High Commissioner's Address at the National Defence College
Indo-Pacific Security Paradigm- Australia’s Choices
8 May 2017
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Thank you Major General Srivastava for your warm introduction. I’m delighted to have the opportunity to share perspectives on defence and security issues with senior military officers and civilians here at the National Defence College. You of course hosted our Prime Minister, Malcolm Turnbull, just last month and I am pleased to continue the conversation on challenges and opportunities for cooperation in the Indo-Pacific region.
Prime Minister Turnbull’s visit provided further momentum to an already very active bilateral relationship. The visit progressed our existing bilateral agenda, including our thriving education partnership. The Prime Minister was accompanied by Education Minister Birmingham and a delegation of 146, the largest ever combined education and skills delegation to visit India.
The visit also furthered our agenda in new areas including sports, health and innovation.
During the visit, Prime Ministers Turnbull and Modi talked about the enormous scope to expand the economic and strategic relationship between Australia and India as we continue to adjust to changing dynamics in the Indo-Pacific region.
Geopolitical and economic shifts open significant opportunities. But they are not without risk. As two democratic, liberal economies, Australian and Indian interests are converging and we are natural partners to establish new mechanisms and habits of cooperation in a new regional order.
Today I will examine the broader trends in the Indo-Pacific and what this means for Australian and Indian interests. I have essentially three core propositions:
First, the Indo-Pacific region is undergoing a prolonged and dramatic period of flux. This brings its own set of opportunities and challenges.
As a result, my second proposition is that we need flexible, adaptable and swift mechanisms of cooperation to manage the change in our region.
Finally, as two democratic, liberal economies, Australian and Indian interests are converging. We are natural partners to establish new mechanisms and habits of cooperation in our region.
The Indo-Pacific region
But first the semantics, for Australia the “Indo-Pacific” is as much a strategic concept as geographical definition. It recognises our distinctive position as a continent which faces both oceans and captures the maritime nature of the region.
Like India, Australia depends heavily on the oceans for trade. More than 98 per cent of Australia’s international trade by volume and 97 per cent of India’s trade by volume is carried by sea. Both our economies have a strong interest in free and secure trade routes throughout the Indo‑Pacific.
But more than that, the term Indo-Pacific brings India into the strategic frame of Australia’s region of interest and reflects India’s greater involvement in East Asian affairs, both directly and also institutionally through the East Asian Summit.
This terminology has also entered the Indian lexicon. Prime Minister Modi, External Affairs Minister Swaraj and Foreign Secretary Jaishankar have all referred to the Indo-Pacific. There may be nuances between us regarding where this strategic arc begins and ends, but broadly speaking, we share a similar view of the whole.
A region in flux
The Indo-Pacific region is undergoing a dramatic transformation. It is not one or two countries rising in power in an otherwise static environment. Rather, we are facing an extended period – some decades at least – where economic and strategic power relativities will be in constant change.
We do not know when, or indeed if, the shifts we see in the Indo-Pacific will reach a settling point.
A few examples to underscore the dramatic shift in power relativities:
- China is predicted to overtake the United States by 2030 as the world’s largest economy in market exchange rate terms.
- For its part, India is the fastest growing big economy in the world. India is expected to become the world’s third largest economy in US dollar terms by 2030.
- The Economist predicts that by 2050:
- Indonesia will leap from the 16th largest economy today into the top 10 economies;
- Vietnam may be one of the fastest growing large economies; and
- Established economies like Japan, South Korea and Australia will drop in relative GDP rankings.
Speculation on American decline is probably overbown. It is very likely that US primacy in the region will continue for some time yet. The United States is still predicted to be a top three economy by 2050. Its military and technological investments now will give it a sizeable edge in the future. All this is supported by immense soft power and influence in the region.
Right now, the defining feature of the region is uncertainty.
China’s actions in the South China Sea are adding to the uncertainty and we are again seeing a rise in tensions on the Korean Peninsula. Just last month North Korea attempted to test a medium-range ballistic missile, prompting a strong response from the US. Reportedly, North Korea may be on the verge of another nuclear test. Separately, China has protested the deployment of the THAAD anti-missile system in South Korea.
In reaction to uncertainty, and with a shift of economic weight to and within the Indo-Pacific, we are witnessing the rise of military capabilities.
By 2020, combined military budgets in the Indo-Pacific will probably exceed US$600 billion, matching military spending in North America for the first time.
According to the 2016 Defence Outlook by Deloitte:
- The Indo-Pacific is expected to drive 60 per cent of the global increase in defence acquisition, research and development.
- Nineteen countries in our region will account for one third of global defence budgets by 2020; and, specifically:
- China will build 30 new submarines and another new aircraft carrier.
At the same time that our region is dealing with internal challenges, it is also afflicted by external pressures.
The threat of terrorism is pervasive, unpredictable and highly adaptive. Prime Ministers Modi and Turnbull acknowledged in their Joint Statement that terrorism constitutes one of the most serious threats to peace and stability. It preoccupies nearly every government. The same technologies that have enabled greater connectivity, access, communication and economic opportunities have also contributed to the spread of terrorism and radicalisation, particularly among the youth.
Climate change is bringing significant impacts as sea levels rise and weather patterns change, affecting agriculture, industry and critical infrastructure. Policies to address climate change, for example expanding renewable energy sources, will also drive changes in the structure of economies in the Indo-Pacific.
The pace of technological change and the internet have political and social effects, as well as economic ones. News just travels faster. World leaders communicate by mobile phone, text message and twitter. Information is more fragmented. People are less likely to be influenced by large institutions, the government or the mainstream media, and political outcomes are less predictable.
All of this is to say that we face a number of challenges at a time of great transition in states’ economic activity, strategic weight and international ambition.
A strong platform of bilateral defence and security cooperation
In this environment, Australian and Indian interests are clearly converging. We have a strong basis of strategic alignment, cooperation and trust.
Our relationship is founded on common values. We share an interest in maintaining a rules-based system in our region and in regional security, including freedom of navigation and sea lanes of communication. We care about expanding economic opportunity and about democracy, human rights and individual freedoms.
We have the right ingredients to work together in the region.
A key outcome of Prime Minister Turnbull’s visit was the signing of the Memorandum of Understanding on Combatting Terrorism and International Organised Crime. This MOU paves the way for greater cooperation to tackle common threats including terrorism, cyber-crime and people smuggling.
The Prime Ministers also committed to deepening the bilateral defence relationship.
Our program of defence cooperation has evolved over a long history of military-to-military interaction. Australian and Indian soldiers fought side by side in World War I and many times since. Even today, our peacekeepers are working together in South Sudan.
Our training interactions date back to the 1960s and notably Australia’s current Head of State, our Governor-General Sir Peter Cosgrove, studied at this college in 1994. He often describes it as a key, formative stage in his career and one which he enjoyed tremendously.
Our defence engagement reached a new level following the agreement in 2014 of a bilateral Framework for Security Cooperation.
We held our first bilateral maritime exercise in the Bay of Bengal in 2015 and we will hold the second iteration off the coast of Western Australia next month. We held our first Army Special Forces exercise in October last year and the next interaction will be held later this year in Australia.
Annual staff talks between our Army, Navy and Air Forces are resulting in open dialogue and we are seeing regular unit-level visits between all three services. For instance in early April we saw a team of Royal Australian Air Force doctors visit to Delhi and Bangalore to exchange information and experience in aviation medicine practices. Last week a delegation of Indian Air Force Garud personnel were in Australia for a training exchange in Brisbane and next week we will have a delegation from Australia visit the Army Training Command in Shimla to discuss combined arms doctrine.
In addition we will be having a ship visit to Chennai by one of our Border Force vessels, Ocean Shield, where the crew will train and interact with Indian Coast Guard personnel.
The large number of defence activities we are now seeing indicates there is recognition in both Australia and India of our shared interests. More importantly, it reflects the respect and trust our two nations have built over time.
Each engagement activity forges personal relationships between our soldiers, sailors and airmen and women. It is these people-to-people links that are the foundation of defence relationship and will be the means by which we continue to take the relationship forward.
And while we are doing a lot, there is scope to do much more.
Australia is very keen to finalise an arrangement to better facilitate logistics support for combined exercises and training. Our ships practice replenishment at sea together and we should now do it for real.
We will continue to grow our service-to-service engagement and look forward to establishing a new bilateral Army exercise in 2018. We are looking to expand counter-terrorism and counter-IED cooperation with Indian Army and National Security Guard.
There may be opportunities for closer air force cooperation across common platforms with a view to humanitarian and disaster relief exercises in the future.
As maritime nations our Navy engagement is already strong but we would like to develop this further, increasing the complexity of existing activities such as our maritime exercise Ausindex.
Beyond bilateral - expanding habits of cooperation
Beyond bilateral cooperation Australia and India are looking to engage other close partners to form broader habits of cooperation, develop capabilities and shape the regions strategic outlook.
As always, we start with diplomacy.
The importance of dialogue is often underrated. But history has shown it can be an important means of building confidence and understanding among nations, to avoid miscalculation and resolve differences.
Regional institutions play an important role, in particular in establishing global norms. But they have limitations. Crises and transnational issues don’t respect the boundaries of traditional groupings or stay neatly in a single region.
So, small group diplomacy will matter more over time in the Indo-Pacific. Small groups, overlapping groups and so-called ‘minilateralism’ are important because every strategic issue we face is different and will engage different countries in different combinations.
We should look to establish a range of bilateral, trilateral, quadrilateral and small group mechanisms to enable us to shape developments and to respond to challenges and threats quickly and effectively.
At the policy level Australia and India have established a variety of trilateral groupings including the Australia-Japan-India Trilateral Foreign Secretaries dialogue which took place last week for the third time.
Policy dialogue works best when it is supported by practical cooperation.
Our militaries already work together in a number of multilateral exercises. The Royal Australian Navy has been a regular participant in India's multilateral maritime Exercise Milan and in 2016 the Australian Army participated in the multinational Exercise Force 18, hosted by India which was the largest land forces exercise ever conducted in India, involving 18 ASEAN Plus countries.
At the current time there is a coalition of nations, under the banner of the Combined Maritime Forces, working with China and India, to patrol the Arabian Sea and northern Indian Ocean on watch for piracy which has continued to be a menace in those waters.
We are also looking forward to India’s participation in Australia’s multi-lateral air Exercise Pitch Black in northern Australia next year.
Australia would also welcome an invitation to participate in India’s trilateral exercise with the US and Japan, Exercise Malabar.
A secure, stable and connected Indo-Pacific region is crucial for the security and prosperity of Australia, India and all countries in the region. Creating an order that is flexible, resilient and nimble will be vital to secure our collective future.
Prime Minister Turnbull, when he spoke here less than a month ago, said:
We are natural partners – today more than ever – and the Australian Government will continue to do all in its power to ensure that that partnership continues to flourish.
I have taken that as my commitment as well. And I look forward to working with you, and with the Indian Government, to build on that partnership for the security and prosperity of the Indo-Pacific region.