I am delighted to be here today to speak to you about the great global challenges as Australia sees them, as well as our deep and enduring relationship with Europe, with this region of the eastern Mediterranean, and with Greece.
Here we are situated at the home of democracy.
And here in this wider region, we see peoples today struggling to bring about democracies in their own societies and in their own states.
We have all watched with profound interest and awe the unfolding of democratic movements across the Middle East.
We have seen political change occur in Tunisia — although we still wait to see the unfolding shape of the political system that will accompany that change in the months ahead. We also see changes unfolding in Egypt — a country often described as the 'Mother' of the Arab World.
Egypt is a vast country of more than 85 million people. It boasts a civilisation of great antiquity. For more than half a century, it has been a leading voice in the non-aligned movement and the Arab and Islamic worlds. Therefore what happens in the future political evolution of Egypt will have far wider implications than in the country itself.
We believe that Egypt needs fundamental political reform beginning now. We also believe that this process of reform must be delivered peacefully.
We are therefore deeply concerned at the violence that erupted today in Tahrir Square. This sort of violence is an anathema to Australians and we deplore it.
We call on the Egyptian authorities to ensure its people are able to undertake their peaceful protest safely. We again call on the Government to exercise maximum restraint and respond to peaceful protests without violence.
I conveyed directly to the Secretary-General of the Arab League Amr Moussa my concerns about this violence. He too was very concerned by today's events.
Difficult and dangerous days lie ahead in Egypt. Around a million people took to the streets of Cairo yesterday. Many will take to the streets again on Friday.
The Government and the people of Egypt have been presented with an historic opportunity to engineer peaceful democratic transformation — creating a modern democracy out of this most ancient land.
More broadly across the Arab world, the forces of democratic transformation are also at work. These forces run headlong into the two, well established stereotypes of what has hitherto been believed to be politically possible in the Arab world.
One such stereotype is, that given the challenges of governance in the countries of the region, the only workable political system is an authoritarian dictatorship.
The other is that if you lift a lid on democracy, you open up the possibility of an Iranian-style revolution and a creation of an Islamist state.
The people on the streets of Cairo appear to be calling for another way: a democratic system of government capable of embracing a multiplicity of views within its political system.
This appears to be very much a popular movement from below — led by young people whose names by and large are unknown to the outside world; people whose incomes have not risen in recent years because economic growth has been so thin; an intellectual class which has long sought greater freedom of expression; by both new and long-standing opposition political figures who have often been in conflict with one another in the past; as well as those who are calling for a more central role for Islam in what since Nasser has been a secular Arab state.
The difficult challenge ahead lies in how these disparate elements might be melded together into a pluralist democracy while preventing radical Islamists from snuffing out the pluralist voices of the people.
While this represents a difficult challenge, more difficult is the prospect of hanging on indefinitely to the political absolutism of the past.
Political reform is necessary in the wider Arab world — although ultimately it's a matter for the Arab peoples themselves to determine its shape.
The Arab peoples are no different to others in the world who have found their democratic voice in recent decades — across Latin America, across Indonesia, across the former states of the Eastern bloc and across other parts of the world.
In Australia, we hold democracy to be a universal value — not one which is particular to one culture, one people or one set of intellectual traditions.
There is a basic animating principle of freedom to which all peoples strive — the freedom of political expression; accompanied also by economic freedom to unleash the full potential of all people.
This does not mean that the State has no role in maintaining law and order or in regulating economies. But it does mean that these constraints must be bound constitutionally in order to offer genuine freedom to peoples everywhere as the proper condition of humankind.
Events in Egypt and elsewhere in the Arab world also have potentially profound implications for the Middle East peace process. It is possible that new democratic voices unleashed in Egypt and elsewhere will begin to challenge many of the assumptions underpinning the traditional views of moderate Arab states such as Egypt, Jordan and even Saudi Arabia.
In other words, the geopolitics of what flows to the region from the streets of Cairo are likely to have significant implications on the current state of negotiations between Israel and the Palestinian Authority.
Many of us who are friends of Israel and friends of the Palestinian people are familiar with the broad architecture of a comprehensive settlement which would create a two state solution — an independent and secure Israeli state and an independent and secure Palestinian state.
These elements include the 1967 borders, with mutually agreed land swaps; the question of the right of return; the question of Jerusalem and the holy sites; as well as necessary security guarantees.
Ultimately this is a question of course for Israeli and Palestinian negotiators to resolve because what is at stake is the future of their respective homelands.
Given the possibility of opportunistic actions by Iran in the light of the political changes currently underway in Egypt and other parts of the Arab world; it therefore becomes more imperative than ever to bring the Middle East peace negotiations to a successful conclusion.
There is political capacity for this to be achieved on both sides of the negotiation table.
From Israel's perspective reaching such an agreement holds out the prospect of greater security for Israel and its people, and recognition and respect from its neighbours and the wider world.
Reaching such an agreement also holds the potential to transform the Arab world into an open market for Israeli goods and services, helping grow the Israeli economy as well as helping grow the economies and employment opportunities among its neighbours.
For the Palestinians, an independent and secure state would also enable its Government to get on with the task of improving the lot of its people.
And for the region at large, it would remove the Israel/Palestine question as the regional rallying point around which Iran seeks to bolster its political and diplomatic standing.
The governments of the region are carefully analysing the possible strategic consequences of what now unfolds from political reform on the streets of Cairo.
Countries like Greece and Turkey, which I have visited in recent days, are deeply engaged with the strategic stability of the eastern Mediterranean and the wider Middle East.
Countries such as Australia, while a long way removed geographically, from this region, are nonetheless deeply engaged with the countries and societies of the region. We have significant Greek, Turkish, Arab and Egyptian communities in our country. More fundamentally Australian foreign policy is animated by the principles of good international citizenship — and what we can do through the agency of creative middle power diplomacy with our friends and partners in the world to contribute to the development, maintenance and improvement of the regional and global order.
Furthermore, the axiom of the last half century continues to apply. The strategic and economic stability of the world continues to be shaped in considerable measure by the long term strategic and economic stability of the Middle East.
We all therefore, as responsible members of the international community, have a profound interest in seeing a satisfactory conclusion to the Middle East peace process — as well as the peaceful political transformation of the wider Arab world.
This, therefore, is one of the challenges we face today.
What I would like to do now is consider some of the other global and regional challenges that lie ahead in the decades before us.
Let me nominate just five such challenges.
One is the continuation of global economic stability. This is critical. The global economy is not permanently guaranteed to continue the recovery that has occurred since the global financial crisis.
We, together with other members of the G20, have worked long and hard to prevent what was emerging as the global recession of 2008-09 becoming a full blown global depression.
When the G20 met in London in March of 2009 global leaders looked across the cliff and saw the real possibility of a global economic depression.
The good news is that they acted, and they acted concertedly. They brought about guarantees to the banking systems across the world so that systemically important banks did not collapse.
They also brought about a five trillion dollar global stimulus package which enabled the impact of what occurred through the global financial crisis to be held within limits and not translate into a fundamental depression of the type we experienced in the 1930s.
In other words, the governments of the G20 and their economic and finance ministers drew heavily from John Maynard Keynes and the lessons of the 30s by maintaining strong private and public demand at a time when it was critical for the global economy.
That saved the global economy.
The challenge ahead lies in how to maintain global financial and economic stability for the future. And a key element of that is the nature and content of the financial regulatory regime which has been developed through the Financial Stability Board and the Basel Committee.
These are complex and real challenges. They require unprecedented coordination among economies of the world, and financial systems, and central bank governors.
But unless this is done properly through the agency of the G20, we face the risk of a repeat of what occurred in 2008-09.
The good news is the governments, the finance ministers and the central bank governors of the G20, are fully seized of this challenge.
The real problem will lie in harnessing the continued political will necessary to deliver the outcomes necessary to provide a guarantee for the financial system and the general economy into the future.
A second challenge that we face as a global community is in dealing with the inadequacy of global governance more generally.
This of course is important not just for the management of the global economy but for global political challenges as well.
Australia has long supported the reform of the United Nations Security Council and other global institutions. There is a gap in the readiness of current global institutions to confront and act on some of the key challenges facing us.
If I can identify two specific examples: the United Nations Security Council has failed in the past in Darfur and in Rwanda over the last twenty years and we can not afford for it to fail again if things start to go wrong in southern Sudan.
Similarly the UN system through the UNFCCC has not risen to the challenge of dealing quickly and expeditiously with the global challenge that is climate change. That must occur as well, as it affects all countries and all societies and all economies everywhere.
The third is the failure so far of the WTO to deliver a new Doha round which will bring about global trade liberalisation and a large injection of confidence into the global economy.
To deal with these challenges in the future there is an opportunity, given the mandate of the G20, for it to begin to broker outcomes in these critical areas and then have them translated into the formal institutions of global governance through the UN for decision.
The third challenge, is how the international community deals with the rise of India and the rise of China.
Let's look at China in particular. There is constant speculation about when China is going to overtake the United States as the world's biggest economy. Goldman Sachs puts it at 2027, The Economist last month put it at 2019. What most people seem to have agreed is that it will happen whether it's in one decade or two.
And when it does, it will be the first time in centuries that the global economy does will not have a Western economy as the most powerful force. Also, it will be the first time in centuries that the world's largest economy is not a democratic country.
The other powerhouse of the Asia-Pacific region, of course, is India — tipped at some point over the next 15 years to overtake China as the world's biggest population.
But here is the challenge: these two great global economic powerhouses come from the Asia Pacific region, where the peace and stability is by no means guaranteed into the future.
These two global economic powerhouses are likely to drive the global economy into the 21st century through to mid-century. Yet this will be happening in a region which is characterised by 19th century security arrangements.
Let me look at the region more broadly. We have fundamental territorial disputes on the Korean Peninsula. We have territorial disputes between China and Japan over the East China Sea. We have territorial disputes over the future of Taiwan. We have territorial disputes over the South China Sea involving China, the Philippines, Vietnam, Malaysia and Indonesia.
We have outstanding territorial disputes between India and China over the Sino-Indian border. We have outstanding territorial disputes, of course, between India and Pakistan over Kashmir.
My overall point is this: if you look at the region at large, what you see is a fairly brittle set of security policy arrangements.
So what do we do about this?
Australia, in recent years, has advocated the development of an Asia Pacific community to form the institutional architecture to provide the support and the ballast for this brittle set of security arrangements.
In doing so we would seek to learn from our friends in the European Union. If you look at the history of Europe prior to the 1950s and the formation of the earliest manifestations of the European Union, Europe for the previous several centuries had gone through untold bloodshed.
One generation after another — the Second World War, the First World War, the Franco Prussian War, the Napoleonic Wars — these were large scale conflicts by any standard in global history.
And what happened at the end was that Europe agreed finally that we could not do this again. And they came together in an institution now known as the European Union.
For those that criticise the European Union, as an outsider I simply say this: reflect carefully on history. And reflect carefully on what Europe has achieved as opposed to what might be the ideal.
In the Asia Pacific region, the challenge is therefore to learn from this and to begin to build up institutions that are capable of providing confidence and security building measures between the United States, China, Japan, India, the countries of South East Asia and ourselves.
The vehicle which now presents itself to do that is an institution which is called the East Asian Summit. It is something which Australia has been a member of since its beginning just five years ago.
Largely through Australian diplomatic effort we have secured admission to this body also for the United States and for Russia.
This is important because it brings all the principal players to the table with the mandate to discuss political, security and economic matters and to begin to form the rules of the road and the confidence and security measures that our region needs.
It's a very early step, but a necessary step, if these rising economic giants are not to be undermined by security policy misadventure around the region.
And I say to my friends in Asia and the Pacific this is now not just a matter for us to be concerned about in our neighbourhood. It is a matter for the world to be concerned about because if one of these economic giants was to collapse as a consequence of security policy pressure, the consequences for the rest of the world would indeed be drastic.
The fourth challenge is this: dealing with the threat of the proliferation of nuclear weapons — one of the greatest threats to peace.
Australia is an active participant in the non-proliferation field.
Since the United Nations convened the Nuclear Non-Proliferation Review Conference in March last year we have been active supporters of the implementations of its 62 recommendations.
To give effect to this, together with Japan, we've established a new cross-regional initiative with middle powers across the world dedicated to the implementation of the Nuclear Non-Proliferation Review Conference recommendations.
In particular we are focussed on two specific areas: the entry into force of the Comprehensive Nuclear Test Ban Treaty strengthened by IAEA safeguards; as well as to start what is called the Fissile Material Cut-off Treaty negotiations.
People may regard these challenges as remote to day-to-day business and the economy. I would simply remind people that security underpins all.
Dealing with the question of nuclear weapons proliferation, dealing with the question that arises from other threats to security, both state-based and non-state based, is fundamental to the stability necessary for economic activity to flow, open economies to flourish and for people's living standards.
The last point I would raise is where I began my talk this evening.
What I call the “global democratic deficit” is an important challenge for the future.
I've spoken so far about what is happening in the Middle East and in Egypt, but here is a figure I would simply remind you all of here this evening: the independent watchdog Freedom House in its annual rankings found that in 2010 more countries in the world were either “not free” or “partly free” than were free.
Let me put that in numbers. It graded 105 countries around the world as either “not free” or “partly free” compared to 89 that are free.
For those that assume that democracy is simply the inevitable condition of humankind, here in 2011 we should reflect on that analysis.
No one should allow, least of all in this great city of Athens, for democracy to fall off the international agenda as a norm for all states to follow.
Ladies and Gentlemen thank you for your attention this evening.
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