Australia and East Asia

Ladies and gentlemen, Australia has long been a very close friend and security allay of the United States. Probably at no time in our history of these two countries have relations been stronger than they are today. The common values shared in the historical and cultural bonds between Australians and Americans underpin our people to people friendship and our enduring strength of the defense and security alliance. We are very pleased to have Ambassador Dennis Richardson here this evening to discuss the current state and future of the America and Australia relationship the state of affairs in Southeast Asia and Australian policy for East and Southeast Asia. The Ambassador resumed his current post of ambassadors of Australia's Ambassador of the United States in July of 2005. He began his career in public service in 1969 when he joined the Australian Foreign Service, serving post in Nairobi, Port Moresby and Jakarta from 1996 until his current appointment for 10 years he filled the critical position of Director-General of the Australian Security Intelligence Organization before which he was a Deputy Secretary of the Department of Immigration and multicultural Affairs. Ambassador Richardson has also served in various senior public policy roles in the departments of the Prime Minister, he was a key advisor in fact the principle advisor for the Prime Minister from 1990 to 1991. Ambassador Richardson holds a bachelor's degree with honors from Sydney University and received the most prestigious order of Australia board in 2003. Please welcome Ambassador Dennis Richardson. Thanks Doug - for that very very warm welcome. I would like to acknowledge your own role. Doug as a member of congress you were a great friend of Australia, he has played a big part in the Australia-US Leadership Dialogue over the years and I know that you were a great friend of my of my predecessor. I would like to thank the World Affairs Council, the Australian- American Chamber of Commerce and also for the Asia Foundation for making tonight possible. Also a few words about Australia about Australia and East Asia and afterwards I'm very happy to take questions on anything whether it's a topic I have covered or if you want to raise other topics that you would enjoy rising on in any area, then your prerogative to do so and my prerogative to determine whether I can answer it or not. The I suppose by way of by way of background Asia is so definitely Asia is central to Australia you have only got to look at the map to work that one out. But I think it's important to note that Asia alone does not define Australia and it's foreign defense politic or strategic policies, you know, geography, history and national interest dictate that while we have very firm and very important regional priorities our interests are very much global in nature. We are not a big country but neither are we small. I just mentioned three things in that context to paint a little picture for you. There is about a 191 countries sit in the United Nations general assembly. About a 140 of them have populations smaller than Australia. 177 of them have smaller economies than Australia and about a 179 of them have smaller defense budgets than Australia. So while we are not big compared to say a country like the United States relative to others we are not exactly small either. Australians have always been outward looking. We have never sought to opt out of World Affairs, there has never been a debate historically in Australia which you might term isolationist indeed a big driver in the Australian public debate is a fear of isolation and how we need to engage in the world but not retreat from it. And that's really no surprise when you think of who we are. 24 percent of all Australians were born in another country that compares to 12 percent of Americans who were born in another country. 40 percent of Australians have one or both parents born in another country. At any one time about a million Australians or five percent of our population is either traveling or living overseas. That's the equivalent of about 15 million Americans at any one time traveling or living overseas. Also when you look at the issue of terrorism there are currently about 25-26 people in prison in Australia either serving sentences on terrorism relating related offences or who are awaiting trial for alleged terrorism related offences. Of those 25 to 26 people all but about one have been connected, to link to or motivated by events, issues or individuals either in South Asia or in or in the Middle East. So we have this dichotomy as a country that the greatest threat to us the greatest threat to Australians when we are outside the country is in Southeast Asia as when witnessed by Bali one and Bali two and by the terrorist attack on the Australian embassy in Jakarta in September of 2004. And the dichotomy is between that when you step outside Australia but in Australia the the challenge very much arises from individuals who were linked further up field beyond Southeast Asia. Australia's global interest - Australia's economic interests are global also. If taken as a single entity the European Union is our largest trading partner, but our largest investment partner and they are single and they are single biggest commercial relationship is with the United States. And our largest and fastest growing export markets are in East Asia. Australia's current military deployments also tell you something about the very nature of our priorities. We currently have military deployments in Iraq which we have had from the beginning, in Afghanistan, in East Timor and we continue to have small military deployments in Solomon Islands and and elsewhere. East Asia has been and remains a primary focus of Australia's Foreign and Security Policy. That's an enduring aspect of our postwar international outlook. We actively supported Indonesia's independence in the 1940s despite opposition from some other quarters, we were central to the formation of the Colombo Plan, the mini-Marshall Plan focused on Asia in the 1950s. We instigated and say through to completion the Cambodian peace process in the 1980s, we initiated the creation of APEC, initially as a foreign ministers gathering in 1989 and we responded quickly as did the United States to to regional crisis such as the 2004 Tsunami. East Asia is undergoing remarkable change that we all know. But it has been doing so for quite a number of years. The world's economic and strategic center of gravity is shifting to to Asia. In terms of the challenges posed by nation states and their interactions America's strategic fortunes in coming decades will be shaped more by developments in Asia and in the Middle East than elsewhere In the past 15 years East Asia's growth has averaged seven percent a year. In 1960, East Asia made up 11 percent of global GDP today it makes up 21 percent of global GDP. East Asia's economies have become more open and mature, average tariffs in the APEC region have fallen by someway between a quarter and a third in the last 10 years, and politically too East Asia has changed quite decisively and probably the best example of that is the obvious one of Indonesia. Equally significant, but often overlooked is a social transformation in East Asia. Our Prime Minister John Howard recently said that we are witnessing for the first time in history the emergence of a truly global middle class one that is not limited to the industrialized West, but one which includes Asia. India and China alone could produce middle classes of between 400 and 800 million people over the next 20 to 30 years. As their incomes grow they will want greater political participation, better healthcare and retirement benefits and a cleaner environment. We don't yet know where this will lead. How will China reconcile this social transformation with its politics that they are unknowns for the future? Add to that the ageing of much of East Asia's population, especially in China whose population is expected to peak around 2050 even as that of the United States is expected to grow. What will all of that mean? China's rise looms large in everyone's thinking. In Australia, the public debate about China has a different tone to some aspects of the debate here in the United States. And one of the reasons for that is by and large we carry a small trade deficit with China. But we are a beneficiary of China's economic growth in a way that is visible and understandable to ordinary Australians. We have the things that China needs in order to grow at the pace it is. Where as in the United States of course you have the largest single deficit with China that you have had with any country in your history and when manufacturing jobs are lost in Middle America, people look to China even though in many cases China is not being "a culprit." But it's important to see this in a wider context. We you have a significant trade deficit with China, the United States has a significant surplus with Australia in fact your second largest surplus trading surplus with any country in the world is with Australia. And we have a small deficit with China. So you have got a triangular arrangement where Australia exports raw materials and services to China. China exports cheap manufactured goods to Australia and the United States. And United States exports advanced manufactures and services to Australia and also to China. We are all doing what we do best. So it's not a simple zero sum game. Australia has a pragmatic clear headed approach to China. We welcome its growth as natural and is benefiting others. We welcome that fact we welcome the fact that it is engaging other countries, something that we have been urging it to do. We welcome its efforts in the war on terror and we also welcome its real action in respect of North Korea. We see China's leaders as essentially pragmatic, less ideological overtime and clearly preoccupied with a serious internal governance challenges facing them. We are under no illusions however that China's values match our own. Our relationship our relationships with China and with the United States are different. Australia is friends with both China and the United States, we are allies with one. We have noted aspects of China's military build up. And in 2005 Australian government national security update. We we observed that and I quote "The pace and the scale of China's defense modernization may create the potential for misunderstandings particularly with the development of new military capabilities that extend the strike capability and sustainability of its forces." It is important that the development of China's military capability is transparent and that's its capability decisions remain consistent with its legitimate security needs. But from where we sit, it is far from inevitable as as some alarmist suggests that China's rise will and its military modernization will inevitably lead to conflict in Asia. We don't think that that it is a necessary follow on a tool. The question rather is the extent China's rise will change the system in which it rises. Can China play by the rules or will it think to change the rules. We in Australia want China to play by the rules and we believe it can and will do so. After all in the long-term we believe that's very much in China's own interest. Some degree of hedging against possible features must inform US policy that is only natural and sensible. But hedging is not enough. We much actively seek the kind of China and the kind of region we want. To achieve that, we need to have frank discussions with China about where we differ but not to loose sight of the fact that those differences sit a long side other areas where where we have tremendous say common interest. And I think the United States has in fact found that balance. I think it's very difficult to read Bob Zeollick's major speech on China in September 2005 which provided the conceptual framework within which the administration has taken forward its policies on China. It's very difficult to read that and to take take issue with any of the sentiments expressed in it India's rise is also a significant. We in Australia welcome the prospect of a democratic, English-speaking, cricket loving nation such as India, and we were very pleased to see the president pick up by a cricket bat, when he was in Pakistan, you know, I think last year at some point. That's probably a bridge too far in terms of Australian public diplomacy here in the US but who knows, because soon as you mention to an American that a game of cricket can take five days and not have a result at the end of it they are not really interested in anything else. As a major energy consumer and producer, we need India's help to find an equitable and sustainable solution to climate change. That's why we welcomed it as a founding member of the Asia-Pacific partnership on climate and development. India is also an indispensable partner in the war on terrorism. The real the reality has been recognized by the United States in its efforts to build a substantial strategic relationship with India in it's own right and that is something that from an Australian point of point of view where you see as as something we entirely welcome and and something which we consider to be somewhat natural. China and India are rising powers. Japan is all is a risen power and is no less important for it. Japan has been Australia's largest export market for 40 years and is our closest friend in Asia. It is easy to take Japan and the U.S.-Japan Alliance for granted but they are in fact of fundamental significance. Were the US - were the U.S.-Japan Alliance to falter and we see no sign of that whatsoever. But were if it is a falter it would affect the entire system of regional security and we would not want to see Japan that filled isolated and vulnerable. Australia has actively encouraged Japan to play a greatest security role regionally and globally. We've done so on the basis that Japan's postwar outlook has been unambiguously peaceful and democratic, safely anchored in the US Alliance with the commitment to global multilateral institutions. We've encouraged Japan's important outer various security responsibilities in recent years including in Istanbul, Afghanistan and Iraq. To us, it is a welcome sign of a more relaxed Japan by assuming its rightful place. As it increasingly does so, it will inevitability rub against others that harbor resentment towards it. Japan needs the afford to be acute to to be astute and generous and it's handling of those issues and relationships. And the trilateral strategic dialogue between Japan, Australia and United States has added a new dimension to to Japan's role. No sensible discussion about East Asia can or should exclude Indonesia? Just think of its significance. The world's fourth most populous country, the worlds third largest democracy, a young one at that and the world's largest Muslim nation. Indonesia is not a great power but by any major it is pivotal when you look at East Asia. That is even more so in the context of the global dimensions of terrorism and democracy and the challenge and the challenge is terrorism poses not only to our own societies but those in countries such as Indonesia. For Australia for the region and I would argue for the United States, Indonesia is crucial. We have welcomed Indonesia's direction in recent years especially under President Yudhoyono. We've also welcomed the significantly increased US engagement with Indonesia over the past 18 months. And for instances, the decision to restore military to military ties with Indonesia, which we believe was the right thing to do. And the success of visits to Indonesia over the last 18 months by former Secretary Rumsfeld, by Secretary Rice, and by Attorney General Gonzales and by the President himself. It is important in engaging Indonesia to sustain the effect. We know through our own experience, that there will be times that that might be difficult. However, we can't afford with Indonesia as we've anything that's important, you've got to look to the long-term. It's easy to marvel at sky over East- Asia's economic and social transformation. It is quite another thing to put it into context and understand what it means for us - what it means for us today. To get the full picture, you can't look at Asia in isolation. One common track is to assume that because because East Asia, especially China is growing so quickly, the rest of us including the United States are some are somehow failing or risk being left behind. This ignores the reality that Asia's that East Asia's growth cannot be separated from the role of the United States and others. Indeed East-Asia's growth would not have occurred without the United States stabilizing alliances with the United States openness to trade and visitors form Asia and the innovative efforts of US Businesses in Asia. Whether in strategic or economic terms it is best to think of the Asia Pacific region as one single system. In this, I would include North Asia, Southeast Asia and the United States. The flipside is is the notion or fear that we in the west are threatened by the growth of the East Asia in particular that of China and that we must guard against it by limiting investment in in those countries especially China. Again, this ignore the realities of align economies. That the enormous benefit for instance that the the United States, and Australia and other western countries have got from the capacity of China to manufacture high quality products at cheap prices. That basic that basic thing has been fundamental in this country and in Australia in keeping down inflation over the period of growth that we have experienced in the last 10 years or so. And Australia for one would be disturbed if voices calling for greater protectionism and limitations on foreign investment would become more influential in the debate here in the US. Another manifestation of this thinking is an exaggerated sense of concern among some commentators that the United States is being excluded from regional institutions and somehow sidelined in Asia. The United States should certainly watch the development of institutions carefully but it need not look to judgment or agonize over its place in the region. East Asia is not Europe, regional institutions in Asia need to be seen against the historical background that unlike in Europe institutions took a very long time to develop in East Asia. Regional architecture in East Asia is messy, is still developing and does not sit easily with those who aspire to neatness and order. The pace of change in regional architecture cannot be forced, nor can models be readily be copied from other regions or settings. As Prime Minister Howard said in a speech in Chicago last May, people who limit the strength of of US influences globally and people who seek a reduced US global role should be careful for what they wish for. This is especially true in Asia, indeed it is perhaps of no surprise that those who call most loudly for reduced US global role tend to live not in Asia but in parts of the world where where the peace has already been won, such as in Europe. Unlike Europe, East Asia is still subject to profound great power competition. Without the United State's strategic involvement in East Asia, issues involving China and Japan for instance, could take on a very different dimension. And I think as an outsider I think the US Administration deserves a lot of credit for its diplomacy in Asia. It is I think that I wonder how many people in this room thought five years ago that in 2007, the administration would have developed separately, enhanced relationships with each of Japan, China and India. Think about it, that's not a bad achievement and you have also developed enhanced relationships with both India and Pakistan at the same time. The you have also brought North Korea into a multilateral process on denuclearization, quite obviously there is a long way to move there but nonetheless progress now has been made. You have reopened military ties with Indonesia and you have built US-ASEAN Partnership with annual leaders' talks. So I think when you look at when you stand back from it and you look at the United States and you look at your engagement with East Asia over the last five or six years, there are lots of positives there. And I think there are positives which have gone largely un-remarked and to some extend unnoticed because of the understandable amount of oxygen that has been taken up by other issues which is which is obviously inevitable. Australia's alliance with the United States is something of bi partisan support in Australia. We see it as an asset for us in the region and we believe it's an asset for you in the region. It's a reminder of our shared interests which mutually reinforce those of regional countries and it's also something which very much reflects our shared values. I think one of the reasons why the alliance between the US and Australia is is a reasonably comfortable one and one which has I think broad support in both countries is that it fits it fits comfortably with both our political and our economic interests. We have come to finish off back at the starting point. I think most people here would not be surprised at all to learn that the US is by far the the largest foreign investor in Australia. I think it probably think that was quite not remarkable effect. You probably would be little bit surprised to discover that there are only seven or eight other countries in the world that have more foreign investment in the United States than Australia. It is an Australian company that owns more retail floor space in California than in any other company. Now go out to the Napa Valley and there are significant Australian interest and indeed go to the Barossa Valley in South Australia and you will see significant American interest. The end so you have a very significant economic relationship overlaid with enormous amount of people to people contact. There is about a 100,000 to 130,000 Australians have living in the United States and work here and you run into them allover the country. The in April of this year, we will be celebrating the 90th anniversary of Australia and the US being allies in conflict together when you entered the First World War in 1917 but we are also celebrating in April of this year the contribution made the relationship by Australian War Brides, some 15,000 to 20,000 Australian women married US service men in the 1940s and they have between they have between 40,000 and 60,000 children and grandchildren and most of the women have died overtime however, quite a number of them are alive we are bringing as many as we can together in Washington in April and because they represented the largest single organized movement of people out of Australia in our history. We we are the country we are the country of immigration. Australians go overseas to live temporarily even if it's for 50 years. But we but this was this was an organized immigration out of Australia the largest of its kind. You put the strategic partnership together, you put the economic relationship together all of that is underpinned by something as common as values which gets tossed around all the time but think of it one of the reasons why we can do business with one another so easily is because by enlarge what's right and wrong in this country is right and wrong in Australia and vice versa. It just makes it pretty easy. Now sometimes Americans are a bit difficult to understand and we are a bit difficult to understand but that's really around around the edges. So Doug, that's all I want to say by in conclusion just I just wanted to touch on that bilateral relationship and to flag it. But I'm very happy to take questions on anything including Iraq, including Iran, I don't know much about it but I'm very prepared to engage in the discussion.