It's a great pleasure on behalf of the Lowy Institute to welcome so many people here to the second annual Lowy Lecture on Australia in the world. I would now like to invite the Chairman of the Institute Mr. Frank Lowy to introduce our lecture. Ladies and Gentlemen, friends of the Lowy Institute: One of the reasons, I decided to set up this institute three years ago was because I believe, very strongly that Australia and Australians can make an important contribution to the international debate and that our voice should be heard more clearly. One way of doing that is through our annual lecture on Australia in the world. Each year this will look like - this will look at the changing world and at the way Australia interacts with it. Our inaugural lecture last year was delivered by the Prime Minister John Howard and was one of the most important far- reaching foreign policy speeches he has given. This year I am pleased to introduce the speaker and we will continue this excellent tradition, Professor Bob O'Neill. Bob, an Australian scholar of major national and international standing, he understands Australian defense and strategic issues. And his scholarship is supported by BedRock Credentials of military career including active service. He has an outstanding record of economic achievement and leadership of some of the world's leading think-tanks and academic institution including as director and later chairman of the international institute of strategic studies in London and as Professor of History of War at All Souls College at Oxford University until his retirement in 2001. Happily for us Bob does not really know the meaning of retirement. Since coming back home from Oxford in 2001 Bob has exerted great influence in shaping international policy scholarship in Australia. He was the first chairman of the Australian Strategic Policy Institute. I am happy to tell you he is the member of the Board of Lowy Institute and he has now become acting CEO of the recently announced United States Center at the University of Sydney. Bob has been a mentor to many leading scholars who speak with him and respect with respect and affection. He continues generously to foster new talent. Bob has an enormous network of friends and associate that cover the world and some of you are here tonight. Bob O'Neill has made a personal contribution to bringing Australia closer to the world and the world closer to Australia. I have been grateful for his help and support in the establishment of the Lowy Institute. I am delighted to invite him to deliver the 2006 Lowy lecture on Prospect and perspectives for international security. I can tell you ladies and gentlemen you are in for a treat. Chairman thank you very much for that kind introduction and above all thank you for the honor of the invitation to give the Lowy Lecture for 2006. We stand at a very testing time in terms of shaping our security environment. I don't want to be overly pessimistic. We and our forbearers have come through worse situations and gone on to great periods of prosperity, relative peace and cultural achievement. But for us, at this time, that happy end is by no means assured. In the next 30 minutes I want to touch on some our major challenges, addressing them from the stand point of my own experience and from what I have learnt from others around me at crucial times. I shall offer you five perspectives on the current dangers before us taken from different stages of my life at roughly 10-year intervals. The first as a soldier in Vietnam, the second when I headed the strategic and Defense Study Center at the Australian National University, the third from the seat of the Director of the International Institute for Strategic Studies in London. The fourth from the Chichele Chair of the History of War at Oxford and the fifth from Sydney as a Director of the Lowy Institute for International Policy. Like the Chairman, I began my working life as a soldier. Also like him I was fortunate in having a Commanding Officer who took great care when the lives of his men were at stake. Frank's Rafi Kocer was of the same character as my Commanding Officer in Vietnam, Lieutenant Colonel John Warr. Kocer never gave a command without discussion. If he sent a group of men on a dangerous mission, he talked about it first with them. The same went for John Waugh. Perhaps it helped that both of them had been blown up and badly wounded by landmines early in their careers. They knew what severe wounding was liked. Not a lot of Westerners, especially political leaders know that today. Frank and I both survived our wars. Not a bad way to begin lives in which international issues were to play a large part. As young men we had both been at the cutting edge of international politics and taken a few cuts ourselves. That experienced helped to give us a true idea of the consequences when political leaders called for the ultimate sanction in international order military action. 40 years ago this week I had just returned to base at Nui Dat in the Province of Phuoc Tuy, South Vietnam. We had been operating on a coastal island. I was sitting in my tents sweating, putting the finishing touches to a piece of practical military analysis. My Battalion, The Fifth of The Royal Australian Regiment had been on operations for six months. It was time to recess our methods and the results of those six months critically. Colonel Waugh had set me his intelligence officer the tasks of assessing our operational experience to help us shape our strategy for the next six months. We were clearly engaged in a war of insurgency and counter-insurgency not without relevance to the main conflicts in which we are engaged today. The conclusions I came to in Vietnam were the following: 1). Our principal challenge was not the Viet Cong Main Force and the North Vietnamese Army, but the Political Cadres which the Viet Cong had inserted into towns and villages to convert people to their cores, hold their loyalty once given, obtain intelligence and supplies and undermine popular support for the Saigon Government. 2). Our prime tasks had to be the removal of enemy political cadres from the towns and villages. The Main Force did not have to be pursued to their deaths, but simply kept at bay, well removed from the population centers of our Province and lacking supplies, ammunition and intelligence they would be ineffective. 3). Our second priority was to helped with reconstruction and development, so that the local people's needs would be met effectively and they might come to feel that a Non- Communist Government would give them a better chance of a good life than a Communist One. 4). Major offensive operations in or near populated areas were highly counter productive in terms of winning popular support. We might be forced occasionally to fight in turns, but in so doing we destroyed much of the fruit of our earlier efforts. 5). Other kinds of operations, especially those aimed at eliminating Viet Cong Cadres and winning popular support were much less costly to our source in casualties, and therefore much more sustainable politically by our Own and Allied Governments. These conclusions survived the following debate among my fellow officers and set the guidelines for our second six months of operations. We felt at the end of a year in Vietnam that we were beginning to get on top of the issues. A successful result could be achieved at reasonable cost. Had the Vietnam War been confined to Phuoc Tuy Province, I might have been right. But we all knew I was not. Phuoc Tuy was just a small sub-theater in a big country. It didn't count for much by itself. Different ideas were being practiced in other parts. The overall result was not a military disaster, but it was unacceptable to the American public. Too little was being achieved at too great a cost. Fast forward to Iraq in 2006, is it a familiar picture? In fact Iraq is even worse than Vietnam. Iraq to begin with, it is not a Unified Nation State like Vietnam, but an artificial creation of the British Empire in 1921 to kill two birds with one stone. Holding down an Arab revolt there while finding a place for Prince Feisal whom the French had ejected from Syria. Iraq has been held together by force ever since ready to fly apart once the group of that force was broken. In late 2002 it was clear to me that the main problem in invading Iraq would be the insurgency and chaos phase that would follow the toppling of Saddam. When I put the point then to relevant friends in the United States who supported the pending invasion of Iraq, it was dismissed. We will do the heavy lifting and get rid of Saddam, the Allies can handle the occupation. Of course, toppling Saddam was not the heavy lifting. So the Coalition went to war with little understanding of what they are about, a flawed strategy and no policy in place for responding to what was bound to follow a formidable insurgency. The invasion went in with the US force much smaller than that of General Wes Morland in Vietnam, who himself had faced a much smaller problem. As for Allied Forces in the invasion of Iraq, they were hopelessly short of the strength needed to mount a counter insurgency campaign. The Coalition launched the war without enough troops, US or Allied to do the job and without a strategy for structure and the necessary civil capabilities for meeting the main challenge. Having blundered into a hornets nest, the intervening force and its Allies in Iraq have taken a hammering. The fate of our Iraqi Allies and the civil population like that of a Vietnamese Partners in the 1970's is perhaps the saddest aspect of the war. Initially Coalition Forces had little idea of how to fight an insurgency. The sense of all five of the points that I have just mentioned was ignored or violated. Although some US and Allied Soldiers have by now developed excellent ideas on what to do to win the support of the civilian population while keeping control of the insurgency at the same time, the coalition lacks the numerical strength to put these ideas into effect. The recent Congressional elections have shown us that essential U.S. public support for a protracted force with much higher force levels has been lost. Premature withdrawal seems very possible. We now face the prospect of a defeat with unpalatable consequences. This will not be the end of counter-insurgencies for the United States and its Allies. National and Sub-National uprisings, guerilla warfare and terrorism are likely to remain active at the cutting edge of international politics for a long time especially in the Middle-East. I draw your attention to the recent reports issued by Elizabeth Manningham-Buller, Director General of the British Security Service and the Oxford Research Group to this effect. We are now into a new phase of warfare. The lessons I have mentioned from Vietnam remain relevant. We, meaning the West collectively under United States Leadership must train our forces properly, build their numbers up and give them the necessary civil capabilities to be able to win next time round at acceptable cost and in reasonable time. In this kind of conflict lives and time are very precious commodities. Above all our leaders must learn to plan their interventions on sound strategic principles or eventually we will all be lost. Let me now offer a perspective from a decade later. In the 1970's I was working at the Australian National University with a distinguished group of scholars, Bruce Miller, Headley Bull, Carol Bell and Tom Miller. They were some of the finest that Australia has produced in this field, and I was very lucky to be able to work with them. My purview moved from the Vietnam War to the Community of Sovereign States. How should States relate to each other and why should they adhere to a set of rules and concepts that we call International Law. It all began with the piece of Westphalia. The two treaties by which the 30 years war was concluded in 1648. I am giving you here a historical perspective but not entirely a backwards one. Opinions differ as to whether or not Westphalia was the real foundation of international order as we know it today. In my view it was very important because it marked recognition that a dominant power eventually has to heed the wishes of the lesser states around it or it will have no peace. This was a painful lesson for the Holy Roman Empire and the Papacy to have to learn. However the sad and costly experience of the Thirty Years War which was close to a 100 years War if one goes back to the failure of the Treaty of Augsburg compelled recognition that the world would work better if there was a recognition of sovereign equality between states in a formal legal and diplomatic sense, despite their differing strengths. This lesson has obvious implications today, both for the functioning of alliances and for the pre emptive use of military force against other states by the dominant power. I shall return to the theme of effective alliance working in a few minutes. Let me say on pre-emption that although strictly speaking it is not illegal, it carries with it an implication of such abnormal behavior that it is acceptable to the community of states only rarely and then only when there is clear and convincing evidence that a serious attack on the pre-emptor was thereby averted. In other circumstances, the claimed justification of pre-emption is viewed by most as a merely a fig leaf for aggression. When pre-emption is practiced by more than one state at a time it leads to widening conflicts and instability. This is also true for pre-emption between a state and a sub-national terrorist group. Anyone who disagrees with me is asked to reflect on the way the First World War began: the Russians, the Austro-Hungarians, the French and the Germans all had war plans with essentially defensive aims but with pre-emptive elements in them. Once one began, the others were all drawn in without options to do otherwise. They suffered a four-year Armageddon which destroyed three and bled the fourth white. Unless pre-emption is based on the most accurate intelligence and practised seldom, it is a prescription for continuing instability and wide-spread hatred of the pre-emptor. My third perspective is from London. Around this time 20 years ago, I had just returned to my seat there as Director of the International Institute for Strategic Studies. I have been observing the summit meeting in Reykjavik between Presidents Reagan and Gorbachev. It was a truly remarkable meeting. Both sides agreed, after several years of bitter disputes, to scrap their intermediate-range nuclear forces in Europe and reduce the rest by 93 percent. Soon this accord was extended to the total elimination of intermediate range nuclear weapons. The Soviets also agreed to the US proposal that in future human rights problems could form part of the agenda of major issues to be discussed between the two sides. The Reykjavik meeting paved the way for a smooth and reasonably rapid end to the Cold War. The Americans deserve great credit for the way in which they led the North Atlantic Alliance during the Cold War. The Soviets used the Warsaw Pact simply as a body to bless their own policies and issue orders to. By contrast the Americans treated NATO as a forum for the airing of real differences and they were prepared to modify their own policies in order to maintain cohesion within the Alliance. There was a great deal of public dissent on defense policies across the Atlantic in the early 1980s. Not everyone was satisfied with the compromises reached, but vigorous debate maintained cohesion. Since then NATO has prospered whereas the Warsaw Pact has fallen apart. I suggest that the spirit of free debate on key policies within NATO, not only at political and official levels but also in the public arena, was one of the most powerful determinants of the outcome of the Cold War. The lesson for the 21st century is that nations which aspire to be leaders of alliances or coalitions need a sensitive ear, excellent connections with their partners on all levels including that of public opinion, and a willingness to adjust their policies in order to maintain cohesion among their friends and partners. Once alliances are split they take a lot of putting back together. The Reykjavik Conference is famous for another attempt at a grand settlement, an attempt which failed but one which remains relevant to our future security. After the two sides had agreed to eliminate 93 percent of their intermediate range nuclear weapons outside of Europe, President Reagan proposed that all strategic range missiles be eliminated. President Gorbachev responded with a proposal to eliminate all nuclear weapons of all types and ranges. As we know the advisors to both leaders quickly walked their cats backwards and these proposals came to nothing. They are important however because they show that the two men who were in supreme command of their national nuclear weapons both regarded these systems more as sources of danger than of security. They both wanted a world without offensive strategic nuclear weapons. Today, despite major reductions in both US and Russian strategic nuclear systems, we have at least nine governments with nuclear weapons under command and probably soon there will be 10. If the current enthusiasm for nuclear power stations is sustained we will soon have a large number of countries capable of producing fissile material. Will they all abjure the weapons option? This problem will have to be addressed by strengthening the Nuclear Non-proliferation Treaty regime. In this process the example set by the nuclear weapons states will be of critical importance if we are not to have a world of 40 or more states armed with nuclear weapons. If the nuclear haves will not give them up, the nuclear have-nots are going to become increasingly tempted by the status that these weapons confer if for no other reason. In 1987 I moved from the IISS to the Chichele Chair of the History of War at All Souls College, in the University of Oxford. Let me give you another historical perspective. The man whose name was on my chair, Archbishop Henry Chichele, Archbishop of Canterbury had been a foreign policy adviser and war financier to King Henry V. You had to be versatile to be an Archbishop in those days. Chichele had backed the King's strategy of going to war with France and as leader of the Church he had provided the essential money for Henry's celebrated and successful Agincourt campaign in 1415. Chichele's status a quote and in the Church rose especially because this was a success won by the young king against very long odds. Chichele, I should point out, was no mere royal apparatchik. In1418 the Archbishop, present on the battlefield, interrupted the English siege of Rouen to make sure that refugee townsfolk were not jeopardized and ill treated in the way that the Army had intended. Following Henry V's early death in 1422 Chichele's power grew, both as Archbishop of Canterbury and as a member of the King's Council which ruled while Henry VI was still a minor. Towards the end of his long life Chichele persuaded Henry VI to join with him in funding a new type of institution at Oxford. In effect a specialized graduate college to train men of ability for the service of Church and state. Chichele wanted to ensure a more copious supply of the people that he never had enough of as supporting staff when he was carrying out diplomatic and strategic policy work for the King. All Souls College was one of the first of a long line of research and training institutes in the field of government service. Today, through the broad international composition of Oxford's intake of graduate students in the fields of foreign policy and strategic studies over the past fifty years, All Souls is training talented young people from around the world, East Asia to North America, Africa to Australia, for service in government academia and the research community and the armed services. It will make its mark for a long time to come. It's been a great gain for Australia that Frank Lowy, supported by his family, decided to found a foreign policy research institute in Australia. The first of its kind here, the Lowy Institute has serious responsibilities. It has to improve the standard of foreign policy ideas available to the Government in view of the dangers lying ahead. It has to build the right sort of reputation so that its proposals are taken seriously, both in the public debate and by the Government, the Opposition parties, the Government's advisers and the media. The Lowy Institute also has the important aim of raising Australia's profile in the international debate on foreign policy issues. Anyone who has worked abroad, especially in Washington and the European capitals, knows how hard this is to achieve. All members of the staff and board of directors are working hard to realize this great opportunity. Just as Archbishop Chichele knew in 1438 when he began to build All Souls, the challenges of developing good strategic policy are both formidably difficult and crucial. After five centuries the College has earned a place of respect and it has gone on to have a wider impact on the international scene as it's students, and scholarship itself, have become globalized. We at the Lowy Institute are dedicated to a similar purpose for Australia and we are similarly grateful to our founder. For meeting the security challenges to Australia today, we need good ideas, dialogue with government and a relationship which tolerates free expression of views, especially where we have differences with existing policies. None of these essentials comes easily. We, the analysts, need experience in practical work diplomacy, war, business and politics - as well as intellectual spark before we have any notion as to what is a good idea. Once we develop some ideas we need to be able to discuss them with senior people in government so that our views are taken into account in the mix that goes into decision-making. Our colleagues in government will not bother to listen to us if they do not respect the relevance and quality of our work. And it's up to us to win their attention and hold it. Moving up to 2006 and my fifth perspective, that of a Lowy Institute board member trying to look into the future, let me assess our current challenges. Iraq, Iran, North Korea, and Israel and the Palestinians are the most obvious points of concern. There is a wider and less identifiable danger of a type of international class war between those who feel most discriminated against, especially in the Islamic Community, and the West. We have to think hard about what kind of over-arching international organization we shall need for a more secure and just future. Energy security is another extremely important field. And there are a huge number of related problems coming in the wake of changes in our climate. Given the result of the recent elections in the United States, we need to think hard about the consequences of a possible defeat in Iraq. To elaborate on what I said earlier, that conflict can be won only by a much more effective coalition effort, requiring a major increase in US and allied troop numbers in Iraq. Substantial improvements in training and operational methods, and a much stronger civil reconstruction effort. This is not likely to happen. The probable outcomes are either a sudden dissent into chaos as coalition forces are withdrawn, or a protracted civil war, overlain with an insurgency against remaining coalition forces. In the event of chaos, effective government in Iraq will cease for at least some years during which terrorist groups will be able to concentrate, re-build, flourish and reach out to other targets outside Iraq. Enemy forces will be heartened. Their recruiting will rise. Funds and weapons will pour in, pressure will be exerted on regional governments friendly to the West. More young men and women who are willing to commit suicide to harm Western and Israeli interests will become available; and the oil price will rise to new heights. Defeat in Iraq will be a serious blow to the public standing of the United States and will invite other challenges to its authority. United States citizens will have to be more careful of their own security both outside and inside their own country. US business abroad will feel more under threat of terrorist action. Iran will read a message of encouragement for its intransigence in dealing with the West. It will almost certainly go ahead to produce nuclear weapons. It will exercise an overshadowing influence in Iraq, Syria, the Arab Gulf states and Israel. The lesson of US failure in Iraq will be read and perhaps wrongly as US unwillingness to attempt regime change in Iran. The North Koreans will probably draw similar conclusions, although with less justification than in the case of Iran because North Korea is nowhere near a stronger state. Nuclear weapons proliferation will become more difficult to control with the threat of intervention against the proliferators dismissed. North Korea is not the only major security problem of the East Asian region. Tensions are evident between Japan and several neighbors. Taiwan could prove a casus belli. The United States and China could clash. Yet there are powerful forces helping to maintain peace in East Asia. The mutual linkages of economic interaction and greater knowledge on the part of peoples around the region of each other are helping to make war a much less likely outcome than in the second half of the previous century. This trend is in part a result of effective alliance leadership and diplomacy by the Clinton and current Bush Administrations. It is also due to a growing awareness on the parts of the principal East Asian nations as to where their true interests lie. From an Australian perspective there remain all too many weak states in the neighborhood which will require copious assistance and occasional intervention by police or military forces. Otherwise we risk seeing them spiral into disorder and poverty, becoming points of vulnerability from which other forces can penetrate our guard. The thankless task of the local hegemon falls to us here and we have to undertake it, and sustain the necessary forces and skills to deal with problems quickly, economically and successfully. There are ample challenges for Lowy Institute analysts in this field. The way in which the Bush Administration decided to invade Iraq underlines the need for reform of the United Nations. After 9/11 the United States is not going to tolerate the position of being the one most at risk of attack yet unable to retaliate merely because of lack of a UN Security Council consensus. On the other hand the international community will not passively accept US pre-emption of possible enemies unless it can be shown to be clearly justified. We are up against formidable dilemma here. We must continue to wrestle with the problems reform of the Security Council is too important to let go. The UN remains essential in dealing with these and other international problems such as climate change. We need a new recognition of what's at stake here. The UN also has to improve its performance, especially in the fields of human rights, prevention of genocide, combating corruption, and its own internal administration. But while this process of reform is underway, the UN should not be ignored or disregarded by its most powerful members. Climate change poses unknown hazards. They could be end of us. Obviously large refugee flows are likely to be set in motion from the most severely affected areas such as in Africa as drought takes a firmer hold and in flat coastal regions of high population density such as Bangladesh as sea levels rise. There will be other regions of distress of course. The necessary humanitarian aid can probably only be met through major commitments requiring extensive use of national armed forces. And there are bound to be more direct security implications as national governments try to advance their own interests in these difficult times. The Australian government has to take these risks more seriously and build them into security policy development, both at the national and at the international levels. Green house gas reduction is now an important security objective. It is just possible that the combined effort that it will take, involving the whole international community, might be sufficient of a unifying force to help us to re-integrate humanity into a cohesive body to fight its external problems and not itself. Climate change helps to put our differences on issues such as religion, reform of the United Nations, nuclear proliferation and terrorism into a different perspective. While I do not want to sound overly romantic or naïve about this prospect, the effort that will be required to prevent global warming from wiping out vast sections of the world's population could in many ways be a positive force for international order and co-operation. In conclusion We will need to do all this in close partnership with the United States. Not only is it the world's greatest power, it is also the only one with the strength of commitment and values to be able to exert credible leadership. It has huge capacities for good around the world. But it is also sailing through uncharted waters and in recent years has been in heavy seas. We, Australians, as one of America's serious allies, have a responsibility to help the US through this difficult passage. We can do this in many ways through diplomacy, economic co-operation and military commitments. We also have an obligation, when we see our senior partner about to make a mistake, to speak out and warn of the consequences, and even offer some suggestions on how to reach our common goals more effectively. As I look into the future I can see some very undesirable outcomes, but we are not in their grip yet. With a major effort intellectually, politically, commercially and militarily, we might just avoid them and come through into the more peaceful upland that we had hoped for so much at the end of the Cold War and then failed to find. The great challenge for leaders and analysts in the decades ahead will be to find ways of building cohesion and co-operation, not division and destruction. We must not let the War on Terror destroy the world order from which we derive so much benefit and protection. Thank you very much.
member. 
