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New Opportunities for Australia’s Middle Power Diplomacy in the South Caucasus

07 Jul 2022
By Dr Nina Markovic Khaze
President of the European Council Charles Michel speaks at the 23-24 June European Council, where MEPs welcomed the decision to open the EU’s doors to Ukraine and Moldova.  Source: European Parliament, Flickr,

The recent European Council summit demonstrated a willingness to potentially accept new states, like Ukraine, Moldova, and Georgia. Australia should follow their lead and engage further with Eurasia.

The recent European Council summit, held on 23-24 June, was historic. The conference granted Ukraine and Moldova official candidacy status for membership in the bloc, only four months after they submitted membership applications amid extraordinary circumstances. Georgia was recognised as a potential EU candidate state, just like Bosnia and Herzegovina which applied in 2016 but is yet to receive a formal candidacy approval. These developments grant new opportunities for Australia to increase its diplomatic clout in the South Caucasus and the former Soviet space. People-to-people links still form the backbone of Australia’s connection with this highly diverse area in Eurasia, but government and business ties have the potential for significant expansion.

Pearl Anniversary Reflections

The 30th anniversary of diplomatic relations in 2022 between Australia and three South Caucasus countries (namely, Armenia, Azerbaijan, and Georgia) offers a point of reflection for Australia’s middle power diplomacy as Russia increasingly militarises the region. At the recent Madrid Summit, which Australian Prime Minister Anthony Albanese attended before his brief visit to Ukraine, the North Atlantic Treaty Organization (NATO)’s new Strategic Concept declared Russia to be the “most significant threat” to its members’ peace and security. The Department of Foreign Affairs and Trade’s 2017 White Paper makes no mention  of the South Caucasus, but this should be altered in the next version. The region remains particularly vulnerable to geopolitical tensions and spill-over effects from the Russo-Ukraine war, including further conflict escalation, as it was seen in 2008 during Russo-Georgian war when Australia was asked for a military assistance but did not provide any.

Reduced Funding for Diplomacy in the Forward Estimates

The election of the Albanese Labor Government in May 2022 has offered a new chance for Australia to increase its diplomatic footprint globally, including in the former Soviet space which has become a major international security flashpoint. The most recent federal budget has projected in forward estimates a significant decrease in funding for diplomacy of $163 million: from $1.41 billion in 2022–23 to $1.247 billion in 2025–26. With Australia’s foreign aid also being predominantly Indo-Pacific focused, the government should support Australian businesses, diaspora communities and the private sector to engage in partnership with the federal government to promote “Brand Australia” more actively in this region. At the same time, Australia can work closely with its Quad and EU partners to promote democracy and good governance in the South Caucasus and Eurasia generally.

Australia’s democracy promotion activities are currently quite limited in scope. This capacity has been further eroded during the COVID-19 pandemic and Australia’s international isolation amid a long period of border closures. Since the abolition of independent AusAID programs after four decades in 2013-2014, Australian diplomats were more focused on promoting their economic agenda in the development policy rather than on democracy promotion per se. This too, can be addressed in the next iteration of DFAT’s White Paper during Foreign Minister Penny Wong’s term.

Eurasia is a contested geopolitical space where Australia could target its development assistance programs more actively to promote peace-building measures and good governance, including by supporting the establishment of an independent judiciary, democratic institutions, and impartial media reporting. Australia’s closest partners, such as the United States and the EU, are already actively promoting democracy in Eurasia; there is no reason as to why Australia’s middle power diplomacy should not become more democracy-focused in its foreign assistance and trade. The Australia-EU Free Trade Agreement, which the Albanese Government is attempting to resuscitate, will also contain democracy promotion and human rights provisions.

Diaspora Connections

Diaspora ties may help too, as Australia’s growing ethnic communities from former Soviet republics have an underutilised “linking up” potential and could act as a bridge between Australia and their ancestral lands. For instance, the galvanising response and coordinated support of the Ukrainian community in Australia alongside the government’s assistance to newly arrived Ukrainian refugees in Australia has demonstrated the significance of diaspora communities linking Australia with the world during international crises. In the South Caucasus, mineral rich Georgia and Armenia, and oil and gas abundant Azerbaijan, a close ally to Israel, offer untapped opportunities to expand Australia’s trade in goods and services which can be underpinned by proactive and business-focused community relations. There have been inter-diaspora tensions in Australia, especially between Armenian and Azerbaijani communities in recent years, which threatens social cohesion and could be reversed by focusing more on business and less on politics.

Australia’s Ad Hoc Engagement with the South Caucasus

During the previous Labour Government, Prime Minister Kevin Rudd appointed Australia’s renowned Liberal Senator, Dr Russell Trood, as Prime Minister’s Special Envoy for Eastern Europe, the Balkans and the Caucasus. During his two-year term, he visited the Caucasus in 2012 to lobby for Australia’s non-permanent, two-year seat at the United Nations Security Council for the 2013–14 term. Since then, there has been a growth in parliamentary links with individual countries from this region but no concerted effort to permanently increase Australia’s diplomatic and economic footprint in the largely forgotten region by Australian policymakers. Given the major change in strategic circumstances following Russia’s war against Ukraine, it is time for Australia to reassess its funding of diplomacy globally and engage South Caucasus countries and wider Eurasia in its diplomatic, education and training programs. Australia’s varied diaspora communities can also be brought into wider Australian Government’s efforts to bring peace, stability and prosperity to South Caucasus countries and improve business ties including the trade in services which is currently on the low end. With Australia’s struggling education sector, new Eurasian markets offer untapped opportunities and potential to utilise Australia’s middle power diplomacy more strategically.

Dr Nina Markovic Khaze (PhD Pol. Sc., ANU) is a sessional academic at Macquarie University, political analyst for SBS radio and Director of Communications at Solve Law, Manly. She was previously Vice-President of the AIIA’s ACT Branch, and senior parliamentary researcher for Europe and Middle East.

This article is published under a Creative Commons Licence and may be republished with attribution.