Speech at University of Western Australia: Australia's foreign policy looking west

Speech, check against delivery

Perth

12 November 2010

In less than a year's time, Perth will host the Commonwealth Heads of Government Meeting (CHOGM).

53 international leaders will be here.

In all, over 4,000 participants will visit for what will be the largest political summit ever hosted in Australia.

The Commonwealth spans every continent.

The Commonwealth has a combined population of over 2 billion – almost a third of the world's population.

It represents more than a quarter of the nations of the world.

It has within its number a quarter of the membership of the G20, the premier body for global economic governance.

The Commonwealth represents one fifth of total global trade.

And among the Commonwealth's membership is the rising global economic powerhouse of India.

And for Australia, trade with Commonwealth partners represents $89 billion, or 22 per cent of Australia's global merchandise trade.

The Australian Government's choice of Perth as host of the 2011 Commonwealth Summit is deliberate.

It is not just because we know that Perth will host the event superbly.

It is not just because Western Australia is itself an economic powerhouse.

It is also because half of all Commonwealth countries lie to Australia's West.

And Perth is Australia's western capital – our national gateway to the Indian Ocean region.

This brings me to the central purpose of my address today,

  • the future political, strategic and economic significance of the Indian Ocean region;
  • Australia's foreign policy directions in this vast and diverse region;
  • and where the CHOGM Summit in 2011 fits within this framework.

As Australia looks west to the Indian Ocean region, we see many of the challenges and opportunities we face for the future.

Of course, nobody need encourage a Western Australian audience to look West: you do this intuitively.

You already appreciate the fundamental changes taking place in the Indian Ocean region. It's a function of your geography, your history, and your people-to-people links to so many countries of this wide region.

Australia is a middle power with global interests.

We have an interest in the stability of the global strategic and economic order.

We have a deep national interest in the great global security challenges, including combating terrorism.

We have an interest in nuclear non-proliferation, arms control and disarmament.

We have an interest in the great global challenge of climate change.

We have an interest in human rights, in humanitarian assistance and in development.

These global interests require us to be active in all the regions and capitals of the world through what I have long called creative middle power diplomacy.

It was through this vehicle that Australia fought, together with like-minded middle powers, to secure the establishment of, and Australia's membership of the G20, where Australia has a permanent seat at the table.

Australia is also a middle power with profound regional interests.

We have long looked east across the Pacific to our long standing allies the United States.

We have looked north, to the profound strategic and economic developments now taking place across East Asia.

Equally now Australia must look west, to the great challenges and opportunities that now present themselves across the Indian Ocean region.

The Indian Ocean region is vast.

Its countries are home to more than 2.6 billion people, almost 40 per cent of the world's population.

It comprises some 48 countries.

It represents already some 10% of global GDP and rising.

The Indian Ocean region is also home to what are arguably the world's most important sea lanes of communication. 70 per cent of the total traffic of petroleum products passes through the Indian Ocean. 40 per cent of world trade passes through the Strait of Malacca; 40 per cent of all traded crude oil passes through the Strait of Hormuz.

The region is highly diverse in its peoples, cultures, religions, political systems and levels of economic development.

Within the region, there is the extraordinary economic growth in South Asia, led by the rising great power that is India.

The global influence of the Gulf States, on whom the globe relies for so much of its energy needs, is set to grow in the years ahead as energy security increasingly becomes a concern of national security.

And as many nations within the continent of Africa resolve long-standing security problems, proceed down the path of economic development, and open their significant energy and resources markets to the world, Africa's economic significance is growing as well.

Also, as noted above, the Indian Ocean's shipping routes are vital, and much of the energy and resources Australia exports to meet rising demand in India and North Asia travels on these sea lanes as well.

It is a region that also grapples with the full range of security challenges, including

  • weapons of mass destruction;
  • terrorism in Afghanistan, Pakistan, Yemen, and across the Horn of Africa;
  • piracy across the region;
  • as well as fisheries management, food security and the impact of climate change on low lying states.

The Indian Ocean region therefore is a region undergoing profound transformation, both in economic and security terms.

Nowhere is this more apparent than in India.

India's economy by GDP may increase to as much as USD 4 trillion by 2020, and double again to reach USD 8 trillion by 2030, on track to becoming the world's third largest economy after the United States and China.

And by that time India is likely also to be the world's most populous nation.

Its infrastructure needs will be huge: the Indian Government has planned a USD 1 trillion infrastructure spend in the course of its next five year plan.

The Gulf States boast a combined GDP close to USD 1 trillion and growing.

This includes some of the world's wealthiest countries and individuals - Qatar's GDP per capita is among the highest in the world and is projected to overtake Norway in 2011.

The Gulf region has almost 40 per cent of the world's crude oil reserves and over 20 per cent of natural gas reserves.

The Gulf's rapid infrastructure development, open trade, liberal capital flows and labour market make it an important centre for regional economic growth.

It is expanding its global economic footprint, becoming a centre of global capital and banking and aviation hub, with Dubai airport now the world's 6th largest.

In Western Australia, many of your companies and business people are now benefiting from the vast economic potential of Africa.

Like many others around the world, WA companies see opportunity where many others still have an outdated view of a continent totally in the grip of poverty, conflict and despair.

Some of the key facts are startling.

Africa has nearly a billion people.

It has more than 500 million people of working age.

By 2040, Africa will be home to one in five of the planet's young people, and will have the world's largest working-age population.

Its combined consumer spending in 2008 was $860 billion.

McKinsey predicts this will grow to $1.4 trillion in 2020.

Africa has more middle class households (defined as those with incomes above $20,000) than even India.

FDI in Africa has increased from $9 billion in 2000 to $62 billion in 2008 – almost as large as the flow into China when measured relative to GDP.

According to McKinsey, the rate of return on foreign investment in Africa is higher than in any other developing region.

This is a big story, and it spells opportunity for Australia.

Your private sector gets it.

The rest of the country needs to catch up.

Africa is a more stable, peaceful and prosperous continent than a decade ago.

None of this is to say there aren't difficulties and challenges.

We are not naïve about this.

We recognise the potential and its recent progress without ignoring its considerable security and development challenges.

Africa has 33 of the world's 49 least developed countries; despite its recent progress, one half of the continent lives in absolute poverty.

We are also deeply concerned about the situation in the Democratic Republic of Congo, Somalia and Sudan. We lament a lack of political progress in Zimbabwe despite some tentative signs of economic recovery.

But my overall point is Africa is a more complex modern reality with a greater range of opportunities than some of the stereotypes of the past would suggest.

These countries of the Indian Ocean region are Australia's neighbours, our markets, and many of them our security partners.

Our interests in the region therefore require an increasingly activist Australian foreign policy.

Australia's maritime zone is 8.5 million square kilometres and more than a third of this lies within the Indian Ocean region.

Australia has significant current and prospective energy and resource projects within this zone.

Protecting these projects, as well as continuing to assert Australia's sovereignty over our wider maritime zone where future projects will lie, is fundamental to the nation's long term economic interests.

Beyond the energy and resources sector, the Indian Ocean also represents a significant fisheries resource. Australia has an abiding interest in ensuring all fishing nations engage in lawful and sustainable fishing practices. This is an interest we share with all Indian Ocean coastal states.

Once again Australia has a deep interest in ensuring that our sovereignty in relation to these interests is maintained.

Beyond these core national interests, there is also of course the wider interest we share with other Indian Ocean states in ongoing oceanographic research into the world's third largest water mass.

Since it came to office, the Government has established a more comprehensive approach to the countries of the Indian Ocean region.

We are committed to paying to the region the attention it deserves.

This means working on the range of security, development and economic challenges and opportunities that lie before us.

It means developing stronger bilateral relationships, strengthening our role in regional bodies, and boosting collaboration in multilateral bodies deeply engaged in the region, including the United Nations and the Commonwealth.

Our closest Indian Ocean neighbour is, of course, Indonesia – a key Indian Ocean power. Australia's relations with Indonesia have never been better. We have a strategic partnership, underpinned by our strong, comprehensive bilateral relations.

Our leaders meet annually as do foreign and defence and trade ministers. Our cooperation regionally and globally is close and productive – in the G20, on climate change and in regional institutions such as the East Asia Summit and APEC.

We are drawing together economically. The announcement earlier this month by the Prime Minister and President Yudhoyono of negotiations towards a Comprehensive Economic Partnership underscores our deep commitment to Indonesian and Australian prosperity.

Our mission in Afghanistan reflects our wider national interests in responding to the threat of both global and regional terrorism. In this context, Pakistan is also of strategic importance to Australia.

It is critical to progress in Afghanistan, where about 1550 Australian troops are deployed.

My first visit after being sworn in as Foreign Minister was to Pakistan. I saw first-hand the devastation caused by the floods.

Australia recognises the sacrifices and loss of life made by the Pakistan Government, military and people as they counter and stare down terrorism.

As a founding member of the Friends of Democratic Pakistan, Australia is strongly committed for the long-term to support and work with Pakistan as a partner to strengthen its security, economy and its democracy.

All regional countries – including India – will benefit from a Pakistan which is more stable and prosperous.

Australia has doubled the number of Australia-based training positions for Pakistani defence personnel to more than 140 places and doubled our development assistance to $120 million over the period 2009-11.

The work in Afghanistan and Pakistan comes on top of $180 million Australia has provided in overseas development assistance to other parts of South Asia this financial year. This includes assistance to:

  • improve primary education, water sanitation and maternal health outcomes in Bangladesh;
  • help establish an Electoral Resource Centre in Nepal to increase understanding of the electoral process and help entrench democratic institutions; and
  • resettle and rehabilitate communities in northern Sri Lanka after the war.

With the President of Sri Lanka soon to be inaugurated into his second term in office, more than a year after the end of the military conflict that caused suffering to so many for so long, we would continue to urge the Sri Lanka government to "win the peace".

In Australia's view, achieving that objective – that is, ensuring and guaranteeing long-term peace and stability in a united Sri Lanka - involves inclusiveness, and a sustained and determined commitment to reconciliation.

The Australian Government is greatly enhancing engagement with South Asia - with every country individually, and also as a region.

Merchandise trade with the region was worth $19.7 billion in FY2009-10.

We recognise the central importance of our relationship with India, the world's largest democracy, a member of the Commonwealth for 63 years, and Australia's fastest-growing major export market over the last decade.

We were pleased to see President Obama during his visit to India last week give support for a permanent seat for India at the Security Council, a policy approach which successive Australian Governments have supported for many years.

The Australian and Indian Governments have been working to reshape the bilateral relationship in the long-term interests of both nations.

Exactly 12 months ago, Australia and India launched a new Strategic Partnership, including a Joint Declaration on Security Cooperation.

This partnership will see us greatly expand our cooperation across the full sweep of our common interests: political, security, trade and investment links, education and science, tourism, sport and immigration.

Australia has no intention of discovering, then neglecting and rediscovering India every few years: we are there to stay.

Like Australia's business community, the Government knows the value of a robust, durable, substantial presence in India to underpin this new partnership.

Already, Australia is in the process of more than doubling our diplomatic and trade resources in India to underpin that strategic partnership. We are:

  • expanding our High Commission in New Delhi;
  • upgrading our Consulates in Chennai and Mumbai;
  • and opening or expanding Austrade offices in another eight cities across India.

Western Australia is playing an important role here, as evidenced by the A$20 billion ExxonMobil deal to supply LNG to India's Petronet from WA's Gorgon project from 2014.

LNG is an important fuel for stationary power. It produces fewer and cleaner emissions to generate the same amount of power as traditional coal-fired plants.

Australia should prove an increasingly attractive investment destination for the growing economies of the region, with India's Oswal Group's investment in a liquid fertiliser project on WA's Burrup Peninsula a good example.

Australia's relations with countries in the Gulf are also becoming stronger. And, given the many interests and concerns we share, there is much more that we can do together.

Together with the countries of the Gulf we place a high priority on regional security. Australia has a long record of working with these countries to promote peace and stability.

We work together to fight terrorism – we have a bilateral counter-terrorism MOU with the UAE and maintain close contact with other Gulf countries on the threat of violent Islamist extremism. We share concerns over the growing threat emanating from extremists in Yemen.

The ADF values its close defence links with a number of Gulf countries. It has its Middle East headquarters in the UAE.

To improve our institutional links with the Gulf Cooperation Council (GCC) and its member states, we have agreed to hold a regular Australia-GCC Foreign Ministers' Strategic Dialogue, the first of which I hope to attend early next year. The Dialogue will provide a forum for exchanges of views on issues on mutual interest and will be an important platform to further broaden and deepen our relations.

Australia's economic interests in the Gulf are also significant. Merchandise trade with GCC countries is worth some $8.6 billion (FY2009-10).

Australia is committed to negotiating a comprehensive high quality free trade agreement with the GCC. A free trade agreement will bring mutual benefit to what is already a strong relationship.

Tens of thousands of Australians live in the Gulf and many thousands of tertiary students from GCC countries are studying in Australia – including at the University of Western Australia. These people-to-people links are continuing to grow.

I've mentioned the challenges and opportunities in Africa.

Australia is committed to working with African countries, the African Union and the wider international community to assist Africa tackle its development and security challenges.

We will work with Africa to take advantage of the economic opportunity afforded by the continent's slow but tangible move towards stability and prosperity.

As a sign of the strength and commitment of Australia's engagement with the African Union, Australia has opened a new embassy in Addis Ababa, the headquarters of the AU and the capital of Ethiopia.

The Government will provide $200 million in Development Assistance to Africa in 2010-11.

This represents an increase of 23% over the previous year.

We will work in areas where Australia has expertise, to help Africans and their governments improve agricultural productivity and food security, increase access to clean water, improve the health of women and children and build Africa's human resource capacity.

I announced in September that Australia would provide $140 million over 5 years for midwifery training, obstetric care and family planning in eastern Africa.

Our development assistance contributes to Africa's stability and emergence from poverty.

It is also part of a wider story of an emerging continent undergoing a boom in economic growth and investment.

The minerals and petroleum resources in Western Australia is driving Australia's economic engagement in Africa.

Current and prospective investment by Australian resources companies is estimated at USD 20 billion.

Some 200 Australian companies have assets on the ground in Africa, across 41 countries.

In 2010 alone, 30 new companies have started projects in Africa, and over 100 new projects have started.

More than 350 of a total 560 current Australian resources projects commenced over the last five years.

And Perth is home to 85% of the Australian listed resource companies working in Africa.

This is story of success and opportunity in our economic engagement.

It is a Western Australian story.

We saw this again at the Africa Down Under Mining Conference, held most recently in Perth in September this year.

Six African Mining Ministers were among 1,300 delegates discussing opportunities for private sector investment in Africa.

This story of economic success, however, has also been blighted by personal tragedy.

A plane crash in the Republic of Congo in June claimed eleven lives, including all six members of the board of Sundance Resources.

This loss had a major impact on the families involved, on the company and on the mining community in Perth.

The Government worked with the mining sector and African Government to deal with the aftermath.

This tragedy was an important reminder of an obvious fact.

Just as our economic engagement grows with Africa, so will the number of Australians travelling to, and working in, the continent.

The Australian Government is going to be increasingly called upon to advance these economic interests in Africa, and to provide diplomatic and consular support to its companies and its citizens.

To maximise the returns to Australia and to pursue our growing national economic interests, the Australian Government and the private sector need to work together on these challenges.

I hear one message from the Australian mining industry, and that is that they want Australia to be more engaged with the affairs of the continent, not less. And that too is the resolve of the Australian Government.

Additionally, Australia has strengthened its role in Indian Ocean regional bodies.

Australia participated for the first time in the South Asian Association for Regional Cooperation (SAARC) as an observer in April 2010 and launched a regional food security project.

SAARC provides an important opportunity to engage South Asian governments annually at the highest levels reinforcing our bilateral engagement.

In August this year, Australia was appointed Vice Chair of the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) for 2011 and 2012.

Comprised of 18 Indian Ocean littoral states – from Africa, the Gulf, South Asia and South East Asia, including many Commonwealth nations – IOR-ARC aims to strengthen regional engagement and prosperity.

Over the next two years, Australia will work closely with India, as IOR-ARC Chair, to progress issues of relevance to IOR-ARC members, including fisheries management, customs training, energy security, and disaster management.

We will ourselves assume the role of Chair in 2013 and 2014.

Australia's engagement with the countries of this region is now on the upswing.

This will take time.

In saying this, I am particlarly mindful of the recent and excellent work done by the Australian Strategic Policy Institute on both oceans policy in general and our Indian Ocean policy in particular.

But here in Western Australia where this will be most important, you already generate 42% (or $83 billion) of Australia's merchandise exports, with China and Japan especially important.

Not only is Perth the centre of Australia's engagement with the Indian Ocean region, it is also helping provide intellectual firepower through its universities, think tanks and other institutions.

The University of Western Australia is helping to grapple with these new challenges, establishing recently an Oceans Institute that will build research programs to address science and resource issues in the Indian and Southern Oceans.

The University of Western Australia also supports the Indian Ocean Research Group, which has launched a new academic "Journal of the Indian Ocean Region" which seeks to identify, research and suggest policy issues of common regional concern.

Curtin University has the South Asia Research Unit.

And Perth's Future Directions International think tank has developed a strong Indian Ocean research program.

Western Australia is also one of two proposed sites for the Square Kilometre Array (SKA), a revolutionary international radio telescope project currently under development.

Australia and New Zealand are jointly bidding to host the SKA – if successful, a trans-Tasman SKA would involve thousands of antennae spanning 5,000km from the core site in Western Australia to outlying antennae in New Zealand.

A final site decision is expected in 2012. Ahead of this Australia and New Zealand with the strong support of the WA Government continue working with partner countries and institutions to develop the strongest possible case for hosting a SKA offering maximum global benefit.

It is appropriate that Perth, our gateway to the Indian Ocean and the growth regions it contains, will now host the 2011 CHOGM.

One year out is a timely point to consider what CHOGM 2011 can deliver for the Commonwealth, for Australia and for our engagement with this new dynamic Indian Ocean region.

To secure its future, Australia must look West as well as East.

The profound changes in this region demand that we do so.

This will require a new, dynamic policy agenda from Government to rise to these new challenges.

And this must be done in partnership with our good friends here in Western Australia, WA business, WA institutions and the WA government. And that is precisely what the Australian Government now intends to do.

END

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