There's a New Deputy in Town: Australia's New Strategy

STRATFOR.COM
Global Intelligence Update
Weekly Analysis September 27, 1999

Summary:

Australian Prime Minister John Howard announced a new foreign policy last week, dubbed the Howard Doctrine. It asserts Australia's more active role as "deputy" to the United States, assuming the United States is hiring, and that Australia's application for the job will be accepted over other worthy candidates. The Howard Doctrine represents a dramatic shift in Australia's foreign policy following economic collapse. It is a critical piece of the regional strategic response to the new economic reality.

Analysis:

Last week, in the wake of Australian troops landing in East Timor, Australian Prime Minister John Howard announced a new strategic doctrine for Australia. Quickly dubbed the "Howard Doctrine," the new strategy included two core elements. First, Australia would assume a more active role in Asian security matters, including further interventions as needed. Second, Australia would undertake this role as "deputy" to the United States. As an enabling element, Howard promised to increase Australian defense spending from its current level of about $10 billion a year (less than 2 percent of GDP). The Thai and Malaysian governments immediately condemned the move. The opposition Labor Party also attacked the Howard Doctrine.

John Howard has committed Australia to a mission that no Asian country applauds and some condemn. He has done so without building the domestic coalition necessary for such a transformation in Australian policy. Finally, he chose to commit himself to a policy for which Australia does not have sufficient armed forces, for which money has not been appropriated, and which will require a force build-up of several years following fund allocation. Given all of this, it would have seemed reasonable for Howard to watch his Timorese adventure unfold before proclaiming a dramatic new shift in Australian policy. He didn't wait. Therefore, it is important to try to get a sense of the perceptions of events in the region that might have caused Howard to take this dramatic step.

Let's begin by considering how dramatically the East and Southeast Asian scene has changed in a little over two years. As 1997 dawned, Asia was headed toward what the conventional media were calling "The Asian Century." Fantastic growth rates, in place for a generation, appeared to be driving an Asian juggernaut destined to be the perpetual global growth center. In the midst of this fantastic growth rate, all political disputes appeared trivial. All political issues could be handled with judicious allocation of a never ending flow of investment funds. In foreign policy, apart from the marginal issue of North Korea, there were no substantial disagreements, save over trade and tariff matters. China and the United States agreed that financial cooperation trumped political and strategic disputes and led the way to a highly de-politicized region. Even the most fractious countries, like Indonesia, were held together by rising financial tides, which submerged political disputes in complex and profitable financial arrangements.

Starting in the summer of 1997, it all fell apart. As the region's economy deteriorated, the economic balm of vast rivers of investment and credit dried up. Complex domestic arrangements disappeared. Strategic issues, submerged under the flood of money, emerged again. Suddenly, the status of Taiwan was no longer a trivial matter to China. China-U.S. relations deteriorated dramatically; espionage and invasions became more important than investment and trade. Suddenly Asia became a completely different place.

There was a golden age in Australian security policy that essentially lasted from the end of the Vietnam War (1975) to the collapse of the Asian economy (1997). During this period of Asian prosperity and stability, Australia (and its sidekick New Zealand) was in geographical heaven, finding itself more secure than at any time since before World War I. Australia first shared the insecurity of the British empire. The defeat of Great Britain would have opened up Australia to domination by other powers like Germany or Japan. This compelled Australia to participate in Great Britain's wars.

Following World War II and Indonesian independence, Australia faced the general problem of communism in Southeast Asia and a more direct challenge from Sukarno's radical nationalism. A series of events worked together to seemingly abolish Australia's strategic problems. The Indonesian challenge ended through Sukarno's fall and the imposition of a military government (The seizure of East Timor, following the fall of the Portuguese empire, created no follow-on threats for Australia). Second, the U.S.-China entente neutralized any Chinese strategic threat. Finally, the end of the Vietnam War helped stabilize Southeast Asia. The North Vietnamese consolidated their hold over Indochina; the United States was not inclined to destabilize them or anyone else. The Chinese were absorbed by internal development and the Soviets.

Australia and New Zealand appeared to be completely insulated from national security threats. They had three major interests:

* First, they wanted to participate in Asia's economic miracle by positioning themselves as politically benign and economically helpful. They saw Asia's expansion as an opportunity for exporting the available mix of primary commodities and industrial products. Australia carefully separated business from politics.

* Second, they wanted to minimize their entanglement with U.S. strategy, which during the 1980s continued to involve taking risks to contain the Soviet Union, many of which were unacceptable to Australia and New Zealand. New Zealand's stance on the presence of nuclear-armed ships in its harbors destroyed the ANZUS pact. Australia was more cooperative, but it was also cautious in involving itself in U.S. adventures, both before and after 1989. Australia was there for the United States, as long as the United States accepted the Australian definition of what "being there" meant.

* Third, both Australia and New Zealand depended heavily on trade. This trade rested upon the security of the sea lanes passing through the archipelago around Asia. They saw two lines of defense for these sea lanes. The first was the inherent stability of the prosperous region. The second was the United States. Both Australia and New Zealand assumed the United States would intervene should threats to sea lane security arise, regardless of Australia's ability or willingness to participate in the operation.

Australia had a well-known identity crisis during this period. It saw its primary economic interest as participating in Asia's boom and wanted to maintain its relationship with the United States. First, powerful economic ties existed between the two countries. Second, Australia saw the United States as the ultimate guarantor of Australia's maritime interests. At the same time, Australia saw no immediate or real threat to its maritime interests. It also saw the United States as placing Australia at risk in operations where it had only marginal interests.

Australia defended itself by systematically under-arming itself. This policy supported all three goals. It freed GDP from unproductive defense and for economic development. It did not increase Australian vulnerability, because the region's stability protected Australia. Finally, with limited forces available, it structurally limited its involvement in American interventions around the world. It assumed the United States would defend Australia's maritime interests in the course of defending its own interests. Australia devised a policy superbly suited to this purpose. New Zealand, geographically more marginal, allowed itself to be even more strategically marginalized.

Since 1997, Australia has experienced three massive shocks that have required it to redefine its objectives:

* First, the Australian assumption about Asia proved false. To be more precise, all good things must end. Asian imports of Australian products plummeted. Even the vaunted recovery has not been sufficient to revive many of Australia's export industries. Moreover, the Australians did not cultivate economic relations in the United States as vigorously as they cultivated Asian relations. The United States placed a massive tariff on Australian and New Zealand lamb, at the behest of U.S. meat-producing states. Australia simply didn't have the political levers to prevent it. They had bet on the wrong horse.

* Second, Asia's economic situation deteriorated and so did political stability. The most important country to Australia is Indonesia, which is near chaos. The instability was inevitable. Political stability built on prosperity lasts only as long as the prosperity lasts. Australians first underestimated the extent of Asia's economic problems and then refused to see the inevitable consequences. Suddenly, the sea lanes, guaranteed by regional stability, were no longer secure. For example, ships headed along the Australian east coast for Southeast Asia and China must pass through the line of Taiwan-Philippines-Indonesia. No one can guarantee what that line will look like six months from now, let alone 10 years from now. The basic premise of stability evaporated. Australia did not expect this.

* Third, the United States passed on intervening in East Timor. The opposition to intervention in the Pentagon was wide and deep. East Timor was not seen as strategically important to the United States, given the tempo of operations elsewhere and the possibility of threats in Taiwan and Korea. Australia had participated in U.S. operations by contributing token forces. The United States could now give Australia token support. Most important, something of strategic importance to Australia did not mean strategic importance to the United States. The Australians suddenly found the tables turned on them. For a generation they had reluctantly participated in U.S. undertakings with the fewest forces possible. Now they were on the receiving end.

But there was a deeper message. Australia assumed the congruence of Australian and American strategic interests meant the United States would be forced to intervene in support of the Australian national interest, without involving massive risk and expense by Australia. Australia assumed it was a matter of strategic interest to the United States to guarantee sea lanes through the archipelago. Australia would be the beneficiary of a policy it did not have to underwrite.

In East Timor, John Howard encountered the limits of this assumption. Certainly, the United States has an interest in maintaining secure sea lanes between the Pacific and Indian Oceans. U.S. presence in the Persian Gulf, among other things, depends on that. The United States may have an interest in maintaining sea lanes for the movement of oil from the Persian Gulf to Japan. That does not mean it has an ongoing interest in keeping open sea lanes that are of interest to Australia.

Howard tried to portray his new policy as a tilt toward Asia. He is actually trying to reorient Australian foreign policy in a direction that meshes with the United States.

The United States continues to be the economic engine of the world. Australia's bet on Asia was the wrong bet. It needs American markets badly. When the great battle over lamb came, Australia had few friends. Having avoided strategic exposure, it also limited U.S. strategic dependence. No one in the defense or intelligence communities was prepared to argue for Australia's economic well- being. Howard had this slammed home to him. He understood the need to increase Australia's value to the United States in order to gain leverage.

His declaration of Australia as America's deputy is part of this strategy. He wants to buy Australia a major seat at the strategic planning sessions of the American-Asian alliance. Australia was happy to be marginalized in the Persian Gulf and Kosovo, but Australia must be able to shape U.S. strategic policy in Asia. The United States is not listening to Australia right now, nor will it until Australia antes up. That means having sufficient forces in the kinds of operations the United States wants.

That is the nub of the problem. Being the U.S. deputy means the United States is the sheriff. The sheriff, not the deputy, calls the shots. Now, the deputy might be heeded, even admired, but at the end of the day, he's the deputy. One of the immediate effects will be on force structure. The United States wants to see a more robust navy and a more substantial and varied air force for Australia (and New Zealand). The United States will also want those forces available for alliance interventions outside Australia's defined security zone.

In other words, Howard is taking Australia in a direction that will cost it substantial freedom of action. Howard realizes Australia has little choice in the matter. Events have conspired to pose national security challenges to Australia. It needs the United States badly for economic and military reasons. The United States will charge a heavy price for that in terms of Australian freedom of action, Australian resources and Australian risks.

The era of Asian prosperity is over and with it, the easy times for Australian foreign policy. Malaysia and Thailand's reaction indicates the price will be steep for the role Howard is choosing for Australia. But, Australia has little choice. Beyond minor interventions and patrolling against Indonesian boat people, it has to be willing to subordinate itself to the United States in order to achieve more control in Asia. In the end, there are worse things then being the deputy. Plenty of other Asian countries are interested. Howard simply tried to get Australia's resume in first.

*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. ***

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