Event ReportsPublished on Jun 19, 2012
Underlining the need to develop an India-US-Australia trilateral, Mr. Rory Medcalf of the Lowy Institute says the recent US pivot to Asia is an opportunity for this relationship to burgeon.
Australia should become part of relationship between India and China

With the US pivot to Asia and Australia increasingly looking towards the India Ocean region, it needs a comprehensive strategy to deal with the changing scenarios in Indo-Pacific region, according to Mr Rory Medcalf, Director (International Security Program) of the Lowy Institute for International Policy, Australia.

Giving a talk on "Managing uncertainty: Australia’s evolving relation with the US, China and India" on 19 June 2012, Mr. Medcalf highlighted the concern regarding the short-term thinking among the Australian policy makers. He pointed out how the changing nature of the emerging world has opened up Australia’s policy dilemmas.

Mr. Medcalf asserted that now is the best window of opportunity to prepare for the on-going changes. The dynamism of the region will be good for Australia, despite the prospect of stability being questionable. The relationship between India and China will shape the way Australia makes its decisions in the future, he said.

Mr. Medcalf said, with the rise of China in particular, there is a need to balance the economic gains with the security concerns. For the first time in its history, Australia has developed strong economic linkages with a country which is not its ally, he pointed out. On the other hand, there is a concern regarding how a powerful China will behave in the international arena. However, the relations cannot be viewed in isolation without taking America into account with whom Australia share a historical relations.

Despite the uncertainty, India and China are expected to grow significantly in the long term, and this is going to be reflected in their power and influence. China is already expanding its military capabilities and so is India. According to projections, the future of defence budgets in Asia is going to be significantly large; which would mean that Australia will have to make the appropriate changes as well.

Mr. Medcalf also outlined some of the strengths of Australia. Namely, a very rich supply of natural resources; which includes the fact that Australia exports more than half the food it produces. He also laid claim to the fact that Australia has a well developed social order and a very strong democratic system. This is reflected in their resilient multiculturalism, with 25% of their population being immigrants.

A point of debate that was highlighted by Mr Medcalf was the changing definition of Australia in the region. With the growing engagement of India and China, there is a divide between Australia being an East-Asian unit, an Asia-Pacific unit, or an Indo-Pacific unit.

The growth of both India and China has had a positive impact on the Australian economy. China is Australia’s largest export market with the latter exporting 70% of their iron ore to China. India too is a significant market for Australia with coal exports playing a major role. However, there is a scope for broadening its economic relationship with India. Investments in energy and food security are critical. There are concerns in Australia regarding foreign ownership of farmlands; but they also need the foreign investment. The US still remains the largest investor in Australia. Uranium exports have also been a topic of discussion of late. Australia, originally, did not export to India and China; it was a hindrance to the development of Australia-India bilateral relations. Nonetheless, Medcalf illustrated the pragmatism of the Australian policy makers in their decision to start exporting uranium to India.

Mr. Medcalf said Australia also sees the expanding military capability of India and China as a potential area for partnership in tackling transnational security concerns. While the potential for partnership with China exists, there are serious limitations due to a significant trust deficit. Medcalf pointed out certain positive signs in their relationship; such as Australia maintaining the dialogue with China despite the break-down in US-China relations.

He said Australia’s security tie with India is of less concern. There are numerous points of convergence in the security concerns of the respective countries. Terrorism threats in India are an issue for Australia as well. Australia is also interested in the Indian Ocean region, opening a scope for maritime cooperation with the Indian Navy. Both nations have been slow to recognize one another as potential partners. This is accentuated by the Australian security thinkers being uncertain of India’s role in the future. However, the two countries have made significant inroads in their relationship with the signing of the Security Declaration in 2009. Concerns regarding Australian military ties with Pakistan, as part of Australia’s role in the coalition, were also discussed. Certain apprehensions were expressed and it was suggested that Australia should rather focus on building Pakistan’s policing capability rather than training their military.

Mr. Medcalf underlined the need to develop an India-US-Australia trilateral. He noted that the recent US pivot is an opportunity for this relationship to burgeon. There is, however, a definite political caution regarding the relationship. Similar nervousness, he felt, also exists in the developing of the Australia-Japan-India-US quadrilateral.

Discussing Australia’s future in this changing environment, Mr. Medcalf remarked that there will be a need to adopt a hybrid strategy; balancing between engagements and hedging. There is a need to strengthen their military capability as soon as possible. He also elucidated on the need for strengthening its alliance and engaging in security ties with other partners such as Japan, Indonesia and India. He observed some troubling signs which were reflected in the White Paper and emphasized the need for Australia to work hard to be a part of the relationship between India and China.

Mr. Medcalf noted that the reduction of US budget doesn’t necessarily mean a decline in their power. However, the manner of US involvement in the South China Sea and Chinese EEZ will pertinent in the provocation of China.

Prof. C. Raja Mohan, Distinguished Fellow, Observer Research Foundation, who chaired the event, noted the need to focus on the positive historical interactions between India and Australia and how it can be used to further improve relations between the two countries. He also made the assertion that India needs to look beyond the activities of US and China, and develop its relationship with the median powers.

(This report is prepared by Arvind John, a Research Intern, at Observer Research Foundation)

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