Tag Archive for: Asia–Pacific

Building the Indo-Pacific defence industry base

Indo-Pacific alliances and partnerships are a key advantage of the United States in competing with China.

Now the United States seeks an economic version of that strategic advantage with a Statement of Principles for Indo-Pacific Defence Industrial Base Collaboration.

It released the statement at the Shangri-La dialogue in Singapore last week. Australia and other allies immediately endorsed it.

Australian Deputy Prime Minister and Defence Minister Richard Marles said the point of such new groupings was to foster ‘a constellation of states’ that acted as a force multiplier for collective security and delivered network effects.

New formations would serve different functions, Marles said, ‘some normative, some about capability, some about security, others about industry integration. Building more resilient supply chains is a key priority for Australia, which is why I’m endorsing at this dialogue the Statement of Principles to strengthen the region’s defence industrial bases.’

The principles for defence industrial resilience in the Indo-Pacific call for collaboration to:

·      expand industrial-base capability, capacity and workforce;
·      increase supply chain resilience;
·      promote defence innovation;
·      improve information sharing;
·      encourage standardization; and
·      reduce barriers to cooperation.

The work must be ‘consistent with free and fair market competition and protection of intellectual property’ and will involve governments, industry, capital providers, academia and other forms of partnership.

Nothing more specific was said about the proposed defence-industry cooperation. No one said how deep it would be, what sort of military systems it would cover nor even which countries would be included, though they would be ‘like-minded participants’.

This effort is driven by the same factors that motivated the Biden administration’s 2022 Indo-Pacific Economic Framework for Prosperity, not least the China challenge and Asia asking Washington what it has to offer.

The defence dimension is a response to the pain and the pleas of allies and partners over many years about the difficulty of buying some kinds of defence equipment from the United States or partnering with it in military manufacturing.

As the chairman of the US House of Representatives foreign affairs committee, Michael McCaul, said last year, America’s ‘approach to defence and military technology exports is in dire need of reform’.

American officials say the AUKUS partnership with Australia and Britain has been an important learning experience, showing Washington how US laws stand in the way of equipment partnerships. The United States is offering what it has done for Australia to other Indo-Pacific countries in a more general and gentle version.

As well as noting the AUKUS agreement, the United States points to co-development with Japan of a glide-phase interceptor to counter hypersonic threats; partnership with Australia and Japan on an integrated air-and-missile defence architecture; and work with India on co-producing fighter engines and armoured vehicles.

US Defence Secretary Lloyd Austin said that before joining the Biden administration he had had personal experience of the problems of partnership. ‘Several years ago, we set out with a notion to gain approval for India to build jet engines for fighter aircraft in India. I served on a board of a company that makes jet engines for fighter aircraft and I know how difficult this was going to be. And we were hopeful but very sceptical that we could get this across the finish line. We did it. That’s happening.’

Austin said the industrial commitment to the Indo-Pacific had enough momentum to continue, no matter who won the US presidential election in November.

In AUKUS, Australia is near the top of the US partnership hierarchy. Other close allies face a steep climb to get there. How difficult was shown at the Shangri-La dialogue by a question to Austin from Chung Min Lee, a professor at Korea’s Advanced Institute for Science and Technology:

The US has always said that the Republic of Korea is a lynchpin of Asian policy and security in the region. And yet, unlike AUKUS, the US has been quite lukewarm to South Korea’s desire to have nuclear-powered submarines. So, my question to you, sir, is if the South Korean government officially asks Washington for its support in building nuclear-powered submarines for the ROK Navy would you support such an initiative?

A version of AUKUS for South Korea would be ‘very, very difficult for us’, the US defence secretary replied. The initiative with Australia and Britain was a generational investment, he said. ‘This is no small endeavour. It is very, very difficult to go through each piece of this. And so, we’ve just started down this path with Australia. Highly doubtful that we could take on another initiative of this type any time in the near future.’

The nuclear crown jewels of AUKUS mean it is a rare deal—so rare that Canberra had formerly known it needn’t bother to ask Washington for help in building nuclear submarines. It had known the answer would be a firm ‘No.’

China changed that, just as it has caused the United States to launch this new effort to build the Indo-Pacific defence industrial base. At a time when US politics is protectionist—turning inward with trade barriers and tariffs—the industrial principles show a United States still able to look outward to what its allies and partners need.

Advice to ASEAN: ‘N’ should equal non-aligned, not neutral.

As this week’s 50th anniversary ASEAN-Australia summit wraps up in Melbourne, I would like to offer one simple piece of policy advice to each party to help them strengthen their relations in future from a position of intellectual clarity.

First, for ASEAN, a rigorous parsing of the differences between non-alignment and neutrality could be helpful for articulating Southeast Asian countries’ foreign policy interests more in line with their traditions.

The 11 countries of Southeast Asia, including the 10 ASEAN members and Timor Leste, all belong to the Non-Aligned Movement (NAM). NAM notably originates from an Indonesian initiative to convene the world’s developing and newly independent countries, then mostly from Asia, at a summit in Bandung, in 1955. NAM describes this foundational impulse as a ‘desire not to be involved in the East-West ideological confrontation of the Cold War, but rather to focus on national independence struggles and… economic development.’

The Bandung Principles somewhat loftily specify a commitment to abstain ‘from the use of arrangement of collective defence to serve the particular interests of any of the big powers, (and) abstention by any country from exerting pressures on other countries.’

In Southeast Asia, only the Philippines has continuously maintained a bilateral defence treaty with Washington (since 1951) though it no longer hosts US military bases or forces on a permanent basis. Thailand was a close ally of the US during the cold war and remains a major non-NATO ally to this day. Under various arrangements, Brunei, Singapore and Malaysia all host foreign military forces on a modest scale, none of which has impeded NAM membership or their pursuit of non-aligned policies.

In its heyday, in the 1960s, non-alignment was widely embraced as offering a means for developing states to avoid siding with either the US-led or Communist blocs, and preserving their freedom of manoeuvre, or ‘agency’ to use the more awkward but currently fashionable word. Southeast Asia was a hot zone for most of the cold war, as devastating wars raged across Indochina, while smaller-scale insurgencies and political violence took a horrific toll elsewhere. ASEAN came into existence, in 1967, with the aim of projecting greater political cohesion across such a fractious region. It was one of the first international organisations formed by Southeast Asians without external prompting, a point that still has political resonance.

None of the five founding ASEAN members was officially neutral, however, in the mould of Sweden or Switzerland (the latter only joined the UN in 2002). All, in fact, were avowedly anti-communist, including Indonesia’s military-dominated government after 1965. In this important sense, ASEAN’s founders were aligning with each other from the beginning. After the communist victories of 1975, Vietnam, Laos and Cambodia were not neutral in any meaningful sense either, partly because their respective patrons awkwardly straddled the Sino-Soviet split. Burma’s socialist junta probably came closest to neutrality in Southeast Asia, though it was eventually persuaded out of its self-imposed seclusion to join ASEAN in 1997, around the same time as the three Indochinese countries.

For contemporary Southeast Asia and its expanded ASEAN membership, the distinction between non-alignment and neutrality is more than a matter of historical or semantic significance, as geopolitical divisions are again on the rise. Yet this nuance sometimes appears lost among ASEAN’s political leaders and policy elites, who increasingly frame their foreign policy in terms of neutrality. A desire for neutral status is most often espoused in connection with fears about escalating China-US rivalry and the perceived risk that Southeast Asia will again become geopolitically riven. Under President Ferdinand Marcos II, the Philippines has become the outlier within ASEAN, emphatically doubling down on its alliance with the US to protect it against China’s maritime expansionism. Manila has no problem with counter-balancing alignments either.

Neutrality means consciously avoiding partiality in conflicts and disputes among third parties. Malaysia’s Prime Minister, Anwar Ibrahim, has used the word repeatedly since assuming office, which has not gone unnoticed in China’s Global Times. This is in spite of Anwar being more effusive than his predecessors or most of his ASEAN counterparts in condemning Russia for invading Ukraine. Neutrality is at odds with Malaysia’s membership of the Five Power Defence Arrangements, whereby Australia, New Zealand and the UK have a quasi-treaty commitment to come to Malaysia and Singapore’s aid in case of external aggression. Australia maintains a low-profile military presence on the Peninsula for that purpose. Malaysia benefits through access to shared surveillance and intelligence. Malaysia also conducts regular military exercises with the United States. Neutrality is further at odds with ASEAN’s softer, collective commitment to support its own members against external threats, for example through the South China Sea Code of Conduct, which involves all 10 members. Yes, the Bandung Principles enshrines ‘abstention from intervention or interference into the internal affairs of another country’. But again, non-interference is not the same thing as neutrality.

Indonesia’s Foreign Minister Retno Marsudi has explicitly distanced herself from the term, claiming that ‘our independent and active foreign policy does not mean neutrality and disengagement’. But some foreign policy commentators in Indonesia have articulated a desire for strategic equidistance from the US and China in terms of neutrality. If taken up by the President-presumpt, Prabowo Subianto, the term is likely to become more entrenched across ASEAN.

Neutrality has a tangible and legal definition in wartime. In case an armed conflict breaks out between the US and China, for Indonesia and the Philippines, the concern is that vessels and aircraft belonging to the belligerents will transit through their archipelagic waters. This is also a hot-button issue in Australia-Indonesia relations, and not simply in relation to AUKUS.

Yet neutrality does not feature significantly in the foreign policy traditions of most Southeast Asian countries. Nor is it in their best interests.

Loose non-alignment is a more prudent and flexible posture to aspire towards. The leading exponent of this within ASEAN is Singapore, which sees no contradiction between its adherence to non-alignment and pursuit of close defence relations with the United States and Australia, or close economic and diplomatic relations with China. Singapore’s diplomacy, in truth closer to ‘poly-alignment’, ultimately rests on the ability to credibly defend itself. Singapore consciously frames its key foreign policy decisions as positions of principle, rather than allegiance to another country. That is perhaps the most persuasive definition of non-alignment in contemporary terms. Prime Minister Lee Hsien Loong pointedly offered a detailed endorsement of Australia’s regional security role at his joint press conference with Prime Minister Anthony Albanese this week, repeating Singapore’s offer to host visits by Australia’s nuclear-powered submarines in future.

Vietnam’s omni-directional foreign policy shares some basic similarities with Singapore, though Hanoi has adopted a stricter policy regarding not hosting foreign military forces, or forming alliances, than most other ASEAN members.

Neutrality without the independent means to defend oneself is the worst of all strategic settings for ASEAN countries. China wants Southeast Asian countries to cut their security ties to the US and its allies. It has been applying collective pressure on ASEAN, through the South China Sea Code of Conduct negotiations, to give it a veto over exercises with navies and air forces from non-littoral states. If the South China Sea becomes a bastion for the PLA to dominate uncontested, neutrality will feel more like subjugation for the maritime states of Southeast Asia, including Vietnam.

A posture of non-alignment offers a more optimal standpoint than neutrality for ASEAN member states to exert their agency in foreign policy. This includes broad-based cooperation with a dialogue partner like Australia, extending into defence and security. The expectations on either side need not be exclusive, or bloc-based, but can be more portfolio in nature. Just ask Singapore.

Advice to ASEAN: ‘N’ should equal non-aligned, not neutral.

As this week’s 50th anniversary ASEAN-Australia summit wraps up in Melbourne, I would like to offer one simple piece of policy advice to each party to help them strengthen their relations in future from a position of intellectual clarity.

First, for ASEAN, a rigorous parsing of the differences between non-alignment and neutrality could be helpful for articulating Southeast Asian countries’ foreign policy interests more in line with their traditions.

The 11 countries of Southeast Asia, including the 10 ASEAN members and Timor Leste, all belong to the Non-Aligned Movement (NAM). NAM notably originates from an Indonesian initiative to convene the world’s developing and newly independent countries, then mostly from Asia, at a summit in Bandung, in 1955. NAM describes this foundational impulse as a ‘desire not to be involved in the East-West ideological confrontation of the Cold War, but rather to focus on national independence struggles and… economic development.’

The Bandung Principles somewhat loftily specify a commitment to abstain ‘from the use of arrangement of collective defence to serve the particular interests of any of the big powers, (and) abstention by any country from exerting pressures on other countries.’

In Southeast Asia, only the Philippines has continuously maintained a bilateral defence treaty with Washington (since 1951) though it no longer hosts US military bases or forces on a permanent basis. Thailand was a close ally of the US during the cold war and remains a major non-NATO ally to this day. Under various arrangements, Brunei, Singapore and Malaysia all host foreign military forces on a modest scale, none of which has impeded NAM membership or their pursuit of non-aligned policies.

In its heyday, in the 1960s, non-alignment was widely embraced as offering a means for developing states to avoid siding with either the US-led or Communist blocs, and preserving their freedom of manoeuvre, or ‘agency’ to use the more awkward but currently fashionable word. Southeast Asia was a hot zone for most of the cold war, as devastating wars raged across Indochina, while smaller-scale insurgencies and political violence took a horrific toll elsewhere. ASEAN came into existence, in 1967, with the aim of projecting greater political cohesion across such a fractious region. It was one of the first international organisations formed by Southeast Asians without external prompting, a point that still has political resonance.

None of the five founding ASEAN members was officially neutral, however, in the mould of Sweden or Switzerland (the latter only joined the UN in 2002). All, in fact, were avowedly anti-communist, including Indonesia’s military-dominated government after 1965. In this important sense, ASEAN’s founders were aligning with each other from the beginning. After the communist victories of 1975, Vietnam, Laos and Cambodia were not neutral in any meaningful sense either, partly because their respective patrons awkwardly straddled the Sino-Soviet split. Burma’s socialist junta probably came closest to neutrality in Southeast Asia, though it was eventually persuaded out of its self-imposed seclusion to join ASEAN in 1997, around the same time as the three Indochinese countries.

For contemporary Southeast Asia and its expanded ASEAN membership, the distinction between non-alignment and neutrality is more than a matter of historical or semantic significance, as geopolitical divisions are again on the rise. Yet this nuance sometimes appears lost among ASEAN’s political leaders and policy elites, who increasingly frame their foreign policy in terms of neutrality. A desire for neutral status is most often espoused in connection with fears about escalating China-US rivalry and the perceived risk that Southeast Asia will again become geopolitically riven. Under President Ferdinand Marcos II, the Philippines has become the outlier within ASEAN, emphatically doubling down on its alliance with the US to protect it against China’s maritime expansionism. Manila has no problem with counter-balancing alignments either.

Neutrality means consciously avoiding partiality in conflicts and disputes among third parties. Malaysia’s Prime Minister, Anwar Ibrahim, has used the word repeatedly since assuming office, which has not gone unnoticed in China’s Global Times. This is in spite of Anwar being more effusive than his predecessors or most of his ASEAN counterparts in condemning Russia for invading Ukraine. Neutrality is at odds with Malaysia’s membership of the Five Power Defence Arrangements, whereby Australia, New Zealand and the UK have a quasi-treaty commitment to come to Malaysia and Singapore’s aid in case of external aggression. Australia maintains a low-profile military presence on the Peninsula for that purpose. Malaysia benefits through access to shared surveillance and intelligence. Malaysia also conducts regular military exercises with the United States. Neutrality is further at odds with ASEAN’s softer, collective commitment to support its own members against external threats, for example through the South China Sea Code of Conduct, which involves all 10 members. Yes, the Bandung Principles enshrines ‘abstention from intervention or interference into the internal affairs of another country’. But again, non-interference is not the same thing as neutrality.

Indonesia’s Foreign Minister Retno Marsudi has explicitly distanced herself from the term, claiming that ‘our independent and active foreign policy does not mean neutrality and disengagement’. But some foreign policy commentators in Indonesia have articulated a desire for strategic equidistance from the US and China in terms of neutrality. If taken up by the President-presumpt, Prabowo Subianto, the term is likely to become more entrenched across ASEAN.

Neutrality has a tangible and legal definition in wartime. In case an armed conflict breaks out between the US and China, for Indonesia and the Philippines, the concern is that vessels and aircraft belonging to the belligerents will transit through their archipelagic waters. This is also a hot-button issue in Australia-Indonesia relations, and not simply in relation to AUKUS.

Yet neutrality does not feature significantly in the foreign policy traditions of most Southeast Asian countries. Nor is it in their best interests.

Loose non-alignment is a more prudent and flexible posture to aspire towards. The leading exponent of this within ASEAN is Singapore, which sees no contradiction between its adherence to non-alignment and pursuit of close defence relations with the United States and Australia, or close economic and diplomatic relations with China. Singapore’s diplomacy, in truth closer to ‘poly-alignment’, ultimately rests on the ability to credibly defend itself. Singapore consciously frames its key foreign policy decisions as positions of principle, rather than allegiance to another country. That is perhaps the most persuasive definition of non-alignment in contemporary terms. Prime Minister Lee Hsien Loong pointedly offered a detailed endorsement of Australia’s regional security role at his joint press conference with Prime Minister Anthony Albanese this week, repeating Singapore’s offer to host visits by Australia’s nuclear-powered submarines in future.

Vietnam’s omni-directional foreign policy shares some basic similarities with Singapore, though Hanoi has adopted a stricter policy regarding not hosting foreign military forces, or forming alliances, than most other ASEAN members.

Neutrality without the independent means to defend oneself is the worst of all strategic settings for ASEAN countries. China wants Southeast Asian countries to cut their security ties to the US and its allies. It has been applying collective pressure on ASEAN, through the South China Sea Code of Conduct negotiations, to give it a veto over exercises with navies and air forces from non-littoral states. If the South China Sea becomes a bastion for the PLA to dominate uncontested, neutrality will feel more like subjugation for the maritime states of Southeast Asia, including Vietnam.

A posture of non-alignment offers a more optimal standpoint than neutrality for ASEAN member states to exert their agency in foreign policy. This includes broad-based cooperation with a dialogue partner like Australia, extending into defence and security. The expectations on either side need not be exclusive, or bloc-based, but can be more portfolio in nature. Just ask Singapore.

Thirty years of APEC summits

The APEC summit in San Francisco this week offers poignant echoes and painful contrasts with the first summit in Seattle 30 years ago.

Asia–Pacific Economic Cooperation is always ‘four adjectives in search of a noun’, a wry line from Gareth Evans. Yet the terms and tone of APEC’S quest transformed in the journey from Seattle in 1993 to San Francisco in 2023.

The geoeconomic optimism of the Asia–Pacific has been replaced by the geopolitical competition of the Indo-Pacific. The ‘Cooperation’ bit in APEC’s name is embattled. Render the ‘C’ today as ‘Competition’. And the ‘Economic’ ambitions turn to de-risking and decoupling.

San Francisco this week aimed to keep the show on the road and offered the venue for cautious repair and reflection by China’s Xi Jinping and the US’s Joe Biden.

APEC’s current horizons are dark, whereas 30 years ago, the vistas were broad. The weather metaphor misleads in one way, because Seattle was the wintriest talkfest I covered, far chillier than later northern hemisphere summits in Osaka (1995), Vancouver (1997) and Shanghai (2001).

In Seattle, the leaders dressed for the cold. The APEC tradition of funny shirts was launched the following year, in Bogor, when Indonesia’s Suharto got them all into batik.

While the sleet blew in the day after the Seattle communiqué was released, for foreign policy wonks and tragics that first summit was a Wordsworth moment: ‘Bliss was it in that dawn to be alive.’

Seldom do you get a leaders’ meeting where the optimism seems natural rather than scripted and the promise of the new is more than diplomatic bloviating. In Seattle, the Cold War was safely dead, globalisation was the rocket taking off and Asia’s era had arrived.

Boarding the ferry for Blake Island in Seattle’s Puget Sound, the leaders were all in the boat going the same way. The statement they issued on the island hailed their ‘unprecedented meeting’, reflecting ‘the emergence of a new voice for the Asia Pacific in world affairs’. The 21st century could belong to this newly imagined region with 40% of the world’s population and 50% of its GNP.

Australia and Japan quietly glowed at how they’d brought APEC to life. The Canberra–Tokyo intermingling of effort over decades had a culminating moment in Seattle.

Back in 1968, the Pacific Basic Economic Council had been formed as an extension of the Australia–Japan Business Cooperation Committee. The ‘Pacific Community seminar’ Japan and Australia ran in Canberra in 1980 became the second-track Pacific Economic Cooperation Council. The government-level step-up was the first APEC ministerial meeting in Canberra in 1989. And then with plenty of urging from Australia’s Paul Keating, US President Bill Clinton gathered the leaders in 1993.

Leveraging a nod of agreement from Suharto and a Japanese commitment, Keating pitched the summit idea to Clinton during their first White House meeting. Keating said he’d told Clinton, ‘A drop of interest and authority from you, and I’ll be able to pull all this together.’

As Clinton later joked, Keating knew how ‘to punch the frog’ to get an idea hopping.

Keating said Clinton couldn’t resist the intellectual opportunity of APEC: ‘I said, “Look Bill, we’re from fraternal parties. I’m doing all the legwork. I’m gifting this thing to you. All you’ve got to do is be big enough to take the gift.”’

The trade idea Australia and Japan injected into APEC was ‘open regionalism’.

The open regionalism theology reflected Japan’s nightmare of trade blocs in Europe and America, plus Australia’s experience of unilaterally smashing its own tariff walls. Open regionalism preached that the free-trade targets APEC set itself for 2010 and 2020 would be voluntary and non-binding. APEC’s job would be to offer persuasion and peer pressure, while keeping score as each nation marched to the free-trade goals.

The optimism lasted five years. The APEC summit in Kuala Lumpur in 1998 was a crunch moment for each country to embrace ‘early and voluntary’ liberalisation of trade barriers in areas identified by APEC.

Asia, though, was already reeling from the 1997 Asian financial crisis. And in KL the country that had done the most to create the vision of open regionalism plunged a sword into its heart. Japan refused to cut protection for its forests and fisheries sectors; what APEC was asking of Tokyo was so domestically sensitive as to be politically impossible.

The sixth APEC summit in KL was when the broad vistas of that first Seattle gathering started to shrink and sink. Since then, APEC has been characterised by a ‘strange combination of a loss of direction and mission creep’. Far from running the game, APEC runs to stay relevant to the game.

One constant is APEC’s useful role as a neutral space for leaders to do individual business. Seattle was the first meeting between the presidents of China and the US since the Tiananmen Square massacre. The highpoint in San Francisco this week is the Xi–Biden meeting.

The biggest then-and-now contrast is the paucity of the US contribution to the trade discussion, compared with Washington’s dominance 30 years ago. The US has marginalised itself from new efforts at regional integration.

A rich new era of Asian commerce arrives, yet US protectionism means it will have ‘fewer economic carrots to offer’ and US ‘economic and political sway will be diminished’, as The Economist notes. ‘America will retain influence over Asian security, but its economic importance will decline.’

APEC still influences the language of the trade discussion. But the free-trade effort getting all the attention is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, lauded by Canberra trade types as pre-eminent because of its ‘ambitious scope and high quality standards and rules’.

The ambition and scope were injected by the US in the original TPP, but Washington walked away from all that and zoomed off into an era of protectionism and industry policy. China is more interested in getting into the CPTPP than the US, although Beijing faces huge policy hurdles (subsidies to state-owned enterprises, intellectual property protection, barriers to digital trade and labour rights).

The concept of a trade ‘region’ stretches, from the Asia–Pacific to the Indo-Pacific. And that regional stretch snaps in the CPTPP, which welcomes the United Kingdom as its newest member.

The 30 years of APEC summits show that meetings on the mount do service by commission and omission—by delicate deferral as well as communiqué. The achievements list has several columns, including ‘successfully done’ and ‘successfully avoided’.

Substance mixes with symbolism, and oft times it’s difficult to pick the reality beneath reams of rhetoric. The beauty of summit season is that it comes around annually. The continuum counts.

After 30 years, APEC still demonstrates a Delphic truth: the meeting is the message.

Working with the Pacific island nations to build resilience

Soon after she became foreign minister in May last year, Penny Wong went on a self-described listening tour of the Pacific.

‘I’m very happy to be here again, to listen … to the new government and to the people about your priorities,’ she said in Port Moresby. ‘Papua New Guinea’s a regional leader and … I think we want something very similar. We want a stable, resilient and prosperous Pacific. We want a region in which sovereignty is respected.’

This week’s budget, with its foreign policy boost to regional capacity building for cyber and policing, represents some practical responses to that listening. Taken together with the recent defence strategic review and the managed leak of the future capability plan for the Department of Foreign Affairs and Trade, Australia is moving the conversation beyond foreign aid.

Rather than providing for the Pacific, we need to be working with them: sharing expertise, learning from each other, and building regional resilience—resilience being equally important for the Pacific island countries as it is to Australia.

With that in mind, the budget contains some careful and canny targeting, with measures that achieve the dual purposes of meeting regional priorities while also, importantly, addressing Australia’s own needs—a neighbourhood which is more stable, more secure and more open.

In parallel, there is an increasing focus on ‘statecraft’, through which we marshal our full national power to strengthen our overseas relationships and contribute to regional stability.

Many observers in the aid community have, not surprisingly, argued that there should have been a bigger hike to overseas development assistance. Fine, that’s their job. No doubt, Australia’s development program is an important tool in its statecraft efforts at $1.43 billion next financial year.

But the enhancement of diplomatic capability will do more for the region. It will, over time, increase public confidence that the aid program and money spent on other countries is in Australia’s interests and strengthens our security as well as those of our partners.

Budget measures such as those we saw this week ensure that instead of just saying we are the partner of choice for the Pacific, we are actually offering practical support that provides alternatives to that offered by Beijing and others who don’t have the region’s interests as their priority.

The pressing need for the boost to diplomacy and practical capacity building, rather than simply more aid money, was highlighted by a future capability plan for DFAT.

The internal review found that Australian diplomacy was dangerously under-resourced and the overseas diplomatic network overstretched to the point of ineffectiveness. The foreword by the highly respected Allan Gyngell—who passed away this month—captures the idea of ‘statecraft’ as the art of government, describing all the elements and qualities that determine the capacity of a state to succeed and thrive.

‘Australia will need a strong economy, a capable defence force, well-structured governing institutions, and a resilient population if it is to preserve a competitive edge in the emerging world. It will also need an effective foreign policy and service,’ Gyngell wrote.

The importance of strong foreign policy and diplomacy has also been advocated by the defence establishment, which has been doing some heavy lifting in Australia’s Pacific relationship. Its Pacific outreach, and the Defence Department’s approach to using people-to-people connections has helped move us beyond providing aid to building partnerships and capability.

Notably, the defence review makes clear that the security of our Pacific island neighbours is intrinsically linked to our own, that their internal stability is important for our region’s cohesion, and that their own defence and security capabilities keep our region safe. It states that it is through DFAT that there should be a ‘strategically directed whole-of-government statecraft effort in the Indo-Pacific’.

And that’s where the budget story picks up. The budget’s attention to strategic communications will be welcome to security and foreign policy analysts who have been watching Beijing gain an upper hand in influencing many capitals in the Pacific and Southeast Asia.

The budget’s allocation of $80 million to boost DFAT’s public diplomacy and strategic communications capability is an important investment by government in projecting the informational element of Australian statecraft and countering disinformation by revisionist states.

It is an area in which ASPI has been heavily involved, detailing for instance how Beijing has used its propaganda and disinformation capabilities to push false narratives in support of Chinese Communist Party objectives such as undermining Solomon Islands’ relationships with Australia and the United States.

Similarly welcome will be cyber capacity building for the region which, as the DFAT budget notes, is experiencing growing malicious cyber activity. Such support will enhance our reputation as a trusted partner.

‘In response to increasing requests for support from Pacific island countries, DFAT will enhance and focus our cyber capacity building and expand our crisis response capabilities, under the leadership of the Ambassador for Cyber Affairs and Critical Technology,’ the budget papers state.

Similarly, with security cooperation, the budget includes an increase to Australian Federal Police partnerships in the Pacific with a view to supporting local law enforcement and criminal justice initiatives.

Then there are measures for strengthening the Pacific Islands Forum, expanding the Pacific Labour Mobility Scheme, strengthening climate resilience in the region, investing in health, water, sanitation and hygiene, education and social protection, empowering women and girls, and people with disabilities.

In the DFAT review’s foreword, Gyngell wrote that foreign policy, rather than a reaction to external events, was ‘the purposeful way the state marshals and leverages the resources available to it to achieve its goals.’

Crucially, there is growing complementarity between foreign and defence policy, which have so often been viewed as in competition. They are, in reality, two sides of the same coin that need to be aligned towards the same objectives—pursuing our interests in coordination with partners and safeguarding our sovereignty.

It is a theme that is being increasingly grasped in Canberra and reflected in major policy statements. As the defence strategic review put it: ‘National Defence must be part of a broader national strategy of whole-of-government coordinated and focused statecraft and diplomacy in our region. This approach requires much more active Australian statecraft that works to support the maintenance of a regional balance of power in the Indo-Pacific.’

The approach of properly harnessing our national power—diplomacy, defence, security, intelligence and economic power—and applying it to shape and influence our region in our national interest, has begun to be reflected in some of the budget measures we saw this week. That is a welcome start to what will need be a committed effort in the years and decades ahead.

APEC’s challenging 2022

The start of 2022 held much promise for APEC economies. The Covid-19 pandemic seemed under control. As the 2022 APEC host, Thailand anticipated a full year of in-person meetings to focus the region’s attention on deepening inclusive and sustainable economic growth.

All bets were off after 24 February when Russia—an APEC member—launched a military assault on Ukraine. Whether it is called an ‘invasion’ or a ‘special military operation’, a geopolitical conflict involving an APEC member is tough on everyone.

Thailand had to recalibrate to ensure that the group stayed focused while managing the fallout from the Ukraine war. The Thai model of managing conflict in an international grouping while simultaneously eking out consensus could provide a template for ensuing meetings in 2023. It may be particularly relevant for the United States as it tries to balance its opposition to the Ukraine conflict with its obligations as host of APEC 2023.

This is what was supposed to happen in 2022—APEC provides a platform to build trust, facilitate difficult conversations and make headway on matters of collective importance, such as structural reform, trade and investment, and climate change.

Yet what actually happened, during the first meeting of the APEC trade ministers in May 2022, was that representatives from the United States, Japan, Canada, Australia and New Zealand walked out to express their displeasure with the Russia–Ukraine war. What grabbed the headlines was not the consensus achieved on collaborating on sustainable and inclusive growth, but the walk-out.

Away from the public eye, APEC 2022 was not all about geopolitics and trade tensions.

While trade and investment has always been central to the grouping’s work, much has changed since the idea of the ‘free-trade area of the Asia–Pacific’ was first mooted in 2005. Covid-19, climate change, digitalisation and concerns over workers’ rights and competition policy—the so-called next generation trade and investment issues—have taught the region that trade and investment agreements must go beyond ‘traditional’ market access concerns.

Thailand pulled through, successfully pushing APEC to put these concerns on the table. This was an important step given the grouping’s aims to be the testbed for free-trade agreements of the future.

Another imperative that APEC had to navigate throughout the pandemic was the safe resumption of travel. It first had to ensure the movement of essential workers, which was closely followed by getting businesses going again.

In January 2022, APEC kickstarted the process by establishing the Safe Passage Task Force to coordinate safe and seamless cross-border travel within the region as it emerged from the pandemic. This covered essential workers, including air and maritime crew, as well as the interoperability of vaccination certificates and making the APEC Business Travel Card—a card issued to businesspeople and senior government officials to allow easy, short-term travel within the region—accessible to more people.

APEC is a voluntary, non-binding forum. It is not the main regional platform for dealing with environmental issues. But the members recognise that there cannot be meaningful discussions on inclusive and sustainable growth without addressing the challenge of climate change and the increasingly frequent extreme weather fluctuations and natural disasters arising from it. APEC members were able to build consensus on meeting commitments to phase out inefficient fossil fuel subsidies. They also implemented measures to deal with illegal, unreported and unregulated fishing and marine debris.

Thailand completed its 2022 work by getting APEC members to adopt the Bangkok Goals for a bio-circular-green economic model. This is a comprehensive framework that includes measures to encourage businesses to adopt greener business models—sealing APEC’s commitment towards sustainable economic growth.

Despite a challenging year, the Thai-led initiatives are important achievements for APEC. They reflect collaboration, flexibility and a collective realisation that working for the greater good remains relevant. These are the values that the grouping must continue to uphold given that 2023 is expected to be another tough year for global economic development. As APEC 2023 host, the US will helm the group through the challenges and focus attention on the economic wellbeing of the region.

Australia and Canada are ideal Indo-Pacific partners

Canada’s Indo-Pacific strategy says the region plays a ‘critical role in shaping the country’s future over the next half-century’. The comprehensive and well-resourced strategy, published late last year, seeks to expand Canada’s collaboration with other countries in the region and follows four years of ‘frigid relations with Beijing. It offers great potential for Australia to be a key ally and partner.

Australia and Canada can work closely in key areas it outlines and it’s timely to identify how they can best do this. Global Affairs Canada, the department managing diplomatic relations, says the two nations enjoy strong and multifaceted bilateral relations, regularly consulting on international issues based on their policy convergence in areas such as defence and security, trade ($4.8 billion two-way), investment ($67.7 billion two-way), economic growth, illegal migration, counterterrorism, counter-proliferation, and on social areas including Indigenous peoples, transportation and regional matters. Canada’s defence relationship with Australia is its largest in the Asia–Pacific.

Both nations have felt China’s coercion on trade and arbitrary detention in retaliation for perceived slights. Both have been adversely affected by China’s predatory business practices. Canada’s strategy helps companies diversify away from China to other countries in the region and helps manage risk exposure to China-related business tactics. The need for such diversification was identified by Canada’s former ambassador to China, Dominic Barton. The strategy is also clear on the need to retain trade with China while opening new trade and investment opportunities.

Australia has engaged closely in the Indo-Pacific but without the kind of comprehensive strategy that other nations, and the European Union, have in place. Australia’s 2017 foreign policy white paper, has a short section on the Indo-Pacific while the 2020 defence strategic update, ministerial announcements and press releases all deal with the region. Significant initiatives include the Quad, AUKUS, Prime Minister Anthony Albanese’s statement at the 2022 NATO summit in Madrid, and membership of the Pacific Islands Forum. Albanese announced soon after he came to power in 2022 a defence strategic review to help better understand where Defence should prioritise investment and ensure that the Australian Defence Force is well positioned to meet the nation’s security challenges through to 2033 and beyond. The review, to be delivered early this year, can only help to inform strategy and won’t represent a comprehensive, whole-of-government strategy.

We have previously proposed that both countries would benefit by implementing detailed strategies to guide their relations with other nations and regional multilateral forums. This requires more than a framing of strategy by ministerial speeches as with the then Canadian foreign minister’s 2020 speech that used ‘challenge, compete, cooperate, coexist’ to describe Canada’s relations with China. Keywords and taglines do not answer strategic questions about sectors to be dealt with, priority areas, how this approach will be carried out, with whom, and what resources will be required.

Taglines don’t help make strategic decisions or identify how other nations can most constructively engage. That’s what the Canadian strategy helps facilitate with its five core objectives: promoting peace, resilience and security; expanding trade, investment and supply chain resilience; investing in and connecting people; building a sustainable and green future; and being an active and engaged partner in the Indo-Pacific. If well-developed and implemented, these objectives should help Canadian and Australian policy frameworks operate collaboratively. Canada and Australia have had long-term defence and security engagements, but this does not mean that Canada needs to be a full member of all regional defence collaborations. Australia is a member of the Quad and AUKUS, and Canada is not. But Ottawa can contribute ideas and resources to effect a more sustained effort to engage allies and reflect Canadian interests. Working with the allies’ technology working groups including those on artificial intelligence, biotechnology, advanced materials, photonics, quantum, and oceans technologies will help. Intensification of the level of cooperation around robust intelligence, defence and foreign policy programs will keep Canada moving forward in these vital areas.

A new, more co-ordinated approach to Indo-Pacific strategy will serve Australian and Canadian diversification plans and deepen diplomatic engagement and partnerships more generally. This approach signals to traditional allies, including the US, the UK, Australia and New Zealand, that Canada is more closely aligning with them. But a widening of partners can (and should) include connecting with France’s interests in the South Pacific.

Canada and Australia should see themselves not only as members of a coalition of like-minded middle powers such as India, Japan and South Korea, but also as aligned with a broader range of countries with whom many interests are shared, such as Malaysia, Singapore, Indonesia, Vietnam and others, as well as the Pacific island nations. Canada’s ocean-management practices and technologies could be of great use to Pacific countries, particularly those facing over-fishing from Chinese vessels. In some areas, such as mitigating climate change and protecting global biodiversity, shared interests with China will offer new opportunities for positive engagement. For Australia and Canada, developments in the South China Sea and Taiwan remain primary security concerns and enhancing economic relations with Taiwan is also of particular importance.

Australia and Canada have experienced recent lessons in contemporary geopolitics when dealing with China. Both are adapting to new realities of strategic power competition across the Indo-Pacific. Canada’s strategy can facilitate co-operation, intelligence- and expertise-sharing, and collaboration around deepening and diversifying regional economic ties. The strategy promotes sustainable development partnerships across the Indo-Pacific while upholding democratic values and human rights. The challenge will be for both countries to implement their Indo-Pacific strategies so that they connect ground-level initiatives to broader opportunities and help re-balance the most difficult relationships where possible.

But Australia and Canada cannot assume the autocratic powers will alter their drive to change the international rules-based order to their liking, or that the US will not revert to a hard-line ‘America first’ national security strategy should political circumstances change. The two Commonwealth countries are ideally suited to collaborate on many initiatives in the region, but it would be disingenuous to sugar-coat the challenges ahead. Their strategies will need to be operationally clear and well resourced so that objectives are achievable and politically savvy.

Malaysia’s new dawn?

In 2007, on the 50th anniversary of Malaysia’s independence, Nobel laureate economist Joseph Stiglitz celebrated the ‘miracle’ of the country’s economic rise and creation of a vibrant multiethnic society. In the 15 years that followed, however, revelations of large-scale corruption and abuse of foreign workers damaged Malaysia’s international reputation and fuelled domestic political instability.

But Malaysia’s fortunes may be turning around. Late last year, long-time opposition leader Anwar Ibrahim was sworn in as the country’s prime minister. His record of effective and corruption-free leadership offers good reason to hope that Malaysia can return to a stable development path leading to greater prosperity for more people.

As deputy prime minister and finance minister in the 1990s, Anwar oversaw the double-digit GDP growth that drove Malaysia’s rise as one of Southeast Asia’s ‘tiger cub’ economies. When the Asian financial crisis erupted, he played a central role in mitigating the contagion. And he managed all of this without a whiff of malfeasance.

Anwar’s record stands in stark contrast to that of Najib Razak, another finance minister who went on to lead the cabinet. Under Najib’s government, Malaysia became embroiled in a multibillion-dollar corruption scandal at the state fund 1MDB, with much of the plundered funds having ended up in his own bank accounts. He is now serving a 12-year prison sentence for corruption.

To be sure, Anwar was jailed for nearly a decade himself. The difference is that the charges against him were concocted to remove him from the political picture, after his relationship with Mahathir Mohamad—the prime minister when Anwar held the finance portfolio—broke down.

The question now is whether the 75-year-old Anwar can bring to bear the policy savvy he has previously shown in addressing the challenges Malaysia faces today, not least sustaining the post-Covid-19-pandemic recovery at a time of elevated inflation and declining foreign direct investment. This will require, for starters, urgent action to strengthen Malaysia’s fiscal position, including narrowing the budget deficit and reducing the debt burden.

To this end, social spending must be reformed. Malaysia needs a stronger safety net, but funding it will require the government to reduce fiscal leakage by rationalising subsidies and ensuring that resources and services are well targeted. The ethnocentric handouts that have historically dominated Malaysia’s social budget must be replaced by needs-based programs.

Increased private investment will also be essential. Mending Malaysia’s tarnished international image will help to restore the country’s status as a competitive destination for high-value investments. Any incentives for private investment (foreign or otherwise) must therefore be accompanied by rules ensuring higher labour standards and business practices that comply with international norms. It is assumed that future inward FDI will adhere to the principles enshrined in the National Investment Aspirations framework that was adopted in April 2021.

Beyond attracting more foreign investment, Anwar’s government must nurture the investment capacity of Malaysian-owned companies. Malaysia’s entire economy would benefit from enhanced efforts to transform indigenous firms into high-value-added global industrial champions. But upgrading local industries cannot be done in a vacuum. Cultivating partnerships with foreign investors that can provide access to frontier knowledge, technology and capital is also crucial.

When it comes to trade, Malaysia will maintain its export-oriented regime, while pursuing pro-market reforms, such as streamlining non-tariff measures and domestic regulatory barriers, in an effort to improve transparency and eliminate cartels. Malaysia’s government might also consider eliminating the ‘approved permits’ licensing system for agricultural imports—a step that would help bring down food prices.

Equally important, Anwar’s government must break the ‘iron triangle’ of bureaucrats, politicians and manpower-industry interests that contributes to abuse, exploitation and shortages in Malaysia’s migrant labour market. The country’s export sector is already suffering from an acute labour shortage. Until Malaysia secures a steady supply of workers whose rights are protected, local businesses cannot grow and foreign investors will not return.

The good news is that Anwar’s 10-point election manifesto acknowledges some—though not all—of these priorities. But campaign promises often go unfulfilled, overwhelmed by the hurly-burly of politics. Overcoming the ills afflicting Malaysia’s economy will depend in large part on Anwar’s ability to maintain a strong and stable government—no easy feat, when the unity government comprises members of five political coalitions.

Anwar has passed his first political test, winning a parliamentary motion of confidence in his government. But, to sustain his administration’s unity, he must carefully balance the interests of winners and losers. For now, it is reassuring that Anwar has reiterated his commitment to his election manifesto, a move that signals a positive shift in Malaysia’s political culture.

The next step will be to expand and refine that manifesto. This will require regular dialogue with civil society, including representatives of various ethnic groups. The inclusion of political parties from the East Malay states of Sabah and Sarawak in the new government represents a historic opportunity to address regional disparities.

The challenges Malaysia faces are undoubtedly formidable. But perhaps no one is better equipped to confront them than Anwar, who has also assumed the role of finance minister. A new era of sustained growth and shared prosperity may soon dawn in Malaysia.

Eradicating modern slavery: lessons for Australia and the region

Australia has long positioned itself as a leader in the global effort to eradicate modern slavery. Two reports released in the past three months highlight both the importance of this leadership to Australia’s broader strategic goals and the increased urgency of the challenge that lies ahead. While the eradication of modern slavery is a moral imperative in its own right, the issue is also one of (often underestimated) significance for Australia’s strategic interests in the Asia–Pacific.

The 2021 Global estimates of modern slavery report, published last month, shows that—despite a global focus over the past decade—the problem of modern slavery is actually getting worse, not better. While the challenges of obtaining reliable estimates of the true extent of modern slavery are well known, the report (which was developed by the International Labour Organization, Walk Free and the International Organization for Migration) provides one of the best available insights into the extent of the problem. The findings are sobering. Nearly 50 million people are estimated to be living in situations of modern slavery on any given day, an increase of about 10 million people since the last report was released four years ago.

Despite the world making a clear commitment to eradicate modern slavery and human trafficking by 2030, we have actually gone backwards over the past few years. The Global estimates report identifies the impact of compounding crises—including the Covid-19 pandemic, armed conflicts and climate change—as leading to an increase in a range of vulnerability factors. These findings squarely highlight the enormity of the challenge that lies ahead.

The strategic importance for Australia is underlined by another recent report, the 2022 Trafficking in persons report, released in July by the US State Department. The goal of this annual publication is to solidify the global effort to combat human trafficking. The report provides a detailed account of 188 countries’ efforts to hold perpetrators accountable, provide survivor services and prevent trafficking in persons. Countries are ranked into one of four tiers, reflecting the extent of government efforts to address the issue of human trafficking.

On the surface, the report presents a positive picture of the work being done in Australia. It does identify some important areas of improvement and offers prioritised recommendations to strengthen Australia’s response. These include stepping up efforts to proactively identify trafficking victims among vulnerable groups, providing alternative referral pathways for victims to delink support from participation in the criminal justice process, and establishing a national compensation scheme for trafficking victims. Importantly, Australia maintained its Tier 1 ranking, meaning that the Australian government is considered to fully meet the minimum standards for the elimination of trafficking.

In our immediate region, however, the report presents a more mixed picture and a significant strategic challenge for Australia. In East Asia and the Pacific, it documents a steady decline in prosecutions, convictions and identified victims, and in the introduction of new or amended legislation, over the past five years. Besides Australia, only a handful of countries in the region are ranked in Tier 1, including the Philippines and Singapore. Most others are in either on the Tier 2 watch list or in Tier 3, including Brunei, Cambodia, Indonesia, Malaysia, Myanmar and Vietnam. These rankings reflect an assessment that those countries don’t fully meet the minimum standards for the elimination of trafficking and, in the case of countries with a Tier 3 ranking, aren’t making significant efforts to do so.

Foreign Minister Penny Wong reiterated the importance of ASEAN and Southeast Asia to Australia’s future in a recent lecture, declaring: ‘What happens in, to and through this region will be strategically central to Australia’s future.’ A stable and prosperous region, and one that respects the rules-based international order, is undoubtedly in Australia’s strategic interests. If modern slavery is persisting in the region—or even growing, as suggested by the Global estimates report—Australia should be concerned not only because modern slavery itself is abhorrent, but also because its presence is a result of factors such as growing poverty and displacement that weaken and destabilise the region overall.

Given the regional commitments that have been made to eliminating human trafficking—the ASEAN Convention Against Trafficking in Persons, Especially Women and Children is one key example—the lack of sustained progress in some countries might also raise doubts about the extent to which respect for the rules-based international order is translating from principle to practice.

Australians also need to consider the not insignificant role that we ourselves play in driving modern slavery in the region. Australian businesses, consumers and investors choosing to make ethical decisions about the products they purchase and the investments they make could have a significant impact on the regional drivers of modern slavery, particularly in terms of labour exploitation.

Continuously strengthening our efforts to combat both child sex tourism and online child sexual exploitation is also essential. The Trafficking in persons report highlights increased incidents of online child sexual exploitation during the pandemic, and the continued involvement of Australians in child sex tourism in countries such as Cambodia, Laos and the Philippines.

Both reports emphasise the ongoing urgency of the global fight against modern slavery and human trafficking. Eradicating modern slavery should be a focus for Australia simply on the basis that it is the morally correct thing to do. It is also, however, clearly in our strategic interests given the importance of a stable and prosperous regional neighbourhood to Australia’s future.

The ADF needs knowledge if it’s to shape, deter and respond

There’s no shortage of rhetoric about Australia’s changing strategic environment, and the key thread is that the possibility of major conflict in our region can no longer be considered remote.

More likely than a great-power confrontation are operations in the ‘grey zone’, a cold war rather than a hot one. Already we’ve seen many of the hallmarks of a cold war—economic and political coercion, propaganda and espionage, cyberattacks and information activities.

Australia should always be ready for high-end conflict, but talk of war is creating a Thucydidean distortion in the reprioritisation of defence funding towards armed capabilities at a time when the capabilities that inform adversaries’ decision-making and deter them from conflict have never been more important.

An exclusive focus on investment in weapons and offensive platforms risks misaligning the Australian Defence Force’s mechanisms of operation, the nation’s broader strategic priorities in our region and the value of Australia’s role within a coalition.

Overinvestment in weapons could also lead to insufficient enhancement of the intelligence, surveillance and reconnaissance (ISR) capabilities needed to respond decisively with offensive systems in a conflict. Re-equipping the ADF should also ensure that it has capabilities that allow us to pierce the information fog of grey-zone activities so we can work to avoid conflict.

Defence Minister Peter Dutton has said a conflict triggered by China’s claims over Taiwan ‘should not be discounted’. Notwithstanding China’s goal of unification, and its 2005 ‘Anti-Secession’ law to legitimise the use of force against Taiwan if it approaches independence, we have gone 16 years without movement on policy.

It’s likely that China would require a change in the status quo within Taiwan to trigger the use of force, and it knows that would bring a United States response, given Washington’s longstanding position and the warning from Secretary of State Antony Blinken that the US is committed to Taiwan being able to defend itself.

China’s probable way forward is a continuation of its regional engagement, encouragement and coercion with a focus on using economic and political levers. From the Pacific to the Antarctic, and from Africa to Asia, Beijing is seeking to extend and entrench its influence.

In the Pacific, China’s infrastructure investments (and the use of debt) have expanded Beijing’s influence and normalised its increased presence. It is building stations in the Antarctic and the regular flights to and from them are raising concerns about future resource extraction. In Djibouti, it has a military logistics base that is capable of supporting aircraft, submarines and naval ships. The structures China has built in the South China Sea have encroached on territory claimed by other nations.

These changes have implications for Australia’s supply routes and border approaches and require a response that fits with the 2020 defence strategic update’s ethos of ‘shape, deter and respond’. In the context of grey-zone activities, that means gaining information to support policy and decisions across the spectrum of responses, not just weapons that may be required as a last resort.

If conflict should occur, the need for information to ensure the effective employment of offensive capabilities will become even more acute.

In his recent ASPI address, Dutton noted that ‘effective deterrence is important in ensuring those who seek to threaten our national interests are made to think twice before doing so’. This involved ‘creating capabilities to hold a potential adversary’s forces and infrastructure at risk from a greater distance’.

The minister said the government was investing in long-range strike weapons and offensive and defensive cyber and area-denial systems. However, it’s difficult for those capabilities to be effective without a long-range ISR capability.

Gathering this information over a predominantly maritime area ranging from the South China Sea to Antarctica, and from Africa to the eastern Pacific, represents a significant burden, particularly when challenges can emerge from any direction at any time. In that context, Australia’s ISR capabilities need to be persistent and responsive—and they must be an investment priority.

ISR has great value in the grey zone, the pre-conflict world where potential adversaries are testing resolve and probing for weakness. It provides decision-makers with the clearest possible picture of the situation around them. Not only does it ensure they’re not caught unawares, but it prevents surprise encounters and limits panicked decisions that could inadvertently trigger conflict.

ISR can also avert a more intentional march towards war through deterrence by early detection. An adversary is less likely to act if it knows its actions are being observed and, should its resolve remain, it will be constrained by the need to adjust plans to better hide its intentions.

As well as lowering the risk of conflict, ISR is essential to preparing for it. It provides a pattern of life that ensures decision-makers can see changes more clearly and understand what those changes say about the potential for conflict. ISR also gives insights into the capability and intent of adversaries, while allowing for refinement of indicators and warnings. It builds our situational awareness, providing us with time and knowledge to inform posture and decisions.

Preparing in the dark is never a good idea and it’s even less so when preparing for war.

Given that we’re operating in the grey zone now and probably for years to come, we are at risk of doing just that. We appear to be more committed to enhancing weapon capabilities while reducing the commitment to the sovereign ISR assets that both the 2016 defence white paper and the 2020 update emphasised the need for.

This reduction would be a mistake given that we’re seeing more complex and more frequent grey-zone activities in our region. Reducing the priority to enhance our ISR poses a significant risk to Australia’s regional understanding and readiness.

The ADF operates increasingly as a system of systems, and going toe-to-toe with an adversary is only one element that must work for the force to be effective. The public discourse needs to highlight the requirement for us to be able to observe our region in close detail. That ability is necessary throughout all phases of a conflict.

Our growing fleet of P-8 Poseidon aircraft and our surface and satellite assets do keep an eye on the region, but they have competing tasks due to their multirole nature and their operations are limited by the endurance of their crews and the risks they can be exposed to.

Unmanned ISR assets such as the MQ-4C Triton and MQ-9B SkyGuardian drones can overcome many limits. Their long range and endurance provide Australia with the persistent, high-quality and broad ISR and threat-warning support that other capabilities can’t match. They can contribute to all aspects of national security, including securing our borders and responding to bushfires, floods and cyclones. They could provide valuable data on Australia’s Antarctic territories, well out of the easy reach of other assets.

Regionally, they can enhance the maritime security support provided to our Pacific neighbours as part of the government’s Pacific step-up, helping them protect their maritime assets and respond to natural disasters. They also offer a valuable Australian ISR capability to support European, US and Asian partners in maritime operations throughout the Indo-Pacific.

Dutton also noted the rapid build-up of military capability in the Indo-Pacific, including ‘new maritime surveillance and anti-access and area denial technologies [that] will further complicate the strategic environment’. This is certainly true, but Australia doesn’t need to be a bystander. We should also complicate the environment for potential adversaries with our own surveillance capabilities.

We need to enhance those capabilities now, while we’re in the grey zone, whether conflict comes or not. It would be unwise to reallocate funding to enhance strike assets for employment in a ‘possible’ dangerous circumstance at the expense of ISR capabilities for current circumstances or a range of other likely scenarios.

We risk jeopardising our ability to understand what’s happening in our region and in our vital supply lines if we deprive decision-makers of valuable intelligence. That would also undermine the ADF’s ability to be informed and effective in its operations across the spectrum of ‘shape, deter and respond’.