Conference on the Arab World, Iran and the Major Powers: Transitions and Challenges

Chancellor, Vice Chancellor, Director and conference delegates. I'mabsolutely delighted to have the opportunity to be here this morning.Congratulations to the Centre on its 20th anniversary.

The first Bulletin issued by the Centre in 1994 included an article onIsrael, Syria and Hezbollah by Bob Bowker. Bob was listed as 'Research Scholarat the Centre and officer of the Department of Foreign Affairs and Trade'. Bobis now an Adjunct Professor with the Centre for Arab and Islamic Studies, havingbeen Australia's Ambassador to both Jordan and Egypt. His career provides a goodexample of a phenomenon I strongly believe in – the cross-fertilisation ofideas, between Government and academia, to bring the finest, most informed andconsidered views to bear on our foreign policy and our international relations –absolutely in Australia's national interest in a very tangible way.

The Australian Government is determined to adopt a considered approach topolicy development and implementation. We will pursue policies that are focusedon our core interests and are targeted to ensure effective outcomes. On thedomestic front, we are working to secure Australia's financial future and haveaddressed people smuggling activity.

In foreign affairs, I have put the aid budget on a sustainable footing,announcing last week a new aid paradigm that will ensure our developmentassistance achieves results and is directed at where it can be most effective.

The aid policy is indicative of this government's approach – championing creative, innovative and results-oriented policies, particularly inour engagement with the world. An initiative where our foreign policy finds itsexpression is the New Colombo Plan, which will increase Australia's engagementwith countries in our region and make a tangible difference to our understandingof our part of the world. The New Colombo Plan, building on the vision of theoriginal Colombo Plan, is I believe, one of the finest examples of innovativeresults-driven policies.

We are providing young Australian undergraduates the opportunity to live,study and undertake work experience internships with countries in our region.This policy builds individual capacity, but even more importantly, buildsunderstanding between societies. The people-to-people links, working towardcommon goals, the sharing of ideas, and living and working amongst one another –this is the path to peace and prosperity. With a deeper and strongerunderstanding about each other's cultures and religions we will break down themisconceptions and the inequalities from which conflict is so often born.

These are signature policies that will have material impact on Australia'ssecurity and prosperity. Our goal is to represent and build upon our values – topromote them to the wider world, to project and advance Australia's reputationas an open, export-oriented economy, and a democracy based on freedom ofexpression and respect for the rule of law.

These are the values that guide us in our interactions with our neighboursand our partners abroad, including in the Middle East. Events unfolding andescalating in the Middle East remind us of the limits on the AustralianGovernment to solving global problems but this is not to diminish in any way theimportance of such issues, but to ensure our responses contribute to animprovement in any situation. It's critical that in reacting to dramatic changesin world events, our actions are considered, measured, and effective. This is aguiding principle of the Government's approach to the Middle East.

We recognise the Middle East is of global strategic significance.Developments materially impact on international security and economicprosperity. Australia has had important international political, security andeconomic interests in the Middle East since Federation. And this will continue.

What the world has witnessed in recent weeks in Iraq and over some time inSyria has been deeply concerning, and it has been destabilising. The emergenceof this international terrorist group, Islamic State of Iraq and the Levant –ISIL, on this scale in this vital part of the world, threatens the stability andsecurity of the whole region and by extension, global security. If we everneeded a reminder of the complexity and challenges of this region, the conflictin Syria and Iraq is it.

The violence in Iraq requires a political, not a military, solution. We joinothers in calling on Iraqi leaders to work closely together to combat theviolence, and ensure safety and security for the Iraqi people. The AustralianGovernment will support Iraq's efforts in this regard. We have stronglycondemned the actions of ISIL, as it continues its campaign of violence acrossIraq. The loss of life in recent weeks is deeply distressing, and we have graveconcern at the widespread displacement of Iraqis and damage to property.

We are concerned by the growing humanitarian consequences. I announced lastweek that the Australian Government will provide $5 million in immediateassistance to support the hundreds of thousands of people fleeing from theviolence in north and northwest Iraq. Australia's assistance will help providefood, medical assistance, tents, access to clean water, hygiene kits and thelike. We are working with the World Food Programme and the United Nations HighCommissioner for Refugees to deliver our aid and ensure that it reaches thosewho need it most.

Of course, the bloody and protracted civil war is also still raging in Syria,with a devastating impact on refugee flows and the spill over of violence onneighbouring countries. We have joined the UN Security Council condemnation ofthe violence, and played a leading role as co-author of UNSCR 2139 in efforts tosecure greater humanitarian access to the millions of people suffering withinSyria itself.

We are now working on a follow-up resolution that will provide forcross-border access for humanitarian agencies, will require specific actionsfrom the Syrian regime to support humanitarian relief and will include triggerprovisions for further Council measures in the event of continuingnon-compliance. And we continue to provide assistance for the Syrian crisis –around $53 million this year, and almost $133 million since the crisis began.

This includes $20 million in assistance that I announced for the "No LostGeneration" schooling and education initiative during my visit to Jordan andLebanon in April where I saw firsthand the scale of the crisis and the impact onneighbouring countries. I visited a refugee registration centre in Amman run bythe UNHCR. I heard the heart-rending stories from mothers and their children inparticular. Our support for the Syrian crisis demonstrates Australia'scommitment to help the people and countries affected by this enormous challenge.

Developments in Syria and now Iraq also present Australia with a domesticsecurity challenge. The influx of foreign fighters, with at least one hundredAustralians fighting in the region today, raises the prospect of radicalisedAustralians returning home with terrorist skills and an extremist orientation.The Australian Government is taking steps to prevent people becoming involved inthese conflicts, and will detain and prosecute any Australian found to beengaged in terrorist activity in the Middle East or elsewhere. We will alsocontinue to engage regional countries and our other partners on the foreignfighter challenge – our individual and collective security interests requirethis.

Turning to other seemingly intractable issues, the Australian Government isdisappointed by the lack of progress on the Middle East Peace Process. I commendthe efforts of United States Secretary of State John Kerry, but it is incumbentupon leaders on both sides to seize the opportunity before them. We havepersistently urged Israel and the Palestinians to return to negotiations towardsa just and lasting two-state solution, existing side-by-side in peace andsecurity, within internationally recognised borders.

Australia's longstanding commitment to contribute to the peace process in apractical way is reflected in the ongoing development assistance we provide tothe Palestinian Territories. Since 2010 Australia has provided over $200 millionin Palestinian aid. This year Australia will provide the highest ever level ofannual funding for Palestinian aid – over $56 million – a three per centincrease compared with last year.

In the past week I've pleased to have the opportunity to engage withdiplomatic representatives from Arab and Islamic countries and I note that manyof them are here today. First in a meeting in Parliament House where wediscussed developments in Iraq and prospects for the Middle East Peace Process,and I also hosted a morning tea yesterday for Ambassadors from the Middle Eastat the Department of Foreign Affairs and Trade. I think this regular engagementhighlights the Australian Government's willingness to discuss important issuesand maintain an open and frank dialogue with countries of the Middle East.

Iran's nuclear program poses a serious threat to regional and internationalsecurity.

We support the P5+1 efforts to negotiate a comprehensive agreement to resolveinternational concerns. The importance of Iran is demonstrated by its policiesbeing a focus of this conference. We hope that Iran will adopt a moreconstructive approach in its regional and international policies. I am concernedthat Iran will remain a major issue on the international agenda for some time tocome.

We are living through a tumultuous period in Egypt, which has seen its fourthpresident in as many years, a sharp rise in political violence and terroristactivity, and an economy in need of major reforms to satisfy the aspirations ofits youthful population.

I cannot speak about Egypt without commenting on the case of Australianjournalist, Peter Greste. I am deeply disappointed that Mr Grestewas convicted earlier this week and given a severe custodial sentence of sevenyears. Peter Greste is a highly respected journalist who we believe was simplyreporting on the political developments in Egypt. On the basis of theevidence that was presented, we simply do not understand the verdict.

The Australian Government respects the outcome of the recent elections inEgypt. But we are concerned that the verdict from Mr Greste's trial sendsabsolutely the wrong message about Egypt's commitment to a transition todemocracy. For democracy must embrace freedoms including a free press.This cannot be how the new Egypt wishes to present to the world. We willcontinue to press the Egyptian Government at every opportunity to resolve thiscase so that Mr Greste can come home and be reunited with his parents andfamily. We welcome the statements in support of the Australian Government'sposition from leaders across the world.

A deteriorating security and volatile political situation in Libya is alsohaving an impact on the wider region, given porous borders and the proliferationof arms. Despite the initial optimism of the Arab Spring, the overall trajectoryhas been uneven to say the least. We understand the inherent attractiveness ofopen, free market economies and democratic societies – like our own – wherepeople can chose their own governments.

Weak institutions, struggling economies, high unemployment and risingextremism are direct challenges to political progress and stability. However weremain hopeful the countries in the region and their people will have a muchbetter future.

While this region is complex, and often volatile, it is also an area of greateconomic dynamism and potential. The Australian Government is not focused onlyon the challenges and the negatives. We are also focusing on the vastopportunities presented by the Middle East. Economic diplomacy is a key pillarof the Government's international engagement, and the Middle East region offerssignificant potential - just as traditional diplomacy sought peace, so economicdiplomacy seeks prosperity. Since becoming Foreign Minister I've repeatedlydrawn the link between economic prosperity and greater political stability.

The Middle East is in many respects incredibly wealthy, economically powerfuland strategically placed on the crossroads of the world - a region thatrepresents for Australia great future opportunities, especially for increasedtrade and investment.

The IMF estimates a regional GDP growth rate in 2013 of 3 per cent, while forGulf Cooperation Council (GCC) it's over 4 per cent. There are alreadysignificant trade and investment links: in 2013, Australia's two-way trade wasworth over $16 billion, up over 15 per cent. Trade with our largest partner, theUnited Arab Emirates, grew by 24.7 per cent to $6.4 billion and the UAE is nowour 15th largest trading partner and 13th largest export market.

Investment into Australia was estimated to be worth over $21 billion in 2013,and this almost certainly understates the actual amount.

There are enormous opportunities for us to build a prosperous and a stablefuture together. The growth of the middle class in the region will drive demandfor higher end goods and services. A middle class predicted by the BrookingsInstitute to rise to over 234 million by 2030. Increasing numbers of youngconsumers wanting high quality foods, education, tourism, and health services –the services and products that Australia is well positioned to provide. Theincreasing number of international events being held in the region, includingthe UAE hosting Expo 2020, offer opportunities for Australian expertise inconstruction, management and hospitality services.

The Gulf Cooperation Council is a key focus of our efforts and last yeartwo-way trade with the six GCC countries – Bahrain, Kuwait, Oman, Qatar, SaudiArabia and the UAE – was worth $12.3 billion. The combined wealth of the GCCcountries was over US$1.6 trillion in 2013. These countries alone are home tofour of the world's top 10 sovereign wealth funds, managing assets of over US$2trillion - making the Gulf countries a centre for global capital.

Individual Gulf countries are realising their unique economic potential bybuilding on their energy strength, diversifying their economies, broadeningtheir skill bases and engaging more deeply with other regions, includingAustralia and Asia. The region is an aviation hub and there are now 140 flights,I think I've been on every one of them, between the Gulf and Australia eachweek. These aviation links will have a transformative impact on our commercialand people-to-people links.

Gulf countries are investing in rapid infrastructure development - with plansto invest around $3 trillion in the infrastructure, leisure and tourism sectorsby 2020 thus diversifying their economies. Gulf countries have opened up theirtrade and labour markets to emerge as important regional markets for food,consumer goods, weapons, and technologies associated with power generation andwater and waste management. Food and agriculture, energy, and chemical andmineral processing are all areas of growth. The region has a strong servicesindustry, with strengths in education, law, engineering, financial advice andIT.

The Australian Government will work to assist business to take advantage ofthe strong synergies between our economies. That's why I am working with mycolleague, Minister for Trade and Investment Andrew Robb, to seek the resumptionof our Free Trade Agreement negotiations with the Gulf Cooperation Council.

The Australian Government has recently finalised strong Free Trade Agreementswith South Korea and Japan, and we are confident that a Free Trade Agreementwith the Gulf Cooperation Council would similarly bring enormous mutual benefit,cementing strong economic ties with the region. The signing of the Australia-UAEAgreement on Cooperation in the Peaceful Uses of Nuclear Energy offersAustralian suppliers the opportunity to bid to supply uranium for the civilenergy program.

Australia already has a large contingent of people working in the Gulf States- over 35,000 Australians and 360 Australian companies - across a diverse rangeof industries, including aviation, finance, education, energy, health,engineering, construction and telecommunications.

So ladies and gentlemen, there are significant opportunities for Australiaand the Middle East to work together, to build sustained economic growth and tobenefit all our populations. With creativity and innovation, with a focus onresults – I believe we can achieve a great deal.

This conference provides an important opportunity to focus on the biggerpicture - to discuss political issues confronting the region, but to alsoconsider its possibilities. Australia and the Middle East share many ties. Ourcommunities are enriched by those with Middle Eastern heritage who have madeAustralia their home. The Middle East will remain important to Australia, withgrowth in commercial links a priority for the Government. We have many economicties that we can use to build a very prosperous partnership well into thefuture.

The Middle East is a rich and wonderfully diverse part of the world –birthplace of three of the world's great religions, the crossroads of traderoutes for many centuries. And now a rapidly growing and youthful population –ready to fulfil the promise of a brighter future, wanting to be educated, toparticipate in the world's economy in meaningful and prosperous ways. Thesepeople will face the future with an acute awareness of the conflict many of themhave seen and experienced. And they will be looking for change, and for hope.Australia wants to be part of that.

Promoting our position as an open democracy, committed to freedom and therule of law, Australia has a role to play, and I believe in the future we canbuild in partnership a future together - that defies present troubles, andcontinues long into the future, as long as the culture of the Middle East is old- to build on the traditions of trade, of prosperity, of scholarship, to weatherthe storms of the current period, to build a bright and peaceful world.

I wish you all the very best for your deliberations today.