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Australia and the Illusion of being a G20 Power

27 Nov 2014
Peter Dean
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Further continuing a series sparked by the AIIA’s National Conference “Foreign Policy for a Top 20 Nation”, Peter Dean, fellow at the Strategic and Defence Studies Centre at the ANU, contributes his perspective as to whether Australia qualifies as a G20 power. 

Peter Jennings is right. Australia is a G20 power and has global interests. But those facts must be set alongside others, not so encouraging, that relate to Australia’s position on the global stage.   In all likelihood Australia has reached its economic peak when it comes to the league tables of global economic weight. Coming in at number 12 in 2014, Australia’s performance to reach those lofty heights has been nothing short of exceptional. That position and its corresponding economic clout make Australia a major world economic player. Australia’s high wages and high standard of living, its extensive social safety-net, world-class health and education systems, strong financial sector and dependable economic performance make it the envy of many in the world.

But those strengths are tempered by its small—and ageing—population (less than one-third of the UK’s, about one-fifth of the Philippines’, approximately one-quarter of Vietnam’s and less than one-tenth of Indonesia’s), its limited infrastructure, budget deficits and political division over a reform agenda. While Australia avoided the worst of the GFC it has poor productivity and its global competitiveness has been slipping since 2009. Its relative position vis-a-vis ‘rising’ countries in the region and around the globe means Australia’s economic standing will only come under more pressure in the future. Time is also not on our side.

Indonesia is projected to have the 10th largest economy in the world by 2030 (some even argue 7th largest), when its GDP will be twice Australia’s. Those vying for Australia’s position on the economic league tables also include the Republic of Korea, Spain, Mexico, and Turkey. Moreover, there’s little likelihood that Australia will be clawing its way up the G20 rankings. There’s a big difference between being in the bottom half of the G20 and being in the G8, the G4 or the G2. The G2’s combined economic clout is equal to the next nine largest economies in the world in 2014. So while Australia will remain a major economic player for some years to come—and potentially for much longer given the difficulties of managing sustained growth in emerging economies—in the end we’re a middle power, with some small-power pretensions.

So our G20 status needs to be kept in perspective and we need to recognise that in coming decades it’s highly probable our weight, significance and power both globally and regionally will decline. That’s hardly a strong platform for carving out a strategy of global focus and reach.

Still, Peter’s right to claim that Australia has global interests—in this highly-interconnected world most countries do. In order to promote and protect those interests Australia should continue to have a global edge to its foreign policy. It should continue to use its diplomatic skills and weight through multilateral institutions, bilateral relations, its alliance with the United States and its security partnerships in the region and beyond to further its interests.

But no country in the G20, beyond the US, is truly a global power. Like Australia, the rest pursue global interests but prioritise their strategic policy on areas much closer to home. While as Peter states ‘the UK, France, and Germany…don’t argue that their strategic interests stop at the Atlantic’, they also don’t structure their forces for operations in the East or South China Seas. I don’t see Brazil flying fighters in Iraq or putting ‘boots on the ground’ in the fight against ISIS, and while Japan is in the process of reinterpreting its constitution to allow the Japanese Self-Defense Forces to work alongside other militaries that’s hardly because its focus is on Africa or the Middle East.

A regional focus to Australia’s strategic policy is hardly an indicator of a ‘geopolitical cringe perspective’. Rather it’s a practical recognition of the difference between Australia’s fundamental strategic interests in the Indo-Pacific, especially in the South Pacific and Southeast Asia, and issues of strategic concern such as global terrorism, Iraq and the Middle East. Such an approach is also a reflection of the difference between Australia’s ability to use diplomacy on the global stage on one hand, and, on the other, the limits on its ability to use armed force in international affairs to achieve its strategic objectives. As the 2013 White Paper states, Australia must be cognisant in relation to its support for global security of the ‘limits of our capacity, given the priority of our other tasks’.

As I’ve noted elsewhere on The Strategist, that’s not to deny that Australia has interests in places outside the immediate region. But throughout its history Australia’s commitment of military force to regions such as the Middle East has always been dependent on a stable Asia-Pacific, one largely devoid of tension and major strategic competition—and that’s clearly no longer the case.

If it’s time, as Peter claims, for a ‘grown up’ discussion of Australia’s foreign and defence policy then surely one of our first calculations must be the limit of our power and reach. Otherwise Australia will end up with a strategic policy where it’s living well beyond both its means and capabilities.

Peter Dean is a fellow at the Strategic and Defence Studies Centre at the ANU, and one of the editors of Australia’s Defence: Towards a New Erapublished by Melbourne University Press in 2014. 

This piece was originally published by The Strategist. It is republished with permission.