Australia Is On the Map But Not On the Minds of South-East Asia | Asia Society

Australia Is On the Map But Not On the Minds of South-East Asia

Greater economic engagement with South-East Asia is needed not only for Australia’s sustained prosperity but also for its political clout as a bona fide Asian power, writes Asia Society President and CEO Kyung-wha Kang in the Australian Financial Review.

Even in this age of distance and time-defying technologies, geography is fate in the life of nations, and the first order of statecraft is to strengthen peace and prosperity with your closest neighbours. The legendary Australian diplomat Richard Woolcott was keenly aware of this when in 1967 he started orienting the country’s foreign policy towards Asia. Six decades later, the mission he set out to achieve is still a work in progress. That is the takeaway from the inaugural The Australian Financial Review Asia Summit, organised in partnership with Asia Society Australia. Australia’s place as part of Asia is clear on the map, but not so, it seems, in the minds of the public in Australia and some of its closest Asian neighbours.

There are bright spots for sure. For example, when it comes to South Korea, the country I served as foreign minister, Australia is held in high regard as a privileged partner. Australia’s sacrifice in the Korean War still resonates. The UN Memorial Cemetery in Korea in Busan houses 281 fallen Australian soldiers. Beyond this historical bond, Korea and Australia are held together by the shared values of liberal democracy. Both are navigating through turbulent waters as security allies of the United States managing relations with China, their largest trading partner. As market economies, both countries have benefited greatly from free and open trade and are now trying to come to grips with the wave, imagined or real, of decoupling and derisking that is taking place under the tense geopolitical climate of US-China strategic competition.

Thus, for South Korea, Australia’s value is unquestioned. It is only the second country with which Korea holds the 2+2 Foreign and Defence Ministerial Meetings. But more can be done to realise the full potential of the relationship. Beyond the recent boost in defence industry co-operation, there is much room to enhance bilateral ties as well as deepen strategic dialogue to shore up peace and prosperity in the region.

In contrast, attitudes toward Australia in South-East Asian countries seem more mixed. The latest survey of elites in the ASEAN countries – academic experts, officials, business leaders and civil society figures – conducted by the Yusof Ishak Institute in Singapore indicated a fall in Australia’s standing in the region. Out of ASEAN’s eleven dialogue partners, Australia was ranked seventh on average in the ten countries in terms of strategic importance – even in Indonesia, its most important bilateral partner in the region. This perception seems incongruous with the importance of ASEAN at the official level for Australia: it became the first dialogue partner for ASEAN in 1974 and was the first to establish a Comprehensive Strategic Partnership with ASEAN in 2021.

Indeed, the Australian Government has clearly been making a concerted effort to strengthen its ties with the region, as reflected in the new South-East Asia economic strategy. Foreign Minister Penny Wong has been tireless in her efforts to strengthen Australia’s economic and strategic ties with ASEAN. One survey may be just a snapshot, but the same snapshot with similar results over
several years indicates a trend. The latest survey was conducted before the Australia-ASEAN Summit in Melbourne in March this year, which, I understand, was very successful. 

Perhaps the score will be higher for Australia with the ASEAN elites next year. But that will require robust follow-up of all the Summit agreements not only by the governments but also, and more importantly, by the Australian business leaders whose relative lack of presence in South-East Asia seems to be a key reason for the country’s middling profile in the region.

Having learned the lessons of the Asian financial debacle of 1997-1998, beefed up infrastructure and undertaken some serious reforms, South-East Asian economies are capitalising on the disruptions in the global order to re-emerge as a growth engine for the world. In the past two decades, South-East Asia averaged 8.5 per cent gross domestic product growth, and foreign direct investment flow into the region grew nearly fourteen-fold.

While China and the US have both doubled theirs into the region, Australia’s direct investment in South-East Asia has gone backwards. In 2022, it was lower than in 2014. On current trends, Australia is losing out on the energetic phase of wealth
generation of its neighbours. Greater economic engagement with South-East Asia is needed not only for Australia’s sustained prosperity but also for its political clout as a bona fide Asian power. It will also be to the benefit of the South-East Asian countries to draw Australia much closer economically and politically, as they try to infuse greater substance into the claim of ASEAN centrality in the Indo-Pacific region.

The Asian century is unfolding, much of it in South-East Asia. So, too, is big power strategic competition with the region as the main stage. In proactive co-operation with the middle powers of the region, such as Australia, South-East Asia can become a counterweight to temper the US-China competition and mitigate its negative consequences for peace and prosperity in the region. And that should surely be welcomed by all countries in the region and beyond.

This oped originally appeared in the Australian Financial Review.