[Acknowledgments omitted]
Today I want to take the opportunity of this Asia Summit to talk about some of the ways Asia matters to Australia.
Starting from the questions of what we want, and how we make that happen.
As an important power, but not a superpower – with our economy built on trade – the short answer to what we want is a world that is peaceful, stable, prosperous and respectful of sovereignty.
Where disputes are addressed in accordance with international law and norms, not by power and size.
And as an important power, but not a superpower, the short answer to how we make that happen is by prioritising our alliance with the United States, upholding the rules and a deep focus on partnering with the region.
Which is why a large part of this Government’s foreign policy has been centred on repairing and strengthening our relationships in the Pacific and Southeast Asia; seeking to make Australia a partner of choice for countries across the Indo-Pacific that want what we want.
And this is why so much of what I talk about is the region.
Yet still today, most of the discussion about Asia in Australia is about China.
Australia’s interests with China are mostly discussed only in bilateral terms.
And when the discussion isn’t just about our direct relationship with China, it’s about the impact and risks of China’s strategic competition with the United States.
Just as a Mercator map can alter perspectives, the way these debates are framed can distort our understandings.
In both cases, whether we’re talking geopolitical poles or the geographical equator, the poles appear to have more import than what’s in the middle.
This is not to say China and strategic competition don’t matter to us. As demonstrated – among other things – by our consistent efforts to restore dialogue in the China relationship, they are of huge consequence for Australia.
But the way we manage our interests in the face of challenges involving great powers is only partly through direct dealing. Much of the answer lies in approaching these challenges in regional terms.
There is a lot that happens in the thousands of kilometres between Australia, the United States and China, just as there is a lot that happens in the broader Indo-Pacific.
This space is central to Australia’s future. This is where we need greater understanding, both among analysts and commentators, and also within the polity. It is where I will start today.
In the last couple of weeks, we’ve had Indonesian President-elect, Prabowo Subianto, visit Australia and Australian Deputy Prime Minister, Richard Marles, visit Indonesia.
A major emphasis of these visits has been a new Defence Cooperation Agreement.
President-elect Prabowo also gave emphasis to the shared history of our countries – specifically, Australia’s role in supporting the creation of a sovereign and independent Indonesia, as the Netherlands sought to resume control of the archipelago at the end of World War Two.
So, it seems timely to reflect on that history.
During the war, many Australians and Indonesians formed profound bonds.
And emerging from the war, Prime Minister Ben Chifley and his Foreign Minister, Doc Evatt, had a clear concept of Australia’s future in the region – and of the importance of Indonesia.
They agreed, as Evatt put it, that:
“Our interest in the region lies in security and also in order, provided it is founded on justice, welfare, progress and the satisfaction of legitimate political aspirations.”
Delivering on that interest has always taken persistent effort, as it certainly did then.
The leader of the Indonesian nationalist movement, Sukarno, proclaimed Indonesian independence just two days after Japanese surrender, in August 1945.
That was far from the end of the matter. Years of conflict, trade blockades and diplomatic wrangling ensued.
Australia announced de facto recognition of the Indonesian nationalist government on 9 July, 1947.
But what followed was of even greater consequence.
The Dutch launched a major military assault on nationalist areas.
In response, Australia referred the matter to the United Nations Security Council, where we were a non-permanent member, arguing this was a “threat to the peace” under Article 39 of the UN Charter.
The Security Council called for a ceasefire and established a so-called Committee of Good Offices to settle the dispute.
In a singular honour, Indonesia chose Australia as its representative on the Committee.
Unfortunately, that process didn’t succeed, and eventually continued defiance by the Netherlands prompted India to convene a conference of Asian and Middle Eastern nations.
Australia helped draft the resolutions of the conference, and the unity among regional nations galvanised the Security Council to move more decisively, reconstituting the Good Offices Committee as the more powerful UN Commission for Indonesia, and a deal was finally landed at The Hague.
On 27 December 1949, the Netherlands transferred sovereignty. That very day, Australia recognised the Republic of Indonesia. The next month, Indonesia hosted its first state visit, by Evatt’s successor, Percy Spender.
None of this was easy, and all of this was new.
Australia was the first country to ever invoke Article 39 of the UN Charter.
And the Australian military observers sent as part of the Good Offices Committee’s work were the first UN peacekeepers.
Moreover, we should recall that Australia’s activism for Indonesian independence wasn’t always welcomed by our closest allies.
All of this took place only a few years after Australia had ratified the Statute of Westminster in 1942, giving us complete sovereignty over our own international policy.
It is impossible to overstate Australia’s good fortune, in these earliest days of our sovereign foreign policy, that Chifley and Evatt understood how important Indonesia would be to Australia and the world.
Both seeing so clearly our future in the region – and pursuing it so courageously.
Their foresight was further underlined by contrast with the moral and intellectual leader of the Liberal Party, Robert Menzies, who in 1947 described Labor’s support for Indonesian independence as “the very ecstasy of suicide.”
Myopia and relentless negativity appears to be transmitted from one Liberal leader to another.
The integrity and vision of Chifley, Evatt and others now looks so obvious.
Indonesia stands as a major and growing power in our region and beyond.
It is the world’s largest Muslim majority country. The world’s third largest democracy. And over the next fifteen years, it is projected to become the world’s fifth largest economy.
A successful, engaged Indonesia that sees Australia as important to its own story is of enormous benefit to us as we chart our own course.
As we deepen partnerships with more countries with shared interests and diversify our economy, especially through Southeast Asia.
We have our work cut out. When we came to government, Australian direct investment in Southeast Asia was lower than it was in 2014.
Over this period, while international investment in the region had grown apace, Australia’s investment in it had gone backwards, both in relative and absolute terms.
In 2022, Southeast Asia’s combined nominal GDP was around A$5.2 trillion-larger than the economies of the United Kingdom, France or Canada.
And by 2040, Southeast Asia is predicted to be the world’s fourth-largest economy after the United States, China and India.
We have a good foundation in our free trade agreements across the region, but Australia’s trade and investment has simply not kept pace – and we need to turn this around.
I feel like I say this over and over again and people look at me and nod and move on.
I just want to give you some statistics that explain how we’re being left behind.
If we go back to 2001, between 2001 and 2021, the annual growth rate in the region averaged 8.5%. Our trade, on average, grew 5.5% a year.
So, our trade is not keeping pace with growth, and it is insufficiently diversified to maximise benefit.
Our investment is similarly underweight.
ASEAN’s share of FDI stocks from Australia fell from 6.3% in 2017 to 2.9% in 2022. That’s actually a remarkably small fraction, remarkably small fraction of our total global investment.
But in comparison, Southeast Asia’s share of global FDI has increased over the past two decades from 3.6% to 6.9%.
So the rest of the world is investing more.
Between 2000 and 2021, Southeast Asia’s global inflows of direct investment stock increased by 13%, on average, a year.
Our investment stocks increased by 8% a year over the same period.
Again, we’re simply not keeping up.
Others are. Between 2016 and 2020, US and China investment both doubled into Southeast Asia and over the same period, Canada quadrupled.
So, this backdrop, is why we appointed Nick Moore. And I want to thank Nicolas for his work as Australia’s Special Envoy to Southeast Asia, and for developing a first-class Southeast Asia Economic Strategy to 2040. If you haven’t read it, please do.
We have started to deliver on a number of measures in response to the Strategy.
The $2 billion Southeast Asia investment financing facility is up and running. Export Finance Australia is developing a pipeline of projects to boost Australian investment in Southeast Asia – particularly in clean energy transition and infrastructure development.
We have established new deal team hubs in Jakarta, Singapore and Ho Chi Minh City and offices in Hanoi, Bangkok, Kuala Lumpur, Manila, Phnom Penh and Bandar Seri Begawan to connect Australian investors with opportunities in the region.
In the June quarter, our deal teams engaged 157 Australian companies and institutions to discuss plans for the region and investment opportunities, and facilitated the largest ever Australian investor delegation by value to Singapore and Vietnam.
Austrade have had their best ever client results in Southeast Asia this year, with over $1b in commercial outcomes since the beginning of 2024.
We have opened new landing pads in Jakarta and Ho Chi Minh City to help more Australian start‑ups engage and enter new markets in the region, building on the successful landing pad in Singapore.
Our senior Southeast Asia Business Champions, including Shemara Wikramanayake, Jennifer Westacott, Tony Lombardo, Shayne Elliot and Peter Fox are actively working with Australian businesses on the opportunities and leading high-level business delegations to the region. I thank them for their work, and their leadership.
Under the Southeast Asia business exchange, we have undertaken business missions to Singapore, Malaysia, the Philippines, Thailand, Indonesia and Vietnam, with more to come in the next few months.
And we have improved visa access for businesspeople from Southeast Asia.
What I would say to the business community, is that no one today could claim they don’t understand the risk of putting too many eggs in one market.
Whilst our Government’s initiatives are designed to make it easier for Australian business to get established in new markets, it is up to business, smart business to take the opportunities we have created through this Strategy.
And since this event is co-hosted by the Australian Financial Review I would make the point that we are asking Australian business to do just that.
To create new value for your companies, and for your country.
I also hope Australian media companies consider how they contribute through reporting from Southeast Asia – and that hope extends to the AFR.
Australian business benefits from the insights of an Australian business newspaper.
We all need to play our part. Complacency, or business as usual, has a cost, and it’s a cost that risks compromising our influence today and our prosperity tomorrow.
I want to turn now to some of the strategic dimensions of this discussion.
Greater economic engagement with Southeast Asia is good for our prosperity. We know, historically, how much Australia has benefitted from locking into growing markets, just as we did with the North Asian economies.
Greater economic engagement across Southeast Asia, and across the region also helps build alignment.
It helps foster a dynamic that reassures the region of our intentions for peace and prosperity.
Building this alignment, and bolstering our economic weight, has never been more important.
The complexity and interconnected nature of the challenges we face cannot easily be compared to any other period in history.
The prosperity, peace, and stability we seek are being seriously undermined.
Meeting the basic food and energy needs of many of the world’s people – already a challenge – is only becoming harder.
More people are displaced. More people are hungry.
Great advances in development and technology are having an uneven impact across the globe.
And the benefits of modernisation are accompanied by threats to our democracy, through disinformation, interference, cyberattacks and the unregulated use of AI.
Regulation, rules and norms are not keeping pace with technological advances.
Australia is grappling with a world where trade is a vulnerability as well as an opportunity.
A world where we see the undermining of the trade rules that have sought to level the playing field.
This is a confronting picture for a great trading nation like ours – that has benefitted so much from globalisation.
And longstanding institutions and rules continue to be undermined and broken.
Never more so than in Russia’s full-scale invasion of Ukraine, which demonstrates what is at stake in standing up to aggressors – an assault on sovereignty that we cannot allow to set a successful precedent.
In Gaza, despite the weight of international pressure including from Australia, a ceasefire has not been reached, the threat of regional escalation continues, and the humanitarian catastrophe worsens each day.
We can see the pervasive nature of regional and global challenges closer to home in Myanmar, where the political, humanitarian and security situation continues to deteriorate, and the toll of civilian suffering continues to worsen.
We see it when North Korea threatens our region, with impunity, in violation of UNSC sanctions.
And while I said at the outset these challenges are bigger than Australia-China relations or even US-China relations, I do not want to understate the risk of instability and the potential for miscalculation that compounds these challenges.
We do remain deeply concerned by the pace at which China’s military is modernising, without the transparency or reassurance that the region expects.
And we see growing military cooperation between China and Russia, and China’s efforts to normalise dangerous actions towards the Philippines and Taiwan.
Behaviour speaks louder than words. And we share our region’s concerns that these activities stand in contrast to stated and shared objectives of peace and prosperity.
As military capabilities grow, we know that a level of transparency is expected from our region and our partners – just as we expect transparency of others.
This is why at every step of our military acquisitions and process, including through the ³Ô¹ÏÍøÕ¾ Defence Strategy and AUKUS, we have sought to engage our partners, openly and transparently.
Since I became Foreign Minister, I have consistently reiterated US calls for open lines of communication with China. So to, has the Prime Minister in his engagement both with President Biden and President Xi.
We are pleased to see the resumption of leader-level and military-level dialogue between the United States and China.
These are important steps on the path towards stability that the region has called for.
We must also commit to preventive architecture to increase resilience and reduce the risk of conflict through misunderstanding or miscalculation.
What does that mean? It means finding ways to ensure that we have systems in place that enable us to talk to each other at times of crisis.
Of course, this is not just about the great powers.
I recall President Widodo telling the East Asia Summit this:
“All of us sitting in this room have an equal responsibility to create peace, stability, and prosperity in the region. We all have the same responsibility to refrain from creating new conflicts, to refrain from creating new tensions, to refrain from creating new wars.”
I could not give a speech detailing Australia’s enduring ties with Indonesia without paying due respect to outgoing President Joko Widodo. He has demonstrated leadership and wisdom in assisting Indonesia navigate the challenges of the past ten years.
As both President Widodo and incoming President Prabowo know, all countries – large and small – have a role to play, and an interest in shaping the region we want.
And what is that? It is a prosperous region, a region at peace, a region in balance.
This means preserving the character of the region – a peace that enables Australia and other countries to decide our own futures, free of interference.
This doesn’t happen on its own. And Australia cannot make it happen alone.
What we must do is be active, working with our friends and partners, including in regional fora like ASEAN, to prevent conflict, to bring both deterrence and reassurance to bear, and to help shape the region that we want.
This is the message I took to the ASEAN-led Foreign Ministers meetings in Vientiane in July.
It is also the message reflected in the Melbourne Declaration and Vision Statement agreed by the Prime Minister and ASEAN leaders at our Special Summit in March this year.
At that Summit, Leaders committed to ‘work together to promote open communication and dialogue within ASEAN-led mechanisms, to enhance mutual understanding, reduce the risks of miscalculation, and prevent conflict’.
Recognising that the collective sum of our efforts is far greater than the parts in preserving the balance of power in our region.
And recognising that if we work together, openly and transparently, we can shape the calculus of any potential aggressor so that conflict is never seen as worth the risk.
We can respond, when we, or our neighbours, are coerced or have their sovereignty threatened.
We can enable choices. We want a region in which countries are not required to choose sides, but can make their own sovereign choices.
To have the space to agree and to disagree.
And our efforts are both about enabling choices in terms of the character of the region we want, and in practical terms about projects and partners.
This is what guides Australia’s approach to our region. Preserving that character and responding to the priorities of our partners.
We pursue this by exercising all arms of our national power.
In just the last six weeks, we have:
- Stood side-by-side with Pacific leaders to announce a Pacific-led, Australia-backed Pacific Policing Initiative
- Celebrated entry into force of the historic Falepili Union, a transformational agreement to safeguard Tuvalu’s future in the face of climate change
- Announced an Indo-Pacific Broadcasting Strategy
- Announced funding for the Civil Society Partnerships Fund
- Launched the Quad Cable Connectivity and Resilience Centre
- Established the ASEAN-Australia Centre
- Signed the Defence Cooperation Agreement with Indonesia
- And we have tabled the AUKUS Treaty text in the Parliament.
These are just the latest developments, adding to our ongoing efforts to make Australia’s contribution to our region’s balance.
A contribution we are pursuing through the region’s architecture – ASEAN, the Indian Ocean Rim Association, and the Pacific Islands Forum.
And a contribution that we pursue this through regional partnership – bilaterally, multilaterally, and with our Quad partners Japan, the United States and India.
These nations and institutions share our belief that we benefit from a region that operates by rules and norms.
We want each country – large or small – to operate by the same rules. Rules that we have all had a say in shaping.
When disputes inevitably arise, we insist those differences are managed through dialogue, and according to the rules, not by force or raw power.
These are principles embedded in our region, and the countries of our region make an ongoing contribution to maintaining and promoting them.
Take the agreement between Vietnam and Indonesia to delimit their Exclusive Economic Zone after 12 years of negotiations – an example of how long-standing maritime disputes can be resolved in accordance with international law.
These negotiations illustrate how international law is not merely a Western construct. They reflect decisions by countries in our region to pursue peaceful ways to resolve disputes.
We see this from all the reaches of the globe – in Vanuatu’s landmark International Court of Justice case, in countries coming together through the Multi-Party Interim Appeal Arbitration Arrangement at the WTO to ensure trade rules remain enforceable while we reform the dispute settlement system.
We see it in Philippines’ decision to go to the Arbitral Tribunal, constituted under the UN Convention on the Law of the Sea (UNCLOS), and in Australia’s support for its unanimous, clear, ruling in the South China Sea arbitration between the Philippines and China, which is final and binding on the parties.
We have also seen the countries of the region participate in joint defence exercises to reinforce shared principles and habits of cooperation, both within ASEAN and with regional partners.
Last week, the Philippines and Vietnam announced their intention to secure a defence cooperation agreement.
We saw ASEAN members last September conduct a joint military exercise, ASEAN Solidarity Exercise 2023, focused on humanitarian and disaster relief-the first ASEAN-wide military exercise not involving any external partners.
We have also welcomed ASEAN participation in our own defence activities.
For example a Vietnamese People’s Navy ship will join Australia’s Exercise Kakadu this month.
And last month, Australia, the United States and Indonesia came together to in a joint exercise to strengthen our humanitarian aid and disaster relief preparedness.
These are all examples of regional countries seeking to maintain their ability to chart their own course.
Not taking sides, as some might like.
Some might say that not taking sides is being neutral. That assumes the strategic calculus is a simplistic binary. Neutral is not the same as passive. Non-aligned is not the same as passive.
And the real question is not binary. The real question is how do we exercise our agency to shape the region we want?
Which brings me back to where I started: Indonesia.
Indonesia is proud of its history of non-alignment – a point made by President-elect Prabowo in Canberra last month.
This needs to be understood clearly. Indonesia is pursuing what they describe as an independent and active foreign policy.
Seeking opportunities to cooperate with a range of partners to advance its national interests and collective regional prosperity and stability – consistent with its leading role in ASEAN.
As my good friend, Indonesian Foreign Minister Marsudi has said:
“The fate of the world cannot be defined by the mighty few. A peaceful, stable, and prosperous world is a collective right and responsibility of all countries.”
And Australia seeks those opportunities to cooperate with Indonesia.
These are the terms in which we should see the historic Australia-Indonesia Defence Cooperation Agreement.
The treaty-level agreement between our countries allows for enhanced practical cooperation and interoperability between our defence forces in areas such as:
Maritime security, counter terrorism, humanitarian and disaster relief, logistics support, education and training, as well as across defence industry.
Australia and Indonesia have an important history of grounding our relationship in substantial diplomatic agreements.
The strategic context today brings new and different challenges – but again we are committing to work together in service of the strategic equilibrium in our region.
Because then, as now, the countries of our region look to create and maintain peace, stability and prosperity.
And the agreement signed between us last week takes on an even greater significance in the face of the most confronting circumstances in our region in decades.
It says that even though we will make our own sovereign choices in our national interests, we can assure our sovereignty better by working with our neighbours who face the same challenges.
As much as anything, it will be the success of these partnerships that determines whether we can both withstand the region’s challenges and achieve the region’s promises.
It will be the success of these partnerships that determines whether our great leaders who foresaw Australia’s interests in the region and in Indonesian independence will have their wisdom fully realised by this generation.
