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Net Assessment of Australia

Jan. 22, 2016 Australia has the 12th largest economy in the world and it is the sixth largest country by land mass. It is without question the most powerful nation in the South Pacific, yet has struggled to achieve one of its most important strategic goals.

Net Assessment

|December 13, 2017

The defining feature of the South Pacific is that it is dominated by one country, Australia, which enjoys the position of being the most influential and important actor in the region. The fact that Australia is both a country and a continent is not just an interesting piece of geography trivia; it is the reason why a net assessment of the South Pacific must be, for all intents and purposes, a net assessment of Australia. It has the 12th largest economy in the world in terms of GDP and it is the sixth largest country in the world by land mass. The other countries in the South Pacific that surround Australia – New Zealand, Papua New Guinea, the Solomon Islands and numerous other small island states – pose no threat to Australia by themselves. Indonesia is the largest well-populated country in the vicinity, but it is thousands of miles away from Australia’s population core and also has rarely been unified or strong enough to pose a serious security threat. In fact, Australia is the only significant power in the world that has never faced a land-based existential threat from a neighbor. No country – not even Japan in World War II – has attempted a ground invasion of Australia since British ships seeking to establish a penal colony made landfall in what is today Sydney in 1788.

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A net assessment of the South Pacific then must look different than all of the other regional assessments Geopolitical Futures has written thus far. Rather than modeling the balance of power and relationships between a region’s key powers, a South Pacific assessment must begin by asking the question: What is Australia’s grand strategy? Because Australia is disproportionately large and powerful compared to its immediate neighbors, its grand strategy is the defining feature of the region. Therefore, in this special case, our net assessment for Australia will act as our regional assessment for the South Pacific.

Grand strategy is a commonly used concept in geopolitics. It can be a vague term, but we use it with intention. A country’s grand strategy is defined by its permanent geographical features and the political and social circumstances that constrain its actions. In geopolitics, we study the intersection between these elements – essentially, geography and power. Geography is so important precisely because, more so than any other factor, it is for the most part unchangeable. A country’s geography imposes a reality that cannot be altered by government policies or sheer force of will. In this context, ideology becomes relatively meaningless. The Australian colonies sent troops to fight the Second Boer War in South Africa from 1899 to 1902, just as Australia began to bomb Islamic State targets in Syria in 2015 at the behest of the United States. Though these two actions were and are justified by the government using extremely different ideologies, an understanding of Australia’s strategic imperatives demonstrates that it engaged in both of these foreign military endeavors for the same strategic reason. The ideology ultimately matters little.

Australia’s Grand Strategy

Australia is the only major country in the world that has been largely secure from a land invasion for all of its history. Even the United States has at times faced land-based threats. Had Santa Anna not been defeated at the Battle of San Jacinto, which ended in Texas gaining independence from Mexico in 1836, the U.S. might look very different than it does today. However, despite Australia’s high degree of security, the country has been at war for almost a third of its existence, since unifying and declaring independence in 1901. Furthermore, the majority of the over 100,000 soldiers who were killed in battle died in far away places across the world.

There is an inherent contradiction here. On the one hand, Australia has a highly secure geographic position when compared to any other country in the world. On the other hand, it has a long history of engaging its military forces in conflicts. To explain this, we must begin by defining the layers of Australia’s strategic interests. These interests are:

  1. Unify the continent under one rule.
  2. Protect the coastal approaches to the continent.
  3. Intervene in conflicts in the South Pacific in order to prevent any other nation from gaining a foothold in the region, which can be used to challenge Canberra’s power.
  4. Protect global shipping lanes so that Australian imports and exports can move freely throughout the world.

It is the fourth strategic imperative that explains the contradiction between Australia’s security and its appetite for foreign military expeditions. In large measure, Australia has already achieved the first three of these strategic goals. However, the problem that Australia has faced throughout its history and will continue to face for many future generations is that it cannot achieve the fourth imperative on its own. Unlike the United States, which enjoys the benefit of having the largest system of connected, navigable waters in the world running through its heartland in the Mississippi River, much of the Australian interior is inhospitable to large-scale human settlement. The ring around the continent is where Australia’s cities are located, with its largest cities based in the southeast end of the island. Almost half of Australians live in Sydney, Melbourne and Brisbane, and more than three-quarters live in urban areas. Despite being the sixth largest country in the world by total area, Australia has only the 51st largest population with approximately 23 million people. Australia’s needs outstrip its domestic resources.

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As a result of these geographic realities, the lifeblood of the Australian economy flows via the shipping routes used in global trade. In describing Australia, George Friedman wrote in The Next Decade that “Australia is like a creature whose arteries and veins are located outside of its body, unprotected and constantly at risk.” Australia needs help defending this external circulatory system and the currency with which it has secured that help has historically been denominated in blood.

Strategic Imperatives During the Colonial Period

In order to understand Australia’s current objectives and strategy, we need to first look at the circumstances that led to its formation as a country. When the British arrived in Australia in 1788 with the intent of colonization, the first order of business was to subdue the native population and to impose order over the new colony. According to the Australian Bureau of Statistics, the exact number of indigenous people living on the continent at the time is unknown but the number has been estimated at somewhere between 315,000 and 750,000. The battle between the colonists and the natives was not a conventional war, but rather a century-long period of small fights and skirmishes between both sides. As a result of both disease brought over by the Europeans and the superior technology of the British and then Australian military, colonial forces subdued the continent with relative ease – only about 2,500 Europeans died in battle during this period.

From 1788 to 1870, when each of the six Australian colonies assumed defense responsibilities with their newly formed colonial militias, British regulars defended the colonists, cleared the native population and policed the new colony. Although British troops were there to protect the colonists from foreign attackers, they were involved almost exclusively with putting down occasional rebellions, as at the Battle of Vinegar Hill in 1804, at Bathurst in 1830 and the Eureka Rebellion in 1854. In addition, the 1808 Rum Rebellion saw British officers in the New South Wales Corps depose the governor of the New South Wales colony and place the colony under military rule. The Battle of the Eureka Stockade has a particular resonance in Australia today and is often identified as a pivotal moment in the development of a greater Australian identity and democracy. This may be true, but it was also an example of British troops and colonial police putting down an insurrection and declaring martial law.

While British infantry regiments were there to maintain the rule of law, the British navy also made sure that the Australian colonies were protected from potential attacks by sea. From 1788 until 1859, the Royal Navy kept detached naval units in Sydney. In 1859, Great Britain established a permanent Australia Station in the South Pacific, which they handed over to the Royal Australian Navy in 1913 – 12 years after the six colonies formed the Commonwealth of Australia.

One of the remarkable things about Australian history is how quickly the fledgling colonies were able to achieve some of the basic strategic imperatives necessary for a unified state governing Australia. Despite the colonial population centers being dispersed, an Australian identity began to emerge quickly and there was relatively little conflict in unifying the country. By 1870, the colonial militias were strong enough to defend the colonists from whatever land-based threats emerged. Furthermore, all of the colonies, except Western Australia, had small naval forces of their own. While these were not ships with blue-water capability, able to operate across deep oceans, they were able to defend the Australian coast and intervene in other areas of the South Pacific if necessary. From 1861 to 1864, Australian colonies sent naval forces and fighters to New Zealand to aid the colonial government there in its war against the Maori.

Over 30 years before Australia was created, the colonies had sufficient capability to control their territory on the continent, to defend themselves from potential attacks along the coast and to intervene in a limited way in other conflicts within the region. All the while, the world’s first true global maritime power used its Royal Navy to ensure that Australia’s line of supply to the British Empire and the rest world was safe.

World War I: An Ideological Shift

When Western Australia, New South Wales, Queensland, South Australia, Victoria and Tasmania came together in 1901 to form a federation that was called the Commonwealth of Australia, thousands of citizens from the new state were already at war over 6,000 miles away in South Africa. From 1899 to 1902, the British Empire and its South African colonial subjects went to war with the descendants of Dutch-speaking settlers, who had arrived in what is today South Africa in the 18th century. In July 1899, two months before the war began, Queensland offered troops to Britain. By the following summer, whether by choice or British request, Queensland, New South Wales and Victoria had all sent between four and six contingents to fight for British control over South Africa. Over 16,000 Australian troops were sent to fight in a war two continents away and over 500 died.

The Second Boer War is not an event that is thought of much in parts of the world outside Great Britain and its former colonies. But it is an important part of Australian history because it demonstrates just how close the relationship was between Australia and Great Britain. At the time, despite the surge of Australian nationalism and the declaration of a new unified country, many Australians still saw themselves, if not as British subjects, as part of the commonwealth family nevertheless. But there is also a deeper truth here to observe. In 1901, the new Australian nation still depended completely on Great Britain for any naval capability beyond its immediate vicinity. Australia’s fate was inextricably bound up in a tight military relationship with the empire and so, when the opportunity arose, those living in the Australian colonies answered the call. And the fact that Australia was at war thousands of miles away helping to fight another country’s battle underscores the strategic paradox at the core of Australian strategy.

At first, Great Britain did not support Australia’s development of its own mature naval capabilities, preferring to maintain its dominant relationship with the former colony, until the specter of World War I began to cast its shadow. However, a surge in naval construction by Germany changed Britain’s position and, by 1911, London was supporting the creation of the Royal Australian Navy, which by October 1913 boasted a fleet consisting of a battlecruiser, three light cruisers and three destroyers.

When World War I broke out in 1914 and Britain declared war on Germany, Australia was quick to follow suit. Australian Prime Minister Joseph Cook declared, “when the empire is at war, so is Australia.” But the First World War was to be a major turning point in defining Australia’s identity as a nation for two key reasons. The first is that the new Australian navy proved to be a formidable force and the country could now safely say that its first three strategic imperatives had been achieved without any doubt. Joint Australian-French naval forces enabled New Zealanders to take German Samoa. Australian forces also attacked and controlled German New Guinea and other small strategic islands in the Pacific throughout World War I.

The second is that World War I also marked the moment in history where the interests of Australia and the British Empire would diverge and this split would be irrevocable. Australia’s population was approximately 4.9 million during the war and over 450,000 Australians enlisted, equivalent to 38.7 percent of males between the ages of 18 and 44, according to Australian historian Ernest Scott. Of those enlisted, about 60,000 died. Moreover, the Gallipoli Campaign, a battle in 1915 in present-day Turkey that claimed 8,000 Australian lives, in hindsight was a paradigm-shifting moment for Australia. The perceived needlessness for which Australians died at Gallipoli led to the conclusion that, while Australia would choose to go to war many more times in the future, it would do so to defend Australia and not simply out of loyalty to Great Britain. Here, the ideological construct of Australian military action shifted – but the strategic reality stayed the same. Australians simply had to justify the military expense in a different way.

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World War II brought to an end the British Empire’s dominance of the world’s oceans. In its place, the United States emerged and, during and after World War II, the relationship Australia once had with Great Britain was replaced by its relationship with the United States. The two sides needed each other in World War II. Australia was never threatened with a land invasion from Japan during the war, but Australia was directly threatened by Japan’s attempt to control the Pacific and Indian oceans. For the United States, Australia’s strategic position became key during the war. Australia served as a depot for U.S. forces to build up and support their attacks on the Japanese in the Pacific.

Since World War II, Australian troops have fought in all of America’s major wars: Korea, Vietnam, Iraq (twice), Afghanistan and now in the fight against the Islamic State in Syria. This understanding was initiated during World War II and, shortly after hostilities began in Korea, solidified in a 1951 collective security agreement called the Australia, New Zealand, United States Security Treaty (ANZUS).

Geographic and Economic Vulnerabilities

Earlier in this net assessment, we described Australia’s extremely secure geographic position. And indeed, Australia is essentially a highly defensible island fortress. However, it remains insecure in several regards. Australia is truly an isolated country. And while this isolation is an advantage for some aspects of its defense, it is also the source of Australia’s greatest vulnerability and the reason that Australia will not, in the foreseeable future, be able to achieve its fourth strategic imperative on its own. This vulnerability requires Australia to continue to cooperate closely with the United States in the realm of security, defense and active military engagement. But before we examine what Australian strategy looks like with this in mind, we must define Australia’s vulnerability in more concrete terms.

Australia’s greatest weakness is its reliance on sea lanes to overcome its isolation and to import and export raw materials and goods. Between exporting wool to Great Britain in 1901 and its overreliance on iron ore exports today, Australia has always relied heavily on trade and would not have become the 12th largest economy in the world without it. However, Australia can only trade commodities and other goods by sea. The foundation of the Australian economy is keeping exports competitive and making sure they can leave the country and imports can enter.

This makes the Australian economy extremely vulnerable. In terms of exports, Australia is disproportionately dependent on raw materials, particularly iron ore and coal. Furthermore, Australia is significantly exposed to China, which has reached the limits of its low-cost, high-growth export driven economy. Indeed, China, Japan and South Korea together accounted for almost 60 percent of Australian exports in 2014, and China alone accounted for almost 34 percent. China’s economic decline in 2015 had a negative effect on Australia. According to reports from China’s customs agency, through July of 2015, the decline of Chinese demand for Australian imports had already resulted in losses of approximately $15 billion for Australia – or 1 percent of GDP.

Australia is also dependent on imports, particularly of crude and fuel. Despite the fact that Australia is the world’s ninth largest energy producer, 90 percent of the country’s transport fuel was imported in 2014, according to a report commissioned by the National Roads and Motorists’ Association. Of the 29 countries that are members of the International Energy Agency, Australia routinely has the lowest oil supply, often under the 90 days of stockpiles that the IEA makes a criterion of membership.

Although Australia’s Mid-Year Economic and Fiscal Output Report released in December was slightly better than expected, the decline of commodity prices driven by low Chinese demand has lowered projections for Australian growth and the budget deficit has ballooned to over $27 billion. The demand for coal, iron ore and other industrial minerals may recover before other commodities, but this is dependent on increased demand in Europe and the United States. It is inconceivable that European demand will rise enough in 2016 and impossible for the United States by itself to pick up the slack, although this is a possibility in the next few years.

However, Australia’s vulnerability is not the negative economic effects it is exposed to as a result of fluctuations in demand for its exports or disruptions in its supply chain. Australia’s vulnerability lies in the fact that the country’s own military resources are not capable of defending the foundations of its economy. Australia has the economy of a great power but it lacks the ability to ensure its desired way of life. As was the case in 1788 and 1901, Australia today still must outsource a key component of its grand strategy.

Current Australian Strategy

Australia continues to be defined by the four layers of its grand strategy. This has led to intervention in regional conflicts, whether in the Indonesia-Malaysia confrontation from 1962 to 1966, or in East Timor in 1999, as well as more minor deployments in Papua New Guinea and the Solomon Islands. This strategy has also led to the development of positive relationships with the countries that directly affect Australian security and trading interests. From this point of view, Australia’s relationship with Indonesia is crucial, but so is its relationship with South and East Asian countries. The Strait of Malacca, located at the tip of the Malay Peninsula, has become the world’s busiest trade route, with roughly two-thirds of the world’s oil and a third of the world’s bulk cargo transiting to and from the Indian and Pacific oceans. Australia maintains strong relations with both Singapore and Malaysia as a result.

Australia’s strategy also requires maintaining a unique relationship with the United States. Indeed, Australia has the same kind of relationship with the U.S. that it used to have with Great Britain. However, this relationship is also changing in subtle ways. The role the U.S. wants Australia to play now has less to do with supporting military adventures in different conflict zones and more to do with enforcing a balance of power in Asia.

These changes began to take shape with the Nixon Doctrine. In 1969, during a stopover in Guam, then-President Richard Nixon said that, though the U.S. would keep all of its treaty obligations and provide a nuclear shield for all free nations, it would no longer provide the primary manpower for the defense of other countries if they were attacked. Instead, the U.S. would offer military and economic support and expect the nation involved to assume primary responsibility.

The Nixon Doctrine has been largely forgotten in the United States – at the time, it was a predictable statement by a U.S. president, as the Vietnam War and the credibility of the American government had deteriorated. But it was a major development in Australian strategy. The ANZUS Treaty remained in effect, but even the possibility that the United States would pull back is something Australia could not ignore. As a result, after the Vietnam War, Australia, to the extent it could, sought to define a more self-reliant defense policy that prioritized developing capabilities to operate independently in Asia as well as relationships with major countries important to Australian interests.

The United States still guarantees Australia safety, and so long as its navy is the world’s most powerful and ensures that global trading routes are free and secure, Australia’s national strategy will be linked to American interests. But the United States is also shifting away from a foreign policy focused on direct intervention towards maintaining a balance of power between regional leaders throughout the world, including China and Japan. This makes Australia one of the United States’ most important allies in managing relations in East Asia. Not only does Australia offer the U.S. a prime strategic location, but it can also help the United States pursue its goal of ensuring that neither will dominate the region.

From our perspective, neither China nor Japan will become a regional hegemon in the next 10 years. China’s economic miracle is subsiding and its biggest concerns are domestic right now –many of its moves in the South China Sea are as much for popular consumption as for strategic gain. Japan has demographic and economic issues of its own that it must face. But Australia does not have the luxury of being an ocean away from developments in East Asia and its economy is deeply exposed to the region. Therefore, Australia will continue developing its political relationships and its military capabilities to take as active and independent a role as it can in the region.

But it’s also important to remember that this is only possible because Washington has Canberra’s back. The Royal Australian Air Force made headlines in December when it released an audio recording of a Chinese warning issued to an Australian surveillance aircraft that was on a freedom of navigation flight over the South China Sea. Australia followed the incident up with fighting words, as senior Australian defense officials and Prime Minister Malcolm Turnbull himself flatly stated that Australian planes and ships will go wherever international law permits them. Australia can make such statements because it knows it has the full force of the American navy to back it up, since it shares an interest with the U.S. in keeping freedom of navigation and shipping lanes in the South China Sea and around the world free and open. Australian troops may be called upon to serve abroad in foreign conflicts less – but that is because the dominant global maritime power right now has a greater interest in a strong, active Australia than it does in support for operations that it is trying to stay out of and avoid. Should that dynamic shift, Australian strategy would change with it. The imperative in the end is to be a part of a global system of trade whereby Australia’s economy can function – all of Australia’s actions must be seen through the constraints and obligations of its grand strategy.

Conclusion

Australia is a country of subtle contradictions. It is isolated and secure, yet a critical part of its survival is too vulnerable for Australia to defend on its own. There is a resilience and a grittiness to its founding myths – stories and poems of colonists hacking new lives out of a sunburnt country – and yet it is the 12th richest country in the world. Australia’s population centers are spread far apart, separated by thousands of miles of harsh territory, but there is a well-defined Australian nationalism and identity in spite of the geographic barriers that would normally preclude their development. And despite the fact that it has never been seriously threatened with invasion, it has produced hundreds of thousands of soldiers, many of whom have given their lives thousands of miles away, the majority of the time ostensibly fighting the battles of other countries.

Geopolitics tells us that, while Australia is secure in many ways, it has a fundamental weakness – it cannot alone defend itself from attack. Australia is a country that depends on maritime trade, but it does not have the resources necessary to defend its economic interests from more powerful countries. Unable to extend the armor of the Australian continent around these economic supply lines, Australia leverages its strategic position and a country’s most valuable resource – its people – in order to acquire the naval might necessary to secure its well-being. For the foreseeable future, this means continuing to pursue a tight military alliance with the United States. In the near term, this will involve less emphasis on support of American military expeditions abroad, and more on Australia serving as a strong anchor for American interests within the South Pacific and increasingly throughout Asia. In the long term, it means one can always understand Australia’s actions by keeping in mind those permanent characteristics that have always and will always define the country.

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