The question for Australia is not only about whether or not we are punching above our weight. It is also about whether we are equipping ourselves for the right fight.
Addressing members of the Department of Foreign Affairs and Trade, Corrs Partner and CEO John W. H. Denton spoke on "Punching above its weight? Australia, middle power status and second-track diplomacy".
Click 'text version' to read the speaker notes.
Good day. It's a pleasure to be here. As the introduction noted, I was myself once in your shoes as a diplomat for the Department of Foreign Affairs and Trade.
I was recently asked why I chose your career as my first career and why I left? In trying to example that period of my life I recalled the following exchange from Naghoub Mahfouz - palace of Desires. The Cairo trilogy
A group of 3 young members of the Egyptian middle class are discussing their futures and the following emerges:
“The Foreign Service would provide you with a distinguished profession and opportunities for travel”
“It’s hard to get into”
Husayn Shaddad replied
"the foreign service no doubt has extraordinary advantages. For the most part it's a ceremonial career. It would accommodate my desire to avoid the servitude of work. It's a form of tourism and provides free time. It would allow me to have my desired spiritual life dedicated to the pursuit of beauty."
Now that might explain why I joined and equally why I left! It didn’t quite live up to that expectation! I didn’t have much time to devote to the pursuit of beauty.
Anyway I'm grateful to have the chance to talk to you all today.
And given today’s topic, it feels appropriate to be here in the Gareth Evans Theatre.
Gareth Evans was, of course, a driving force for mainstreaming the boxing metaphor of “punching above our weight” when describing Australia’s place in the world.
Australian Foreign Ministers seem to either love the phrase or hate it.
Evan’s successor, Alexander Downer, mainly avoided it, as did his successor, Stephen Smith, who preferred to argue that Australia "punched below its weight" and we should be doing more.
Your former Secretary Dennis Richardson prosecuted this argument forcefully, asserting the challenge was not to punch above our weight, but to punch up to our weight.
And under Bob Carr, I note the original phrase has crept back in to the DFAT lexicon. Though I don’t think I’ve seen him tweet about it!
so the topic of the day is whether Australia 'punches above its weight', or whether Australia suffers from a malady known — usually in more academic circles — as 'middle power malaise'.
I'd like to start by noting that I'm not sure these two things are exclusive to each other.
As part of working throughout the region (and in tribute to our new Prime Minister), I've been forced to become familiar with the Chinese idea of a 'maodun' — a pithy word referring to what happens when an impenetrable shield meets an invincible spear. In other words, a maodun is an irresolvable dilemma, or an apparently irreconcilable position.
So is Australia's position in the world a ‘maodun’ as the topic suggests. I don’t think it is. Our situation is not this. It is the by-product of the assets we possess as a nation, of how we define our national interest and of the choices we make in prosecuting this national interest. Whether or not we feel a sense of 'malaise' about how well we punch, or not, I think is a separate question, one I shall return to subsequently.
The first part of our topic today centres on the idea of Australia's place in the world, and particularly on the idea of how effective we are at prosecuting our interests in it. This is the idea of 'punching above our weight' — the concept that we do 'more with less', that we are more effective than our capabilities may make us appear. And its not at all a new reality to contemplate.
Indeed, Australia has a long tradition of not being content to just accept the status quo – we are in our nature, and necessarily so, forward looking, rather than anachronistic in our thinking. Perhaps, we see ourselves as a ‘challenger’ nation or a ‘contender’
This is something I have seen and lived at first hand.
I joined the then Department of Foreign Affairs in the mid-1980s having completed a dual Arts Hon/Law degree from the University of Melbourne.
And it really was heady days as I was sent off on my first posting to Moscow as third secretary – covering a grab bag of issues, including political and human rights, science, agriculture (for a brief time), and private secretary to the ambassador.
Chernenko died as I arrived to be replaced by Gorbachev, a correlation to my arrival or a coincidence! Ushering in the dying days of the USSR.
Despite the challenges of the Cold War, Australia was leading a number of great middle power diplomacy pushes across multiple fronts.
We were forming the Cairns Group of agricultural exporters.
We were setting up the Australia Group of countries working to minimise chemical and biological weapon proliferation.
We were establishing the Canberra Commission on the Elimination of Nuclear Weapons.
And the genesis of APEC was forming, culminating in Australia hosting the first meeting of 12 key economies of the Asia Pacific in Canberra in the late 1980’s.
In addition we were building on our own domestic capability by enacting historic domestic economic reforms, including floating the dollar, deregulating the financial system and dismantling Australia’s tariff wall.
Fast forward two and a half decades to today, and Australia’s voice is still strong. We are still punching.
My argument is that we are not lightweights in the world of foreign affairs.
We may have a small population when compared to many of our neighbours, but we have a strong economy (12th largest globally)a potent defence force (15th largest defence budget), a large aid donor footprint, a vast land mass (6th biggest globally) a bounteous national endowment of resources and minerals and an extraordinary ‘built endowment’ including sound regulatory frameworks and institutions a fantastic education and health system and the enormous capability of our diverse population.
This is even more the case right now. We have one of the strongest economies in the world. Unemployment is low. Inflation is contained. The terms of trade – despite falling 10 per cent last year - are still relatively high.
And we expect per capita income to continue to rise, albeit at a slower rate.
While commodity prices appear to have passed their record peak, considerable minerals and energy investment is still to come and large-scale production and exports are yet to flow
Our public finances are among the strongest in the world. Government debt is low. Our financial institutions are sound and we have the highest possible sovereign credit rating. And on top of all that we have a multicultural, highly skilled and creative population that has demonstrated capabilities in innovation and complex problem solving.
We're a major part of regional trading bodies, and indeed, we are a big winner from trade overall and our commitment to an ‘open economy’. The Centre for International Economics suggested that trade liberalisation since 1988 may have added 2.5 per cent to Australia’s GDP in the long run, representing an increase in real income of around $3,000 to $4,000 a year for the average Australian family. More than one in five Australian jobs today are trade-related.
We're seen as worthy of a seat at many of the finest tables. We're a member of the G20, have a seat at the EAS, we’re a non-permanent member of the UN Secretary Council, and a vital hub of (indeed, occasionally acknowledged as a force behind) APEC.
We are a major beneficiary of the US security alliance within our region. Our defence, diplomatic and intelligence ties with the US make us privy to, and occasionally a part of, the security guarantees provided by the United States to the region, including to our major trade partners Japan and South Korea.
But we have relationships that transcend being a mere appendage to this relationship. For example, we've recently signed Strategic Partnership Agreements with both India and China along with the likes of “Great powers” such as the UK.
And we are close to ASEAN — indeed, we were the first external dialogue partner of ASEAN in 1974 — and we participate regularly in the ASEAN Post Ministerial Conference, which brings together ASEAN and its dialogue partners, including Australia, once a year.
These achievements don't come without some weight, or at least some clout. International relations remains an environment where realists are right more often than not. We may not like it, but right doesn't always beat might, and clout usually beats shout.
As Theodore Roosevelt would have phrased it, our weight, in this sense, allows us to walk relatively softly, knowing that we have a decent sized stick beside us.
Perhaps we should throw out the metaphor of punching above our weight as interesting but irrelevant and ask more pointedly ‘are our punches still able to hit our targets?’
This is not a simple question. It requires us to confront how much of our position is an accident of history or circumstance; confront questions of how well we have used our historic endowments; and confront questions of how much our current policies will continue to maintain our position.
Of course history is often a good starting point to examine contemporary problems.
And looking at Australia’s foreign policy approaches since we finally asserted our independence in international relations through the Statute of Westminster Adoption Act in 1942, it appears our current policy setting is a moving mix of the three main historical traditions in foreign policy that have served Australia well since the post-war period:
- As an aside, this was a period that has been labelled by some as assertive and energetic, bordering on hyper-activity; which perhaps all sounds very familiar and contemporary to you; and
So the question we are asking ourselves today could equally apply during these different periods in Australia’s development.
But to examine properly these questions would take me far longer than we have available.
So for simplicity, I am just going to give you my answer and I'll let you all think about where you may stand on these issues.
My position is, that we should just stop downplaying our achievements (as un-Australian as that might sound!) I think hard-headed analysis shows that Australia has considerable weight in the world — more than would normally be expected of a country with 20 million people. Let's put that in perspective — population wise, our nearest counterparts are Ghana, Yemen, Sri Lanka and Syria.
Given that answer, will we suffer from a diminishment of our clout in the future? Possibly. But surely that will be a matter of our choices and policy decisions.
And this idea of choice and decisions probably gets to the second part of the question put to me today and no, I don't think we suffer from 'middle power malaise'. I think that the idea of middle power malaise takes our agency away — there is too much 'destiny' or fate and not enough acknowledgement of what we can do. Let’s face it: we are actually ‘complicit’ in our own future!
So, what can we do? How do we both acknowledge that our weight is too considerable for us to punch above it, and yet avoid the idea of middle power malaise?
Firstly, we need to look at what we mean by 'clout'. It means influence, getting things done, persuading others to our point of view and getting them to act in accordance with that point of view. By doing this — through whatever means — we can prosecute our national interests.
Similar to some of you, I have recently been involved in an extensive process on this idea of defining our national interests and establishing how we will prosecute them — the crafting of the Australian in the Asian Century White Paper. Along with my colleagues, Ken Henry, Catherine Livingstone and Peter Drysdale.
As you are all no doubt aware, as an advisory panel we came up with a number of themes, each of which sheds light on an element of this argument regarding our national interests.
Our actions in these themes will determine how well we 'punch', no matter our weight class!
The first of these themes we focussed on was all about how we keep our region stable. Part of prosecuting our interests will be building trust and cooperation in the region through regular contact and activities. We will also seek to secure a greater role for Asian countries in the rules-based regional and global order, and particularly, through working with ASEAN. And we said we'll do this while maintaining a strong alliance with the US, and encouraging China to fully participate in regional developments.
None of this is anything new to you - not in the slightest. But the themes of the White Paper also show us how we will achieve this regional stability.
We'll do it firstly by building on our strengths, and reinforcing the things we already do well. We must keep our own house in order (i.e. our economy strong), as this is what makes us attractive to Asia. This means a continuing commitment to domestic economic reform and an open economy.
We will also develop the capabilities of our people, making sure they understand the region. This includes making better use of the many capabilities of our diverse population and our diaspora. We need these capabilities and this understanding in order to build stronger relationships and partnerships across the region.
The part of this argument, if I may, that is occasionally overlooked is the idea of building our human resources capability— the talent of our workforce. This endowment is one that we have created — through our education system, our diaspora, and our experiences on the ground.
We should never underestimate the great strength of our people — we have a healthy, highly skilled and creative population.
You, of course, are all a large part of this. You are, to a woman and man, well-educated; experienced; and worldly. DFAT, as a department, is a testament to the power of the Australian education and training system. There is a vast depth of talent here in this department.
But what do we do with this talent? Is it enough that we keep DFAT highly skilled in order to maintain the appearance that we punch above our weight? To maintain the image of Australia as a heavy hitter diplomatically?
I think these roles are vital. But we need to continue to think about how DFAT's human resource talent will allow it — in the great public service cliche — to do 'more with less'. Or, as the Secretary (Peter Varghese) outlined to DFAT staff when he started in the role last December, should ‘we rather be doing ‘less with less’?’
Let me be clear here — I am not advocating a cut to DFAT's budget at all. As the Lowy Institute and others have pointed out, we have the smallest diplomatic footprint in the G20, and indeed are grappling with a diplomatic deficit. But I think we need to acknowledge two parallel impulses of any government — one is to look for 'efficiency dividends', and the other is to talk about how the changing world we live in means that we need to strengthen Australia's relationships across the region.
Let’s be candid: If given a chance between more money for schools or hospitals and more money on a diplomatic footprint, a government will always go for the former.
This, to return to the idea I mentioned before, is a genuine 'maodun', a contradiction that appears irreconcilable. And it is, I imagine, a contradiction that you face every day. This might be cold comfort, but I can assure you it is also a contradiction faced squarely by business as well.
Yet how can we get around this contradiction? Is it resolvable?
Obviously, these are weighty questions for the Secretary much more than for me as a guest speaker. But I would like to use the rest of my time here today and elaborate on a concept that I am committed to: the idea of 'second-track' diplomacy. My question to you is whether a greater embrace of this concept may help resolve this ‘maodun’?
And more specifically, how we can increasingly use the private sector to complement the development and implementation of foreign policy.
When former US Foreign Service officer Joseph V Montville first coined the phrase “track two diplomacy”, in an article in Foreign Policy magazine some three decades ago, its doubtful he would have had in mind a diplomatic action like Dennis Rodman’s tweet earlier this year calling on ‘the Supreme Leader of North Korea or as I call him “Kim”, to do him a “solid” and cut loose an American citizen in detention.
But such is the changing face, and medium, of diplomacy.
Second-track diplomacy was traditionally defined as the direct involvement of private organisations or individuals in conflict resolution.
But it is now much more than that, and certainly can be more.
I don’t necessarily subscribe to the view expressed in the 1993 book Multi-Track Diplomacy, by Louise Diamond and John McDonald, outlining a Ferris wheel-like arrangement of nine tracks of diplomacy, including separate tracks for religion, for activism, for training.
But it certainly should include the shaping of foreign policy priorities and opportunities through dialogue and persuasion by those who influence foreign policy at home and abroad.
And Australia’s private sector has the capabilities to contribute to this task
I saw a good example of this missed opportunity to harness the private sector in 2011, when I was asked by then PM Rudd to help with an independent review of Australia’s aid effectiveness.
Quite early into the review it became clear that wide parts of our aid machinery viewed the role of business in a somewhat limited light- if not in an antagonistic manner.
Business was seen as delivering products, delivering services, and providing philanthropy through corporate social responsibility projects.
But what was missing was the potential for business to assist development outcomes across a broader spectrum of activities. For heavens sake the dramatic lift of people from impoverty in the last 25 years has come from economic development and private sector formation.
The private sector has a lot to offer through advice on policy and program development, for example on major infrastructure developments for aid recipients. Or how to harness the employment creation effects of a functioning private sector.
In short, this experience told me a broadened concept of second track diplomacy needs to be further mainstreamed.
At the moment track two diplomacy is seen as useful, however, it is always seen as an adjunct to foreign policy rather than integral to it.
So I am proposing that we focus more on broadening the idea of track two diplomacy itself. I think we need to do this. We need to bring a wider array of envoys, groups and activities into play for Australia.
Critical to this is the idea that the development of a wider and deeper set of relationships, partnerships and interconnections, rather than singular focus on formal dialogue (be it track one or two), must form the backbone of sustained engagement with Asia.
Indeed, one of the big ideas of the White Paper was that:
'A wide range of groups — from businesses, to educational institutions, to community groups, to unions, to cultural organisations and even to sports teams — can enjoy stronger relationships through Asia. It will be these relationships that form the base for future improvements in Australia's relations with Asia.'
While these relationships sound nebulous in the abstract, they are critical to helping us with the longer-term challenge we face in how Australia actually becomes a part of the region.
I think this commitment needs to happen through long-term relationships, partnerships and interconnections shaped through time, through doing things together with our government, business and educational partners in Asia and through committing to each other’s prosperity in a way that transcends the transactional. Formal mechanisms are useful — but they themselves don't create partnerships, they merely formalise them.
Creating partnerships across different parts of the community also suits the changes that are occurring within our nation right now.
These shifts in our society (among other reasons) are why the White Paper sets out the ambitious goal of making Australia ‘fully part of the region across all levels of society, business, government and the community’.
This desire to be a part of our region is entirely appropriate and logical given the political, economic and demographic shifts that have taken place over the past few decades.
And wanting to be a part of our region reflects that encouraging strong personal relationships lead to direct as well as unanticipated benefits. Just ask the cherry growers in Tasmania who discovered that a friendly Korean tourist happened to be the head of a major conglomerate — and ultimately the provider of a major contract to ship premium product into Asia.
We can’t plan specifically for such serendipity. But we can create the circumstances that create it. We know from the history of our experience with countries like Japan that it can, does and will happen, the result of countless small but positive interactions.
The breadth of this vision of our relationship with the region meant that the White Paper couldn't be the sole preserve of any of the foreign affairs, economic or defence bureaucracies. It had to be the product of the whole of government. Which is why we also engendered a national dialogue – not just a Canberra/Sydney/Melbourne dialogue of elites/
Moreover, I'm not sure change of this magnitude, or such a deep shift in mindset can always be facilitated by government. As the public service is forced to do more with less, so it has necessarily become more fragmented and specialised in ways that make it harder to have a vision across the whole APS, but makes it easier for you to hit gaps or niches more effectively and efficiently.
So the White Paper instead called on resources and institutions across the whole of Australian society. We thought building the sorts of relationships we want with the region will need a national effort. It will need to deploy all of these institutional arrangements that the government is currently putting in place to build capacities for dealing with Asia. And it will need Australian society to use these capabilities to seek out more opportunities and better relationships throughout Asia.
Having businesses that successfully operate in Asian markets is a big part of this vision. We need our business sector to have strong relationships with others in the region. We'll need new business models and new mindsets to operate at our best in Asian markets, and to seize the opportunities in our region.
Australia’s experience in tackling challenges such as low-emissions growth, infrastructure development, urban design, stresses on air quality, soil and water systems and health and aged care will create opportunities to cooperate with our neighbours in these areas.
Obviously there is a large carrot in this for Australian business as well. Australian Bureau of Statistics reports indicate that businesses that innovate are twice as likely to report increased productivity as businesses that do not. And innovating businesses are also 40 per cent more likely to report increased profitability.
Even in the business sector, this doesn't mean that there isn't a large role for the public sector to play. The Government will need to work with businesses, especially small and medium-sized enterprises, to build their capabilities, identify opportunities and open markets.
And the government will be critical to setting regulations and frameworks that allow us to succeed. An example is the transfer of knowledge and ideas. The scope and speed of knowledge sharing are partly driven by intellectual property rights regulations, and by Australia upholding the regulatory obligations contained in relevant international agreements.
So this is my idea of helping build a wider and deeper platform to enable effective second track diplomacy — I can see Australian business becoming fully part of the region, developing viable Asia-focused strategies, joining regional value chains and forming genuine long-term relationships. And in doing so, Australian business (and other elements of society) forming relationships that can ease the role of formal government processes, negotiations and interactions.
In a way, this all probably sounds like old hat. That's because, bluntly, it is. Second-track diplomacy isn't about doing everything anew; it is about being more deliberate in what we naturally do anyway. It's recognising that the scale of the opportunity that faces us will require a commensurately large response — and that we can only have the clout and heft to provoke that response should we bring all elements of our society to bear on the problem of becoming part of the region. The challenge is to shift the way think about the execution of our foreign policy priorities to include explicit utilisation of this broader “second track” platform.
It's worth noting that second-track diplomacy is already something we are known for in the region.
An academic at the ANU I was discussing this matter with recently noted that a Thai observer recently told him that:
“Compared to us, Australians have a much better idea of how to use other tracks of diplomacy. It comes from size and interaction, I think — but either way, every time I go to an event everyone there — be they from Asialink, ANU, government people, or business — everyone knows each other. It's this strange slightly anarchic multipronged and tentacled effort. But it works. Every time I head discussions of Thailand as a middle power, I think of the Australian approach and realise that we have a long way to go.”
At the same time, when I accompany business colleagues to the APEC Business Advisory Council meetings, to the B20 Summit, and other international gatherings, I see the US, and the Europeans, in a similar light, and realise how far Australia has to go still.
But this is the vision I have for getting over the idea of middle power malaise, or punching above our weight. It's doing what others think we do — working together (albeit in a slightly anarchic way), building better relationships and then using them for influence — but this time we will be doing it a little better.
And this time, we will be doing it more within our region. A significant and revealing study I read recently examined how other countries perceive Australia. In international polls, Australia regularly ranks among the top countries to visit and to live, work and study in. However, our reputation is stronger in G8 countries than in countries in our region. In a Reputation Institute poll, for example, G8 countries ranked Australia 3rd behind Canada and Sweden for countries to live, work or study in. Non G-8 countries (including Brazil, China, India, Indonesia and South Korea) ranked us 14th overall.
So to conclude, I think the question for Australia is not only about whether or not we are punching above our weight. It is also about whether we are equipping ourselves for the right fight.
Gareth Evans described four factors needed for middle power diplomacy to be effective: opportunity, capacity, creativity and credibility.
We are lucky to have all four.
As another aside, and I promise this will be the last, the Business Council of Australia has been working away over the last few months on a long-term economic vision and action plan for Australia. The plan, with 93 specific recommendations for action, will be launched tomorrow. Putting on my hat as the chair of the Global Engagement Task Force of the BCA, I ask you to look out for the plan, and to consider the linkages between a vibrant, productive and growing domestic economy and a vibrant, creative and growing foreign policy.
I understand that the Secretary (Peter Varghese) during his inaugural address to DFAT staff last December also highlighted the importance of forming your own view of the world.
Your own view of global politics.
And your own view of where Australia fits within that framework, and our role within that framework
So I’m equally interested to hear your views of this discussion today.
On that note, thanks for the invitation to speak today. And I welcome your thoughts and/or questions.
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