Time for a Larger Australia

March 20, 2014 Topic: Great PowersSecurity Region: Australia

Time for a Larger Australia

An underestimated country needs to live up to its potential and become a great power.

Editor’s Note: The following speech was delivered by Dr. Michael Fullilove, Executive Director of the Lowy Institute, at the National Press Club of Australia on March 12, 2014.

One of the most pernicious clichés in my field is the claim that “Australia punches above its weight.” It’s meant to be a compliment, but it’s inaccurate and demeaning.

The truth is most Australians underestimate our country’s weight class.

Australia has the twelfth-largest economy in the world and the fifth-richest people.

We have a continent to ourselves. We are the sixth-largest country in the world, with responsibility for ten per cent of the earth’s surface.

We have good diplomats and a capable military. We belong to the world’s most effective intelligence network, the Five Eyes community. We are the president of the G20 and an elected member of the UN Security Council.

Australia is not a super heavyweight, but we are certainly not a flyweight. People say we’re a middle power. But there’s nothing middling about Australia. We are a significant power with regional and global interests.

We don’t punch above our weight; we punch at our weight. Sometimes, I’m afraid, we punch below our weight.

The phrase is not just wrong, however. It’s also debilitating. It breeds complacency—because if we’re already punching above our weight, then there’s no need for us to do anything more.

In fact, the reverse is true. We should brace ourselves, because in the next decade, we will need to move up a weight division.

We are facing unprecedented changes that will test us as a people. To pass this test, we need to muscle up. We will need to be a larger country, with a larger tool chest, a larger debate and a larger foreign policy—in short, a larger Australia.

The Predicament of Proximity

For most of our history, the world was run by countries like our own. When the world map was painted pink, we were a member of the British empire. Throughout the Pax Americana, Australia has been a treaty ally of the United States.

The order that has prevailed since the Second World War has served our interests. Western countries ran the international economy. American predominance was embedded in international institutions and reinforced by the US military.

But now two things are happening. Our great and powerful friends are becoming, in relative terms, less great and powerful. And wealth and power are moving eastwards, towards us.

China’s economy should be the world’s biggest within the next decade. Other rising Asian economies are also powering world growth.

The Asian Development Bank predicts that Asia will nearly double its share of global GDP by 2050, thereby regaining the dominant economic position it held some three hundred years ago, before the industrial revolution.

If the economic outlook in Asia is positive, however, the security outlook is unpredictable. Economic growth is magnifying interstate competition. A number of regional powers, including Japan, South Korea, India, Indonesia and Vietnam, are jostling for advantage. There are worrying tensions on the Korean peninsula and in the East and South China Seas.

And the contours of the relationship between the United States and China are unclear.

The United States is the world’s leading power—the only country capable of projecting military power anywhere on Earth.

Our alliance with Washington is overwhelmingly in our national interest. Any argument that we should downgrade the alliance in order to please China is wrong-headed. Unsolicited gifts to rising powers are not reciprocated, they are pocketed.

It is true, though, that the challenge posed by China is unlike anything the United States has faced before. And there are worrying signs about Americans’ readiness for the contest.

Bloodied by its adventures in Iraq and Afghanistan, and hungry for nation-building at home, the United States is turning inward. President Obama has little taste for forceful action, as we have seen in the cases of Syria and Crimea—and neither do most Americans.

Mr Obama’s most important foreign policy initiative is the pivot to Asia, which he outlined in Canberra in 2011. The pivot makes powerful strategic sense, but I’m concerned that America’s heart isn’t in it.

The military elements of the pivot are hardly overwhelming, even if they all proceed.

Politically, the pivot has gone off the boil. Last year, John Kerry made only four brief trips to Asia and thirteen trips to the Middle East. President Obama, too, has been distracted by troubles abroad and political dysfunction at home. It’s important that his trip to the region next month is not cancelled like the last one.

Finally, the economic element of the rebalance is in trouble. Even if Asian states agree on the Trans-Pacific Partnership, the Congress may not. Asia will be watching carefully to see how hard the president fights for TPP—because if TPP fails, it will prove the pivot has run out of puff.

Meanwhile, China has plenty of puff. In the past three decades, China has remade its economy and lifted hundreds of millions of people out of poverty. Increasingly its economic success is mirrored in its growing military strength.

The US National Intelligence Council argues that the Indo-Pacific will be the dominant international waterway of the twenty-first century, as the Mediterranean was in the ancient world and the Atlantic was in the twentieth century.

China wants to win the naval competition in the Indo-Pacific. Last month, three Chinese warships did a lap of Java. As one of my colleagues has suggested, that voyage will be more consequential to Australia’s future than any number of asylum seeker passages over the past decade.

China’s façade conceals frailties, of course. Still, even if we don’t credit straight-line projections, it’s clear that China has arrived as a global player.

There is an uneven quality to China’s international stance: usually quiet but occasionally strident; usually cautious but occasionally combative; always prickly; never predictable.

Sometimes Beijing’s assertiveness spills over into bluster, as with its recent unilateral declaration of an air defense identification zone over disputed territory in the East China Sea.

I hope the United States recovers its confidence and reaffirms its Pacific presence. I hope China’s foreign-policy behavior becomes more measured and predictable. But what if these hoped-for developments do not occur? What if the two countries face off in a new cold war?

Even more alarming, what if America retreats while China advances? What if Australia confronts the worst possible combination: a feckless America and a reckless China?

I hope we avoid this outcome. But nation-states must follow Disraeli’s lead, hoping for the best but preparing for the worst. Crimea shows that we can quickly find ourselves in worst-case scenarios.

For many years, Australians complained about the tyranny of distance. Now the tyranny of distance has been replaced by the predicament of proximity. Our new economic opportunities come with new political risks. We are closer to the world’s booming markets—and closer to the world’s developing crises. We are less isolated—and less insulated.

Australians understand the predicament of proximity. Let me give you a sneak preview of a couple of results from the 2014 Lowy Institute Poll, which will be released in full this May. On the one hand, sentiments towards China have warmed six points this year, the equal highest level since 2006. On the other hand, nearly half of Australians think it’s likely that China will be a military threat to Australia in the next twenty years, up seven points since last year.

How should we approach the predicament of proximity? How can we maximize our opportunities and minimize our risks?

The usual answer is that we need be smarter and shrewder than ever before. That’s true. But we also need to be larger.

A Larger Country

First, we need to be a larger country. The single biggest contributor to a nation’s power and influence is its economy. Economic success allows us to afford the diplomatic and military capacities we require. It makes us more attractive as a country. It ensures that our leaders are listened to in the councils of the world. There are good grounds for optimism about Australia’s economic growth in the future, so long as we maintain the pace of economic reform.

Both our economy and our strategic weight would benefit from a larger population. Managed properly, skilled migration grows our workforce, closes skill gaps, improves our demographics, and thickens our connections to the economies around us. It provides a daily infusion of ambition and imagination.

Those who say we cannot manage the social and environmental consequences of immigration underestimate Australia. In 1945, we established the world’s first immigration department. In the thirty-five years after the Second World War, we doubled our population, from seven million to fourteen million, without serious controversy or disharmony. Does anyone think we are not a stronger, wealthier, more interesting country for it?

We can grow our population by settling more migrants and boosting our birth rate. We can also get larger by embracing the one-million-strong Australian diaspora. This group is well-educated, well-connected and well-disposed to Australia. In business, academia and arts, the Australian diaspora is distinguished. It is a world-wide web of ideas and influence.