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  • Australia in the Asian Century – Chapter 9: Deeper and broader relationships

    Australia in the Asian Century – Chapter 9: Deeper and broader relationships

    This post is one of the series of articles on the Australia in the Asian Century report.

    Australia in the Asian Century’s final chapter looks at how Australia can deepen relationships with its Asian neighbours. The chapter is full of fine ideas which don’t quite match the reality of government policies and spending.

    Early in the chapter the white paper proposes increasing the number of Australian diplomats in Asia along with opening a new embassy in Ulan Baator, a Jakarta based ambassador to ASEAN and consulates in Shenyang , Phuket and eastern Indonesia.

    Fine words, however Australia’s diplomatic corps has been shrinking for the last twenty years so staffing these facilities will require a withdrawal from other regions. The white paper doesn’t identify which countries Australia’s representation would be cut from and the consequences of that.

    More importantly, it doesn’t identify how Foreign Affairs and Trade staff will be skilled up to man these facilities, instead we get another worthy ambition.

    National objective 22. Australia will have the necessary capabilities to promote Australian interests and maintain Australia’s influence.

    • Australia’s diplomatic network will have a larger footprint across Asia.

    Again, one would surely expect that Australia would already have the necessary capabilities to promote its national interest and maintain influence. Is the white paper suggesting we don’t?

    Which leads us to the next national objective;

    National objective 23. Australia will have stronger and more comprehensive relationships with countries across the region, especially with key regional nations—China, India, Indonesia, Japan and South Korea.

    If we accept the assumption which underlies the entire paper, that Asia is going to continue to grow both economically and in influence then this will happen regardless of what governments do. It’s a meaningless and silly statement which once again ignores most of Asia and simplifies the dynamics.

    The Australia Network

    One of the great wastes of the Howard years was the dismembering of Radio Australia which was a cheap and effective way of projecting ‘soft power’ across the region. I personally came across this as a backpacker in China where many manual workers in the hard seat carriages practiced their Australian accented English that they’d learned on Radio Australia’s programs.

    This was shut down by one of the spiteful, stupid and poorly thought out decisions that were the hallmark of the Howard government.

    Replacing this was a new Australia network that replaced the previous awful overseas television service which had been a niche product on Asian cable TV channels – I had it on my Thai cable subscription when I lived in Bangkok. It was rarely watched.

    The Australia Network hasn’t been a great success and that is largely due to the funding – the 2011-21 contract was costed at $221 million in the budget papers.

    A break out box in the white paper boasts about the Australia Channel and its “mandate to encourage awareness of Australia, promote cross-cultural communication and build regional partnerships.”

    Listed is the funding for some other services – Al Jazeera, $359 million in 2009; CCTV, $280 million in 2009 and NHK World/Radio, $226 million in 2008.

    With the Australia Network receiving less than a tenth of this funding, it’s no surprise the station looks amateurish and irrelevant. Once again we see the difference between government words and government deeds.

    Which brings us to the final two national objectives;

    National objective 24. Australia will have deeper and broader people to people links with Asian nations, across the entire community.

    National objective 25. Australia will have stronger, deeper and broader cultural links with Asian nations.

    Again these are more motherhood statements and barely worth considering. The section itself skates over some of Australia’s most important assets – the cultural diversity and immigrant communities.

    That the final chapter spends just a few pages on this aspect probably sums up the entire project – simple, full of motherhood statements and missing the critical strengths and threats to Australia’s, and Asia’s growth.

    Overall the paper is a disappointment that tells us little we didn’t already know while stating some big ambitions which successive governments have shown they aren’t capable of delivering.

    The message for those building Australia’s 21st Century links with Asia is not to wait for government but to get on and do it.

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  • Australia in the Asian Century – Chapter 8: Building sustainable security in the region

    Australia in the Asian Century – Chapter 8: Building sustainable security in the region

    This post is one of the series of articles on the Australia in the Asian Century report.

    The eighth chapter of Australia in the Asian Century looks at the security picture of the region, this is one of the bigger chapters and like some of the others it’s as notable for what it leaves out as for what it says.

    National objective 20. Australian policies will contribute to Asia’s development as a region of sustainable security in which habits of cooperation are the norm.

    That’s nice, worthy and has been undoubtedly true for most previous Australian governments. Except of course when Australian Prime Ministers join the prevailing colonial power in wars like Iraq, Afghanistan, Malaya, Korea, Vietnam or kicking around the German territories in World War I.

    Chapter Eight partly dives into territory already covered in Chapter Three, this time though the analysis does discuss the United States’ role in more detail and makes the observation that US military spending dwarfs that of any other Asian nation – interestingly this is one of the few times Russia gets a mention in the entire report.

    Encouragingly, the paper doesn’t confine the concept of ‘security’ just to military matters and takes a broader view of issues such as guaranteeing access to resources, food and water. There is some discussion of climate change and on regional responses to natural disasters such as tsunamis and earthquakes.

    One notable omission is that of refugees. Given that most of the asylum seekers arriving by boat are Asian – currently coming from Afghanistan and Sri Lanka – and almost all pass through other Asian countries, it would be expected this issue would get some exploration. Sadly it doesn’t and once again skirting over an important issue detracts from the paper’s substance.

    As befits Australia’s most important relationships in Asia, there is a lot of discussion of the three way relationship between China, the United States and Australia with a detailed breakout box in section 8.4.

    The discussion on Australia’s relations between China and the US makes an interesting statement;

    In managing the intersections of Australia’s ties with the United States and China, we will need a clear sense of our national interests, a strong voice in both relationships and effective diplomacy.

    Undoubtedly this statement is true, however successive Australian governments have conflated the interests of the United States with being the same as Australia’s. In recent times Australian leaders have followed the US lead even when it has been clear American policy conflicts with Australia’s Chinese relations.

    Moving away from a reflex support of the United States is going to be one of the biggest challenges for Australian governments in the Asian Century and one hopes the process is as gradual and incident free as the white paper hopes.

    National objective 21.The region will be more sustainable and human security will be strengthened with the development of resilient markets for basic needs such as energy, food and water.

    National objective 21 is an interesting statement in itself – “resilient markets for basic needs such as energy, food and water” smacks of the 1980s privatisation and corporatism that has left Australia with duopoly industries and an excessive financialisation of those markets for basic needs.

    It may well turn out to be the case that Asian countries choose not to follow that path, particularly those like the Philippines and Indonesia who have experienced the effects of crony capitalism in recent history.

    Chapter 8 of Australia in the Asian Century finishes with a detailed look at the regional efforts aimed at building trust and co-operation on trans-national issues.  Much is made of various international groups such as the G20 and the UN.

    An interesting case study is that of the Nuclear Non Proliferation Treaty with an examination of Japan’s and Australia’s work in that field. Sadly this is another area that’s let down by the actions of current and previous Australian governments in selling uranium to India.

    The nuclear weapons stand off between India, Pakistan and China is another ‘elephant in the room’ issue that doesn’t really get the coverage it should in such a report.

    Chapter 8 of Australia in the Asian Century is a very optimistic section of the report however it does hint at the path Australia could follow to being a credible, medium sized economy and influencer in the region. However one has to consider the actions of Australian leaders when asking if the nation is really interested in taking that path.

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  • Short sharp shocks

    Short sharp shocks

    In Atlantic Magazine’s China’s long history of defying the doomsayers, Stephen Platt and Jeffrey Wasserstrom put the case that the Chinese Communist Party is unlikely to fall in our lifetimes.

    China’s military is presently powerful enough and its diplomacy stable enough that the Communist Party faces no realistic threats from outside. Internally, its control over society is effective enough that, while unrest and discontent may be widespread, there are neither well-organized opposition parties nor rebellious armies that might seriously challenge the central government.

    They are probably right, it’s difficult to see any immediate threat to the power of China’s current leaders.

    Although we should keep in mind that only a few decades ago it was inconceivable that the Soviet Union would disintegrate or the Warsaw Pact dissolve.

    Had someone wrote in 1986 that within five years both would happen, they would have been written off as being foolish. But that’s what happened.

    In the stock market it’s said “the market can stay irrational longer than you can stay solvent” and it’s true for any pundit – you may be right that property is overvalued, the US is in decline or the Eurozone will break up, but the powers that be will may be able to kick the can down the road and sustain the unsustainable for a lot longer than any of us expect.

    Steve Keen found this with the ‘walking to Kosciusko” bet where he was railroaded into giving a fixed date of when the Australian property market would fall. He, nor anyone he made the wager with, had any idea of the billions of dollars governments would throw at the market to maintain prices.

    All too often people make the right calls about property markets, economies or the fall of regimes but get their timing wrong.

    In his book The Sun Always Rises Ernest Hemmingway’s character Mike Campbell describes how he went bankrupt – “Two ways. Gradually, then suddenly.”

    And so it is with empires, nations, ideologies and even the most powerful corporation. When the change happens it’s sudden and unexpected.

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  • Google announces eTown awards for Australian towns

    Google announces eTown awards for Australian towns

    I don’t normally post media releases onto the site, but it appears there’s no posting of the Google eTowns announcement. As I’m writing a story for Technology Spectator on it, here’s the release.

    One thing that leaps out when reading the media reports on this is how many outlets just copy and paste. Only the Fairfax entertainment reporter went to the effort of rewriting the release and adding some additional context. You have to wonder how long ‘churnalism’ can survive given readers are onto this laziness.

     

    EMBARGOED UNTIL THURSDAY 30th AUGUST, 4:30PM (EST)

     

    Perth wins top spot in Google’s eTown Awards

    Western Australia capital beats out eastern states as centre of digital boom

    Perth leads the list of Australia’s top 10 eTowns, Google announced today. This new Google award recognises and ranks those communities which are outpacing the rest of the country in having its small businesses use the web to connect with customers and grow.

    The web is transforming all businesses in Australia, not just those typically considered to be “Internet businesses”. The digital economy is already worth as much as Australia’s iron ore exports, according to Deloitte Access Economics, and it’s forecast to grow by $20 billion to $70 billion by 2016.

    To provide a snapshot of this vital economic activity, Google looked at more than 600 local government areas to analyse which communities are contributing the most to the digital economy. The top 5 metropolitan and top 5 regional eTowns for 2012 are:

    Metropolitan

    1. City of Perth, WA
    2. City of Yarra, VIC
    3. City of Adelaide, SA
    4. North Sydney, NSW
    5. Ryde, NSW
    Regional

    1. Byron Shire, NSW
    2. Meander Valley, TAS
    3. Cessnock, NSW
    4. Wingecarribee Shire, NSW
    5. Scenic Rim Regional Council, QLD

    Federal Small Business Minister Brendan O’Connor, who is launching the inaugural eTown Awards at an event in West Perth today, said;

    “The digital economy is fuelling Australia’s economic growth and it’s important businesses of every size are well equipped to take advantage of the potential.  I hope this award encourages other small businesses to get online to connect with people who are actively looking for their products and services.”

    Perth’s Lord Mayor Lisa Scaffidi said, “Perth may be known for its mining boom but this award shows that our businesses are actively grabbing hold of the digital boom. The City of Perth is proud of its eTown Award and I am delighted to represent an area whose businesses are so connected with both their local community and the entire world thanks to the web.”

    Online advertising is a growing phenomenon and Google, through its online advertising and other services, is in a good position to act as a barometer for the strength of this commercial activity – particularly in small businesses. To come up with the eTown Awards list, Google analysed data on the number of local businesses in each local government area which are advertising with Google AdWords and/or have created a free website using Google and MYOB’s Getting Aussie Business Online initiative.

    Byron Shire, home to the popular holiday destination, leads the regional eTowns list with a high proportion of accommodation, recreational hire and tours providers using the web to drive their businesses.

    Claire Hatton, Head of Local Business for Google Australia said, “The eTown Award winners show that anyone anywhere can reap the benefits of the digital economy. These days being on the web is as important as having a phone. Australians expect to be able to seek out products and services online, and local businesses need to be found to compete.”

    For more information about the eTown Award winners and for case studies on how local businesses are succeeding online and driving economic growth, visit www.google.com.au/ads/stories [NB: website will be available after embargo lifts].

    Media are invited to attend the announcement of the eTown Awards with the Minister for Small Business, Perth’s Lord Mayor and Google Australia.

    Local businesses located in each eTown may be available for interviews.

    Thursday, 30th August at 2:00pm – 3:00pm
    The Yoga Space
    Shop 11, Seasons Arcade,
    1251 Hay Street, West Perth.

    To RSVP to the event or for interviews please contact:

    Redacted

    Notes to Editors

    1. AdWords is Google’s online advertising system which enables businesses of all sizes to advertise relevant text ads next to Google search results. Businesses decide the text and their budget and only get charged when someone clicks on their ad.
    2. The Google eTown award top ten list was created by comparing the number of small and medium sized enterprises that used AdWords in each local government area and/or have created a website using Google/MYOB’s Getting Aussie Business Online. The results have been normalised for the relative population of each LGA.

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  • Is Australia’s blue sky future making way for a red sunset?

    Is Australia’s blue sky future making way for a red sunset?

    Australia’s political and business leaders are convinced the nation will ride on the back of a fast growing China for the foreseeable future.

    Having climbed off the sheep’s back during the 1980s and moved from being an economy dependent on agricultural exports to a ‘clever country’ exporting high value services and products, in the late 1990s Australia turned its back on building a modern economy and decided to stake the future on a never ending coal and iron ore boom driven by Chinese industrialisation.

    Smarter than Bill Gates

    Australia’s success in riding China’s coattails allowed the Reserve Bank Governor Glenn Stevens in 2010 to boast how he and the nation’s politicians were smarter than Bill Gates who nine years earlier warned Australia about being over reliant on commodities.

    Despite the hubris, there are real risks in the Chinese economy that the blue sky mining school of Australian economic management needs to plan for.

    China warnings

    The warning to US Presidential candidates on trade with China by Professor Patrick Chovanec of Beijing’s Tsinghua University’s School of Economics and Management is a good starting point.

    In his warning Professor Chovanec points out that Chinese growth in recent years has been driven by the construction sector, even if building activity were to stay constant this would shave off half of China’s growth rate. The options for stimulating the economy in manner similar to 2008 have narrowed.

    China’s economy is not just slowing, it is entering a serious correction.  The investment bubble that has been driving Chinese growth has popped, and there are no quick “stimulus” fixes left.  There is the very real possibility of some form of financial crisis in China before year’s end.

    China’s stimulus package was the world’s biggest response to the 2008 Global Financial Crisis, followed by the South Koreans (another Australian commodities customers) and Australia itself.

    While the Chinese commodities boom drove most of Australia’s trade, it was domestic spending driven by the Rudd government’s stimulus package that saved Australia from entering recession.

    Squandering a century’s boom

    One of the notable things about Australia’s commodity success in the 2000s is just how little a dent the booming coal and iron ore exports put in the trade deficit. Despite record terms of trade, Australians still manage to spend as much on imports as they make on exported goods.

    Not that this worries Australia’s leaders who seem to spend all of their time worrying about pandering to a tiny number of marginal seat voters who listen to fear mongering talkback radio hosts which is what has driven the last two weeks’ obsession with a few hundred asylum seekers.

    Professor Chovanec points out the Chinese leadership is distracted as well with their struggles over a messy change of Politburo leadership, risking that the policy makers might miss any opportunity they have to engineer a ‘soft’ landing for their economy.

    The biggest risk is that of a crisis engineered to distract a discontented population warns Chovanec;

    in a worst case scenario, China may be tempted to provoke a conflict in the South China Sea to redirect popular discontent onto an external enemy.

    Already such things are happening, as anti-Japanese demonstrations step up around China over an island dispute.

    There are no shortage of island disputes in the South China Sea and almost all scenarios involve allies of the United States – the only one feasible dispute that doesn’t is Vietnam and China’s leadership has had their nose blooded in such disputes with their southern neighbour before.

    Even if we don’t see military tensions between the US and China, we certainly are going to see trade and political disputes in the next few years as both countries adapt to their places in a changed world.

    For Australia’s business and political leaders, it means being prepared for a world more complex than one where a country can get by just lazily skimming a few dollars of easy iron ore exports to China.

    We have to hope Australia’s leaders are capable of dealing with the challenges of a much more dynamic and difficult world where huge growth of one friendly trading partner is not assured. The stakes are too high to be distracted by suburban apparatchiks scoring meaningless political points off each other.

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