INTRODUCTION

. I AM DELIGHTED TO HAVE THE OPPORTUNITY TO SPEAK TO YOU TODAY

- I NOTE THAT YOU COME FROM A DIVERSE RANGE OF COUNTRIES LOCATED NOT JUST IN AUSTRALIA'S IMMEDIATE NEIGHBOURHOOD BUT FURTHER AFIELD - FROM INDONESIA, MALAYSIA, SINGAPORE, THAILAND, THE PHILIPPINES, SOUTH KOREA, PAKISTAN, INDIA, JAPAN, FIJI, THE UNITED STATES AND NEW ZEALAND.

- THERE IS NO BETTER DEMONSTRATION OF THE VALUE OF AUSTRALIA'S PEOPLE-TO-PEOPLE LINKS WITH THE REGION AND THE REST OF THE WORLD THAN YOUR PARTICIPATION IN THE LIFE AND WORK OF THE COLLEGE.

. YOU WILL KNOW FROM YOUR STUDIES THAT AUSTRALIA'S HIGHEST FOREIGN POLICY PRIORITY IS CLOSER ENGAGEMENT WITH ASIA.

. IT IS OUR HIGHEST PRIORITY FOR TWO SIMPLE AND ENDURING REASONS.

- FIRST, THE ASIA PACIFIC REGION IS WHERE AUSTRALIA'S BEST OPPORTUNITIES FOR FUTURE JOBS AND PROSPERITY LIE.

- SECOND, AUSTRALIA'S GEOGRAPHIC POSITION MEANS THAT OUR SECURITY DEPENDS LARGELY ON DEVELOPING CLOSER TIES WITH OUR NEIGHBOURS.

. THE AUSTRALIAN GOVERNMENT HAS A VISION FOR AUSTRALIA IN THE 21ST CENTURY AS A COOPERATIVE, ECONOMICALLY COMPETITIVE AND SECURE NATION, FULLY ENGAGED WITH THE REGION, WHILE MAINTAINING AND DEVELOPING LINKS WITH COUNTRIES BEYOND THE REGION.

- THE GOVERNMENT HAS BEEN WORKING HARD - WITH A GOOD MEASURE OF SUCCESS I MIGHT ADD - TO MAKE THAT VISION A PRACTICAL REALITY IN OUR FOREIGN POLICY PRIORITIES AND INITIATIVES.

. I WANT TO FOCUS TODAY ON AUSTRALIA'S REGIONAL INTERESTS, AND HOW THE AUSTRALIAN GOVERNMENT PURSUES THOSE INTERESTS, WITH A SPECIAL EMPHASIS ON THE FULL RANGE OF OUR REGIONAL SECURITY LINKS.

- FIRST, I WILL OUTLINE THE GOVERNMENT'S PERSPECTIVE ON THE MAJOR ECONOMIC AND SECURITY TRENDS THAT ARE SHAPING THE REGION, INCLUDING THE EMERGING PATTERN IN REGIONAL SECURITY ARCHITECTURE.

- SECOND, I WILL EXPLAIN HOW THE GOVERNMENT IS TACKLING THE CHALLENGE OF CLOSER COOPERATION WITH THE REGION THROUGH THE DEVELOPMENT OF BILATERAL, SUB-REGIONAL AND REGIONAL SECURITY TIES.

PART ONE: ECONOMIC TRANSFORMATION.

. THESE DAYS, NO-ONE CAN ARGUE SUCCESSFULLY THAT SECURITY ISSUES - WHETHER NATIONAL, REGIONAL OR GLOBAL - CAN SOMEHOW BE QUARANTINED OR SEPARATED FROM ECONOMIC DEVELOPMENTS, LEAST OF ALL IN THE ASIA PACIFIC REGION.

- PROSPERITY AND SECURITY ARE INCREASINGLY INTERTWINED - FOR AUSTRALIA, AND EVERY OTHER COUNTRY IN OUR REGION AND BEYOND.

. THAT IS WHY THE RECENT DRAMATIC CHANGES IN THE ECONOMIC LANDSCAPE OF THE ASIA PACIFIC ARE THE STARTING POINT FOR ANY COGENT ANALYSIS OF WHAT IS HAPPENING IN THE REGION.

. EAST ASIA'S SUSTAINED RAPID GROWTH HAS CREATED A NEW SENSE OF COMMON INTEREST IN STABILITY.

- THE REGION'S ECONOMIC PROFILE IS ALMOST UNRECOGNISABLE WHEN COMPARED WITH THE MID-1970S.

. THE EAST ASIAN DEVELOPING ECONOMIES WITHIN APEC HAVE GROWN BY ALMOST 8 PER CENT ANNUALLY SINCE 1973.

- IN THE PROCESS, THE KOREAN ECONOMY HAS EXPANDED IN REAL TERMS MORE THAN FIVE-FOLD, AND THE THAI AND SINGAPORE ECONOMIES MORE THAN FOUR-FOLD.

. FOR ITS PART, AUSTRALIA IS FULLY ENMESHED IN THE REGION'S ECONOMIC TRANSFORMATION.

- OVER HALF OF AUSTRALIA'S TOTAL FOREIGN DIRECT INVESTMENT GOES TO APEC COUNTRIES, AND WE EARN THREE OUT OF FOUR OF OUR EXPORT DOLLARS IN APEC MARKETS.

. I AM CAUTIOUSLY OPTIMISTIC THAT REGIONAL GROWTH WILL CONTINUE AT HIGH RATES AT LEAST UNTIL THE YEAR 2020.

- BY THEN, FOUR OF THE WORLD'S TEN LARGEST ECONOMIES WILL BE IN ASIA - JAPAN, CHINA, KOREA AND INDIA.

- INDONESIA WILL BE NEAR THE TOP OF THE NEXT TEN, WHICH WILL ALSO INCLUDE THAILAND AND AUSTRALIA.

- THE ASIA PACIFIC COULD ACCOUNT FOR AROUND TWO-THIRDS OF WORLD OUTPUT.

. THESE CHANGES HAVE RAISED IMPORTANT QUESTIONS ABOUT THE SUSTAINABILITY OF GROWTH AND POLITICAL STABILITY, AS WELL AS RESOURCE, ENVIRONMENTAL, POPULATION GROWTH AND DEMOGRAPHY ISSUES.

. THE SHEER SCALE OF GROWTH IN THE REGION WILL CONTINUE TO CHALLENGE WORLD MARKETS TO DELIVER THE RESOURCES AND CAPITAL NEEDED TO SUSTAIN IT.

- FOR EXAMPLE, ASIAN DEMAND FOR INFRASTRUCTURE CAPITAL COULD AVERAGE US$ 150 BILLION ANNUALLY DURING THE NEXT DECADE, ALMOST TWICE THE CAPITAL FLOWS INTO ASIA IN PEAK YEARS TO DATE.

- SUSTAINABLE GROWTH WILL DEPEND IN PARTICULAR ON THE REGION'S CAPACITY TO MEET GROWING DEMANDS FOR ENERGY.

: BY 2010, ELECTRICITY DEMAND ACROSS THE APEC ECONOMIES IS EXPECTED TO INCREASE BY BETWEEN 50 PER CENT AND 80 PER CENT, PLACING A HUGE BURDEN ON GLOBAL CAPITAL FUNDS TO SUPPLY FUNDS TO BUILD ENOUGH ENERGY INFRASTRUCTURE.

- ECONOMIC GROWTH IS LIKELY TO BE GREATEST IN THE REGION'S MAJOR CITIES, AND THIS WILL PLACE HUGE STRAINS ON BASIC SERVICES SUCH AS WATER, SANITATION AND SHELTER.

. THAT IS WHY CONTINUED TRADE AND INVESTMENT LIBERALISATION, BOTH THROUGH APEC AND THE WORLD TRADE ORGANISATION, IS ABSOLUTELY VITAL.

. I AM PLEASED TO SAY THAT, AT LAST MONTH'S APEC MEETING IN THE PHILIPPINES, REGIONAL LEADERS DEMONSTRATED THEIR DETERMINATION TO GIVE EFFECT TO THE BOGOR LEADERS DECLARATION OF 1994 - FREE TRADE AND INVESTMENT FOR INDUSTRIALISED MEMBERS BY 2010 AND FOR DEVELOPING MEMBERS BY 2020.

- FOR THE FIRST TIME, MEMBERS TABLED THEIR INDIVIDUAL ACTION PLANS, WHICH SET OUT THE PRACTICAL STEPS THEY WILL TAKE.

- THE ACTION PLANS ARE A REASONABLE FIRST STEP IN WHAT WILL BE A 15-25 YEAR PROCESS.

. APEC'S TRADE AND INVESTMENT AGENDA PROMOTES MUTUAL ECONOMIC DEPENDENCIES WHICH HELP REDUCE THE RISK OF CONFLICT. THEY DO NOT, OF COURSE, GUARANTEE PEACE, BUT THEY MAKE IT VERY REWARDING.

. APEC, THOUGH NOT A SECURITY FORUM, ALSO COMPLEMENTS THE DIRECT SECURITY ACTIVITIES OF THE ASEAN REGIONAL FORUM, TO WHICH I SHALL RETURN SHORTLY.

- APEC IS UNIQUE IS BRINGING TOGETHER LEADERS FROM ACROSS THE ASIA PACIFIC. IN THEIR INFORMAL BILATERAL CONSULTATIONS, LEADERS ARE FREE TO RAISE ANY ISSUE ON THE INTERNATIONAL AGENDA.

- THE HABIT OF CONSULTATION AND THE PERSONAL RELATIONSHIPS THAT RESULT FROM APEC MEETINGS DO MUCH TO STRENGTHEN REGIONAL TRUST AND CONFIDENCE.

. THE WTO MINISTERIAL MEETING IN SINGAPORE NEXT WEEK IS A MAJOR OPPORTUNITY TO PUSH ON WITH TRADE LIBERALISATION.

- IT SHOULD, I BELIEVE, HELP PREPARE THE WAY FOR A FURTHER COMPREHENSIVE ROUND OF TRADE NEGOTIATIONS BEFORE THE END OF THE CENTURY.

PART TWO: THE NEW SECURITY LANDSCAPE.

. THE ECONOMIC TRANSFORMATION OF THE REGION HAS BEEN MATCHED BY EQUALLY IMPORTANT CHANGES IN THE SECURITY ENVIRONMENT.

. THE POST-COLD WAR ERA HAS BROUGHT CHALLENGES AS WELL AS OPPORTUNITIES. THE REGIONAL SECURITY ENVIRONMENT IS NOW MORE FLUID, COMPLEX AND UNCERTAIN.

- IN NORTH EAST ASIA, FOR EXAMPLE, IT WOULD HAVE BEEN VERY DIFFICULT DURING THE COLD WAR TO IMAGINE THE RAPIDLY DEVELOPING RELATIONSHIP WE NOW SEE BETWEEN CHINA AND SOUTH KOREA.

- IN SOUTH EAST ASIA, VIETNAMESE MEMBERSHIP OF ASEAN WOULD HAVE BEEN EQUALLY UNLIKELY.

. ISSUES SUCH AS THE COMPETING CLAIMS AND INTERESTS OVER THE SOUTH CHINA SEA, THE KOREAN PENINSULA AND THE TAIWAN STRAIT ARE ALL MANAGEABLE, BUT THEY NEVERTHELESS POSE CHALLENGES FOR THE REGION, AS DOES THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION.

. BEYOND THESE CORE CONCERNS, A RANGE OF OTHER SECURITY ISSUES HAVE ADDED EXTRA LAYERS OF COMPLEXITY TO THE REGIONAL SECURITY ENVIRONMENT.

- THE REGION HAS TO COME TO GRIPS WITH PROBLEMS SUCH AS INTERNATIONAL TERRORISM, DRUG TRAFFICKING AND INTERNATIONAL CRIME.

- OTHER NON-MILITARY THREATS TO SECURITY SUCH AS INTERNATIONAL HEALTH EPIDEMICS AND MASS MIGRATIONS OF POLITICALLY OR ECONOMICALLY DISENFRANCHISED PEOPLE MUST ALSO BE TAKEN INTO ACCOUNT.

. THE REGION'S NEW FLUIDITY AND COMPLEXITY REQUIRE THE FURTHER DEVELOPMENT OF ITS SECURITY ARCHITECTURE.

- A FUNDAMENTAL CONSIDERATION FOR THE ASIA PACIFIC'S SECURITY OUTLOOK WILL BE THE EVOLUTION OF RELATIONSHIPS BETWEEN THE REGION'S MAJOR POWERS: THE UNITED STATES, CHINA, JAPAN, RUSSIA AND, IN THE LONGER TERM, INDIA.

- AS HENRY KISSINGER HAS NOTED, THE EMERGENCE ON THE WORLD SCENE OF A NEW POWER LIKE CHINA ALWAYS REQUIRES A PERIOD OF ADJUSTMENT. I WILL SPEAK A LITTLE MORE ABOUT CHINA SHORTLY.

- CONSIDERATION MUST ALSO BE GIVEN TO THE LEGITIMATE CLAIMS OF THE MIDDLE-SIZED REGIONAL POWERS WHO WILL WANT A BIGGER SAY IN MANAGING THE STRATEGIC AFFAIRS OF THE REGION.

PART THREE: DESIGNING A NEW SECURITY ARCHITECTURE

. CLEARLY, THE ANSWER TO THE NEW SECURITY CHALLENGES I HAVE OUTLINED LIES IN BUILDING AND DEEPENING COOPERATIVE LINKAGES. YOU CANNOT JUST PUT UP THE SHUTTERS AND HOPE THE DIFFICULT ISSUES WILL GO AWAY.

- INDEED, THE REGION MUST TAKE ADVANTAGE OF THE WINDOW OF OPPORTUNITY WHICH REGIONAL PEACE AND STABILITY NOW PROVIDES TO DEVELOP MECHANISMS AND PROCESSES TO MANAGE THE FUTURE STRATEGIC ENVIRONMENT AND DEAL WITH DIFFICULT ISSUES AS THEY ARISE.

. THE FUTURE SHAPE OF THE ASIA PACIFIC'S SECURITY ARCHITECTURE IS NOT YET SETTLED, BUT IT IS POSSIBLE TO SEE A PATTERN EMERGING.

. WHILE IT MIGHT NOT OFTEN BE SAID PUBLICLY BY COUNTRIES IN THE REGION, THERE IS, I THINK, WIDESPREAD SUPPORT FOR CONTINUING UNITED STATES STRATEGIC ENGAGEMENT IN THE ASIA PACIFIC.

- THE UNITED STATES HAS A VITAL ROLE IN HELPING TO STABILISE REGIONAL SECURITY. ITS PRESENCE STRENGTHENS REGIONAL COUNTRIES' CONFIDENCE IN THEIR SECURITY - IN EFFECT HELPING TO MINIMISE TENSIONS.

- THIS IS MOST OBVIOUS IN NORTH EAST ASIA WHERE, FOR EXAMPLE, JAPAN AND SOUTH KOREA HAVE NOT ONLY REFRAINED FROM ACQUIRING NUCLEAR WEAPONS BUT HAVE ALSO UNDERTAKEN LEGAL OBLIGATIONS NEVER TO ACQUIRE THEM.

. SO IT IS CLEAR THAT THE UNITED STATES' CONTINUED STRATEGIC PRESENCE IS AN IMPORTANT ELEMENT IN THE REGION'S EMERGING SECURITY PATTERN.

. THAT PATTERN COMBINES BILATERAL, SUB-REGIONAL AND REGION-WIDE LINKAGES - SOME FORMAL, SOME INFORMAL - IN A GROWING WEB OF RELATIONSHIPS IN THE REGION.

- AUSTRALIA HAS A CRUCIAL PLACE IN THAT WEB.

- ALL THREE LEVELS OF THE WEB ARE MUTUALLY REINFORCING.

- ALL CONTRIBUTE TO WHAT I SEE AS THE CORE GOAL OF AUSTRALIA'S REGIONAL POLICIES - BUILDING A SENSE OF TRUST, A SENSE OF COMMON INTERESTS AND OF SHARED RESPONSIBILITY FOR THE REGION'S FUTURE.

PART FOUR: AUSTRALIA'S VITAL CONTRIBUTION TO A MORE SECURE REGION.

. FOR ITS PART, THE AUSTRALIAN GOVERNMENT HAS SPECIFICALLY SET OUT TO HELP DEVELOP A REGIONAL SECURITY ENVIRONMENT WHICH:

- FORESTALLS RESORT TO FORCE IN INTERNATIONAL DISPUTES;

- PREVENTS THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION; AND

- ENCOURAGES COOPERATION TO ENHANCE THE SECURITY OF THE REGION AS A WHOLE.

BILATERAL AND SUB-REGIONAL

. AT THE BILATERAL LEVEL, THERE IS GROWING ACCEPTANCE THAT STRONG, CONFIDENT RELATIONSHIPS UNDERPIN REGIONAL STABILITY.

. AUSTRALIA SEES ITS ALLIANCE WITH THE UNITED STATES IN THAT LIGHT, AS, I BELIEVE, DO OTHERS WHO HAVE SUCH ALLIANCES.

- THESE ALLIANCES ARE NOT DIRECTED AGAINST ANY OTHER COUNTRY.

- BUT, BY ENHANCING CONFIDENCE AND TRANSPARENCY, ALLIANCES - ALONG WITH OTHER COOPERATIVE LINKS - PLAY A VITAL ROLE IN BUILDING A SENSE OF COMMON INTERESTS SHARED BY THE WHOLE REGION.

. IN JULY THIS YEAR, AUSTRALIA GAVE NEW VIGOUR TO ITS ALLIANCE WITH THE UNITED STATES THROUGH THE AUSMIN JOINT DECLARATION, THE FOCUS OF WHICH WAS VERY MUCH ON THE CONTRIBUTION THE ALLIANCE MAKES TO REGIONAL SECURITY.

. AUSTRALIA HAS ALSO BEEN BUILDING A WIDE-RANGING SET OF BILATERAL LINKAGES - UNDER THE RUBRIC OF "PRACTICAL BILATERALISM".

- THEY INCLUDE ANZUS, THE AGREEMENT ON MAINTAINING SECURITY WITH INDONESIA, THE JOINT DECLARATION WITH PAPUA NEW GUINEA, AND CLOSER DEFENCE RELATIONS WITH NEW ZEALAND.

. THE FIVE POWER DEFENCE ARRANGEMENTS - WHICH INCLUDE THE UK, MALAYSIA, SINGAPORE AND NEW ZEALAND - PROVIDE FOR SIMILAR COOPERATION AT A SUB-REGIONAL LEVEL.

. IN ADDITION TO THESE MORE FORMAL LINKAGES, AUSTRALIA HAS A RANGE OF LESS FORMAL - BUT NONETHELESS STRONG AND GROWING - BILATERAL DEFENCE AND SECURITY TIES WITH OTHER SOUTH EAST ASIAN COUNTRIES.

- FOR EXAMPLE, YOU WILL NO DOUBT BE AWARE OF SINGAPORE'S USE OF AUSTRALIAN DEFENCE TRAINING FACILITIES, AND OF THE DEFENCE DEPARTMENT'S REGIONAL COOPERATION PROGRAM.

. AUSTRALIA IS ALSO STRENGTHENING ITS BILATERAL SECURITY LINKS WITH NORTH EAST ASIAN COUNTRIES.

- THIS YEAR AUSTRALIA HAS COMMENCED OFFICIALS-LEVEL POLITICAL-MILITARY TALKS WITH KOREA AND JAPAN.

- THE AUSTRALIAN GOVERNMENT HAS ALSO REACHED AGREEMENT ON OFFICIAL DISCUSSIONS WITH CHINA ON REGIONAL SECURITY.

. AUSTRALIA WANTS TO EXTEND BILATERAL DIALOGUE WITH INDIA ON POLITICAL, DISARMAMENT AND SECURITY ISSUES.

- THE RECENT SUCCESS OF THE AUSTRALIA-INDIA NEW HORIZONS PROMOTION UNDERLINES THE IMPORTANCE THE AUSTRALIAN GOVERNMENT ATTACHES TO THE RELATIONSHIP WITH INDIA.

. OF COURSE, THE BILATERAL RELATIONSHIPS THAT CONTRIBUTE MOST TO SHAPING THE REGIONAL ENVIRONMENT ARE THOSE BETWEEN THE MAJOR POWERS.

- AUSTRALIA WELCOMED THE JOINT DECLARATION SIGNED BY PRESIDENT CLINTON AND JAPANESE PRIME MINISTER HASHIMOTO IN APRIL. IT REVITALISED THE COMMITMENT OF BOTH SIDES TO THE US-JAPAN SECURITY AGREEMENT.

. IT IS EQUALLY IMPORTANT TO LOOK BEYOND TRADITIONAL ALLIANCE RELATIONSHIPS, AND SUPPORT THE STRENGTHENING OF OTHER KEY BILATERAL TIES, FOR EXAMPLE BETWEEN THE UNITED STATES AND CHINA.

- BECAUSE, IN THE END, INTEGRATION OF ALL REGIONAL COUNTRIES IN A SHARED SECURITY SYSTEM IS THE BEST ASSURANCE OF REGIONAL STABILITY.

. LET ME DIGRESS BRIEFLY TO TRY TO BURY THE FRUITLESS ARGUMENT ABOUT WHETHER THE WORLD SHOULD CONTAIN OR ENGAGE CHINA.

- THE OVERWHELMING FACT IS THAT CHINA IS ALREADY DEEPLY ENGAGED WITH THE REST OF THE WORLD, AND ITS ENGAGEMENT IS ACCELERATING.

: AUSTRALIA WELCOMES THAT PROCESS UNEQUIVOCALLY.

. CHINA IS FIRMLY INTEGRATED INTO THE REGIONAL AND GLOBAL ECONOMY.

- TWENTY YEARS AGO IT RANKED BELOW 30 AMONG THE WORLD'S EXPORTERS, NOW IT IS IN THE TOP TEN AND CLIMBING FAST. IT IS CONTRIBUTING STRONGLY TO REGIONAL GROWTH - AND BENEFITTING US ALL.

. CHINA IS ALSO PLAYING AN ACTIVE AND CONSTRUCTIVE ROLE IN INTERNATIONAL FORUMS.

- TEN YEARS AGO, FOR INSTANCE, NOBODY WOULD HAVE FORESEEN CHINA VOTING FOR A COMPREHENSIVE TEST BAN TREATY, AS IT DID THREE MONTHS AGO.

. AT THE REGIONAL LEVEL, CHINA IS ACTIVE IN APEC AND THE ASEAN REGIONAL FORUM.

- NEXT MARCH, FOR INSTANCE, BEIJING WILL CO-HOST THE FIRST MULTILATERAL SECURITY MEETING EVER HELD IN CHINA - THE INTER-SESSIONAL GROUP ON CONFIDENCE-BUILDING MEASURES.

REGIONAL

. AT THE REGIONAL LEVEL, AUSTRALIA STRONGLY SUPPORTS THE ASEAN REGIONAL FORUM (ARF).

. GIVEN THE IMPORTANCE OF THE ARF TO AUSTRALIA AND THE REGION, I WANT TO SPEND A FEW MINUTES FOCUSING ON HOW IT CONTRIBUTES TO REGIONAL SECURITY.

. AS YOU KNOW, THE ARF IS QUITE UNLIKE EUROPEAN SECURITY INSTITUTIONS OR MODELS.

- IT IS CHARACTERISED BY MINIMAL INSTITUTIONALISATION.

- IT FUNCTIONS THROUGH CONSENSUS DECISION-MAKING AND HAS AN EVOLUTIONARY APPROACH TO ACHIEVING OBJECTIVES.

. IMPORTANTLY, THE ARF BRINGS TOGETHER ALL THE COUNTRIES WHICH HAVE AN IMPACT ON OR ARE INVOLVED IN THE SECURITY OF THE ASIA PACIFIC REGION.

- IT HELPS CREATE A SENSE OF STRATEGIC COMMUNITY IN THE REGION.

- IT IS THE MEANS BY WHICH GOVERNMENTS CAN BEGIN TO STRENGTHEN CONFIDENCE IN EACH OTHERS' INTENTIONS.

- IT HELPS CREATE THE RIGHT ATMOSPHERE AND FRAMEWORK FOR BILATERAL LINKAGES TO FLOURISH.

. THE ARF IS STILL IN ITS INFANCY, BUT IT IS STARTING TO GET PRACTICAL RESULTS.

. THE FIRST LEVEL OF THE ARF'S ACTIVITIES - CONFIDENCE-BUILDING - IS MATURING AS A USEFUL MECHANISM FOR DEVELOPING A SENSE OF SHARED STRATEGIC INTEREST.

- REGION-WIDE SECURITY DIALOGUES ON SENSITIVE ISSUES LIKE THE FUTURE OF BURMA AND THE KOREAN PENINSULA HAVE NOW BEEN UNDERTAKEN.

. BELOW THE MINISTERIAL LEVEL, THE ARF HAS A CROWDED PROGRAM OF INTER-SESSIONAL MEETINGS, WHICH ARE NOW DEVELOPING PRACTICAL COOPERATIVE CONFIDENCE-BUILDING MEASURES.

- THE FIRST RESULTS ARE ANNUAL DEFENCE POLICY STATEMENTS AND THE INCREASED PUBLICATION OF DEFENCE WHITE PAPERS. THESE ARE OF VARIABLE QUALITY, BUT ARE REINFORCING TRANSPARENCY IN A REGION WHERE THAT HAS NOT BEEN TRADITIONAL IN STATE POLICY. THEY ARE IMPORTANT BECAUSE OF THE INCREASE IN REGIONAL DEFENCE EXPENDITURES.

. MILITARY EXCHANGES, INCLUDING STAFF COLLEGE TRAINING SUCH AS THE ONE YOU ARE PARTICIPATING IN, ARE ON THE INCREASE.

- EXCHANGES ON CONFIDENCE-BUILDING MEASURES ALREADY INVOLVE MILITARY OFFICERS.

- ARF MEMBERS ARE BEGINNING TO LOOK POSITIVELY AT NOTIFICATION OF MILITARY EXERCISES AND AT SENDING OBSERVERS TO THE EXERCISES.

. PREVENTIVE DIPLOMACY - THE SECOND STAGE OF ARF'S ACTIVITIES - IS ALSO SHOWING GOOD POTENTIAL.

- AT THE THIRD ARF MEETING IN JULY, FOR EXAMPLE, THE INDONESIAN FOREIGN MINISTER, ALI ALATAS, USED HIS GOOD OFFICES AS CHAIRMAN TO CONVEY ARF MEMBERS' CONCERNS ABOUT THE SITUATION IN BURMA TO THE BURMESE FOREIGN MINISTER.

- I AM PLEASED TO SAY THAT AUSTRALIA PLAYED AN INSTRUMENTAL ROLE IN THIS INITIATIVE

. SUCCESS WITH THE ARF'S CONFIDENCE-BUILDING AND PREVENTIVE DIPLOMACY STAGES MAY LEAD IN FUTURE TO A THIRD STAGE - THE RESOLUTION OF DISPUTES THROUGH AGREED MECHANISMS.

- HOW AND WHEN THAT COULD HAPPEN IS NOT YET CLEAR.

. BUT I WOULD POINT OUT THAT THE ARF HAS ALREADY PRODUCED PRACTICAL RESULTS IN ONLY THREE YEARS THROUGH WHAT IS BECOMING AN ESTABLISHED PATTERN OF EFFECTIVE DIPLOMACY.

. OBSERVERS BROUGHT UP WITH THE TRADITION OF EUROPEAN STATECRAFT SOMETIMES QUESTION THE VALUE OF THE ARF BECAUSE IT IS NOT ABLE AT THIS STAGE TO RESOLVE CONFLICTS BETWEEN MEMBERS AND REGULATE SECURITY AFFAIRS.

- MY ANSWER IS THAT THE ARF WAS NEVER CONCEIVED AS THE SOLE MEANS OF MANAGING SECURITY IN THE ASIA PACIFIC.

- AS SEEN IN THE CASE OF THE SOUTH CHINA SEA, THE ARF ADDS A NEW REGIONAL LAYER TO SECURITY RELATIONSHIPS THAT HELPS THE MANAGEMENT OF ISSUES AT THE BILATERAL LEVEL.

. THE ARF IS A UNIQUE BODY. IT IS DEVELOPING IN ITS OWN WAY AND ITS OWN TIME. IT WAS NEVER INTENDED TO BECOME A COLLECTIVE DEFENCE ARRANGEMENT. IT WAS BORN OUT OF THE IDEA OF DEFENCE WITH OTHERS, NOT AGAINST OTHERS.

- THE ARF NEEDS TO USE THE PRESENT FAVOURABLE PERIOD TO DEVELOP DIALOGUE FURTHER ON ISSUES SUCH AS DEFENCE PLANNING AND ACQUISITION.

- IT SHOULD ALSO TAKE FORWARD THE AGENDA ON PREVENTIVE DIPLOMACY.

. ONE IMPORTANT ISSUE THAT REMAINS TO BE EXPLORED IS THE FURTHER DEVELOPMENT OF REGIONAL EXCHANGES BETWEEN DEFENCE AUTHORITIES.

- WE ARE ALREADY SEEING ACTIVE PARTICIPATION BY DEFENCE OFFICIALS IN ARF INTER-SESSIONAL MEETINGS, A PROCESS THAT COULD BUILD TOWARDS MEETINGS OF MORE SENIOR DEFENCE PLANNERS AND DEFENCE CHIEFS.

- IT MAKES SENSE TO LOOK FORWARD TO AN INCLUSIVE MEETING OF REGIONAL DEFENCE MINISTERS AT SOME STAGE IN THE FUTURE.

. BEYOND THE ARF, AUSTRALIA HAS SOUGHT TO BOLSTER ATTEMPTS AT REGIONAL CO-OPERATION BY TAKING IMPORTANT PRACTICAL STEPS.

- FOR EXAMPLE, REFLECTING THE PRIORITY THE GOVERNMENT ATTACHES TO IMPROVING SECURITY ON THE KOREAN PENINSULA, IN APRIL THIS YEAR WE CONTRIBUTED $ 2 MILLION TO SUPPORT KEDO - THE KOREAN PENINSULA ENERGY DEVELOPMENT ORGANISATION.

CONCLUSION

. IN CONCLUSION, AUSTRALIA CLEARLY SHARES AN EXCITING FUTURE WITH ITS NEIGHBOURS.

. THE LAST DECADE HAS SEEN THE ECONOMIC AND SECURITY ENVIRONMENT OF THE ASIA PACIFIC CHANGE DRAMATICALLY - AND GENERALLY FOR THE BETTER - UNDER THE TWIN INFLUENCES OF EAST ASIA'S ECONOMIC TRANSFORMATION AND THE END OF THE COLD WAR.

. EXTRAORDINARY ECONOMIC GROWTH WILL NOT ONLY TEND TO BRING REGIONAL COUNTRIES TOGETHER, BUT IT WILL BRING GENUINE BENEFITS TO THE LIVES OF PEOPLE - BOTH WITHIN OUR NEAR REGION AND IN AUSTRALIA ITSELF.

- EQUALLY, ANY CHALLENGES WHICH THE REGION FACES ARE CHALLENGES WHICH WE NEED TO FACE TOGETHER.

. IT IS CLEAR FROM EVERYTHING I HAVE JUST SAID THAT PRACTICAL AND EFFECTIVE REGIONAL SECURITY MUST BE A COOPERATIVE ENTERPRISE, FOUNDED ON A WEB OF MUTUALLY REINFORCING BILATERAL, SUB-REGIONAL AND REGIONAL LINKS.

. AUSTRALIA IS THEREFORE WORKING HARD TO IMPROVE THE QUALITY OF ITS RELATIONSHIPS AT ALL THESE LEVELS.

. THE GOVERNMENT IS GIVING PARTICULAR ATTENTION TO BILATERAL RELATIONS BECAUSE WE TAKE THE VIEW THAT MULTILATERAL INSTITUTIONS, WHETHER REGIONAL OR GLOBAL, WILL ALWAYS BE FAR MORE EFFECTIVE IF THE COUNTRIES WITHIN THEM HAVE CONFIDENT AND DURABLE BILATERAL TIES.

. AT THE SAME TIME, AS I HAVE DEMONSTRATED, THE GOVERNMENT IS CONTRIBUTING ACTIVELY TO THE DEVELOPMENT OF REGIONAL ECONOMIC AND SECURITY STRUCTURES, IN PARTICULAR APEC AND THE ARF.

- THESE REGIONAL STRUCTURES ARE INCREASINGLY VALUABLE TO EVERY COUNTRY IN THE REGION - AND EVERY CITIZEN TOO - BECAUSE THEY BUILD A SENSE OF TRUST, A SENSE OF COMMON INTEREST AND OF SHARED RESPONSIBILITY THAT THE AUSTRALIAN GOVERNMENT BELIEVES IS ESSENTIAL FOR THE REGION'S FUTURE.

. THE PEOPLE-TO-PEOPLE LINKS THAT I SPOKE OF AT THE BEGINNING OF MY TALK ARE ALSO VERY IMPORTANT IN THE STRENGTHENING OF COOPERATIVE TIES. I CANNOT STRESS THAT POINT TOO MUCH.

- IN THAT SENSE, YOU SHOULD SEE YOUR PARTICIPATION IN THE COLLEGE AS PART - AN INDISPENSABLE PART - OF THE LARGER PATTERN EMERGING IN THE REGION.

- YOU EMBODY THE PHILOSOPHY OF REGIONAL COOPERATION, TRANSPARENCY AND MUTUAL UNDERSTANDING.

. I URGE YOU TO MAKE THE MOST OF THE PERSONAL AND PROFESSIONAL OPPORTUNITIES THAT THIS COURSE HAS PROVIDED.

. I HOPE THAT YOUR STUDIES HAVE GIVEN YOU NOT ONLY A GOOD UNDERSTANDING OF AUSTRALIA'S DEFENCE AND STRATEGIC OUTLOOK BUT A BROADER APPRECIATION OF AUSTRALIAN SOCIETY AND ITS VALUES OF TOLERANCE, RESPECT FOR HUMAN DIGNITY AND DEMOCRACY.

. I TRUST THAT, AFTER YOU LEAVE AUSTRALIA, YOU WILL CONTINUE TO BE VIGOROUS AMBASSADORS FOR THE SPIRIT AND PRACTICE OF REGIONAL COOPERATION.