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Issue #1521      5 October 2011

Gillard and Asia

Locked into a dangerous US alliance

Despite the regular platitudes about our country’s place in Asia, Australian governments have never been convincing about their embrace of our neighbours. The discourse may have come a long way since the days of the White Australia Policy but in recent decades we have seen Prime Ministers like Paul Keating regularly fly over Asia to get to preferred European destinations, heard John Howard talk regularly and passionately about Australia’s British roots and US connections and supposed China expert Kevin Rudd sling off using a racially offensive remark when negotiators from the People’s Republic wouldn’t roll over during climate change discussions in Copenhagen in 2009.

And despite the talk of regional “partnerships” and being in the box seat for development due to our proximity to emerging economic powerhouses in Asia, official pronouncements have always been followed closely by reference to the centrality of the US alliance and the need to bolster Australia’s own defence forces.

Julia Gillard recently addressed the AsiaLink and Asia Society Lunch in Melbourne and devoted her speech to Australia’s future in Asia. She announced the commissioning of a government White Paper to be called Australia in the Asian Century. Former Secretary to the Treasurer, Dr Ken Henry, will embark on an extensive process of consultation and then report on this burning question.

Gillard’s address already set out a lot of the government’s current thinking on various economic, social and “defence” issues. So is her government any different, any more independent of US influence and more inclined to find its own way in our region? Will her government take its hand away from the holster when dealing with our neighbours in the foreseeable future? No is the short answer.

Facing realities – looking for opportunities

Gillard’s address conceded some remarkable facts. China’s economy has grown by a factor of 20 in the last 25 years. India’s economy is projected to overtake the size of the US economy by mid-century. Even Indonesia’s economic growth rate is putting that of developed countries in the shade. Asian economies have become net lenders while dominant first world nations, like the US, have become needy borrowers. Australia’s economy used to be as big as the combined economies of ASEAN. It is now only two thirds of that size.

Gillard stressed that the changes that have taken place are not just quantitative; they are qualitative. “Australia hasn’t been here before,” she said. The address was keen to downplay the nervousness these developments would be causing in the planning circles of a mid-ranked imperialist power. The US and Japan, she noted, might be down but should not be counted out. The clouds of change might be gathering over US imperialism but the rise of Asia’s middle classes are said to present opportunities for the Australian economy which, she acknowledges, is suffering “patchwork pressures”. The decline in education, retail and particularly manufacturing were mentioned.

“The new Asian middle class will give Australia an opportunity to make our whole economy strong,” the PM claimed. The future of the resource sector is taken for granted. Gillard noted that every tonne of steel requires one and a half tonnes of iron ore and more than half a tonne of coking coal. Every new kilometre of railway needs 7,000 tonnes of steel, a typical Asian apartment block uses six tonnes of steel.

“… the new Asian middle class lives in apartments and catches urban trains built on our iron and coal. But they’ll do more. They’ll fill those apartments with high-end manufactured goods, dine on clean, high quality produce and drink premium wine.”

That, presumably, is where Australia steps in.

“They’ll look to countries like Australia for tertiary education and technical skills. They’ll travel in new ways, seeking new custom-made holiday experiences, not the package tours of former years and through life they’ll want sophisticated financial advice and the benefits of the world’s best medical services as well,” Gillard said.

The assumption is that Asian countries will not be able to satisfy the sophisticated tastes of their growing middle classes. “Innovative” and “clean” are adjectives to be applied to the US and Australia respectively, not to Asian countries. Stereotyping of this sort infects the Australian government and bureaucracy and is evident in the Gillard lunchtime speech.

The PM flagged “structural adjustments” that will have to be made to stimulate the Australian supply of “high-end” Australian goods and services such as health and education. Public ownership and trade unions in those sectors will be targeted in the next phase of neo-liberal shock therapy. It won’t stop there.

China – a special case

For all its recognition of China’s spectacular rise, Gillard’s speech was cautious in her praise of that undeniable phenomenon. Aside from North Korea – described as a rogue state threatening the region – she is generous in her congratulations of Asian achievement. But it is different in the case of China.

“Here, with our largest export market and largest trading partner neither a democracy nor part of our alliance system, a nation whose economic transformation is in turn transforming the economic and strategic balance of our world,” she said.

The adjudication of which countries are “democracies” and which are not is insulting enough but she follows this with the more crucial observation that “… it’s certainly true that the United States’ absolute lead in military power will remain clear for some time to come.” In this age of open markets and “globalisation”, might still makes right.

Gillard followed this rattle of the sabre up with an outright lie: “… there is nothing in our Alliance which seeks to contain China… ” In fact, it is now the bedrock of Australia’s pact with the US. The PM made it plain that Dr Henry’s Asian Century white paper will not be able to alter the priorities established by the Force 2030 Defence White Paper of 2009 that sparked the subsequent rapid growth of Australia’s military spending.

That report locks us into the overall US strategy of containing China with a special role for Australia in the immediate Asia-Pacific region: “We have a deep stake in the maintenance of an Asia-Pacific regional security environment that is conducive to the peaceful resolution of problems between regional countries and can absorb the rise in strategic and military power of emerging players.”

It is the US, not China, that backs up its economic reach with warships and military bases. China’s growing economic influence in the region is at issue here and when comparing future relationships, Gillard is at once frank and elusive – “Strong in the Asian century – with an ally in Washington and respect in Beijing.” The word “ally” is unambiguous. “Respect” can mean to regard highly. It can also mean to treat with caution.

Gillard’s speech indicates that, in the face of the shifting balance of economic forces in the world, Australian governments will remain locked into an alliance with an increasingly reckless and aggressive US. It also foreshadows “structural adjustments” and policy change in virtually every portfolio area. That has spelt very bad news in the past for workers and other less privileged Australians. It was far from a breath of fresh air. It was more of the same.  

Next article – Editorial – Tax reform a class issue

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