A small rich country - revisiting threads in Australia's future

Back in March 2009, Saturday Morning Musings - threads in Australia's future attempted to draw together some of the threads of my thinking. In this post, I want to return to one  thread.

"In economic and population terms", I then wrote, "Australia is a small rich country perched on the edge of the Asian land mass.

In population terms, we presently rank around 53 in the world. In economic terms, 14 or 15th. In military terms, the combination of our wealth with access to technology makes us something of a regional super power.

On current ABS projections, the Australian population in 2051 is projected to increase to between 30 and 40 million people. While this is a large increase in absolute terms, we still drop sharply in global population rankings.

We will also drop sharply in economic ranking.The process here will be a little slower in terms of country rankings because of the big gap between Australian GDP and that holding in countries behind us.

Of more importance, the gap between our GDP and the countries in front of us is likely to widen very sharply. We may retain our nominal place in the G20, but our share of world GDP is likely to fall from the current level of around 1.4% to below 1%.

In military terms, we are going to struggle to maintain a military edge as other countries catch up in technological terms."

Nothing has changed since I wrote this, although the subsequent mining boom has somewhat concealed the economic and demographic trends, at least in our own minds. The country's relative decline in population and GDP rankings is underway, while our ability to maintain a military edge is certainly under a degree of threat.    . .
In 2009, I suggested that this basic pattern had driven Australian trade, foreign and defence policy. I also thought that successive Australian Governments have been quite clever in these areas and especially in trade policy.

At one level, we had worked for freer global trade, while also establishing a growing network of free trade agreements that reflects the dynamics of future world economic power. The Australian Government's greater emphasis on Africa - previously the ignored continent - was the latest building block. From this point, I thought that our life was likely to get a lot more complicated. How we handled those complications would be very important to our future as a nation.

Life has indeed got a lot more complicated! From my perspective, I did not expect the effects of the global financial crisis to linger in the way they have. I completely failed to foresee the Arab Spring with its subsequent domino effects, including the rise of ISIS. I did not expect that terrorism would, once again, become such a dominant theme,

In March 2009, I chose to write about four issues.

The first was the likely Pacification of Australia.

Australia used to think of itself as a Pacific Country, but then we started to ignore the Pacific as our focus shifted to Asia. This was a mistake, one that the Howard Government had to struggle to correct.

Absolute population numbers in the Pacific are not high in absolute terms. However, they are high relative to the populations of Australia and especially New Zealand. They are also growing quite fast. By 2050, there is likely to be one Papuan for every three of the then Australian population.

Australia, I suggested, had a powerful vested interest in the resolution of Pacific problems. If we failed, we were going to face powerful pressures on our borders. Even with success, we were still going to see a rapid rise in the absolute numbers of Melanesians and Polynesians living in Australia.

I should note that I had no problem with this. Apart from my dislike of the way Australia had forgotten its Pacific heritage, my underlying concern lay in the the way that evolving problems especially in PNG might have wash-on effects in this country. I am actually less concerned about this one than I was, although it remains an issue.  

The second issue was the importance of ASEAN.

ASEAN is critical to us along three dimensions; it sits across key trade routes; it is Australia's northern strategic buffer; and it is a key economic partner. The successful development of and relations with the ASEAN countries and especially Indonesia was arguably, I thought,  the key strategic issue from an Australian perspective.

I give Australia a fail here. We have literally lost sight of ASEAN. We do not have a coherent policy, at least one that I can understand, for dealing with our nearest neighbors as a group.  

The third issue I identified was the need to find a balance in our evolving relations with the US, China, Japan and India. This was seen as perhaps the key strategic issue, although I would still have placed ASEAN first from a longer term perspective. The need for this balance is still a continuing meme in Australian foreign policy.

The last issue was the need to avoid Australian hubris and arrogance.

As I had commented in some of my posts on Mr Rudd, I got very uncomfortable when I saw an Australian leader big-noting this country. Among other things, this played to a continued inward looking prejudice within the Australian community about our superiority and place in the world.

I would, I suggested, feel far more comfortable if our approach were more low key, displaying greater recognition of the need to be subtle and clever if we were to properly manage the challenges we faced as a country.

What can I say? I would mark this area as a double F.For time reasons, I will deal with this in another post.