Security dynamics are changing rapidly in the Indo-Pacific. The region is home not only to the world’s fastest-growing economies, but also to the fastest-increasing military expenditures and naval capabilities, the fiercest competition over natural resources, and the most dangerous strategic hot spots. One might even say that it holds the key to global security.

The increasing use of the term ‘Indo-Pacific’—which refers to all countries bordering the Indian and Pacific oceans—rather than ‘Asia–Pacific’, underscores the maritime dimension of today’s tensions. Asia’s oceans have increasingly become an arena of competition for resources and influence. It now seems likely that future regional crises will be triggered and/or settled at sea.

The main driver of this shift has been China, which over the last five years has been working to push its borders far out into international waters by building artificial islands in the South China Sea. Having militarised these outposts—presented as a fait accompli to the rest of the world—it has now shifted its focus to the Indian Ocean.

Already, China has established its first overseas military base in Djibouti, which recently expropriated its main port from a Dubai-based company, possibly to give it to China. Moreover, China is planning to open a new naval base next to Pakistan’s China-controlled Gwadar port. And it has leased several islands in the crisis-ridden Maldives, where it is set to build a marine observatory that will provide subsurface data supporting the deployment of nuclear-powered attack submarines and nuclear-powered ballistic missile subs in the Indian Ocean.

In short, China has transformed the region’s strategic landscape in just five years. If other powers do not step in to counter further challenges to the territorial and maritime status quo, the next five years could entrench China’s strategic advantages. The result could be the ascendancy of a China-led illiberal hegemonic regional order at the expense of the liberal rules-based order that most countries in the region support. Given the region’s economic weight, this would create significant risks for global markets and international security.

To mitigate the threat, the countries of the Indo-Pacific must confront three key challenges, beginning with the widening gap between politics and economics. Despite a lack of political integration and the absence of a common security framework in the Indo-Pacific, free-trade agreements are proliferating, the latest being the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership. China has emerged as the leading trade partner of most regional economies.

But booming trade alone cannot reduce political risks. That requires a framework of shared and enforceable rules and norms. In particular, all countries should agree to state or clarify their territorial or maritime claims on the basis of international law, and to settle any dispute by peaceful means—never through force or coercion.

Establishing a regional framework that reinforces the rule of law will require progress on overcoming the second challenge: the region’s ‘history problem’. Disputes over territory, natural resources, war memorials, air defence zones and textbooks are all linked, in one way or another, with rival historical narratives. The result is competing and mutually reinforcing nationalisms that imperil the region’s future.

The past continues to cast a shadow over the relationship between South Korea and Japan—America’s closest allies in East Asia. China, for its part, uses history to justify its efforts to upend the territorial and maritime status quo and emulate the pre-1945 colonial depredations of its rival Japan. All of China’s border disputes with 11 of its neighbours are based on historical claims, not international law.

This brings us to the third key challenge facing the Indo-Pacific: changing maritime dynamics. Amid surging maritime trade flows, regional powers are fighting for access, influence, and relative advantage.

Here, the biggest threat lies in China’s unilateral attempts to alter the regional status quo. What China achieved in the South China Sea has significantly more far-reaching and longer-term strategic implications than, say, Russia’s annexation of Crimea, as it sends the message that defiant unilateralism does not necessarily carry international costs.

Add to that new challenges—from climate change, overfishing and degradation of marine ecosystems to the emergence of maritime non-state actors such as pirates, terrorists and criminal syndicates—and the regional security environment is becoming increasingly fraught and uncertain. All of this raises the risks of war, whether accidental or intentional.

As the most recent US National Security Strategy report put it, ‘A geopolitical competition between free and repressive visions of world order is taking place in the Indo-Pacific region.’ And yet while the major players in the region all agree that an open, rules-based order is vastly preferable to Chinese hegemony, they have so far done far too little to promote collaboration.

There is no more time to waste. Indo-Pacific powers must take stronger action to strengthen regional stability, reiterating their commitment to shared norms, not to mention international law, and creating robust institutions.

For starters, Australia, India, Japan and the US must make progress in institutionalising their Quadrilateral Security Dialogue, so that they can better coordinate their policies and pursue broader collaboration with other important players like Vietnam, Indonesia and South Korea, as well as with smaller countries.

Economically and strategically, the global centre of gravity is shifting to the Indo-Pacific. If the region’s players don’t act now to fortify an open, rules-based order, the security situation will continue to deteriorate—with consequences that are likely to reverberate worldwide.

As we look at the foreign policy white paper published in late 2017, it echoes some of the remarks in the 2016 defence white paper about the importance of the rules-based global order. Indeed, the frequent use of the term belies a gnawing concern about the fragility of that order, and a hope that repeating the mantra might help bolster that order in the face of numerous challenges. But the defence white paper predated Donald Trump, Rodrigo Duterte, Brexit, and post–19th Party Congress Xi Jinping. The world certainly looks different nowadays. If anything, those developments have added urgency and clarity to the foreign policy white paper.

Overall, it’s a strong and balanced document. But it’s worth seeing it not as some set of platitudes reinforcing Australia’s age-old commitment to the American alliance, although the alliance does, of course, feature. Instead, it looks and feels like Australia’s ‘Plan B’. Until now, we have relied successively on Britain and the United States. The white paper makes declarations about alliances and the enduring utility of remaining a US ally, but it also implicitly and diplomatically recognises that the dynamics have fundamentally changed.

The document stresses the Indo-Pacific space and has the Indo-Pacific featured on the cover. Arguably, it should be spun 45 degrees, with Australia metaphorically hanging from the bottom and Southeast Asia more visibly seen as the fulcrum of the Indo-Pacific. One criticism that could be levelled at the white paper is that, while it does address Southeast Asia, it could have and should have placed greater emphasis on the significance of regional ties. After all, the Association of Southeast Asian Nations, when aggregated, is Australia’s third-largest trading partner and most immediate area of strategic concern.

Some might say that it’s appropriate to place little emphasis on ASEAN, describing the 10-nation grouping as a ‘broken reed’. They see it as unreliable for security purposes. With that in mind, it appears that the paper’s drafters sought to emphasise ‘the Quad’ instead—the relatively informal arrangement among Australia, Japan, the US and India. Given that trilateral ties were already in place with Japan and the United States, the key to the Quad, from the white paper’s perspective, is India.

It remains to be seen how enthusiastic India will be over the long term in being closely associated with a country in the South Pacific that, as Alan Gyngell put it, has a long-held fear of abandonment. In addition, the benefits expected to accrue to Australia from the quadrilateral arrangement aren’t that clear—particularly beyond the already robust bilateral ties with India, Japan and the United States.

In fact, Australia has moved a long way from its post-war phobia of Japan. Canberra has established a comprehensive strategic partnership with Tokyo and undertaken preparations for a visiting forces agreement. The white paper gives due recognition to the bolstered bilateral ties.

Furthermore, there’s a concern that the messaging about the Quad may not work to the advantage of the partner nations in the way some would hope. Objections from China aren’t enough justification to dispense with the Quad, but perceptions in the neighbourhood should inform our approach and degree of enthusiasm in its pursuit.

In the meantime, we need to reimagine the importance of ASEAN. Southeast Asia isn’t some distant faraway land with which we can optionally engage. It’s our immediate front yard, in our immediate neighbourhood. It’s our future. The Australia in the Asian century white paper of 2012 gave remarkably little attention to ASEAN or Southeast Asia. That suggested that there’s a degree of discomfort among Australians in engaging with the neighbourhood, its 637 million people and its nearly $3 trillion economy. Yet Australians tend to disaggregate ASEAN. It appears we don’t like to think of it as an entity. That’s partly because it doesn’t look like the United States or the European Union. It’s a bit amorphous. It’s more indecisive than we would like it to be.

Culturally, it’s also a less comfortable space for the barely monolingual Australians who prefer the halls of New York, London, Paris or Geneva. The apparent trickiness and obtuseness of cultures in Southeast Asia makes for a degree of discomfort for many Australians seeking to negotiate a deal or set up business there. To be fair, Australia is getting better at regional engagement. Indeed, the white paper does emphasise engagement in regional forums, including the East Asia Summit, the ASEAN Regional Forum, the ASEAN Defence Ministers Meeting–Plus, the Indian Ocean Rim Association and a variety of related senior officials’ meetings. Nonetheless, I think our regional engagement remains undercooked.

On one level, the white paper is being seen as a primer for the prime minister’s upcoming ASEAN–Australia Special Summit, which is scheduled for mid-March. A number of universities and institutes are contributing to an ASEAN–Australia dialogue, which will precede the summit. These endeavours are a welcome attempt to promote greater understanding of our neighbouring proto-great power.

The paper’s emphasis on the Indo-Pacific and greater emphasis on regional ties does make one wonder why this is happening now. There’s definitely uncertainty about US resolve, about what ‘America First’ actually means, and about the consequences of having a transactional US presidency that appears hostile to regional and multilateral bodies like the Trans-Pacific Partnership and to other international bodies like UNESCO. That trend is deeply worrying for Australia and much of the world. Implicit also in the paper are concerns over President Trump’s emphasis on military solutions for problems in places like North Korea. There’s an understandable wariness emerging about how Australia responds to such security challenges and how much Australia supports or disapproves of the actions of key stakeholders.

Stressing engagement with our neighbours and partners in the region is important, and there are signs that there’s a degree of discomfort with Australia’s approach to matters like the Quad. Vietnam and Singapore may be happy with this development, but our more forthright policy positions may be jarring to our immediate and important Malaysian and Indonesian neighbours.

In reflecting on the implications of such concerns, we need to be clear about the importance of Indonesia to our security and prosperity. Contentious issues—including beef, boats and spies, clemency, Timor and Papua—have generated significant friction points in the bilateral relationship. From Jakarta’s perspective, Canberra hasn’t been the most faithful or reliable of friends. Economically, ties are weak and shallow. But there’s progress underway on the Indonesia–Australia Comprehensive Economic Partnership Agreement. This is a positive step.

Former president Susilo Bambang Yudhoyo, in Darwin in late 2017, spoke of the need for a comprehensive strategic partnership between Indonesia and Australia. Yet it seems so difficult to attract attention for such issues from the mainstream media and in policymaking circles. In part, that may be due to a degree of resentment. Indonesia appears cavalier and irritable in its relationship with Australia, which plays poorly in the Australian media.

Many inside the Indonesian armed forces also are resentful of our apparent perfidy over East Timor in 1999, when we led an international intervention force after having endorsed Indonesian annexure of the territory for a quarter of a century.

There’s certainly scope for Australia to work on sweetening ties with Indonesia, as well as with Malaysia and Singapore. Arrangements that help bolster those ties aren’t considered in any detail in the white paper. They should be.

The paper also effectively acknowledges that today China is more influential than ever, and that its influence has grown exponentially across the globe. Yet as recent research indicates, countries like Thailand, for instance, still want the US to remain engaged. They also see ASEAN as significant for their future prosperity and security. Australia needs to think more about how the member states view ASEAN for their own security and prosperity.

As a Plan B, the foreign policy white paper is a sound attempt to articulate a vision of Australia’s engagement in an uncertain and dynamic world. As indicated, there are areas where further developments may be explored, but, in the main, it sets out to chart a safe course for Australia in increasingly troubled waters.

It can’t be mere coincidence that US secretary of state Rex Tillerson’s first major foreign policy speech on 18 October was about America’s relations with India. The address, delivered on the eve of his visit to South Asia, was described by a think tank official in Washington as America’s ‘love letter’ to India.

India has steadily risen in the estimation of the Trump administration, particularly since the visit of Prime Minister Narendra Modi to Washington in June. The term ‘Indo-Pacific region’ appeared prominently in the joint statement issued by President Donald Trump and Modi at the end of the latter’s visit. Since then, it has come into vogue in Washington’s official circles as a substitute—some would say replacement—for ‘Asia–Pacific region’, the term traditionally used to describe the vast expanse stretching from India to Japan, Australia, and beyond. This change emphasises both the importance of the Indian Ocean in US military strategy and the increasing geo-political prominence of India in American policy.

In his speech at the Center for Strategic and International Studies, Tillerson stressed that India and America are ‘two bookends of stability—on either side of the globe’ and that the ‘emerging Delhi–Washington strategic partnership’ is needed to anchor the rules-based world order for the next hundred years. His emphasis on the terms ‘strategic partnership’ and ‘rules-based world order’ acquired greater significance when in the same speech he characterised China (India’s chief competitor if not major antagonist in Asia) as a ‘destabilizing force’ in the region and accused Beijing of ‘provocative actions in the South China Sea [that] directly challenge the international law and norms that the United States and India both stand for’.

Tillerson’s choice of words in describing India’s and China’s respective roles in the Indo-Pacific region clearly sent the signal that the US considers India an ally, not only in the traditional strategic sense but also as a partner in the shaping of a future world order based on rules and norms. In contrast, he implied that China is a habitual violator of international norms and America’s principal military and political adversary in the region. Although the Trump administration’s assessment of India’s role and potential as an ally builds on the policies pursued by the Clinton, Bush and Obama administrations, this formulation clearly states what was only implied in the earlier administrations’ approaches to India.

That’s music to Indian ears. Furthermore, the Indian foreign policy establishment has found Tillerson’s references to Pakistan, both in the CSIS speech and during his subsequent visit to South Asia, even more exhilarating. While praising India to the skies, the secretary of state told high-ranking Pakistani officials that the US will no longer tolerate Islamabad’s patronage of terrorist groups operating from Pakistani territory and bent on destabilising Afghanistan. In his CSIS speech, Tillerson declared that the US expects ‘Pakistan to take decisive action against terrorist groups based there that threaten its own people and the broader region’. During his stopover in Kabul on the way to Pakistan, the secretary of state said he will pressure Islamabad to take action on the support that the Taliban and other terrorist organisations receive. He also made it clear that future US aid to Pakistan will be ‘conditions-based … It will be based upon whether they take action that we feel is necessary to move the process forward for both creating opportunity for reconciliation and peace in Afghanistan but also ensuring a stable future Pakistan’.

Most, if not all, of Tillerson’s statements about Pakistan concentrated on the twin and interrelated issues of terrorism and Pakistan’s role in the ongoing civil strife in Afghanistan. It’s commonly acknowledged in Washington that in Afghanistan Pakistan clandestinely supports the Taliban while ostensibly behaving like an ally of the US. There’s also considerable apprehension within policymaking circles in the US that Islamabad’s formidable nuclear arsenal may fall into the hands of Islamic extremists because of the increasingly radical atmosphere and chaotic conditions in the country.

The secretary’s interaction with Pakistani leaders was remarkably different in both tone and content from the statements he made in New Delhi. In India, his emphasis was on larger global and regional issues and the possibilities of cooperation between India and the US in tackling those issues. Pakistan was hardly mentioned. That was a clear signal—if one was needed—that the US no longer links the two South Asian rivals when formulating policies towards the region.

American interests in Pakistan derive from Washington’s concerns about terrorism and stability in Afghanistan, where American forces continue to be engaged in that country’s longest war. Relations with India, on the other hand, are treated independently of those local concerns, and are linked with broader issues of global and regional stability.

It was clear from Tillerson’s remarks that the US sees India as a major regional bulwark against the expansion of Chinese influence and power. The secretary of state more than once emphasised, even if tacitly, that India and the US share the strategic goal of curbing Chinese power and must work together politically and militarily towards that end. While the Indians didn’t openly dispute Tillerson’s thesis on China (and indeed probably agreed with it in their heart of hearts), they didn’t endorse it publicly.

President Trump’s aptitude for frequently sending contradictory signals—as he did recently regarding Pakistan—make the Indians wary of taking the secretary of state’s exuberance at face value. More importantly, geographic and economic constraints make it difficult for India to take an overtly anti-China stance, despite occasional crises erupting on its borders with China and an unstated geo-political rivalry between the two Asian giants. One hopes that Washington understands those constraints and will make haste slowly in its courtship of India.

Last November the Joint Standing Committee on the National Capital and External Territories agreed to examine the strategic importance of Australia’s Indian Ocean Territories (IOT)—the Cocos (Keeling) Islands and Christmas Island. The Committee is looking at the changing regional security environment and security contingencies; defence capability in the territories and associated infrastructure development; the scope of maritime, air and other cooperation with Indo-Pacific partners; and impacts on local communities.

I recently participated in a public forum convened by the Committee. My remarks were based on a submission I authored with the University of Wollongong’s Sam Bateman. Our submission is here (#2). (Sam and I previously wrote the ASPI report, Our western front: Australia and the Indian Ocean.)

While the IOT comprise the Cocos (Keeling) Islands and Christmas Island, it’s important to point out that defence capability and strategic issues vary greatly between them.

But their strategic value is limited by their remoteness and difficulties of resupply, particularly by sea. As can be seen in the table below the IOT are closer to Southeast Asia than they are to main air bases in Australia.

Providing satisfactory sovereignty protection around Christmas Island is a particular concern. It’s got no secure anchorage and its wharf area at Flying Fish Cove is fully exposed to north-westerly winds. There can be periods of several weeks on end during the wet season (November through April) when ships are unable to get alongside to discharge their cargo. Small amounts of cargo can then be lightered ashore but nothing in any quantity.

There are several reasons why a major development of the Cocos Islands like Diego Garcia isn’t a good idea. In comparison with Diego Garcia, the land area of the Cocos Islands is smaller (only about 14 square kilometres) and the main lagoon less navigable. The work required to develop a main base at the Cocos Islands would be extensive, highly damaging to the environment and disruptive for the local population.

The resupply of fuel to support the anti-air defences of the islands would be extremely difficult. Daily aviation fuel requirements could be in the order of hundreds of tons or greater, particularly if fighter aircraft were to be deployed there. Resupply in such quantities would be highly problematic if the islands were under air attack from Southeast Asia. There’s also the issue of weather. Diego Garcia is five degrees closer to the equator than the Cocos Islands which means that it’s much less affected by cyclones and bad weather.

An unhardened base there would be a liability more than an asset. Despite their current strategic importance, the IOT would be extremely difficult in time of conflict to defend against an adversary with access to bases in Southeast Asia. Indeed, their location is within 600 nautical miles of Sumatra and Java, and thus vulnerable to air or missile attack. It would be virtually impossible for Australia to retake them if they were occupied by such an adversary.

For those reasons, Sam and I don’t support major defence infrastructure developments in the islands, beyond the upgrading of the Cocos airfield and increases to the current storage arrangements for aviation fuel and marine diesel.

An expanded and well-resourced Australian strategic presence on Christmas and Cocos (Keeling) Islands would enable closer maritime security and other forms of defence cooperation with a range of Indo-Pacific partners. These might include the US, France and the UK as long-standing strategic partners, and Singapore and Malaysia (the Southeast Asian members of the Five Power Defence Arrangements).

India, with whom our strategic relationship is slowly growing, may also have an interest in access to the IOT: the latest strategy document of the Indian Navy, Ensuring Secure Seas: Indian Maritime Security Strategy (2015), puts an increased focus on ‘undertaking cooperation and coordination between various navies, to counter common threats at sea.’ (ASPI’s Malcolm Davis took a close look at India’s interest in the Cocos islands in his submission (#9) to the Committee.) There may, in due course, be some Australian interest in approaching New Delhi about using India’s Port Blair for our P-8A Poseidon maritime surveillance aircraft on a reciprocal basis.

From time to time Indonesia has expressed concerns about the presence of US marines in Darwin and may also have concerns about any American use of the IOT especially Christmas Island. Given the IOT’s proximity to Indonesia, Canberra should keep Jakarta informed about possible American use of the IOT, and the extent to which any developments there might affect Indonesia. There may also be scope for Australia–Indonesia maritime cooperation around the IOT, something that ASPI’s executive director Peter Jennings supported in his submission (#11) to the Committee.

Australia’s fortunate to have our offshore island outposts in the Indian Ocean. By investing in them in the years ahead the government has an opportunity to increase their strategic importance and utility.

Donald Trump spoke to Malcolm Turnbull within 24 hours of his election. The event produced a quaint response in commentary redolent of an older era in the character of allied relationships.

On the one hand, there was gratitude that our important ally hadn’t overlooked us. On the other, Trump’s election campaign, wherein the candidate disparaged China, trash-talked the TPP, and criticised Seoul and Tokyo for not pulling their weight in support of their own defence, simply reinforced the views of some senior politicians and academics that we should disconnect from the alliance and concentrate on Asia. Turnbull’s focus on their mutual business experience, while understandable, kept contemplation of the significance of the call brief.

According to the Prime Minister’s Office, Turnbull was the second political leader president-elect Trump spoke to after his election victory. The priority we were assigned is significant. It reflects, in part, the fact that we have a unique status in the Trump view of alliances—the only one where the American partner’s contribution wasn’t criticised by candidate Trump. Privately, his policy advisers and campaign team made thoroughly clear to us that they understand both the value of past and current commitments in military campaigns and the importance to the US of facilities we share, capabilities we’re acquiring from American industry, and mutually embedded military and intelligence personnel.

From our point of view, the product of those facilities, the technological advantages we gain from US equipment and our involvement in the development of new capabilities under the ‘third offset strategy’ are crucial to Australia’s defence and unaffordable in any other relationship. Our current status with Washington has evolved well beyond the situation that existed at the end of the Cold War.

The challenge now is how we use that connection to influence American policy in our region where all our friends and allies are deeply disturbed by what they heard from the GOP nominee. Trump’s campaign positions translated into administration policy would result in the suspension of America’s leadership of the post–World War II liberal international project. Originally, the project focused on global free trade, a rules-based system for the global commons, and a comprehensive Western alliance under a system of American extended deterrence. More recently, those priorities have been joined by an effort on nuclear disarmament and a coordinated response to climate change.

A Trump indifferent to South Korean and Japanese nuclear weapons would dramatically destabilise our major trading partners in North Asia. A Trump declaration that China was a currency manipulator—a perception outdated by at least five years—and the promised imposition of a 45% tariff in his ‘first one hundred days’ plan, would be ruinous to the regional and global economy. However, Trump now denies he ever said the former, and the latter would seem to fly in the face of the, albeit undetailed, protestations of mutual respect in the phone conversation between President Xi Jinping and the president-elect. Over the weekend, Newt Gingrich described the promise of a large, high border wall with Mexico as a ‘campaign device’, an elegant exposition of a ‘non-core promise’. Asian leaders will hope that such ‘devices’ will come to characterise plans with regard to the Indo-Pacific.

Currently, the Asian leaders’ conversations with Trump and his team have been bilateral. They will have noted, however, the priority assigned the Australian conversation. They know that Australia wants nothing from the US beyond what it already has and which is unchallenged. They want Australia to be avidly engaged with the US. They know our regional policies and aren’t uncomfortable with them (with the possible Chinese exception to our South China Sea position). Quickly we will become message-bearers.

A recent article in Foreign Policy by Trump advisers Alexander Gray and Peter Navarro appears to be the underpinning of possible Trump secretary of state Rudy Giuliani’s intervention this week on a more militaristic approach to policy in the Asia–Pacific region. He said that the Trump administration would undertake a massive military build-up aimed at countering China and curbing its ambitions. The article and the broader policy direction indicate that under Trump US leadership on the liberal international agenda will be suspended while the commitment to enhance American military capabilities and economic power will accelerate.

There’s much in the Foreign Policy article that will disturb Asian policymakers. It’s a root-and-branch criticism of the implementation of Obama’s Asian pivot but not the priority. They characterise Obama’s implementation as ‘feckless and mendacious’, particularly in its responses to perceived Chinese initiatives. They’re hard-line on North Korean approaches, Taiwan’s defence and South China Sea signalling. As part of their countermeasures, they propose a massive build-up of the US Navy from 274 ships to 350 with a strong Pacific Ocean focus.

Trump plans to end sequestration in defence spending and massively increase the defence budget. In the light of the ‘third offset strategy’, the focus on platform numbers is antiquated. As the Trump administration evolves, they may eventually realise that it’s not the sum total of navy and air force platforms that counts but the capabilities they deploy.

We’re in for a wild ride which will test our maturity and effectiveness. Abandoning the field isn’t an option.