The Australian strategic environment is characterised by its geography and international developments. The West Pacific and Indian Ocean are the major regions which constitute the Australian strategic outlook. Greater land mass with abundant natural resources, developed economy and thin population density also influence Australian perception of the world affairs. Other than geography, its West European cultural background, participation in British and US military interventions also depict its perception of security and reliance on powerful allies. The 21st century globalised world has witnessed the shifting of strategic weight from the Atlantic to Indian and Pacific oceans. The unipolar world which emerged in the aftermath of the Cold War is transforming into multipolar world where Russia, China and India are increasing their influence on the world affairs. Thus the diffusion of global power is a reality faced by Australia where relations between United States (US – established world economic and military power) and China (established economic and emerging military power) will be the major determinant of Australian future strategic environment. Other than multi-polarity, the cooperation or conflict in the Indo-Pacific region, regional military modernisation, global financial crises, terrorism, climate change, cyber and resource security are some of the challenges impending to Australia. The analysis of the situation reveals that US-China relations in a multipolar world and its effects on Australia – US alliance is the first most significant challenge faced by Australia. Whereas management of conflict and cooperation in Indo-Pacific system is second and response to regional military modernization is the third most significant strategic challenge Australia faces over the next decade. Each challenge has been deliberated with respect to its implications on Australian foreign and defence policies and recommended course of action has been discussed in ensuing paragraphs. It is argued that Australia has to maintain a delicate balance between US and China in world affairs as well as between China and India in Indo-Pacific system. Australia should pursue military and economic relations separately and concurrently without compromising on international norms in various territorial disputes. In response to military modernization in the region, Australia should maintain qualitative edge in armed forces and promote defence cooperation against common threats to regional nations.
The first major challenge to Australia in the next decade is the global diffusion of power and its effects on US alliance. Traditionally, Australia has relied on the major maritime power for its defence. The experiences of World War II (WW II) paved the way for greater cooperation between Australia and US which crystalized into the Australia-New Zealand-United States (ANZUS) Treaty in 1954. Since the last sixty years the US alliance has been beneficial to Australia with respect to its security, access to advanced weapons and platforms, and international clout. However, since the last decade most of the countries in Asia-Pacific have witnessed tremendous growth in their economy, resultantly their military might and diplomatic clout has also increased. According to predictions by OECD, the Chinese economy is expected to overtake US by 2016.2 It may be argued that despite economic relegation, US will continue to maintain its influence on world affairs, especially in the Pacific, however, in reality Chinese influence is expected to increase based on its economic rise and associated military modernization. The problem is how to manage the defence relations with US in the wake of waning US global influence and rising Chinese influence in the region. In such a scenario the US will not be able to act unilaterally in forthcoming conflicts. The example of Syria is a watershed in this regard where Russia, China and other world players did not allow military action against the Syrian Regime. Moreover, the United Nations Security Council Resolution (UNSCR) adopted to disarm Syria from its chemical weapons is also termed as a success for the Syrian regime and demonstrated the assertiveness of Russia and China on world affairs.3 Although Russia has more diplomatic and military clout on world affairs than China, however due to Chinese influence in the Pacific region relations between China and US are considered as the primary factor in the success of Australia-US alliance in the future.
The US is responding to Chinese economic strength and its military modernization by terming it as ‘peer competitor’,4 and by strategy of ‘US rebalancing’5 in the region. It has signed the ASEAN Treaty of Amity and Cooperation and it has reviewed its relations with India and joined the East Asia Summit. It has enhanced its partnership with Vietnam, New Zealand, Indonesia, Malaysia and China. In November 2011, US President Barrack Obama announced stationing of 2500 US marines in Darwin.6 He also visited Thailand, Myanmar and Cambodia during 2012 and showed concerns about disputed islands in the South China Sea. These actions without sufficient dialogue between the two powers in the Pacific could lead to misinterpretations and could be considered as ‘encircling China’. The US diplomatic moves in Chinese neighbourhood were not taken positively by Beijing and the Chinese Navy was observed to be defending sovereignty claims more aggressively.7 In order to further fortify the existing relations with US, Australia and US have reviewed their existing cooperation. During Australia-US Ministerial Meeting (AUSMIN) 2012 in Perth both countries agreed to explore avenues of cooperation between the US Navy and Royal Australian Navy in Australian Indian Ocean Base HMAS Stirling.8 The US also reviewed its military posture in the region while planning a long-term military to military relationship with China. The policy between both countries seems more of a competition rather than cooperation. It is important to recognise that US strategy of rebalance will have significant impact on size, structure and technology of US forces assigned to the region. Renewed emphasis on the region may result in increased cooperation between Australia and US which could affect relations between China and Australia.
The relations between US and China may affect Australian foreign and defence policies as China is the leading economic partner of Australia and US. Although both US and China tend to cooperate with each other some form of competition is inevitable. Neither China nor US believe that Australia has to choose between the two; however, both expect that their bilateral relations should not be effected by the other.9 The Australian Government’s policy should encourage the peaceful rise of China and play a positive part to try and ensure that the strategic competition does not turn into a conflict in the region. It is in Australian interest to keep the military and economic relations separate from each other and pursue both of them separately and concurrently. Any move or change in force structure should be managed skilfully in that it should not be misconstrued as being detriment to Chinese interests. In the economic realm, the US, China and Australia have commonality of interests whereas in military terms, US and Australian interest may not synchronize with China’s. A constructive relationship between both the powers is necessary for Australia despite their competition and coordination. Since US and China are interdependent on each other economically, their interdependence on political, strategic and military fronts will be beneficial to Australia due to positive impact on regional stability and security.
The second most significant challenge is the management of conflict and cooperation in Indo-Pacific region. The rise of China and to lesser extent India has brought these two countries at the forefront of global economic and political stage. So the Defence White Paper 2013 recognises the emergence of ‘Indo-Pacific Strategic Arc’ which connects Pacific and Indian Ocean through Southeast Asia.10 China and India are the two major players in the system, where China is the strongest military and economic power in the Western Pacific; India is an emerging power in Indian Ocean. Both the countries are attempting to increase their influence in each other’s neighbourhood. While China is increasing its involvement in Indian Ocean through so-called ‘String of Pearls’,11 India’s ‘Look East Policy’ has increased its involvement in the affairs of Southeast Asia and other countries of Western Pacific. The future trends in the region depend upon the cooperation between India and China. Other than economics of India and China, energy flows from Indian Ocean, and vital sea lanes from the region make it an important factor in Australian strategic environment. It can be argued that ‘Indo-Pacific Arc’ is primarily a maritime system where the stability in maritime environment is important for global trade. Any incident at sea or an incident at land with its fallouts at sea will have major implications in the region. Regional forums like Association of Southeast Asian Nations (ASEAN), East Asia Summit and South Asian Association for Regional Cooperation (SAARC)12 have enhanced the cooperation in economic and security arenas. However, security relationships are affected by overlapping territorial claims in South China Sea, East China Sea as well as in the Indian Ocean.
It is important to understand that whole Indo-Pacific region cannot be considered as a coherent and single entity. It comprises sub regions with different economic and security structures. It is important to discuss major sub regions (Northeast Asia, Southwest Pacific, Southeast Asia and Indian Ocean) with respect to their complexities and implications on Australian foreign and defence policies. The Northeast Asian region contains many regional powers including China, Japan and Republic of Korea. Within this region, the Taiwan Straits, South China Sea and East China Sea are the flash points of any future conflict. Any mismanagement of these tension points may escalate the situation and can destabilise the whole region. This area is likely to play an important role in the Australian strategic environment. Japan and South Korea are US allies within the sub region. While Japan is major power, South Korea is a middle power. Japan has concerns about Chinese military modernization and especially over the sovereignty claims of Senkaku/ Diaoyu Islands. Any conflict on these islands will adversely affect Australian interests. So despite economic interests with China and Japan, Australia should support the peaceful resolution of conflicts on the basis of established international norms. Australia should support freedom of navigation for all countries without hegemony by any individual player. Similar to South China Sea, tensions escalate frequently in Korean Peninsula. Australia should continue to support efforts to de-escalate the situation on the Korean Peninsula.
Southwest Pacific is another important region where Australia is playing a leading role. Due to abundant natural and human resources, the region has strong opportunities to benefit from the growth of the Indo-Pacific Region. However, the ‘youth bulges’ and growing population coupled with rising unemployment, corruption and inadequate governance incite crimes and violence. The problem is further complicated by the effects of climate change and insufficient capacity of these states to counter internal, external and transnationals threats. Although Australia contributes to half of the developmental aid to the region, its influence in the region is changing due to ingress of other players. These include US, China, Taiwan and India. It will be in the interest of Australia that stability prevails in the region. Australia has to work with traditional partners like New Zealand and new contributors (US, India, China and Taiwan) for the maintenance of stability in the region. This will ensure that a friendly influence prevails in the region and no hostile power uses the region against Australian interests.
Southeast Asia is at the centre of Indo-Pacific system. Southeast Asian countries are likely to remain stable as long as multilateral institutions such as ASEAN support the bilateral relations. The integrating efforts by ASEAN and other regional forums to maintain peace and stability in the region are in the interest of Australia to influence the strategic environment in the region. Within the Southeast Asian region, the archipelago and air-sea gap in the north of Australia is important to prevent influence of any hostile power in the region. Among the top ten trading partners of Australia, sea lines of communication for the seven (Malaysia, China, India, Japan, Thailand and Singapore) pass through the region.13 Indonesia is playing a pivotal role in the ASEAN, East Asia Summit, G2014 and Asia Pacific Economic Forum.15 As most of the Southeast Asian archipelago comprises of Indonesian Islands, therefore strong influence in Indonesia is necessary. It will safeguard Australian interests in Indonesia and multilateral forums where Indonesia is playing vital role. Strong defence and economic relations with Indonesia are paramount to maintain influence in the region. The visits by newly elected Prime Minister Tony Abbott are likely to enhance the existing relationship.
On the western side of Indo-Pacific region, Indian Ocean is an important sub region for Australia. Within Indian Ocean region, India is an emerging economic and military power. Based on economic developments, Australia has also reviewed its relations with India. In 2011-12, India joined the top ten trading partners of Australia. It is also a major source of skilled manpower to Australia. India has also invested in Northwest Australia.16 Other than economic rise, Indian Navy is independently conducting anti-piracy operations in Gulf of Aden and surrounding areas. As India is rapidly modernizing and expanding its naval fleet, it is likely to play a leading role in the Indian Ocean. With improving economic and military stature, India may develop clash of interests with Australia. It is in the interest of Australia to maintain good economic relations with India without compromising on the international norms in various territorial disputes between India and its neighbours. While India can be seen as a major naval power in the Northern Indian Ocean, Australia is the only naval power in the Southern Indian Ocean. It is in Australian interests to maintain balance between economic benefits and maritime influence in Indian Ocean.
Middle East and Africa are adjoining areas of Indian Ocean which needs to be considered in the future policies. Middle East is a source of concern for global security architecture due to huge oil and gas reserves. Around 20 percent of Australia’s petroleum needs are sourced from Middle East.17 The area is undergoing a transformation by Arab Spring. Moreover, the longstanding disputes are the flash points for any conflict in the future. Due to Australian interests, the Royal Australian Navy (RAN) is operating in the Persian Gulf since 1990.18 Within the Middle East, Straits of Hormuz is a strategic waterway where 35 percent of world oil trade pass.19 Iranian violation of United Nations Security Council Resolutions and International Atomic Energy Agency instructions is a source of looming instability in the region. In case Iran acquires nuclear capability, it can start a regional proliferation of nuclear arms and can cause major instability in the region. It is in the interest of Australia that peace and stability prevails in the region and Iran follows international norms. Any conflict in the volatile region will adversely affect the global oil prices and world economy as a whole. Although ADF will withdraw from Afghanistan by 2014, Australia needs to maintain presence in Middle East for stability of international energy flow from the region.
The major sub regions in Indo-Pacific system and competing interests of various regional nations have been discussed. Apart from the traditional players in the Indo-Pacific region, Russia is increasing its influence through participation in the Brazil Russia India China South Africa (BRICS) and other multilateral initiatives. Russian ships regularly patrol in Gulf of Aden for counter piracy efforts. Russian ship also participated in the International Fleet Review in Sydney in October 2013.20 It depicts Russian intent to increase presence and role in the region. To maintain friendly influence in Indian Ocean and check hegemony by any regional or extra regional player, Australia should continue to maintain naval presence in Persian Gulf beyond 2014. Australia should enhance economic integration with the region and diversify the defence engagements in the Indian Ocean to safeguard Australian interests.
The third most significant challenge to Australian foreign and defence policies is the response to regional military modernization. As 21st century is being called Asian century, regional nations are increasingly modernizing their military forces to safeguard their interests and grow militarily in line with the economic power. Although most of the nations are spending similar percentage of GDP on defence compared to their spending prior to the Asian Financial Crises of 1997,21 however, due to increased progress and growing GDP, the resultant amount is increasing. Generally the increasing amounts are being spent on the consolidation of the existing capabilities, though some countries (Indonesia, Malaysia, Singapore and Vietnam) are acquiring new capabilities. The new capabilities include airborne early warning aircraft, tactical data links, beyond visual range air to air missiles, air to air refuelling capabilities, advanced corvettes and submarines. In Northeast Asia, China is acquiring hi-tech capabilities for cyber warfare, Anti-Access and Area Denial (A2AD) capabilities, aircraft carrier capability, enhanced anti-submarine capabilities and counter-space systems. In the Indian Ocean, India is modernizing its forces for enhanced presence in Indian Ocean and Bay of Bengal. India is acquiring nuclear and conventional submarines, long range maritime patrol aircraft and carrier based aircraft. It is also participating in a joint venture with Russia for development of fifth generation fighter aircraft.
Regional military modernization poses challenges to Australian foreign and defence policies. Historically Australia has enjoyed superiority in diplomatic, economic and military spheres. Improved economic conditions have enabled regional countries to expand their military capabilities and diplomatic clout. In case of conflicting interests between regional countries and Australia, these countries will be able to react with more assertiveness on diplomatic as well as military fronts. It is considered that Australia should adopt two pronged approach in response without initiating an arms race. The approach involves enhanced defence cooperation with regional nations as well as modernization of Australian Defence Forces. Other than being a challenge, regional military modernization also provides opportunities for improved defence engagement. Australia should promote defence cooperation among regional countries for cooperative security arrangements against common threat of terrorism, people smuggling and natural disasters. Such initiatives will enhance interaction among regional nations and minimize risk of friction. Apart from maintaining friendly influence in the regional armed forces, Australia needs to modernise its forces according to latest technological developments. Most of the regional countries have growing population and they can rely on ‘quantity in men and material’ in defence procurement. Australia should resort to ‘quality’ and strategic alliance with US. This will enable Australia to maintain strategic edge in any future conflict.
In conclusion, Australian strategic environment depends upon on its geography, international developments, West European cultural background, vast territory vis-a-vis low population base, and reliance on powerful allies for defence. With the strengthening of economic and resultant military power of Asian nations, 21st century is being described as Asian Century. Due to developments in the region, US have adopted policy of rebalancing in the region whereas India has adopted ‘Look East’ policy in response to so-called Chinese ‘String of Pearls’ strategy. The competing interests of these nations within Australian strategic environment will have various implications on Australian foreign and defence policies. The management of US alliance in emerging multi-polarity, the cooperation or conflict in Indo-Pacific region, regional military modernisation, global financial crises, terrorism, climate change, cyber and resource security are few challenges faced to Australia. Review of the situation in next decade reveals that US-China relations in multipolar world and its effects on Australia – US alliance, management of conflict and cooperation in Indo-Pacific system and response options to regional military modernization are three most significant strategic challenges faced to Australia in descending order. It has been argued that while continued reliance on ANZUS treaty, Australia should embrace multi-polarity by pursuing economic and security relations separately and concurrently. Within the Indo-Pacific region, Australia should emphasize economic interdependence without compromising on international norms in territorial disputes among different nations. In response to military modernization in the region, Australia should pursue qualitative edge in development of Australian Defence Forces and promote defence cooperation among regional players against common security threats and humanitarian disasters. These measures will enhance existing relations, promote economic progress and avoid hegemony by individual nations.
End Notes
2According to latest report by OECD, China is expected to overtake US economy in 2016. Simon Rabinovitch, China forecast to overtake US by 2016, March 22, 2013, http://www.ft.com/cms/s/0/0a3f5794-92b3-11e2-959300144feabdc0.html#axzz2hYI4cQji. (accessed September 23, 2013).
3Syrian Ambassador to the United Nations, Bashar Jaafari, declared the UN Security Council resolution on Syrian chemical weapons has addressed the concerns of the Damascus. Syrian envoy hails UNSC resolution, September 28, 2013. http://newsr.in/n/India/74w130eom/Syrian-envoy-hails-UNSC-resolution.htm#iJTuVCdkzkq7QkYF.99. (accessed September 23, 2013).
4RAND identified that within next 20 Years, Chinese GDP and its defence budget can supersede US and can prove it to be true peer competitor. What’s the Potential for Conflict with China, and How Can It Be Avoided? RAND Arroyo Centre Research Brief http://www.rand.org/content/dam/rand/pubs/research_briefs/2012/RAND_RB9657.pdf. (accessed September 23, 2013).
5The Obama administration’s rebalancing to Asia strategy is based on the assumption that the future of the Asia Pacific region will be of interest to the United States and there was a disproportionate projection of American resources in the Middle East compared to Asia Pacific. Liu Feitao, Obama’s Rebalancing to the Asia Pacific. http://www.ciis.org.cn/english/2013-09/04/content_6272923.htm. (accessed September 23, 2013).
6Defence White Paper 2013 para 2.22. http://www.defence.gov.au/whitepaper2013/docs/WP_2013_web.pdf. (accessed September 23, 2013).
7Ng. T., Xi Jingping call on navy to be prepared for struggle, South China Morning Post, April 12, 2013. http://www.scmp.com/news/china/article/1212630/xi-jinping-calls-navy-be-prepared-struggle. (accessed September 23, 2013).
8AUSMIN 2012, Joint Communiqué, November 14, 2012, http://foreignminister.gov.au/releases/2012/bc_mr_121114.html. (accessed September 23, 2013).
9Defence White Paper 2013 para 2.20.
10‘China’s continued rise as a global power, the increasing economic and strategic weight of East Asia and the likely emergence of India as a global power are key trends influencing the Indian Ocean’s development as an area of increasing strategic significance. In aggregate, these trends are shaping the emergence of the Indo-Pacific as a single strategic arc’. The concept of Indo-Pacific is a refinement of wider Asia-Pacific region based on the developments at international level, its impact at regional levels and importance for regional stability. The same fact has also been described in the Australia in the Asian Century White Paper as well as National Security Strategy. Defence White Paper 2013 para 1.12.
11The ‘String of Pearls’ is known as Chinese efforts to improve diplomatic, military and economic ingress into Indian Ocean by series of road and maritime infrastructure. http://www.strategicstudiesinstitute.army.mil/pdffiles/pub721.pdf. (accessed September 23, 2013).
12SAARC is a regional forum of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka for promotion of peace stability and progress in the region. http://www.saarc-sec.org/SAARC-Charter/5/. (accessed September 23, 2013).
13Defence White Paper 2013 para 2.32.
14‘The Group of Twenty (G20) is the premier forum for international cooperation on the most important issues of the global economic and financial agenda. It brings together finance ministers and central bank governors from 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States of America plus the European Union, which is represented by the President of the European Council and by Head of the European Central Bank’. http://www.g20.org/docs/about/about_G20.html. (accessed September 23, 2013).
15‘Asia-Pacific Economic Cooperation, or APEC, is a forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. APEC has 21 members – referred to as “member economies” – which account for approximately 40 percent of the world’s population, approximately 55 percent of world GDP and about 44 percent of world trade. Its members include Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Viet Nam’. http://www.apec.org/About-Us/About-APEC.aspx. (accessed September 23, 2013).
16India is investing in Ammonia plant in Northwest Australia. It is the single largest Indian investment in Australia. The author visited the area during a study tour.
17Defence White Paper para 2.66.
18RAN is operating in Gulf since 1990 for enforcement of United Nations Security Council Resolutions. The RAN in the Persian Gulf, http://www.awm.gov.au/exhibitions/iraq/ran.asp. (accessed September 23, 2013).
19‘The Strait of Hormuz is by far the world’s most important chokepoint with an oil flow of about 17 million barrels per day in 2011. Flows through the Strait in 2011 were roughly 35 percent of all seaborne traded oil, or almost 20 per cent of oil traded worldwide. More than 85 percent of these crude oil exports went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations’. World Oil Transit Chokepoints, http://www.eia.gov/countries/regions-topics2.cfm?fips=WOTC. (accessed September 23, 2013).
20International Fleet Review was held in Sydney in October 2013. Russian Ship participated in the Fleet Review. International Fleet Review Sydney 2013, http://events.mosman.nsw.gov.au/events/342/international-fleet-review-sydney-2013. (accessed September 23, 2013).
21Defence White Paper 2013 para 2.47.
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