Australia and the Asian balance

Despite America’s global primacy and the current international focus on the Middle East, most strategists believe that Asia will be the locus of global power in the 21st century. The US Central Intelligence Agency’s think-tank recently came out with a report titled Mapping the Global Future, which singled out China and India as the next “arriviste” powers. For several geopolitical reasons, Australia is now in a position of enormous influence on the Asian balance of power.

However, it is not yet clear if Australian policymakers are willing to adapt their policies to the rapidly changing Asian dynamics. This was illustrated in the seemingly contradictory statements made by Prime Minister John Howard and Foreign Minister Alexander Downer during their recent visit to India.

Since their visit was preceded by a hugely successful trip by US President George W. Bush, which included a deal on India-US civilian nuclear cooperation, the Australian leaders had to respond quickly with a position on India’s nuclear status. Downer’s curt rejection any similar arrangement between Australia and India was typical of someone wedded to the old system, while Howard’s “never say never” response was more pragmatic. That a nuclear deal was on the cards during Bush’s India visit was not a secret and hence it was shocking to see Australian leaders unprepared with a coherent state position on India’s atom program.

Australia’s views on India have historically been in the “India-Pakistan” analytical framework. India has been seen as a nation of curry-eating, cricket-mad but impoverished people, which was constantly bickering with its neighbour and regional “rival” - Pakistan. Given Australia’s pre-eminent role in preserving the current nuclear order based on the 1970 Nuclear Non-proliferation Treaty (NPT), Indo-Australian ties took a nosedive following Indian and Pakistani nuclear tests of 1998. Trade with India was nothing to write home about as well.

In fact, Canberra’s Department of Foreign Affairs and Trade (DFAT) dissolved its separate South Asia and Indian Ocean department not too long ago and the Joint Standing Committee on Foreign Affairs, Defence and Trade of the Australian Parliament still calls India a “regional player”.

Australian policy towards China used to be similarly moribund and perhaps even a bit hostile in the past decades, but a commerce driven renaissance has made Australia reorient its views towards the rising dragon even at the cost of annoying its Western allies. China is now Australia’s third largest trading partner and Canberra has recognised China as a free market economy. In 2004-05, the combined two-way goods trade that Australia had with China exceeded the value of Australia-US trade. China is an especially lucrative market for Australia’s booming commodities sector and the volume of Sino-Australian trade is only likely to increase manifold.

Perhaps as a result of the booming trade relations, Australian policymakers have been willing to take what appears to be an overly benign view of China’s military and economic rise. Despite its robust policy on human rights promotion, Canberra has essentially been willing to turn a blind eye to Beijing’s poor record in the area.

Even in the trade arena, Australia has given China a pass on intellectual property rights violations and murky monetary policies. More surprisingly, China’s burgeoning and opaque defence spending rarely gets a serious mention in Australian policy statements on the East Asian region.

Nowhere is the Australian leniency towards China more evident than in the nuclear field. Even as the world at large remains concerned about Chinese nuclear proliferation, Australia is now about to conclude a framework to allow China to buy immense quantities of uranium, supposedly to fuel Chinese nuclear power reactors. However, most experts were shocked to note that Canberra has not insisted on iron-clad safeguards to make sure that Australian uranium does not get diverted to Chinese nuclear warheads or even end up in the hands of Chinese nuclear clients in Pakistan or Iran. For a nation with a historically strong anti-nuclear stance, this is munificence bordering on recklessness, it would appear.

It is in this context that many in India hope that Australia is willing to take a fresh look at India - in the broader global context as opposed to the narrow “India-Pakistan” box. Australian policymakers got a taste of the new India when they saw the close co-ordination between the Indian and Australian navies in the aftermath of the Boxing Day tsunami of 2004. India is building a truly blue-water navy with an ability to project force from the Far East to the Middle East. The Indian navy will therefore see more chances to interact with its Australian counterpart in the latter’s backyard in the coming decades, especially with close mutual co-operation with the US navy.

In terms of commerce, South-East Asian nations are already courting India not only to leverage the massive Indian commercial potential, but also to prevent an overly dominant China from skewing trade balances it its favour. As the recent controversy over Chinese price-capping of Australian ore indicates, a single buyer situation leaves Australia essentially powerless in the face of economic muscle applied by Beijing to extract unfair advantages. With another strong buyer like India in the picture, China would be naturally restrained from acting up.

In the nuclear commerce field, it does appear that there are significant impediments to a modus vivendi with India. This is not surprising given the passionate and widespread anti-nuclear views existing in both the Australian policy circles as well as the general public. India is still seen as a nuclear rogue. However, scrutiny reveals that Australian policymakers have always found a way to not let anti-nuclear public opinion impede vital strategic interests.