The rise of the Asia Pacific and the role of creative middle power diplomacy

Professor Bernt Seminar Series, Oslo University

Norway

Speech. Check against delivery, E&OE

19 May 2011

On the 10th of February this year, your Foreign Minister, Jonas Store said in his foreign policy address to the Storting that:

"We see new power constellations in the global world community of which Norway is such an integrated part. The world is no longer dominated by two rival powers, as was the case during the Cold War… The world has become multi-polar, with more, and to some extent new, centres of power. This is the 'new normal'".

12 days later, on the other side of the world, I set out Australia’s foreign policy interests in the Middle East in an address to our National Press Club and said the following:

"The truth is that both political power and the range of threats we now face around the world are much more diffuse... we are entering an “age of non-polarity”: a world dominated not by one or two or even several states, but rather by dozens of actors exercising various kinds of power."

This is also part of the new normal – from security policy through to environment policy.

The essence of globalisation is a contraction of the time and space of international transactions. And this phenomenon is often profoundly destabilising but also profoundly enriching.

And for globally active states like Australia and Norway, this provides new opportunities for what I call creative middle power diplomacy.

The point is that Norway and Australia may be poles apart but our view of the world is not as different as our geography would suggest. And in the age of globalisation we should all agree that geography matters less and less.

Norway may have a population of just under 5 million but you have an important place in the world and your reach is far.

Norway is a strong democracy.

You are among the world’s top 25 economies - an economy that is strengthened by a robust oil and gas sector. Your GDP growth forecast of 2.9 per cent in 2011 is impressive given much of Europe is still feeling the effects of the Global Financial Crisis. Your sovereign wealth fund is the world’s second largest and has assets representing one per cent of global equities.

Norway thinks globally. You always have. From the days when Trygve Lie became the first Secretary General of the United Nations. You have a strong commitment to the United Nations. You have a strong commitment to development, democracy and to human rights. Like Australia, you believe in the principle of good international citizenship. And like Australia, you seek to make a difference in the world.

This global entrepreneurial tradition of the Norwegians is perhaps best summed up – not by the Vikings – but by the centenary we celebrate this year of Amundsen’s great achievement in reaching the South Pole in 1911.

Australia sees itself as a middle power with global and regional interests.

Australia is the world’s 13th largest economy. We are the fourth largest in Asia.

We are one of the oldest continuing democracies in the world. Australia is a multicultural, diverse and tolerant society. One in four of Australia’s 22 million people were born overseas. Since 1945 almost seven million migrants have come to our shores. We speak more than 260 languages and identify with more than 270 ancestries.

We are the sixth largest country in the world by land mass. We have the world’s third largest maritime zone. And we are a vast continent straddling the Indian Ocean and the Asia-Pacific: a region to which the global centre of economic and strategic gravity is inexorably shifting as the new century unfolds.

We are also one of the oldest allies of the United States.

We are a founding member of the United Nations, the G20 APEC, the East Asia Summit and of course, the Commonwealth. We are an active member of, or partner with, most of the major councils of the world.

We seek to build and strengthen the global and regional rules-based order.

In particular, we seek to make a difference for small and medium countries, through our commitment to development, democracy and climate change.

We do what we say.

Australia and Norway share strategic interests, particularly in the strengthening of a global rules-based order where all nations – great, middle and small – can prosper from the globalisation that the 21st century has brought.

The great paradox of the 21st century is that while global power is more diffuse, the challenges that we are facing will require greater co-operation than ever before.

Climate change, resource security, nuclear non-proliferation and terrorism all reflect this common reality.

New ways of co-operation will need to be deployed if we are going to be able to rise to these global challenges.

We cannot just rely on super powers. As Secretary Clinton herself has stated, the United States does not and should not “go it alone”. Rather, the US is looking to exercise leadership in new ways – to connect and create partnerships that have the capacity to solve shared global problems.

It is in this way that I believe creative middle powers are well placed in bringing together major, regional and small powers to shape and implement solutions.

Australia and Norway’s recent activism during the wave of change that swept over the Middle East and North Africa is a case in point.

Australia was diplomatically active in helping to build support for the Libyan no-fly zone — particularly across the countries of the Arab League.

Norway was one of the core countries that deployed military assets to enforce the Libya no-fly zone.

Australia is the third largest contributor to humanitarian assistance in Libya after the United States and the European Union. We have been active in working with the international community for solutions through the international contact group on Libya. Earlier this month, I attended the Libya contact group meeting in Rome where Australia is a full member.

Australia and Norway are also making a significant difference in Afghanistan.

You have 500 troops in Faryab province and you provide substantial development assistance.

Australia has around 1550 military personnel and 50 civilians on the ground in Afghanistan as part of the NATO-led security mission. We train and mentor the Afghan National Army 4th Brigade and build the capacity of the Afghan national police. We are key players in the Provincial Reconstruction Team in Uruzgan.

Both Australia and Norway recognise the fundamental importance of investing in health, education, roads and good governance to provide the long term foundations for Afghanistan’s economic and social stability.

Progress there is fragile, but it is real and measurable. I have seen first-hand the difference that our efforts are making to the lives of Afghans, having visited Afghanistan for the fifth time in March this year.

10 000km of roads have been restored. New schools have been opened meaning 6 million children, including 2 million girls, are getting an education. Health care has been extended to 85 per cent of the population.

For Australia, our commitment in Afghanistan is part of our wider commitment to peacekeeping across the world.

Our soldiers are among the more than 65 000 Australian personnel who have been deployed to more than 50 UN and other multilateral peace and security operations since 1947. We currently have over 3,000 Australians serving where they are needed in places such as Sudan, East Timor, the Solomon Islands and the Middle East.

More broadly, Norway and Australia are like-minded in our approach to development assistance.

We are both strongly committed to the Millennium Development Goals. Philosophically, we cannot accept that in the 21st century, nearly one billion people have been left behind as the world enjoys greater social and economic prosperity.

You are the world’s most generous aid donor per capita, allocating over one per cent of your Gross National Income to foreign aid.

Australia has set the target of increasing its ODA to GNI ratio to 0.5% by 2015.

Though Norway is one third of the size of the Australian economy, our ODA budgets in absolute terms are of a similar size.

Many things will influence the shape and success of our development efforts, but the effectiveness of our programs will be critical if we are to maximise the impact of our aid to improve the lives of poor people.

One area where we can make a difference is by making our aid more transparent. Providing information on aid spending, the performance of projects and results helps developing countries with their planning, reduces unpredictability and improves accountability. And we are both working with the international community to improve this transparency.

Your geographic position sees much of your aid go to Africa, the world’s poorest continent.

Much of Australia’s aid, for the same reason, goes to the Asia-Pacific region where two-thirds of the poorest live. 22 of our 24 closest neighbours are developing countries. Also, as a country of both the Pacific and Indian Oceans, we have an interest in assisting small island states with the challenges they face.

In the South Pacific, where Australia has particular responsibilities, we currently deliver half of all global development assistance.

But we are ramping up our engagement with Africa. As you are with the Asia-Pacific.

Among Norway’s innovative aid programs is your US$1 billion partnership with Indonesia as a part of a UN program aimed at Reducing Emissions from Deforestation and Forest Degradation in Developing Countries, the UN REDD+ program.

The partnership is driving reforms on UN REDD+ institutional arrangements and policies in Indonesia.

Last December, Australia joined the Indonesia REDD+ partnership. We see it as an opportunity to build on our longstanding co-operation with our nearest neighbour through the Indonesia-Australia Forest Carbon Partnership.

Other areas where Norway has applied its creative diplomatic energies include:

  • The lead you’ve taken on Middle East initiatives as the chair of the Ad Hoc Liaison Committee;
  • Your work on the 2005 Comprehensive Peace Agreement in Sudan;
  • Leading efforts at peacemaking in Sri Lanka; and
  • You have taken a prominent role in working with Burma.

Australia likewise has looked to enhance the rules-based order through the agency of creative middle power diplomacy. And we have done this in partnership with others:

  • In the negotiation of the Chemical Weapons Convention and the Comprehensive Test Ban Treaty;
  • In the Cambodian peace settlement;
  • In the establishment of the Cairns Group of free trading nations;
  • The establishment of APEC;
  • The establishment of the G20; and
  • By helping shape the emerging regional architecture in the Asia-Pacific where the need is great.

This brings us of course to the critical story of the 21st century – the rise of China and its impact on the Asia Pacific century.

And here again we are seeking to apply the craft of creative middle power diplomacy – to build institutions in our region which are at present too thin to cope with the political and security challenges of the future.

And here I draw extensively on remarks I made while addressing SIPRI yesterday in Stockholm.

Strong and sustained growth in Asia is changing the world in which we live.

Asia is home to 3.8 billion people – over half the world’s population.

As the productivity of this massive workforce continues to catch up to that of the developed world, economic and strategic weight is shifting towards Asia.

Of course the dominant chapter in this unfolding story is the People’s Republic of China. According to the IMF, the Chinese economy will have grown around 25-fold over the 25 years to 2015.

To put this into context, Australia and China had economies of comparable size back in 1990. By 2016, China’s economy is likely to be seven times the size of Australia’s.

The IMF predicts that in purchasing power parity (PPP) terms, China’s economy will surpass that of the United States by 2016. In nominal terms, China may become the world’s largest economy by 2030.

It is not only China that is growing, of course.

India too is firmly on the rapid path to big economy status; Japan’s economy remains the world’s third largest; Korea and Australia are major economies, and Indonesia, Vietnam and others in East Asia are growing fast.

The Global Financial Crisis accelerated this shift in economic power: in the five years from 2005-2010, in purchasing power parity terms:

  • the Eurozone grew by an accumulated 15%;
  • the US economy by 16%;
  • India by a massive 67%; and
  • China by a staggering 69%.

To put this in perspective, in purchasing power parity terms (PPP), together China and India accounted for not even a tenth of the world’s gross domestic product in 1990.

Twenty years later they accounted for a fifth.

In 2020, Australia’s Treasury predicts that they are likely to account for more than a quarter of the world’s GDP. In 2030, they are projected to make up a third of world GDP.

In fact, by 2030, wider East Asia may account for over 40 per cent of global GDP.

The great success of Asian growth brings with it rapidly changing power dynamics and new security challenges.

Coupled with economic growth has been an increase in military spending in the region. Over the last 20 years, East Asian military expenditure has grown by 129 per cent, to $222 billion. China’s military expenditure grew by 565% over the same period.

Of course, the United States is still spending a lot more than any other nation when it comes to military expenditure indeed nearly six times as much as China.

Even so, in 1990 US military spending was nearly six times more than that of East Asia – nowadays, it is just over three times as much.

For the past 40 years, the region has largely enjoyed peace and stability, which has underpinned its economic prosperity. But, there is a long list of unresolved territorial disputes and associated political frictions that could undermine this stability.

They include:

  • North Korea’s irresponsible and reckless behaviour;
  • Rising tensions over the East China Sea and the South China Sea;
  • Russia’s territorial claim over Japan’s Northern Territories;
  • The Taiwan Straits, remain mercifully stable, although we should not be complacent on this score; and
  • In the wider region, there is long-standing issue of India, Pakistan and Kashmir.

Against this background, Asia needs more robust regional frameworks to address security policy issues.

So the big question for us in the Asia-Pacific century will be this: how can the region maintain the strategic stability that has underpinned its growth over the last 40 years?

Across Asia, we see a very brittle set of security policy relations. And in Asia, we lack the sorts of mechanisms and institutions that Europe has developed to manage security challenges.

Our wider region has no institution at present like the EU. There is not even an OSCE. There has never been the equivalent of a Helsinki process.

In South East Asia, the Association of South East Asian Nations (ASEAN) has led us some of the way.

In the 1970s, this group of 10 countries was riven by strife. 35 years later, ASEAN has brought a significant degree of regional trust, peace and development that was unimaginable back then.

What we now need is to expand that sense of common security understanding across the broader region.

That is why, for instance, Australia has worked so hard to develop the concept of an Asia Pacific community.

Before we began on this process, none of the existing organisations brought the main players around one table to even begin to develop a common dialogue on security, let alone develop common security norms for the region.

APEC (the Asia Pacific Economic Cooperation) did not have a political/security mandate – nor did it include India.

The East Asian Summit, the other vehicle through which an Asia Pacific community could be developed, did not include the United States.

That is why Australia argued strongly in ASEAN, and in Washington, for US inclusion in the East Asia Summit.

This finally came to pass in October 2010 when the invitation was issued, although the first Summit meeting including President Obama will not be held until November 2011.

The expansion of the East Asia Summit to include the United States and Russia now means:

  • We have an institution comprising all the key players of our region including the United States, Japan, China, the Republic of Korea, Russia, India, the ASEAN states and Australia;
  • We have an institution with a mandate to cooperate on the full range of political, security and economic challenges confronting the region; and
  • An institution at summit level that is capable of making strategic decisions for our region’s future.

This was our core objective in proposing the concept of an Asia Pacific community – a regional institution with sufficient membership and mandate, and meeting at summit level – to begin to carve out a regional rules-based order for the future.

This work has barely begun.

Beyond putting the right regional architecture in place, how we engage China will be a big part of the answer to ensuring regional stability.

Let me outline the key parts of the conceptual framework we in Australia deploy in engaging China.

First, bilaterally it is important to pursue the type of honest friendship best encapsulated by the Chinese word “zhengyou” – a friendship that acknowledges where disagreements and differences may lie.

The world has to free itself of Cold War paradigms in engaging the China of the 21st century. Both in China and many parts of the West, the dichotomy between being characterised as either pro-Chinese or anti-Chinese has to be consigned to history.

There is a third way of engaging China, one which draws on the enormous areas of agreement we have, while working diligently and effectively on those areas of disagreement.

We seek to engage China through enhanced regional architecture, which China supports.

An increasingly prosperous China that is fully and constructively engaged in regional and global affairs is good for all.

This morning I spoke at length to Prime Minister Stoltenberg on the question of climate change.

We spoke of the continued impact in the world – for example, in the melting of the polar ice caps, and its implications for the low-lying fragile states, particularly island states.

We also spoke of the need for all the nations of the world to cooperate to keep global temperature increases within 2 degrees Celsius.

With the economic growth now underway in the Asia Pacific region and the projected carbon intensity of that growth, this challenge will be great indeed.

China and India alone are set to contribute massively to the future global carbon footprint – as major western economies have done in the past.

Our challenge is this: how to enable the peoples of Asia, Africa and Latin America to be lifted out of poverty and into prosperity without irretrievably breaching planetary boundaries.

This is the great task which lies before us all.

That is also part of the challenge the UN Secretary General’s High Level Panel on Global Sustainability has been presented as well.

25 years after the path-breaking report on Sustainable Development of former Norwegian Prime Minister Gro Harlem Brundtland, the UNSG has tasked us afresh with how to update this vision – and how to give this new vision practical effect.

In short, how do we integrate the concept of sustainable development into the existing global development agenda as reflected in the Millennium Development Goals?

So on climate change we face three challenges in the 12 month period ahead.

First, the Durban Conference of the UNFCCC which is only six months away – building on the success of Cancun, which in turn, built on the outcomes contained in the Copenhagen Accord on temperature limits; combined action by developed and developing countries; as well as the beginning of a global system of measurement, reporting and verification.

Second, the completion by early next year of the Global Sustainability Report – building in part on the work of climate change finance already completed under the capable co-Chairmanship of Norwegian Prime Minister Stoltenberg.

And third, the Rio +20 Conference itself in May next year.

The global climate change and broader environmental sustainability agenda will therefore be particularly challenging for the year ahead.

The problem has not gone away, whatever the climate change deniers might claim.

Global action remains necessary. Action in the Asia Pacific is necessary. And that once again is where creative middle power diplomacy from countries like Australia and Norway can potentially play a useful role.

The complexities are great. But so are the risks to the planet.

Creative diplomacy therefore has a range of possible applications across the world.

Regionally in the emerging challenges of East Asia and the West Pacific.

Globally in continuing challenges such as climate change and broader planetary sustainability.

As well as in continuing seemingly intractable political and security problems facing the international community such as the Middle East Peace Process.

Of course, Norway has long been involved through the Oslo Accords.

Australia also remains deeply engaged with both the Palestinian Authority and with Israel – with whom we have good relations, and where we, like our Norwegian colleagues, fully appreciate the difficulties at hand.

We believe that the opportunity for a peace settlement needs to be grasped with urgency – not least because of the uncertain political trajectories we now confront across the Arab world.

And Australia welcomes President Obama’s continuing and critical contribution to the process.

So the challenges are great.

But countries like Australia, like Norway and others, committed to enhancing the global and regional rules-based order can and do make a difference when we put our minds to it.

And that is why relations between our two great countries have such a rich future – as we combine our intellectual, diplomatic and policy energies to respond together to the great challenges of our time.

END

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