Australian Outlook

In this section

Three Foreign Policy Certainties For Uncertain Times

23 Oct 2017
By Mukund Narayanamurti
Asialink Business CEO, Mukund Narayanamurti speaks at the AIIA National Conference 2017

How can Australia navigate international uncertainty to ensure its foreign policy works to secure the country’s prosperity?

Amidst the shifting tides of today’s global economic, geostrategic and political landscape, there is no question that we indeed live in uncertain times.

However, there is nothing new about this.

On the contrary, responding to uncertainty is at the essence of foreign policy and has been for decades, if not centuries. Indeed, “uncertainty is interwoven into human existence,” as Helga Nowotny, the pre-eminent scholar on uncertainty, would say.

So how can we navigate this uncertainty to ensure our foreign policy works to secure Australia’s economic prosperity?

Here are three absolute certainties we need to address.

1. We need policy by the people, for the people

To be relevant, our foreign policy must be by the people, for the people. It must represent the interests of all of Australia, and all Australians.

We need to move away from a tradition of elitist policy making. Collins Street, George Street and Barton do not represent Australia’s interests anymore. They never did. We cannot align our interests with that of other nations if we do not first correctly identify our own interests. We have made some progress on this front but more needs to be done.

For instance, we live in the age of cities and we’ve been blessed with exceptional mayors like Graham Quirk in Brisbane, Clover Moore in Sydney, and Robert Doyle in Melbourne. They are all deeply committed to positioning their cities as international cities. Their cities are respectful and coordinated with state and federal government initiatives, but they are leading rather than following the interests of these other two levels of government.

These vibrant and outward-looking cities are not contained to the state capitals. In regional Australia, for example, we only need to visit Warrnambool, Toowoomba, or Townsville. These hubs are proactively engaging with the Chinese market for investment and tourism while balancing some of the most complex economic and social challenges in the country.

Yet these stories from regional Australia rarely get air time. In contrast, our risk averse publicly listed businesses continue to dominate the mainstream debate with disproportionate coverage of their international engagement. It is disproportionate because, in reality, Australia invests (not trades) the same amount in China as we do in PNG, and we invest more in New Zealand than we do in all of Southeast Asia.

As recent research by Asialink Business, supported by PwC and the Institute of Managers and Leaders, found, 90 per cent of the boards and senior executive teams from our top 200 listed businesses are not Asia capable. This means that they don’t have the skills, knowledge and experience to conceptualise, design and execute strategies with Asian markets.

On the other hand, local and regional governments and small and medium-sized businesses are engaging with vision, committed leadership and a more balanced understanding of the risks of international engagement. We must better understand their interests going forward.

2. We need long-term thinking

The second certainty about foreign policy is that it has to be long term to deliver outcomes. If governments cannot be long term with their thinking, then how can their citizens, institutions or businesses?

Take Japan: in Japan, governments can change frequently, but long-term thinking prevails with Japanese institutions and businesses.

It is not unheard of for to consider growth strategies spanning hundreds of years. Japan’s large multinationals display a willingness to take big calculated risks that are unimaginable here in Australia.

So we need to break away from the short-term focus where Australian boardrooms are driven by quarterly returns, short management tenures and board rotations with an overly ‘conformance’ rather than ‘performance’ focus.

3. We need to learn faster

Finally, we need to recognise that economic prosperity is a function of global competitiveness. Innovation in its truest form requires us to learn faster than others to drive technological improvements and productivity. So we should consider how we can use foreign policy more as a tool to ‘learn’ rather than ‘promote’ Australian interests.

We have much to learn from Asia on innovation. For example, if we want to develop a space agency (while we have a budget deficit), then perhaps we should learn from the Indian Space Research Organisation (ISRO), not NASA.

ISRO, as it is commonly called, has sent an orbiter to Mars at one tenth the cost of NASA’s missions, and with a more ambitious research scope. We can learn from the Indians how to do more with less and break the Western model of thinking that low cost means low quality.

With the federal government’s new Foreign Policy White Paper just around the corner, reflecting on how foreign policy in an uncertain world can drive economic prosperity is particularly timely.

AIIA’s National President Allan Gyngell has written about the limited predictive abilities of white papers. In this same light, none of our previous foreign policy white papers could have predicted the response to the Asian or global financial crises. These papers couldn’t have predicted that one of the most important multilateral trade agreements of our time, the Trans-Pacific Partnership, may still have the potential to proceed without support from the United States, or that the Belt and Road initiative would include the majority of the world as the most important economic diplomacy initiative of the last 50 years.

Therefore, the next white paper would be well served to treat uncertainty as a given, rather than a factor that can be mitigated. This is a mind set, as opposed to a skill set.

While we build this national resilience, let’s embrace the three certainties impacting our foreign policy that are essential to securing economic prosperity: first, the need for more inclusivity in defining our national interests; second, a long-term approach to policy making; and third, using our foreign policy more to ‘learn’ rather than to promote, sell, or export our commodities, services and power.

Mukund Narayanamurti is the CEO of Asialink Business, the National Centre for Asia Capability. This article is based on remarks delivered to the AIIA National Conference on 16 October 2017.

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