Australia betrayed

The carbon tax debate has been a great success, for an inept government desperate to distract attention from its litany of failures. No failure has been more serious, or less remarked, than in foreign affairs.

There is a widespread Australian disinterest in complex international developments where little is as it seems. The carbon debate has ensured that no attention has been directed to the negligent, incompetent and self-indulgent conduct of Australian foreign policy. This is at a time when Australia's international standing is rapidly, if almost unnoticed, being transformed.

Australia's traditional allies, the United States and the United Kingdom, are consumed by bankruptcy and corrupt and dysfunctional financial elites, by small but extravagant unwinnable wars and by the abuse and erosion of the authority of the post-1945 global institutional order and its "universal" values. The last puts many of the Anglo-American world's dated certainties and privileges under threat..

Australia is moving from being a privileged outpost of the greatest empire the world has known to becoming an isolated and disorientated left-over of that empire. Further, it is geographically located just south of a 2 billion strong Asian community of the world's most productive and best educated people. There, the administrative and commercial elites have all been shaped by a tradition and culture that most Australians understand by little more than "Confucius says" jokes.

Contrary to recent claims by a prominent, but poorly attuned, Murdoch journalist, Australia's present Foreign Minister is a disaster. He is a product of the same compromises that have made the carbon tax a political imperative. With a Prime Minister totally dependent on his vote, he is free to indulge himself, roaming the world, creating mischief and calling for self-defeating and destructive "humanitarian interventions" at whim. He is free to ignore Australia's deteriorating regional standing, to which he contributed substantially with his "diplomatic" postures and initiatives as Prime Minister. He remains free from any serious assessment of this ineptness, when he managed to offend all of Australia's major regional neighbours. This left them in little doubt that even Mandarin speaking Australian leaders would be unlikely to comprehend the unspoken codes and discreet thought customs that shape behaviour in a post-colonial, self-confident and resurgent Asia.

At another time, all of this might not amount to much. At this time, the possible consequences are daunting. Organisations like ASEAN plus Three (ten South East Asian nations plus China, Japan and Korea), SCO (Shanghai Cooperation Organisation, composed of Russia, China and four Central Asian states, with India, Pakistan and others as observers and prospective members) and brics (Brazil, Russia, India, China and South Africa) are emerging as potentially powerful and decisive groupings in a world of rapidly declining Anglo-American authority. None of these groupings are covered meaningfully by Australian media and academia, which are almost totally dedicated to promoting, in one way or another, the virtues of Europe's post-enlightenment "universal" values for "less advanced" peoples. This approach is increasingly out of touch and unreal in an environment that sees these values discredited on a daily basis by abuses and corruption in leading Western nations.

The first of the above groupings comprises a community of over 2 billion who already lead the world in much manufacturing and applied technology and that may soon assume a dominant authority in global finance. The second comprises territories that reach across the land base of Eurasia and that dwarf Australia in their potential to provide as yet undiscovered and unexploited mineral resources, likely linked to markets by efficient and rapid rail services. The third represents a strategic grouping that marginalises Western Europe and North America and that could become decisive should financial problems in the EU and the US continue to discredit their standing and undermine established international institutions like the IMF and WTO. The members of these groupings have a variety of positions on the West's enlightened "universal" values and some have become strongly, if discreetly, critical of Western presumptions of superiority in respect of political and commercial values.

Some Chinese academics speak disarmingly of a noodle bowl of new international organisations, where it becomes almost impossible to follow all the strands of activity. This need not be a cause for concern in a country like China with its vast reserves of highly educated human resources. It is different for Australia, where it is very easy, with limited (in quantity and quality) appropriately skilled diplomatic resources, to lose the way and be smothered in the noodle bowl. It is much too easy for Australians to be distracted by an insignificant but apparently high prestige East Asian Summit and neglect ASEAN plus Three and its low profile Chiang Mai Initiative (CMI). It is almost a political imperative to belittle the CMI, a product of US excess during the 1997 Asian Financial Crisis. Yet, we may be well on the way to seeing the CMI become the financial headquarters of the region with the world's largest financial reserves – perhaps even becoming a sort of global central banker.

With its centrality to ASEAN plus Three, SCO and BRICS, China is uniquely and strategically placed to show the way into a peaceful world where today's global organisations are either discredited or discarded. Rudd and Gillard governments have done nothing to prepare Australians for such a world.

It has taken almost 14 years since the 1997 Asian Financial Crisis for the May 2011 meeting of the ASEAN plus Three Finance Ministers meeting in Hanoi to reach an agreement on two important issues in the development of the CMI. These were the appointment of a Chinese, Wei Benhua, to be the first director of the ASEAN plus Three Macroeconomic Research Office (AMRO) and the doubling of the size of the CMI (to US$240 billion). While the Hanoi meeting left in place the IMF link which limits the CMI's independent capacity to act in a crisis, informed observers suggest the CMI now is on track to emerge soon as a fully-fledged and independent Asian Monetary Fund (AMF).

The recent announcement of the Pan Asia Gold Exchange in Kunming just north of Thailand and Vietnam, may not be unrelated. It has been interpreted by some as a retaliation for the refusal of the United States to restrain its paper currency and help control inflation. This viewpoint sees the Chinese exchange as having the potential to explode the demand for gold and precipitate a collapse in paper currencies, including the US dollar. While these views are no more than informed speculation at this time, they highlight the multi-dimensional character of contemporary global challenges. Australia may not be disadvantaged initially as a major commodity (and precious metal) exporter but it would be seriously troubled, even devastated, by the collapse of the US dollar and the consequent diminishment of US political and military reach and influence.

Whatever the immediate future, it is unlikely that it will take another 14 years for the ASEAN plus Three, SCO and BRICS groupings to assume a much more pervasive authority in reshaping the global community. This will certainly challenge many of the certainties and privileges that have been a source of comfort for the Anglo-American powers, and Australia, over the past two centuries.