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A lost opportunity on Asia

By Julie Bishop - posted Thursday, 1 November 2012


Economic growth in Asia will continue to play an important role in Australia's future prosperity in terms of trade but also in the strategic military balances of our region.

Rising economic power is invariably accompanied by rising military power and is resulting in increased tensions in the East China Sea and South China Sea, for example.

Growing economic and military might in Asia comes at a time of economic downturns in Europe and the United States.

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Given the significance of these issues for our country, many people had high expectations for the Australia in the Asian Century White Paper, hoping it would provide an in-depth analysis of the opportunities and the challenges likely to arise in the region, with new insights and thinking on how Australia could respond.

The White Paper released by the Prime Minister last Sunday does contain a series of laudable goals.

These include the aim of improving the international rankings of our universities, lifting educational standards in our schools and increasing the numbers of Australian students studying an Asian second language.

There is also an aspiration to establish more embassies to enhance our diplomatic presence across Asia.

These are worthy aspirations.

There is no doubt that the authors of the White Paper have gathered a significant amount of data and forecasts on long-term economic trends which makes it a useful reference.

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However the White Paper was a disappointment because there is a yawning chasm between the espoused aspirations and the policy and funding framework necessary to achieve them.

There was no funding commitment for any new initiatives, and the Government's recent mid-year Budget update slashed spending on education, research and innovation.

Asian language programs have been cut.

The Government's current agenda undermines the credibility of the report.

Further, there was also a not very subtle attempt to use the White Paper as a vehicle to justify the government's current policy agenda.

Included in the White Paper was a grab-bag of domestic policies with tenuous links drawn to developments in Asia.

It was as if the Labor spin doctors had hijacked the original exercise and turned it into an exercise of self-congratulations, as it contended that to prepare Australia for the Asian Century all the Government needed to do was continue with its current policies.

That aspect of the report seemed more likely to be the work of the army of spin doctors employed by Labor rather than former Treasury head Ken Henry.

While there are relatively superficial discussions about issues such as demographic trends, there is little critical analysis of the implications.

For example, China faces a demographic time-bomb due to its one-child policy.

Population ageing in China will take just a few decades compared with the same impact on other nations that has taken over 200 years.

This is forecast to put enormous pressure on productivity, the healthcare system and social support structures in China.

Japan's population ageing is occurring at a slower pace than in China but it is also bringing a range of pressures to that country, partly due to its low levels of immigration.

With China and Japan as our two largest trading partners this demographic issue will also have serious implications for Australia's future prosperity.

The White Paper also fails to deal with the damage to relations caused by this Government's handling of issues such as border protection, live cattle exports, foreign investment and increasing union militancy, among others.

To take advantage of the rapid economic growth in Asia, Australia must ensure that our nation is regarded as a secure and reliable trading partner.

The Government's decision to unilaterally ban the live cattle trade to Indonesia sent shockwaves around the region, as other nations began to reassess Australia's reliability as a supplier of food and other commodities.

Rising union militancy was raised with me in Japan recently by business leaders who have long memories of the disruption caused to iron ore exports from the Pilbara in the 1970s and 1980s.

The Prime Minister must accept responsibility for the shortcomings in the White Paper.

It is widely believed that was only commissioned by the Prime Minister to undermine then Foreign Minister Kevin Rudd.

Ken Henry, appointed by the Prime Minister to her staff within the Department of Prime Minister and Cabinet, was tasked by the Prime Minister to produce the report while many senior staff in the Department of Foreign Affairs with long experience of working in Asia were overlooked for the role.

The genesis of the report was political and it is not surprising that the final report is a political rather than a policy document.

While the White Paper will make a contribution to an important debate about Australia's future, it is a wasted opportunity.

It is likely to suffer the same fate as the 2009 Defence White Paper launched with great fanfare, with its recommendations subsequently ignored.

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About the Author

Julie Bishop is the Federal Member for Curtin, Deputy Leader of the Opposition and Shadow Minister for Foreign Affairs.

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