family of weapons’ approach I outline in the report. And reduced commercial leverage is a different order of risk compared to losing a conflict owing to a lack of missile supplies.

A national guided-weapons enterprise could adopt many of the measures in Australia’s naval shipbuilding plan, including enhanced funding for research and development, support for the establishment of precincts for the design and production of guided weapons, and coordinated training and education programs to develop the workforce. Making guided weapons one of Defence’s ‘sovereign industrial capability priorities’, supported by an implementation plan, also makes sense as part of this broader plan.

But we can’t wait until the perfect plan is developed. The urgency of our strategic circumstances means we need to start now. There are many mature weapons that the ADF is already using or has decided to buy that we can start producing here now with minimal risk. But the government should also make some ‘big bets’, investing in the development of technologies such as hypersonic weapons that can be put into production here once mature, rather than waiting to see that maturity demonstrated elsewhere and then trying to retrofit Australia with a production capacity for these powerful new weapons.

The government has established a national enterprise to build ships, submarines and armoured vehicles in Australia, but, without guided weapons, those platforms will have limited utility. Put simply: a small number of military platforms without a large supply of advanced missiles is a force fitted for but not with combat power. The government’s decision to establish a guided-weapons enterprise, if implemented well, will be a key step in providing the ADF’s platforms with the advanced missiles in the types and quantities they need to deliver lethal and survivable capability.

Export possibilities mean Australia’s clean-energy future can also be the world’s

Global energy demand and associated greenhouse gas emissions have been increasing steadily since the middle of the 20th century. With power generation accounting for 41% of energy-related carbon emissions, the power sector is critical to a clean-energy transition, especially since electricity consumption is projected to increase by around 50% by 2040 compared to 2020 levels. The expected growth in electricity demand is mainly due to increased population and access to electricity, as well as electrification of the transport sector. The share of renewables in the energy mix needs to increase dramatically if we are to meet emissions-reduction targets.

Australia’s electricity contribution from renewables increased from 8% in 2008 to 21% in 2019 with generation from hydro, wind and solar. Solar capacity increased from 1.4 gigawatts in 2012 to about 20.2 gigawatts in 2020, initially due to rooftop solar installations. However, large-scale solar installations have been ramping up steadily since 2013, with many more planned. Two solar megaprojects were announced recently, the Asian Renewable Energy Hub in Western Australia and the Australia–ASEAN Power Link (AAPL) in the Northern Territory, which together will more than double Australia’s solar capacity.

Harnessing the NT’s abundant solar irradiance, the AAPL is planned to integrate a 14-gigawatt solar farm near Elliot, multiplying the NT’s current solar capacity by 88. It will be 42 times bigger than the current largest operational and registered solar farm in Australia, the Darlington Point Solar Farm in New South Wales, and the largest in the world. The solar panels deployed at the AAPL are expected to be produced locally. This aligns with a proposal for a solar array manufacturing assembly facility in Darwin that will bring economic benefits to regional manufacturing firms as well as those that build and operate the infrastructure.

The AAPL will integrate 33 gigawatts hours of battery energy storage at the solar farm to manage generation peaks and provide capacity reserve and frequency-control services. The electricity will be linked via a 750-kilometre transmission line to voltage source converters and a battery in Darwin. Electricity will be converted to high-voltage alternating current and connected to the network that powers the Darwin region, and then to a second voltage source converter for transmission to Singapore via subsea cables.

Through battery installations at the farm and at the voltage source converters, the new infrastructure will provide the type of flexibility that legacy networks currently lack and will enable the future deployment of large renewable-energy farms within the region as well as prospective small, decentralised energy systems.

The AAPL has significant potential to export green electricity to countries in the Asia–Pacific region that have little capacity for solar installations due to relatively high population densities. In the first instance, the project aims to supply 15–20% of Singapore’s electricity needs. However, it opens possibilities for other countries in Southeast Asia to access renewable electricity and reduce their greenhouse gas emissions. This will be especially important given that the region is experiencing rapid growth in electricity demand, which is currently met mainly by burning fossil fuels.

While more megaprojects will be required to meet increasing electricity demand over the next few decades, alternative developments still need to be pursued, especially those of medium- and small-scale capacity where supply is closer to demand. While high-voltage direct current transmission lines and cables, such as those proposed in the AAPL, have considerably less power losses than high-voltage alternating current lines, long distances like the more than 4,500 kilometres needed for the AAPL will still mean power losses. Covering these losses will require a larger footprint for an installation to answer the same demand.

With small- and medium-scale systems installed close to demand centres, not only are losses reduced but the footprint of renewable-energy installations is also reduced, because solar panels can be installed over existing structures. With proven enthusiasm from the Australian population in participating in the clean-energy transition (more than 25% of dwellings have a solar system), the industry has an opportunity to further encourage such behaviour. However, to enable higher rates of solar take-up, network flexibility through increased storage capacity is required.

Storage capacity can be supplied through batteries as well as hydrogen and can be of a medium size with community- or network-based storage systems, or a small size at the individual household level. Hydrogen produced through electrolysis using renewable energy and sustainable water sources, also labelled as green hydrogen, can act as both a short-term (daily to weekly) and a long-term (over seasons) storage option. In addition, both electricity and hydrogen can be provided locally for transportation with electric vehicles.

While the AAPL doesn’t currently consider hydrogen production as either energy storage or an energy vector, providing small- to large-scale hydrogen production plants would bring additional flexibility to a clean-energy system as well as assist the energy transition for the transport industry in the Darwin region.

In the race to decrease greenhouse gas emissions and limit the impacts of climate change, both mega and small-scale renewable-energy installations will play an important role. Given a favourable natural environment and especially high solar irradiance, Australia’s opportunity to deploy renewable-energy technologies at high rates cannot be missed, not only for the country’s benefit but also for the world’s.

Biden’s withdrawal from Afghanistan his first major blunder as president

President Joe Biden’s decision to withdraw US military forces from Afghanistan by 11 September 2021 is his first big blunder in office. This could cost America dearly in future years and should give America’s friends and allies pause to ask if Biden has the grit for the tough road ahead.

The president’s announcement, laughably titled ‘On the way forward in Afghanistan’, was nothing more than an unseemly bolt for the exit based, Biden tells us, on a ‘conviction’ he formed in 2008 that ‘American military force could not create or sustain a durable Afghan government’.

In fact, that is precisely what American, Australian and other forces delivered to Afghanistan: a flawed but functioning democracy, keeping the Taliban at bay, and preventing groups like al-Qaeda from using the country as a training base from which to attack the West.

Here Biden and his predecessor Donald Trump are on a unity ticket, locked onto a bizarre sabotage mission, negotiating, and now honouring, a ‘diplomatic agreement’ with the Taliban, while deserting the very Afghans who have fought with our forces over the past two decades.

Let’s be clear: this is an abandonment as complete as America’s failure to back South Vietnam after many promises of providing air support to Saigon in the face of North Vietnam’s advancing conventional forces in 1974 and 1975.

Biden’s statement gives the Taliban a green light to start massing forces against the capital. The president says: ‘the Taliban should know that if they attack us as we draw down, we will defend ourselves and our partners with all the tools at our disposal.’

‘Partners’ refers to NATO, Australia and other countries that seem to have been swept into a unilateral American decision to get the hell out of Dodge. Biden explicitly says that the US ‘will not stay involved in Afghanistan militarily’. He apparently decided—in that crystalline moment of ‘conviction’ in 2008—that Afghanistan cannot succeed.

Moreover, the withdrawal is happening without detailed thinking about what happens next. There is no plan for how the US will fight terrorism in the region, just a promise that ‘my team is refining our national strategy to monitor and disrupt significant terrorist threats.’

There is no plan for how the US will support the government in Kabul, just a vague assurance that ‘over the next few months, we will also determine what a continued US diplomatic presence in Afghanistan will look like.’

With no military forces to provide protection, I’ll tell you what that future diplomatic footprint will look like: nothing, nada, bupkis. Australia will be compelled to follow suit. Our mission in Kabul has a strong security detachment, but protecting an embassy compound is the last part of a system that must also stabilise the town, limit access to key government institutions and embassies and, at worst, enable evacuation to an airport. Without a larger military force, the Western diplomatic presence in Kabul will wither.

To whom should Kabul look for support? Biden has a suggestion: ‘we’ll ask other countries—other countries in the region—to do more to support Afghanistan, especially Pakistan, as well as Russia, China, India, and Turkey. They all have a significant stake in the stable future for Afghanistan.’

Yes, you read that correctly. The US is going to ask Russia to support Afghanistan. Presumably not like the Soviet Union did in its invasion of 1979. Russian President Vladimir Putin will not prop up Kabul, except to put his own proxies in power.

And China? Biden has no interest in promoting Beijing’s growing presence in Central Asia and the Middle East. China has prudently minimised its presence in Afghanistan but may indeed be interested to build a corridor of control through Afghanistan, linking up with its closest partner in the Middle East, Iran.

Beijing also has a close partnership with Pakistan. What could be attractive to China is the chance to build a condominium of influence, strengthening Beijing’s access to the ports of the Persian Gulf and the Arabian Sea.

In that outcome, apart from Afghanistan of course, the big strategic loser is India, which would then face a hostile China on its northeast as well as Chinese proxies in Myanmar under the generals and, to the northwest, in Pakistan.

Biden is right that these countries have significant stakes in Afghanistan, but their interests are not America’s interests, or ours. Beijing will, I suspect, be amazed at Biden’s invitation to supplant American interests in Afghanistan. Xi Jinping may judge that this confirms his assessment of American decline and withdrawal—a dangerous assessment, right or wrong.

This is the enduring reality of America’s strategic situation: Biden can withdraw the remaining 2,500 US troops from Afghanistan, but he can’t withdraw America from its global strategic interests, be they preventing the rise of terror groups, or limiting the malign behaviour of countries hostile to the US—China, Russia and Iran.

For a force deployment no larger than the annual ‘rotation’ of US Marines to Darwin, denying Kabul to America’s enemies was a valuable military investment. Leaving, with only the barest of notions about how to protect American interests in Afghanistan, will destabilise the region and more than likely create the basis for a new intervention half a decade or more in the future.

Biden told the press corps: ‘For the past 12 years, ever since I became vice president, I’ve carried with me a card that reminds me of the exact number of American troops killed in Iraq and Afghanistan.’

He stumbled on the numbers, simply couldn’t read them out, but the corrected transcript of his statement records that 2,448 US personnel died in the Afghanistan conflict. Biden’s announcement offers no solace to the families of those people, or indeed the families of Australia’s Afghanistan casualties, only the weary absence of strategic purpose and historical perspective.

The bigger threat from an aggressive, intolerant, authoritarian China is the strategic challenge of our age. Biden is right to focus on that, as we must, but the Middle East and Central Asia cannot be forgotten and will not be ignored.

I wonder how President Tsai Ing-wen of Taiwan reacted to Biden’s words that, ultimately, ‘only the Afghans have the right and responsibility to lead their country.’ Replace ‘Afghans’ in that sentence with ‘Taiwanese’, or ‘Australians’, for that matter.

As if the Afghanistan war wasn’t fought defending American and Australian interests and purposes. As if the next one won’t be. Lest we forget.

Australia’s illicit drug problem is getting worse

The 2014 rap song ‘Move that dope’, by Future, Pharrell Williams, Pusha T and Casino, talks about the push to sell drugs, including crack cocaine, and enjoy the spoils of the trade. Its underlying message is to move on from low-level sales of drugs to individual addicts to higher level pursuits.

Future’s song subscribes to the tried and tested assumption of a vertically integrated organised crime network, in which the closer you get to the source, the more profit there is to be made. But if that’s correct why, despite Australian law enforcement agencies’ successes, are most illicit drugs easy to obtain, their purity unaffected, domestic retail prices stable and regional wholesale prices decreasing?

One way of understanding Australia’s illicit drug supply challenge and the transnational serious and organised crime groups involved is by analysing likely profits at each layer of the vertically integrated networks producing, transporting and selling drugs. This is why today, ASPI is relasing its latest report ‘High rollers’: a study of criminal profits along Australia’s heroin and methamphetamine supply chains

Our new ASPI report, ‘High rollers’: a study of criminal profits along Australia’s heroin and methamphetamine supply chains, launched today, uses quantitative and qualitative data from the Australian Criminal Intelligence Commission and the UN Office on Drugs and Crime to provide a better understanding of the segmentation of Australia’s heroin and methamphetamine markets and the transnational connections of those markets. We examine the profits made by criminal actors at each level of Australia’s vertically integrated illicit drug supply chains.

The report helps to develop an understanding of the quantum of profits being made and where in the value chain they occur. Australians spent approximately $5.8 billion on methamphetamine and $470 million on heroin in 2019. Approximately $1.2 billion was paid to international wholesalers overseas for the amphetamine and heroin that was smuggled into Australia in that year. The profit that remained in Australia’s economy was about $5 billion. Those funds are undermining Australia’s public health and distorting our economy, and ultimately funding drug cartels and traffickers in Southeast Asia.

One key takeaway from the figures presented in the report is that the Australian drug trade is large and growing. Despite the best efforts of law enforcement agencies, methamphetamine and heroin use has been increasing by up to 17% year on year. Falling prices in Southeast Asia are likely to keep pushing that number up, while drug prices and purity in Australia remain relatively stable.

As production prices for methamphetamine continue to decline along with wholesale prices, more sophisticated transnational organised crime actors are likely to begin to examine their business models in greater detail. Industrial production of methamphetamine for high-volume, low-profit regional markets like Australia has significant benefits for them.

The data suggests that the more sophisticated transnational organised crime groups will seek to expand their control of the heroin and methamphetamine value chains to include greater elements of the wholesale supply chain as well as alternative product lines, such as synthetic opioids.

Given that many of the region’s most prolific organised crime groups have strong links to Chinese organised crime, Australia might not be immune from such vertical supply-chain expansions.

While ever-larger drug busts continue to dominate the headlines, the underlying fact is that methamphetamine and heroin imports continue to rise despite authorities seizing up to 34% of imported drugs. As our report shows, the profits in the methamphetamine and heroin trades are so large that, even if authorities were able to seize between half and three-quarters of imported drugs, they would be unlikely to put many trafficking networks out of business.

The data contained in the report suggests that disruption might be easiest (a relative term) at the points in the value chain where the profitability is lowest, because that’s where disruption can make the business uneconomic. So, while the wholesalers in Australia make the biggest proportional and actual profits, pressuring them enough to make their businesses unprofitable is probably hardest, while pressuring the point of origin—the growers or the precursor providers—might drive them out of business.

Of course, if the businesses are vertically integrated, you don’t have much choice other than to work to disrupt the broader business model.

With vertical integration, it’s about following the money and acting to limit the utility of the profits. Then, acting against high-worth individuals who have assets that can be seized would seem to be a useful strategy, as it strikes right at their profits at the point where those profits are concentrated.

Perhaps the most effective approach for Australia would be to continue to work with international partners to reduce the availability of precursor chemicals, and eventually pre-precursors. Methamphetamine and heroin supply chains could be most vulnerable and prone to disruption at the point of production.

Regional border control within and into the Mekong region is critical to constricting methamphetamine and heroin distribution. In the face of increased connectivity resulting from the Chinese government’s Belt and Road Initiative and ASEAN’s economic integration efforts, border agencies have limited capacity. Greater intra-regional border security cooperation and capability enhancement are critical to addressing this challenge.

Australia’s law enforcement agencies will need to revisit their focus on seizures and ‘decapitation’ (removal of criminal leaders and key facilitators), although the aggressive pursuit of the proceeds of crime, including assets seizures domestically and regionally, will remain a valuable policy lever and strategy option. The evidence in our report suggests that Australia’s onshore wholesalers are resilient to higher levels of arrests and seizures. Perhaps the rapid pursuit of larger numbers of mid-level dealers along the supply chains would have more disruptive impacts than lengthy investigations focused on organisational decapitation.

Regardless, the focus must be on supply-chain disruption. Perhaps Operation Sovereign Borders provides some precedent for such a supply-chain-focused approach. To control people smuggling, intervening ‘upstream’ (before arrivals into Australian jurisdictions), through partnerships and cooperation, has been effective. However, that model needs to be applied to the lower profit areas of the regional illicit-drug-supply and money-laundering chains. Here, arguably, you don’t have to affect the cost of business as much to make it uneconomic. If that assumption is correct, intervention needs to be focused on the points of production and transhipment from Myanmar. Enhanced border control, through capacity development, police-to-police cooperation and intelligence sharing, is critical.

Perhaps the most important message is that, in the absence of supply reduction, and even with more effective supply-chain disruption, our federal and state governments will need to invest more heavily in strategies to reduce demand and minimise harm. In a practical sense, that approach frees up law enforcement resources to concentrate on reducing the supply of illicit drugs.