By Helen Mitchell, international relations scholar

Peace and prosperity in Asia – the world’s most dynamic economic region – has not always existed. Taking the long view, conflicts, trade disputes and political tensions were often normal; the peace and deepening economic interdependence and growth following World War II was unusual. Over that period, Australia’s major ally, the United States, implemented a series of complementary policies like promoting freer trade, defence modernisation and enhancing intelligence sharing that underpinned an international economic environment greatly benefitting the United States, Australia and the wider region.

Today, President Xi Jinping’s plans for Taiwan and the international order, coupled with China’s powerful military, large economy and global economic integration, present sharp challenges for policymakers in Australia, the US, Japan, Taiwan, parts of Southeast Asia and beyond. For example, secure Australian supply chains and shifting to a new energy system will require foreign investment to boost our domestic capacity – but will also pose security risks. 

Despite these tensions, Australia can do things at home and abroad to balance our peace and prosperity priorities in Asia and elsewhere. Statecraft, or the policies and actions that governments can employ to shape our international environment, is a useful perspective for thinking about prosperity and peace. Statecraft includes trade, energy, intelligence, deterrence, diplomacy and other initiatives that work together to help shape the world we want to live in. Statecraft today relies on networks of countries, firms and individuals. Working with allies and key partners like the US and Japan will magnify our efforts to use military, economic, diplomatic and other statecraft tools together to help underpin peace and prosperity in Asia. 

Diplomacy, intelligence sharing, and building trust are key to future policy

That’s the approach Australia has already been taking. Efforts have included building global partnerships through technology and information sharing, developing cyber capabilities, countering disinformation attempts and complementing Australia’s multilateral economic heft with targeted aid programs and leadership in sectors like green energy and critical minerals. 

Statecraft in practice can be tricky as governments usually weren’t set up for just that purpose. Overhauls are typically rarely required. But historical evidence shows there are three main ingredients to doing statecraft well. First, being clear about what problems or opportunities exist in this realm government activity. Second, lining up the diversity of thinking in teams to tackle issues that will spark innovation and creativity. Finally, setting up structures that will allow people to flourish. Highly innovative and resilient corporate structures can give us a glimpse of what works well: collapsed hierarchies; mobility across function areas; and diversity of ideas and expertise working together. 

Australian economic statecraft is on the move, as exemplified by historic announcements from the Treasurer and the Treasury Secretary this year. Coordinated resolve in the realm of economic security is also already evident – a trio of the Director-General of National Intelligence, the Secretary for Industry, Science and Resources, and the Secretary for Climate Change, Energy, Environment and Water headlined an Economic Security panel at a United States Studies Centre conference in Sydney earlier this year. The message was clear: prosperity and peace and security are two sides of the same coin. These signals from the top prioritising economic security mirror similar actions by the US and Japan and complement the broader set of statecraft initiatives these countries, and others, are enacting. 

Looking ahead, Australia has an opportunity to deepen its economic security capabilities alongside other statecraft initiatives to meet major national challenges, like the energy shift and successful deterrence. As Australian domestic initiatives take shape, Australia can also deepen coordination abroad. A key insight from my recent research on economic security is that diplomacy, shrewd intelligence sharing, and building trust with allies and partners will be key to navigating a more contested international environment.  Collaborating with allies and partners like the US and Japan will be critical to managing economic security risks and seizing opportunities for peace and prosperity in Asia and beyond.

Helen Mitchell is the Sir Roland Wilson Scholar (Economic Security & Statecraft) in the National Security College at the Australian National University & Economic Security Fellow (Non-Resident) at the United States Studies Centre. 

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