Australia in the "Asian Century" or is
it Lost in Asia?
China and the US - The Australian dilemma.
Australian Prime Minister Julia Gillard released a long awaited white paper
Australia in the Asian Century yesterday, which has been "wowed" by
the Australian media. The white paper basically affirms that Australia's future
lies with Asia and consequently immense economic opportunities exist for
Australia to grab.
The paper hinges the nation's strategy of becoming a competitive
force within the region through skills development, innovation, infrastructure,
the tax system, regulatory reform, and environmental sustainability. However
before a nation can become a competitive force, it must have an accepted place
in the region.
On this key strategy the White paper does little more than make a
"rally call" to Australians to come out and make it happen. The paper
also reeks of Austro-centrism where most of the points made in the
document are written with the expectation that Australia will win out of closer
ties with Asia without necessarily giving much back in exchange - such as
Australia having closer ties with Asian universities in order to attract
students and skilled workers. Rather one-way to say the least.
The Australian China US relationships
Not surprisingly, the document still goes out to reaffirm
Australia's loyalty to the United States. This could be seen as Premier Julia
Gillard's metaphoric statement of "all the way with LBJ".
Historically the US is seen as a savior from invasion by the
Japanese during WWII and consequently there has been a total commitment from
successive Australian governments through the cold war until the present time
for US foreign policy. The ANZUS Treaty that embodied these commitments has
brought many foreign policy mistakes to Australia and probably cost Australia in
South-East Asia its own persona of identity.
In addition, although Australia could be considered a rich
multicultural society today, some people in Asia still have a negative
impression because of the old white Australia policy, treatment of indigenous
people, Pauline Hansen, and the latest policies on boat arrivals of asylum
In contrast, China is now so important to Australian trade,
investment, and tourism, yet Australia is unconsciously niggling China with its
staunch loyalty to the US. China saved Australia from a deep recession with
demand for minerals whereas the US brought the Australian Government anguish
over the involvement in Iraq and Afghanistan. In addition, it appears the US had
a different rule to Australia than other allies. The Australian Government has
been expected to follow US foreign policy in an unquestionable manner. Each
Australian Prime Minister since Curtin has kowtowed to the US, seeking a close
presidential relationship in the belief that this was in the best domestic and
foreign interests. Certainly a close personal relationship with the incumbent US
president has been seen as something of importance. Conversely, Kevin Rudd's
prowess at speaking Chinese was not good enough to develop the relationship with
China, as the relationship is much more complex than mere small talk.
China would prefer to deal with an Australia with a mature and
independent foreign policy rather than an enthusiastic supporter of US foreign
policy. Precedent shows that China does not necessarily expect blind allegiance
but would like to see Australian decisions more in line with its own realities
rather than someone else's. However looking today at both major parties in
Australian politics this is highly unlikely. In addition the punishment dished
out by the US Government to the David Lange Government in New Zealand in the mid
1980s is a deep lesson about what happens to those disobedient to the US.
From the US perspective, Australia is a nice ally to have, one it
can rely upon on the international stage, which will be important as Australia
takes up a temporary security council seat at the UN. With the Obama visit to
Canberra and Darwin last year and the stationing of troops in Australia, the
country has some importance to the US until it can establish much more
substantial bases closer to China.
China as an ally presents less of a dilemma than the US, as China
has historically always allowed some deviation from the official Chinese foreign
policy. For example China does allow Australia and other nations to have a
separate relationship with Taiwan, and different approaches to regional issues
without making these differences major issues. Maybe Australia can learn from
the Indonesian approach of dynamic equilibrium, a doctrine where
Washington and Beijing would agree to co-exist rather than compete for supremacy
in the region.
Australia is also finding it difficult to accept that there are
other views in the world other than the occidental position on detente and human
rights that it expects within the region. For example, many Australians cannot
understand why so many Chinese people so strongly support the position of the
Chinese Government on many issues like Tibet, and how people can accept a
Australia's relationship with the Asian Region
After decades of successive government foreign and trade policy,
Australia still does not have any embedded position within the Asian region. In
fact Australia has been historically viewed as occasionally condescending and
arrogant towards the region with attitudes towards human rights, where
Australia's own practices in matters like the detention of boat people are seen
by some as hypocritical.
The influence of Australian business and financial institutions
in the region is minor, nowhere near the critical mass needed to become a
competitive force in the region. Australia at this time has only a very low
profile in the Asian banking and finance sector with no brands out there. The
only exception is in the mining sector, which to all intents and purposes has
made the Australian economy very dependent upon demand in Asia, particularly
Back in the 1990s the then Prime Minister Paul Keating stated
that Australia is part of Asia and together with the then foreign minister
Gareth Evans made a concerted effort to embed Australia within the region. This
had some positive effect with Indonesia, Cambodia, Laos, and East Timor with
Australian policy working towards enhancing peace and prosperity within the
region. But they had their setbacks over the recalcitrant remarks about
Malaysia's former Premier Mahathir Mohamed which soured relations with that
country for a number of years. However perceptively, all these gains were lost
when John Howard came to power in 1996 reaffirming the Canberra-Washington link,
earning the label for Australia as the US's deputy sheriff in the Asia.
The Australian relationship with the region is one where
Australia needs the region more than the region needs Australia. The Australian
market is small compared to other markets and of little interest to regional
exporters who prefer to put their efforts into the larger markets of China,
Japan, EU, and the US. Other hubs in the region are more conducive to becoming
corporate HQ hubs than Sydney or Melbourne. The only real interest Australia has
for Asian investors been in rent seeking activities like real estate. Australia
is the gateway to nowhere, so cannot play the role as a hub like Singapore and
Hong Kong have successfully done. However the concept of Darwin as a gateway to
Asia has been formally recognized but it remains to be seen what will actually
be done about it.
With the rapidly changing nature of the region and the shifting
balance between the US and China within Asia, the Austro-centric view of
the region needs urgent revamping. The Australian economy in the short and
medium term is dependent upon China, and Australia perceives itself rightly or
wrongly to be dependent upon the US for security. Australia's acceptance of the
wide array of Asian views within the region that Australia can one day become an
equal partner in the region.
Though Australia has some deeply historical links with many parts
of the region due to some heroic actions of troops during the Second World War
and the Malayan Emergency after that, tragically these opportunities to further
develop relationships were not capitalized upon, due to Australian mesmerization
with Washington. White papers aside, it will be action and not words that are
important and China and the region will be surprised to see any real change,
although the intention and realization of the need is present within the foreign
policy Australian agenda. However with Australia, old habits die hard. And just
as Julia Gillard had an unfortunate fall the other week in India in front of the
media, Australia also has a track record of falling over itself in Asia.
It will take much more than a massive investment in skills and
education to be able to engage the Asian region, let alone be "competitive".
One of the paramount barriers Australia has to overcome is the deep set belief
that its own cultural values are not necessarily universally accepted across the
region. It's not about learning Asian languages but about understanding
different points of view, approaches, and 'mindsets'. Austro-centrism
must take a back seat in relationships around the region for Australia to be
seriously considered a member of the region. Currently it's not.
The white paper is still haunted by Australia's past. Maybe it's
time for Australia to release the US security blanket a little and become a
mature and independent nation within the Asian region. However one fears with
the promise of a rise in real incomes from the "Asian Century"
initiative, that the whole thing is just a pander to the domestic electorate. As
the report itself aspires, Asia is seen only as a means for Australian incomes
to become one of the top 10 per-capita ones in the world.
Rather, Ken Henry the principal author of the white paper appears
to have placated the Australian Government's wishful thinking for a positivist
instrument that can be sold to the electorate, which he may have done well. The
White paper has turned it into a promissory note for a better future within
Australia based upon the misconception that internal capacity building will make
Australia more competitive in Asia, being too "fuzzy" about developing a real
strategy to engage the region. Building up capacities are only building
capabilities. They are not strategies within themselves.
On initial reading of the 312 page report there appears to be
little new in it, and one could argue that existing ALP policy was used as a
template. If this is correct then it will be difficult for this white paper to
garner bipartisan support, and maybe fated to become another relic of a former
government tossed out of office.
Presence and accommodation of Asia to what Australia really has
to offer is the vital key. This implies showing the region that an independent
Australia is truly willing to put its lot in with Asia and not with the US.
Asian suspicion may arise to the issue Ms Gillard herself talked
about Australia being a winner in Asia, and this implies there must be losers.
Its highly doubtful if anybody in the region is looking at
Australia with any more interest today.
Murray Hunter is an associate professor at University Malaysia Perlis, and
the author of a number of books on agriculture, economics, and entrepreneurship.
Surprise, surprise: An Islam economy can be innovative
The Islamic business revolution in Southern Thailand
is a revolution going on in Southern Thailand and I'm not talking about
the insurgency. Cities like the notorious Hat Yai, a sexual playground
for Malaysian tourists are being transformed into vibrant Islamic
business centres. This rapid transformation has been spurred on by the
migration of Muslims from the three troubled provinces of Pettani, Yala,
and Narathiwat to Songkhla Province, in order to get away from the
trouble. One of the results of this is a growing cluster of young Thai
Malay entrepreneurs who are finding innovative ways to develop new
business models based upon Islamic principles.
This avant-garde young business group has seen the potential of
integrating their beliefs into what they do businesswise. And this is
paying off as the Thailand Muslim population is in excess of 6 million
people, many cashed up from bumper rubber prices over the last few
years. In addition the appeal of these products and services produced by
these businesses are not just restricted to the Muslim population.
If one travels around the South of Thailand today there are Halal
restaurants, boutiques, travel agents, tour companies, insurance, and
consumer products all produced and operated by companies that aspire to
comply with Islamic principles. Some larger projects like Halal
hotels and condominiums for Muslim retirees from Malaysia and Singapore
are being currently constructed. What one can feel talking to these
entrepreneurs and seeing the results of their work is an aire of
excitement, innovation and expectation that this strategy will lead to
growth and success.
This is in stark contrast to south of the border in Malaysia where over
the last 50 years an institutionalized mindset of dependence upon
government contracts, favours, and grants has severely inhibited
innovation. Symbolically, this can be seen through the individualized
Islamic fashion worn by Southern Thai Muslim women verses the
stereotyped fashion worn by Malaysian Malay women. Even the night
markets in Southern Thailand are full of innovative Halal foods like dim
sum and sushi with stalls decorated in colourful banners in contrast to
the drab night markets across the border.
This "tale of two cities" along the border of Malaysia and
Thailand probably reflects the vastly different approaches to
development by the two countries. Thai development has been much more
ad hoc than Malaysia, where ideas tend to be generated by
individuals who do something about them using their own resources. If
and when they are successful, others follow and build upon this base
with complementary rather than competitive businesses. Soon after
government agencies provide channels and assistance through their
community industry and marketing programs. Later universities like
Chulalongkorn set up fully accredited Halal testing labs to support the
growing business cluster. These clusters start and grow almost naturally
and this is occurring along the Islamic business front now.
In contrast, Malaysian development comes from top down planning. Much
fanfare is given to new infrastructure projects with grand objectives.
The participants attending launches and involved in implementation are
bureaucrats and agency officials with very little participation by the
private sector. Where opportunities are identified, an agency may set up
a government linked company as a vehicle to exploit it, actually
stifling out private enterprise growth rather than promoting it. The end
result is an attempt to build a cluster with little private enterprise
support, that doesn't have any natural growth or momentum, continually
requiring funds to prop it up.
This story tends to support what the creativity pundits say. Creativity
and innovation comes from adversity and hardship rather than a
comfortable and complacent environment. The Muslim entrepreneurs in
Southern Thailand have had to make it on their own and not rely upon
favors from a structure of cronies who can dish out contracts and funds.
In addition this trend toward Islamic principled business shows that
future wealth will come from innovation rather than connections, which
is very important if substantiated and real economic development is
going to occur. It's not brick and mortar that will bring development,
but new ideas and practices connecting hinterland, culture and
entrepreneur to new market possibilities.
The Malay entrepreneurs of Southern Thailand as well aware that almost
25% of the world population are Muslims and that an Islamic approach to
the market is sure to provide a regional source of competitive advantage
in the international market arena within the not too distant future.
Culture and religion can be a strong and powerful economic resource.
Their gung-ho attitude is to develop the market in Southern
Thailand today and extend out to the region tomorrow. One can see
through the Halal supply chain system developed by the Halal Research
Centre at Chulalongkorn University that this is not just a dream. Some
of the world's major food manufacturers like Nestlé have already adopted
And finally what could this mean for the restless south of Thailand.
Will growing economic prosperity and wealth be the best long term weapon
against any insurgency? Can the people solve this themselves without any
outside assistance? If this hypothesis is true, then the growing Islamic
business cluster in Southern Thailand may marginalize the insurgency
movement. However this doesn't mean that the violence would end. When a
movement is being marginalized it may seek attention thought further
'high profile' acts of violence. That's the sad part of the story.