Australia-India relations and Indo-Pacific Security dynamics
Address to the National Defence College by Australian High Commissioner, H E Harinder Sidhu
2 May 2019
(check against delivery)
It gives me great pleasure to join you all today.
This is the fourth time I have had the privilege of addressing the NDC. And I’d like to extend my sincere thanks to Commandant Vice‑Admiral Srikant for inviting me to speak to you all yet again!
The college’s well-earned reputation for cultivating high quality strategic analysis and its strong history of producing future leaders (including our own Governor-General, General Sir Peter Cosgrove) is why it is my favoured location to share my latest thinking.
Today, with both Australia and India in the midst of election campaigns, it is timely to take stock of our strategic relationship. So I want to do two things.
First, I want to pause and reflect on the changing character of the India-Australia relationship and our respective approaches to the Indo-Pacific.
Second, I want to look forward and sketch the broad outlines of what I see as emerging priorities in our relationship.
In doing so I want give a sense of where our partnership is situated in the context of a rapidly changing regional order.
Australia’s Indo-Pacific Policy
When I spoke to the NDC last year, I outlined the key features of Australia’s then recently released Foreign Policy White Paper, the associated Indo-Pacific strategy and India’s increasingly prominent role in our thinking.
I mentioned then that our Indo-Pacific policy comprised six main elements:
1. Strengthening our alliance with the United States - which is central to Australia’s approach to the Indo–Pacific
2. A strong and constructive relationship with China, noting Beijing’s greater capacity to share responsibility for supporting regional and global security.
3. Working closely with the region’s major democracies, bilaterally and in small groupings. Central among these are our relations with the United States, Japan, Indonesia, the Republic of Korea and of course India.
4. Supporting ASEAN centrality and unity, which includes a plan to ensure we are a leading security, economic and development partner for Southeast Asia.
5. Supporting regional trade, investment and infrastructure building so that they are inclusive and based on market principles. We know from long experience that open, outward-looking regional economies strongly connected to global markets are vital to maximising economic growth and helping guard against protectionism and strategic rivalry.
6. Finally, the White Paper outlined plans to boost defence engagement to enhance the capacity of our regional partners to manage security challenges.
Looking back, what strikes me is how much progress we have made, both together and individually in grappling with our region’s challenges over the past 12 months.
Implementing our Indo-Pacific policies
Only days after my address to the NDC last year, Prime Minister Modi unveiled India’s own Indo-Pacific vision at the Shangri La dialogue.
Underlining the importance of supporting the development of an open, inclusive Indo-Pacific order, Prime Minister Modi’s eloquent address echoed many of the themes in our own Foreign Policy White Paper.
To support the implementation of this vision India’s External Affairs ministry has moved to establish a dedicated Indo-Pacific division.
In December, I attended the inauguration of India’s Information Fusion Centre for the Indian Ocean Region. The Fusion Centre is a key example of Indian leadership in the Indian Ocean region. The new centre will be critical to strengthening regional maritime security. Australia is pleased to be sharing information and contributing staff to the centre.
India has also deepened its engagement with Southeast Asia, most notably upgrading its relationship with Indonesia to the level of a Comprehensive Strategic Partnership.
And finalising construction of the Sittwe Port in Myanmar, completing one of India’s signature infrastructure projects in Southeast Asia.
These are important signals of India’s seriousness in implementing its ‘Act East’ policy and broader Indo-Pacific agenda.
For our part, over the past 12 months Australia has also started the transition from the vision phase to the hard yards of implementation.
The centre-piece of our implementation efforts to date has been a major step up in our engagement with countries in the South West Pacific.
The Pacific is our backyard and we want to ensure it is a region that is secure strategically, stable economically and sovereign politically.
So in October 2018, Prime Minister Morrison announced a large suite of initiatives under our ‘Pacific step up’. Some of particular note are:
- the creation of a $2 billion Australian Infrastructure Financing Facility for the Pacific. And providing Australia’s export financing agency an extra $1 billion in callable capital to support investments in the region;
- providing majority funding for undersea telecommunications cables to Papua New Guinea and Solomon Islands;
- supporting Fiji to redevelop its Blackrock Peacekeeping and Humanitarian Assistance and Disaster Relief Camp into a regional hub for police and peacekeeping training and pre-deployment preparation; and
- supporting the Papua New Guinea Defence Force’s plans to upgrade the strategically located Lombrum Naval Base in Manus Province.
We have also moved to further boost our already deep and broad engagement with our partners in Southeast Asia.
Building on our position as ASEAN’s longest-standing dialogue partner, our relationship reached new heights in March last year with the convening of the ASEAN-Australia Special Summit.
And at the most recent ASEAN-Australia summit in October, the Prime Minister announced a new $121 million Southeast Asia Economic Governance and Infrastructure Initiative designed to help unlock Southeast Asia’s next phase of growth.
We are also expanding our engagement with Southeast Asia on maritime issues, including on maritime law, maritime domain awareness and strengthening civil maritime organisations – all designed to support a rules-based maritime order.
And while India is the natural leader and major power in this region, we are also doing our part in South Asia, including through the South Asian Regional Infrastructure Connectivity Initiative.
As announced by Foreign Minister Payne in January at the Raisina Dialogue, this $25 million initiative will support high quality infrastructure investments, particularly in the transport and energy sectors in South Asia.
Building the Australia-India Partnership in the Indo-Pacific
In my view, the other big story in Australia’s Indo-Pacific outlook over the past 12 months has been the rapid growth in our links with India and our deepening strategic alignment.
For the first time in our history, our 2017 Foreign Policy White Paper identified India as in the ‘front rank’ of Australia’ international partnerships. On par with the US, Japan, Indonesia and China.
The speed at which this relationship is developing is stunning, if not surprising.
Our shared outlook and interests in the Indo-Pacific are now grounded by strong people-to-people links. It is the connections between our communities that, to quote President Kovind during his visit to Australia in November 2018, ‘establishes the human bridge’ between our countries.
I am not sure mainstream opinion in either India or Australia is yet to fully grasp the extent to which the connections between our communities are growing.
Some quick facts:
· One in 50 Australians today (2%) were born in India;
· almost 90,000 Indian students studied in Australia last year – a 25% increase on 2017; and
· over 350,000 tourists visited Australia from India in 2018 – our fastest growing group of foreign visitors to Australia.
This level of personal engagement between us has two key effects.
One, it helps us form a more accurate and contemporary understanding of each other; And two, these connections create a powerful constituency for broad, deep and enduring bilateral ties.
We also have an ambitious vision for our economic relationship. Our 2018 India Economic Strategy has put forward a goal to see India become a top three trading partner for Australia by 2035.
The convergence in our strategic outlooks has also underpinned a deepening of our defence and security ties.
The third iteration of our bilateral naval exercise, AUSINDEX, which has just concluded (April 2-16), represented the largest-ever Australian defence deployment to India.
The exercise builds on a fourfold increase in our defence engagement — from 11 defence exercises, meetings and activities in 2014 to 38 in 2018.
As well as being Australia’s largest defence deployment to India, the exercise was the most complex ever carried out between our defence forces.
For the first time, our navies undertook anti-submarine warfare exercises. And Indian and Australian maritime patrol P-8 aircraft flew coordinated missions over the Bay of Bengal.
This audience knows well the level of trust required to undertake exercises of this complexity involving highly sensitive capabilities.
And while AUSINDEX was a landmark moment in our relationship, it also made clear that there are things we should now do to take the relationship to the next level.
Finalising a Mutual Logistics Support Agreement between our militaries, for example, would make a dramatic difference in our ability to exercise and operate together into the future. This becomes all the more significant when we consider that both Australia and India are acquiring next generation submarines built by DCNS, for instance.
But, on all objective measures the relationship is in very good shape and on an upward trajectory.
Future directions for our Strategic Partnership
It is common for Ambassadors and High Commissioners to stand before this audience and give you a stocktake of the bilateral relationship. Which is what I have just now done.
But with such an informed and thoughtful group, I don’t just want to reflect on progress we have made. You, I am sure will have been aware of many of these important milestones.
So I also want to use my time with you today to give you a sense of where I think our strategic partnership is going.
What I want to do is focus more on what we can do together to achieve our shared vision for the Indo-Pacific.
And actually, this is what friends and close partners do.
As trust and camaraderie grows we expand our horizons from tending to bilateral ties toward working in partnership to solve mutual challenges.
And this is where the modern India-Australia bilateral relationship is heading.
It is through working in partnership that we both can ensure we have genuine impact in shaping the emerging regional order in ways that protect and promote our shared values and interests.
Changing dynamics in the Indo-Pacific
And as we both look to the future we are confronted by both enormous opportunity and unprecedented challenges.
We are at a point in history where we are transitioning from one international order to another.
Power is on the move. From the North Atlantic, to our region: the Indo-Pacific.
By 2030, the top five economies of the world will be in this region: China, the United States, India, Japan and Indonesia.
The Indo-Pacific will deliver over two thirds of global growth – it will be the engine of the global economy.
And as history shows, with growing economic power comes strategic weight.
Military expenditure in the region is on the rise. Already six of the 10 states with the highest military expenditure in the world are in the Indo-Pacific.
We are also seeing deepening rivalries and sharpening strategic competition.
As competition has deepened, respect for international law and institutions has been challenged.
Some powers are also showing a greater willingness to use power coercively.
These trends are playing out in the Indian Ocean, Southeast Asia and the Pacific.
Established institutions, such as ASEAN and its famed unity, are under pressure.
In Australia’s immediate region, the Pacific, external powers are seeking to exploit some of the more fragile developing small island states to further their strategic ambitions.
So it is against this backdrop of a transitioning international order and the attendant risks and opportunities that the India-Australia partnership can, I believe, take on renewed purpose.
The nature and evolution of the relative roles and relationship between the US and China will be particularly consequential for the emerging regional order.
China’s phenomenal economic growth, which has seen its share of world GDP increase from two percent in 1980 to 19 percent today, is already translating into significant power and influence across the region.
China is the largest trading partner for most of the region’s economies – including Australia – and a significant investor. It has the largest navy and air force of any state in Asia. And the largest coast guard in the world. Its aid donations to the region are considerable.
At the same time, the US remains the region’s dominant military power. And it continues to wield significant soft power. It leads the world in technology and innovation and is the hub of the global financial system.
It is easy to conclude that the future of the Indo-Pacific rests in how the US-China dynamic plays out. But this would be two-dimensional; it would underplay the considerable impact of other, powerful, players in the region. We should not ignore these other dynamics.
India in particular will grow in strategic weight. As the world’s largest democracy and fastest growing large economy, India has shown unequivocally development and democracy can coexist. It is the most powerful counter-point to those promoting models of authoritarian capitalism.
Therefore, India’s voice will be particularly consequential in regional order building.
As will other emerging powers such as Indonesia, another large and rapidly developing democracy and ASEAN’s natural leader.
Australia and India: Significant Indo-Pacific powers
While we both share a preference to work in concert or coalition with others, we must not lose sight of the fact that Australia and India are significant powers in our own right.
In India’s case this is in many ways self-evident. But the extent of Australia’s weight and strategic reach is sometimes underappreciated.
Now you might think of course I would say this.
But a recent study by the UK-based The Henry Jackson Society supports my claim.
The study drew on 33 indicators and 1240 pieces of data to assess the geopolitical capability of G20 nations, plus Nigeria.
The results were surprising for some.
The study found that Australia is more politically powerful than even Russia because we are a "hemispheric power" capable of projecting ourselves and defending our own interests within the southern hemisphere.
The study's chief analyst noted that Australia’s burgeoning economy (we've completed 27 consecutive years of annual economic growth) and a strong military have helped secure our position as a major world player.
Now to be sure, this is only one study and its findings could be contested. But if you consider some incontestable facts, it is clear Australia brings genuine strategic weight to the Indo-Pacific.
If you include our Antarctic territories, Australia becomes the country with the largest jurisdictional claim in the world, covering around 27.2 million square kilometres, of which about half is sea.
We're the 13th largest economy (in nominal GDP terms, thus the 13th largest contributor to the United Nations) and the 11th wealthiest nation (GDP per capita).
We have the 12th largest defence budget and 10th largest defence expenditure as a percentage of GDP in the OECD.
To top it off, we have a $200 billion defence investment program over the next decade.
I won’t belabour the point. But what I am driving it here is that part of the modern Australia-India partnership is the need to recognise each other as major players and top tier partners.
Working in the Indo-Pacific
This then sets the foundation for us to join our efforts in pursuing our shared vision for the Indo-Pacific.
This, I believe is the natural next phase of our relationship.
Let’s briefly consider what such a partnership could look like across the sub-theatres of the Indo-Pacific. I would like to consider three areas where we can fruitfully cooperate – the Indian Ocean, the Pacific and Southeast Asia.
If we start with the Indian Ocean Region.
This is India’s core sphere of influence. India will naturally take a leadership role is setting the region’s strategic culture, building the institutional relevance of IORA, driving deeper regional economic integration and connectivity and overseeing the protection of the maritime commons.
And as the world’s largest democracy, India also has an important role to play in presenting an inclusive alternative to leadership in the region.
Australia, as a major Indian Ocean power, has a key role to play here too. We have one of the world’s largest Indian Ocean coastlines and half our trade departs Indian Ocean ports. We have significant interests in a stable and open region.
This is why we continue to deepen our defence and security partnership with India. But also with other Indian Ocean players, such as Indonesia, Sri Lanka and France.
We will also continue to coordinate with and support India’s leadership within IORA. Ensuring the institution is equipped to play a genuine norm-building role.
We can also support India’s efforts to drive connectivity in the region. The South Asian Regional Infrastructure Connectivity initiative is one such tool to support this broader agenda.
The Pacific, on the other hand, is a region where Australia brings unique strengths.
We have a long history of political, economic, development and security engagement with the region. While sparsely populated, the Pacific Ocean is a region of enormous geopolitical significance.
And, per our Pacific step up, we intend to remain the pre-eminent power and partner of choice for Pacific nations.
India’s diaspora links in the Pacific provide a basis for stronger engagement. There is scope for a larger Indian presence in the Pacific, particularly in infrastructure connectivity and through its own development program.
But the Indo-Pacific sub-theatre that holds the greatest prospect for defining the modern India-Australia order-building relationship will be our respective efforts in Southeast Asia.
Earlier in this address, I noted that both Australia and India have placed ASEAN at the centre of our Indo-Pacific concepts.
Southeast Asia is also the locus of the sharpest forms of strategic competition in the region.
ASEAN unity is under pressure as external powers lean on the smaller, economically vulnerable members of the grouping to do their geopolitical bidding.
In many ways, the evolution of the strategic character of Southeast Asia will define the core elements of the Indo-Pacific regional order.
So the stakes are high for both India and Australia. And together we have an opportunity to play a critical role in this important region.
To do so we will need draw on comparative strengths and coordinate our efforts.
As ASEAN’s oldest dialogue partner Australia has a history of deep engagement in the region.
Australia has a large diplomatic footprint, with our embassy in Jakarta – staffed by 750 people (when you take into account contractors) our largest in the world by some margin.
Driven by years of countering the enduring threat of terrorism, we have developed intimate operational security and intelligence partnerships with key regional players, including the Philippines and Indonesia.
Our Comprehensive Strategic Partnerships with Singapore and Indonesia is driving deeper defence cooperation.
On other transnational threats, such as cyber security, people trafficking, illegal and unregulated fishing and other transitional crimes we are the partner of choice for many in the region.
We also have extensive people to people links with the region through education, immigration and tourism.
Our economy is also deeply integrated into Southeast Asia, through our free trade agreements with Singapore, Malaysia and Thailand and our soon to be ratified Comprehensive Economic Partnership with Indonesia. And RCEP offers the opportunity to further intensify the mutual benefits of economic integration.
So we have genuine reach, standing and influence in Southeast Asia.
India brings a different set of advantages to its engagement with Southeast Asia.
As a civilizational power, India has extensive historical and cultural links to the region.
And more recently, India’s traditional non-aligned posture and leadership within South-South groupings has appealed to the ASEAN bloc.
So Southeast Asians do not look with anxiety at India’s rapidly expanding strategic weight.
Rather India’s rise is welcomed as an alternative source of economic opportunity and a potential security partner who brings little baggage.
It is my contention, therefore, that Australia and India are natural partners in Southeast Asia. We are part of the region, we have interests in the region and we bring a unique and distinct set of strategic assets to the region.
So what could an Indo-Pacific partnership centred on Southeast Asia look like?
There is scope in my view for greater coordination of our respective efforts in the areas of maritime security, infrastructure connectivity, cyber security and democratic norms building.
Coordinating efforts in these areas can be done through multiple fora, including our existing bilateral mechanisms and our growing network of minilaterals and calibrated efforts in multilateral institutions.
Here our trilateral senior officials meetings with Indonesia, trilateral strategic dialogue with Japan and Quad coordination meetings have an important role to play.
But most importantly we need to redouble our shared efforts to reinforce ASEAN centrality and unity and the primacy of ASEAN-led regional institutions, particularly the strategic role of the EAS.
In the immediate term, one of our most pressing priorities will be to lend support to ASEAN’s Indo-Pacific vision.
The enunciation of a shared ASEAN view of the Indo-Pacific that overlaps with both Australia and India’s will provide the kind of framework to guide our respective engagement with this key region.
To me this is the future of our partnership. Taking the strong bilateral foundation we have built to work together for the security of our Indo Pacific region.
The ideas I have just set before you are drawn from my experience and observations as High Commissioner over the past three years.
They are also consistent with where the trend in our bilateral relationship is already going.
We have now built a solid foundation in the relationship.
Since 2014, we have established a very strong architecture in the relationship, comprising regular working groups, Ministerial Commissions, bilateral engagements and exercises.
As bureaucrats, we can merrily continue to build the architecture, adding more and more structures.
But at some point, we must consider what we use those structures for. The challenges in the Indo-Pacific mean we cannot work alone; partnership is the only way. I have put forward some ideas of where we can take our partnership forward – working together in the sub-theatres of the Indo-Pacific.
There may well be other ideas out there.
The great privilege and pleasure of our relationship is that we can consider and share these ideas with each other, for the greater good. I look forward to hearing from, and working with you all, in the future on these challenges.
So thank you again for your time today.
I am happy to take questions.