Making the most of the Asian Century will take many years of sustained effort - we can’t build relationships or learn new skills overnight. And many of the things we need to do will require longer term planning.
Corrs Partner and CEO John W.H. Denton was invited to give this speech at the Prime Minister's Economic Forum on 12-13 June at the Stamford Plaza Hotel in Brisbane.
Click 'text version' to read the full transcript.
I’m a strong believer in the value of the private and public sectors talking together about the future of our country, and the policy changes we need to make together. For that reason I’m pleased to see such significant support here tonight for a very important initiative on the part of the Prime Minister.
I’m particularly pleased to be able to share with you some thoughts developed as part of the ‘Australia in the Asian Century’ White Paper process. Strong themes have emerged through our discussions with an exceptionally wide variety of stakeholders, both in Australia and overseas.
The Prime Minister commissioned the White Paper in September last year – describing it as a ‘national blueprint for a time of national change.’
Those of us working on the White Paper are ambitious in our vision. We see a prosperous, distinctive and secure nation, with rising living standards and quality of life. We see an Australia that is integrated with our diverse region and open to the world. We see a country whose people understand, and have the capabilities to deal confidently with, the challenges of this Asian Century -- and make the most of its myriad opportunities.
While the White Paper will, of course, offer immediate insights that will lead to specific initiatives in the short term, the real aim of the White Paper is much more than that.
The aim is to guide consistent policy development in Australia over the long-term -- to develop a road map to identify the best policies and projects over the next ten to fifteen years.
Having a vision for the long-term is critical. Australia is facing an economic, political, social and strategic landscape that’s fundamentally different from the one we’ve experienced in the past half century. Extraordinary change is occurring in the world and it’s set to have a profound impact globally, and especially here in Australia.
Of course, how we respond to this change will determine not just how prosperous Australians are, but how well we manage our broader regional relations in the decades ahead.
This means finding the right domestic policy settings. Reforms in economic policy and in other areas as diverse as trade, education, immigration, and social and cultural policy. It’s also about what Australians can do for themselves to maintain and increase their prosperity in this time of immense change -- the Asian Century.
Success won’t come to us simply through the luck of our geography. The challenges for government, business and the community are daunting. It is no exaggeration to say that a new mindset is required.
And the key ingredient for that is the willingness to adapt continually to that change.
One of the greatest strengths of this White Paper process is that it’s not occurring in a vacuum. It’s a live example of the public – private sector conversation that can be so effective.
For a start, it’s quite unusual that a White Paper Advisory Panel should include so many outside advisers – like Peter Drysdale from the ANU and eminent businesswoman Catherine Livingstone, who’s the Chair of Telstra among other things – and me, of course.
There’s also been a truly remarkable quantity of consultation with interested parties both here and overseas. I’ll speak about that a bit more in a moment.
The Asian region is amazingly diverse -- in culture, language, economic development and just about everything else you could name. For the purposes of the White Paper “Asia” stretches from India in the west, right across South East Asia and goes right through to some of our biggest trading partners in the North East – China, Korea and Japan.
To try and bring some order to that, fairly early on – and after extensive consultations – we decided to focus on six key bilateral relationships... countries that will be vital to Australia over the next few decades.
Those countries are China, Indonesia, India, Japan, South Korea, and Vietnam.
But I must emphasise, that that doesn’t mean other countries are being excluded or ignored. Of course Singapore, Thailand, Malaysia and too many others to name are an important part of Australia’s story into the future.
But when we think of all our relationships in Asia, it’s pretty clear that some are well developed, and some are changing very rapidly. There has to be a priority in building the ‘bilateral’ arrangements for our dealings with China, Indonesia and India over the coming years.
We will need to build comprehensive partnership arrangements with these countries drawing on our past experiences with ASEAN and Japan. That won’t just be a task for government. We will need to call in business, academics and the community as government moves forward proactively with our big non-OECD neighbors in Asia.
Because this is a story about opportunity. Change brings risk as well, and this must be managed, but the opportunities of fully embracing our neighbourhood, vastly outweigh the risks.
During this process the Panel has been told so many stories about Australians and Australian companies who are prospering in Asia. The people who are doing best are those who have truly integrated with our region. Rather than see their business as Australian, perhaps with some staff or assets overseas, they see their business as a truly regional enterprise, integrated into global and regional supply chains.
And it’s how they got to that point that’s really interesting. At its core are personal relationships. Sometimes the story goes back twenty, forty years – when those with foresight thought it was time to start building bridges into the region.
This is the story of business everywhere – but nowhere more so than in Asia that personal relationships, cultural understanding, getting to know people as individuals and core customers is the most important thing you can do.
Because it’s those relationships that build trust and foster collaboration. They enable people to work together to develop the products and services that are needed and then deliver them. As a result, both sides of the partnership benefit.
And that’s something I think this White Paper aims to invigorate the sense that Australians are a part of this region. Our histories may differ, but our future is shared, and there is an overwhelming sense in the community that we are part of that future and need to be engaged in preparing for it. We need to recognise that now is the time to arm ourselves with what the White Paper team has been calling ‘Asia-relevant capabilities’.
That description doesn’t just mean having an economics degree or being a brilliant computer programmer. It’s much more than that.
It’s about having the right skills as a nation, the right workplace settings – and perhaps above all the cultural ‘openness’ to fully embrace the Asian Century.
It’s about ‘getting’ Asia at a fundamental level – having the tool kit to tune in to the region. Increasingly, that might mean also speaking an Asian language and that’s been a strong theme to emerge in our consultations. So the phrase ‘Asia-relevant capabilities’ has become our shorthand for all the tools Australians will need to engage with Asia in the decades ahead.
It’s about programs that encourage investment in the public, political, business, scientific, research, educational associations that stretch over lifetimes.
I mentioned earlier than the collaborative nature of this White Paper’s formulation is one of its hallmarks.
We’ve been committed to openness – and as a result various members of the task force and advisory panel have met several hundred people from business, both big and small, and universities, schools, and youth organisations, to sports and cultural and arts groups to discuss what the Asian Century means for them.
We’ve also been lucky enough to receive 265 – so far - written submissions from some of the biggest business and cultural organisations in the country through to individuals and small business people.
Remarkably, most of these submissions were received during the January and February – a time when many traditionally tune out from great national debates.
So the fact that so many people such effort to communicate with the White Paper team – and with submissions of great quality I might add -- tells us just how engaged Australians are with Asia and how much importance they place on building our relationships in the region.
What struck us though, is that despite the enormous diversity in the people and organisations the submissions came from – a lot of what they had to say was very similar. Without guidance or direction, the hundreds of submissions coalesced into four themes.
Integration. This is a word I’ve used repeatedly this evening. This concept lies at the heart of what the White Paper is all about. By the way, Australia will deepen its integration with Asia, even if we make no policy changes, over coming decades. But to make the most of that integration we need to acknowledge the forces that are driving it and adjust our policies to make the most of it.
After all, if we get the economics right, we’ll be in a position of strength from which other success will flow.
So what is driving integration? It’s lower barriers to trade, investment and cross-border innovation and capital mobility. It’s the globalisation of ideas, the movement of people between nations, it’s becoming more Asia-savvy across the community and it’s Australian firms connecting with regional and global supply chains.
But those things alone won’t get us where we want to be, and until now we haven’t been ambitious enough. One area I’d like to see pursued with more vigour is regional harmonisation – or mutual recognition – across a broad sweep of areas throughout the region. This could mean cross-border or regional recognition of educational qualifications and occupational skills, bringing financial regulations into line, and Asia-wide corporate governance standards.
Longer term, this is about securing a stable, competitive, innovative and financially connected region which is critically important to Australia’s prosperity. The emphasis though is and should be on the region.
In the region we must ensure our economic diplomatic settings are right. We should build on the work of APEC on Regional Economic and Financial Integration
For example, this is something we’ve been working on in ABAC, the business arm of APEC – establishing a regional financial forum that can support the appropriate financial architecture for the region
I see the Forum as a means to build over time a more resilient and stable future for the region and for Australia. It will be one where there is relatively less dependency on financial flows from other regions and greater dependency on regional flows. This would reflect better the growing weight of the region in the global economy.
The forum is important to Australia because it will:
Specifically, it will bring gains to the Australian financial sector because it will:
Over time, policy adjustments will be required, but also adjustments in the Australian mindset, to make us more adaptable and further our capabilities.
The 21st Century business model is likely to be very different from the successful business models of the last quarter of the 20th Century.
Making the most of complementary interests and working collaboratively with partners in Asia, rather than just competing against them, provides the best recipe for long-term success. But what does that collaboration look like?
It could mean Australian companies accessing large Asian markets through export, by creating and by being integrated into regional supply chains. It could mean establishing new enterprises in Asian countries, potentially in partnership with local businesses. To get ahead in the 21st Century – the Asian Century -- Australian businesses will need to be able to do both.
The White Paper will explore these concepts of collaboration, cooperation, partnership and matching capabilities. We expect those words will be part of the economic language of this century just as international competitiveness was the language of last quarter of last century.
Of course, that’s not to downplay the importance of productivity and competition. Productivity and domestic competition will remain the drivers that allow Australians to secure the opportunities brought about by collaboration and cooperation. And accessing economic interdependencies is a critical way of remaining internationally competitive.
For Australian businesses and individuals who get this right, there are vast new opportunities available -- especially in supplying goods and services to help address some of the challenges our larger regional neighbours are facing. Things like food security, energy security, green growth, water, urban design, health care, aged care and public policy design – all areas in which Australia can make a valuable contribution.
Which brings us to our next emerging and defining theme of this process. I’ve already mentioned the phrase Asia relevant capabilities.
None of you would have missed the public discussion about the sharp fall Australia’s experienced in the number of students studying Asian languages. The White Paper will highlight this as a problem – but at the same time also stress the need to develop skills and understanding of Asia more broadly in the community.
That means building the capability of all Australians in order to nurture a dynamic, outward-looking, highly skilled and entrepreneurial workforce. Increasingly, we need to understand that both as individuals and as a society, need to be able to adjust to change and face opportunities and challenges with confidence rather than trepidation.
Which brings us back to how people are the essence of all this, and that too has been reflected as a theme in the submissions. Diplomats and governments often talk about ‘people-to-people’ links, but what they really mean are personal relationships, across all spheres – personal, government and business.
There appears to be a general consensus in both government and business that their relationships in the region are well-developed, although there is always room for improvement. But what we’re hearing again and again is that personal relationships are under-developed.
Indonesia was a common example used for this -- a country that’s now overtaken the Australian economy in purchasing power parity terms. Australian businesses have begun to understand the opportunities available in Indonesia -- but the perception of many Australians of Indonesia lags the reality.
China and India, as I said earlier, present a similar priority,
So we need to inject new vitality into what I like to call second track diplomacy. (Although some might argue it should be the first?) Those grassroots linkages that really enable two countries to foster real understanding of one another, and put historic stereotypes and prejudices into the past where they belong.
We need to rethink how we execute our foreign policy priorities in the region and introduce ‘second track’ thinking into our diplomatic tool box. A good example will be in developing our priority bilateral relationships but also with newly emerging countries like Burma.
So it’s been quite remarkable that from such an enormous number of disparate submissions, these similar themes emerged again and again for us to explore in the White Paper.
That doesn’t mean those will be the only issues we take into account. But the submissions reflect a broad consensus that Asia’s rise and its burgeoning middle class will generate significant opportunities for Australia.
To wrap up - No doubt you have all heard it said that Australia is in the right place at the right time – in the Asian region at the dawn of the Asian Century. This moment is ours to make the most of -- to grab the opportunities that are and will be there for the taking.
But you know as well as I, that it’s not just about Australia. It’s about Australia integrating fully – that word again -- into the region of which we are a part. And that will take co operation, collaboration, and mutual understanding, as well as the right government policies and economic settings.
It’s not easy to achieve all this simultaneously, and the White Paper terms of reference set a high bar. But if we get it right, the dividends -- both in the short term and for future generations of Australians -- are enormous.
This is an opportunity to think about the ambition we have for this nation 20 years from now. To articulate what we want the future to be and lay a road map to help get us there.
But that said, it would be wise not to expect a shopping list of must-do-now policies to be attached to the White Paper.
It must be remembered that the White Paper is a strategic document that aims to set a framework for policy making. It should be the keystone around which policies can be built -- both in both the near term and several years from now.
It’s also important to remember that it’s a government document. A White Paper isn’t a report containing recommendations for the government. It will speak with the government’s voice about the direction we should be taking.
And this White Paper is a bit different, shaped also to engage the nation in a long term mission, calling for committed participation from across the entire community over many years.
Because this is not a task we can leave to government alone. It’s up to all of us to create the change that will make Australia’s economy -- and as a result, its society -- stronger.
Individuals, communities, and businesses – we all need to have the foresight and do the work to develop the capabilities and connections that will allow Australians to prosper.
Making the most of the Asian Century will take many years of sustained effort -- we can’t build relationships or learn new skills overnight. And many of the things we need to do will require longer term planning.
And that’s the importance of the White Paper. It will serve as a beacon for Government policy in the years ahead, and provide a roadmap for the private sector about the direction in which it might want to head. And if we’ve done our job well, those two things will work in tandem. The White Paper will be a guide to creating an exciting and prosperous and future for Australians.
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