SENATOR THE HON PENNY WONG

LEADER OF THE OPPOSITION IN THE SENATE

SHADOW MINISTER FOR FOREIGN AFFAIRS

LABOR SENATOR FOR SOUTH AUSTRALIA

SPEECH

24 January 2018

PEACE AND PROSPERITY IN A TIME OF DISRUPTION

LEE KUAN YEW SCHOOL OF PUBLIC POLICY

SINGAPORE

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It is a great pleasure to be back in Singapore. It is an even greater pleasure to speak to you here at the Lee Kuan Yew School of Public Policy this evening.

Singapore’s success has been due in no small measure to the combined effects of visionary leadership and sound public policy. Lee Kuan Yew personified both. Your first Prime Minister was, by any measure, a statesman of world rank. So it is a singular honour to have been invited to Singapore’s premier public policy institution named in his honour.

On a personal note, Mr Lee has figured large in my life. My father regarded him as the quintessential leader. When I was growing up in Kota Kinabalu, and after we migrated to Australia, Dad would often speak of his admiration for Prime Minister Lee and expound on his political views.

I have often remarked that, notwithstanding my various political achievements including being the first Asian-born woman to serve in an Australian Cabinet, and having served as Australia’s Finance Minister, the thing of which my father was most proud was a fleeting mention of me in one of LKY’s books.

This evening I propose to speak to you about the international situation and how important it is to advance confident and forward-looking foreign policies if we are to secure peace and prosperity in a time of disruption. There is no doubt that the international operating environment in which we currently find ourselves is different from anything we have experienced before.

But what I want to emphasise this evening is the centrality of ASEAN in delivering long-term peace and prosperity in Asia, and the priority an Australian Labor government would give to working with ASEAN to make the most of our collective future in a time of disruption.

Many of you would have read with interest the commentary piece published on 29 December in the New York Times, where White House correspondent Mark Landler wrote:

The post-war international order, the president of the United States declared, is “not working at all”.

This puts in somewhat starker terms the ideas expressed in the President’s National Security Strategy which calls for a fundamental US policy rethink.

At the centre of this rethink is a rejection of the assumption that “engagement with rivals and their inclusion in international institutions and global commerce would turn them into benign actors and trustworthy partners”.

Whether or not you agree with President Trump’s view that the international rules-based system is not working, there is no disputing the international rules-based order is under its greatest period of stress since the end of the Second World War.

So, what is this international rules-based order? As I use the term, it refers to the system of rules and institutions that deliver three principal outcomes: the mobilisation of collective action to solve problems; and the management of international conduct – what countries can and can’t do; and the resolution of disputes.

There is no doubt that we need to make that international rules-based order work if we are to promote peace and avoid conflict.

The best way to promote peace and avoid conflict, of course, is to have solid institutions that reflect and respect the individual sovereignty of their members, and that discourage hegemony.

Peace and Harmony cannot be imposed.

This is especially the case for trade-dependent middle powers such as Singapore and Australia.

We have all become comfortable, perhaps to the point of complacency, with the international system that has operated for the past seventy years.

There have, of course, been discontinuities – crises, conflicts and humanitarian catastrophes such as the Suez crisis in 1956, the Cuban missile crisis in 1962, Konfrontasi right on your doorstep here in Singapore, the Vietnam War, the Cambodian genocide, the fall of the Berlin Wall, the Iraq War, the civil wars and genocides in Africa, and the ongoing political instability, repression and armed violence in a number of the south American republics.

These have both tested the system and demanded skilled diplomacy in pursuit of their resolution. But the interesting feature of these major discontinuities is that the global community has managed them within the rules-based system. There has been no ‘break-out’, as it were.

So we have become comfortable with the resilience of the international rules-based system. This resilience is a function of both the complexity and the multi-dimensional character of both the international rules-based system and the rules, written and conventional, that have governed it.

We have also become comfortable with the strategic leadership of the US, which has played such a normative role in establishing and encouraging adherence to the international rules-based order as part of the global settlement following WW2.

What we are facing now is quite different from the kind of discontinuity with which our international system has long been familiar. Indeed, it would be fair to say we are witnessing a period characterised by widespread disruption, by which I mean a break-down in the global order as President Trump’s remarks might suggest.

The disruption that we currently face is driven by a range of structural factors, ranging from the economic and social inequality of which Thomas Piketty has written, refugee flows resulting from civil war and societal breakdown, consequent ethnic tension in neighbouring countries, the reappearance of nationalism and racism, and the alarming re-emergence of national politics driven by ideology rather than good policy.

The decision of the British people to exit the European Union is not just a symptom of economic and social malaise resulting from Europe’s continuing progression into a post-industrial world, with all the social and economic consequences that has for the Midlands and Northern England. It is a clear rejection of the European rule-making system, at least as it applies to Britain.

Similarly, the Trump administration’s re-assessment of the global strategic engagement of the US is not simply a reaction to massive cost pressures. The US decision to walk away from the Trans-Pacific Partnership is a rejection of the economic globalisation that has become such a distinguishing feature of the international rules-based order since the establishment of the GATT in 1948 and the WTO in 1995.

That is serious enough in itself. But perhaps more serious is the ongoing re-appraisal of the way that the US sees itself in the conduct of global affairs. And the precise implications of this re-appraisal for South East Asia – its stability, security and economic prosperity and the future US strategic role in the region – are, to this point, quite unclear.

Your Prime Minister, Mr Lee Hsieng Loong, put the consequences of a perceived US retreat from the region in characteristically clear terms. Speaking at the US Council on Foreign Relations on 25 October last year, the Prime Minister said:

If [the US is] not there, then everybody else in the world will look around and say: I want to be friends with both the U.S. and the Chinese, and the Chinese are ready, and I’ll start with them.

The break-down in the international rules-based order of which President Trump spoke is exacerbated by fundamental fault-lines in the operating system that underpins the traditional competition for position and power.

For over half a millennium, we have come to terms with the way in which nations face off militarily, building empires that rise and fall as a reflex of their military strength – or lack thereof. Economic and military power were two sides of the same coin – national power.

Our present international operating environment is both subtle and disruptive. Comfortable assumptions that military strength constrains global strategic ambition are challenged by the way in which economic power is being re-focused and re-organised. We are now seeing a divergence in the way economic power and military power are used.

China is already the number one trading partner of the ASEAN member states collectively, as well as Australia.

In a very perceptive essay published towards the end of last year, Kishore Mahbubani and Amrita Nair – distinguished members of this institution – drew our attention to the fact that China is now ASEAN’s largest external trade partner, with a total trade volume of $345 billion in 2015.

The US, in comparison, is the fourth largest, with a total trade volume of $212 billion.

The US remains, of course, the region’s biggest military partner. But the divergence between economic and military partnership is bound to widen. This will inevitably play into the way that the US contemplates its strategic position within the Asian region.

Of course, it remains our view that it is in the interests of all South East Asian nations that the US remains strategically engaged with the region.

The divergence between economic and military power is the paramount feature of China’s rapid rise as a global economic force – an economic force that has strategic effect without concomitant military power, at least for the time being. We have long been familiar with organisations such as NATO and the Warsaw Pact, along with more temporary arrangements such as CENTO and SEATO. These were expressions of military power as the key determinant of strategic power.

China’s Belt and Road Initiative, however, is a game-changer. It employs economic power as an expression of strategic power, linking a new community of nations as both contributors to and beneficiaries of China’s remarkable growth. That is the strategic force of the BRI: it is a radically different approach to the assertion of power.

My point here is not whether the BRI is good or bad, or whether it is beneficial or destabilising. My point is that it is different, and that it is a fundamental change in the way that strategic business is done. It is not simply an alternate way of doing business. It represents a rejection of the conventional ways of doing business since the end of WW2.

It is not a Marshall Plan premised on reconstruction. It is a strategic plan premised on long term economic and political realignment.

The question is: can the BRI be engaged with in a way that ensures that it is beneficial and constructive, and that it enhances prosperity, stability and security?

This is a tricky question, given how little any of us really knows about the BRI, its detailed purposes and its operating rules. It is imperative, however, that we come to terms with the disruption that the BRI represents. How we all respond to the disruption represented by the BRI will stand us in good stead when we need to respond to an even greater disruption – the recombination of economic and military power when China builds its military forces to reflect its economic power and status. That will really give us something to think about.

Our best response to the BRI will be to encourage China and its partners to align the standards and processes of the various projects under the Initiative with the rules and norms of our existing international institutions.

This brings me back to the international rules-based order. A number of nations have expressed their dissatisfaction with the rules as they currently stand. The underlying claim is that they no longer address as well as they might the significant changes in the operating dynamics of the international community.

This should not, however, be seen as an attack on the need for rules in general. All nations, even the most recalcitrant, accept the need for rules, because without them all we have is anarchy and chaos. Without rules, power is the only determinant of action, and its only arbiter. Without rules, the powerful invariably trample the weak.

I know that an emphasis on rules is sometimes seen as a particularly Western preoccupation, a consequence of the Age of Enlightenment and a concentration on the Rule of Law – in the Western democracies at least. But the fact is that the international rules-based system is not code for an imposed global identity. Rather, the international rules-based order is the best way of dealing with political, social and economic diversity.

Rules provide the global community with an operating system. Rules provide the basis of the agreements, for example, that enable economic cooperation and integration on just and acceptable terms. Rules, such as the multiplicity of WTO agreements that ensure that trade flows as smoothly, predictably and freely as possible, are essential if the global community is to contribute to and benefit from trade stability.

Just two weeks ago, for example, Canada filed a WTO complaint over US anti-dumping and countervailing duty measures. The US and Canada are strategic partners and economic competitors, so the availability of WTO dispute resolution mechanisms helps them maintain their economic relationship without resorting to tit-for-tat trade imposts.

Rules set down the guidelines for action and agreement across the multiplicity of areas where nations both compete and collaborate.

As I have said, rules not only establish a basis for managing disputes and constraining behaviour. They also provide a degree of certainty and predictability, preconditions for economic activity. The internationally agreed framework for trade has provided the platform for the economic development which has benefited so many in our region.

In this regard, I am pleased that the Australian government has moved towards heads of agreement with the government of Timor-Leste regarding the seabed boundary dispute between our two countries. This is a course of action that Labor has been proposing for some time.

When countries such as Australia are able to settle disputes amicably through international arbitration with smaller countries, such as Timor-Leste, the global community has another model of how rules-based agreements can resolve competing claims, such as a number of ASEAN countries have in the South China Sea.

All of us want the international community to abide by the rules, whether they are mandated by the UN, its agencies, other international organisations or regional organisations such as ASEAN. But if they are to be rule takers, nations want also to be rule makers: the entire international community needs to participate in the crafting of the rules that guide action in the international arena. Participation generates agreement and observance.

And it remains self-evident that nations of the stature and status of China and the US will be both rule-makers and rule-takers.

This, it seems to me, is quite reasonable. What is not reasonable is for those nations that might be dissatisfied with the current order to change the rules unilaterally, to impose their will rather than reach a negotiated position that meets the needs of all parties.

This is part of the problem in the South China Sea, for instance. Should the Australian Labor Party form government, we will certainly be advocating resolution of territorial claims and the exploitation of fishing stocks and sea-bed resources through negotiation between claimants rather than through unilateral action such as the militarisation of artificial islands.

So I join with your ASEAN partners in congratulating Singapore on taking on the role of ASEAN Chair this year. Singapore has a formidable negotiating history on Law of the Sea matters. Ambassador Tommy Koh, with his decades of painstaking negotiation, is an outstanding example.

Hence Singapore is well placed to work with the ASEAN members and the other negotiating parties towards the resolution agreed at the East Asia Summit in November to fully and effectively implement the declaration of the Code of Conduct in the South China Sea in its entirety.

So the question now arises: how do we deal with disruption? In the words of the Chinese proverb 万事开头难(wàn shì kāi tóu nán), “all things are difficult before they are easy”. Very often, we start with the externalities – the major protagonists, how they relate to each other, the dynamics of constructed (or is it confected)  analytical binaries, and how a zero-sum outcome, which is often considered to be the preferred result, ultimately affects national policy options.

Allow me to offer the view that this is entirely the wrong way to go about dealing with disruption.

To address what are often called ‘wicked’ problems, there are a few simple and quite practical steps that nations like Singapore and Australia should bear in mind. First, we mustn’t simply react to things that we cannot change. Second, we must focus on what we can do. And third, we must resist constructing false binaries that confine us to counterproductive either/or choices.

A focus on the ebb and flow of tensions between them encourages a transactional approach to foreign policy. Simply reacting to surprises consumes all the energy that might otherwise go into crafting a transformational foreign policy that focuses on creating and taking advantage of opportunities.

The starting point for dealing with disruption is a clear understanding of the national interest, and how the national interest informs the national interests (plural). This is also the starting point for a transformational foreign policy.

Those of you who are familiar with the ground-breaking work of Hans Morgenthau, one of the founders of the Realist School of International Relations, will appreciate that ‘the national interest’ is an expression that combines the elements of national power with the key features of national identity.

And the fact is that, because of the integrated nature of our economies, our success in trading in a globalised trading system, our social cohesion, the quality of our education systems and high levels of social inclusion, countries such as Singapore and Australia have rather more national power than we are sometimes inclined to imagine or admit.

An appreciation of the intrinsic power and dynamism of the nation is where confidence and optimism come from.

As I have said elsewhere, the ‘national interest’ is about identity and power, giving foreign policy both legitimacy and authority. I use the term ‘national interests’ to describe what we seek to protect and promote through our foreign policy, giving foreign policy its purpose and energy. ‘The national interest’ is substantive. ‘National interests’ are purposive.

Without a clear sense of identity and power, we run the risk of allowing others to determine our future for us. And without a clear understanding of our national interests, we run the risk of being simply reactive to events and situations that are both surprising and uncontrollable.

In a speech I delivered in Sydney in July last year, I sketched out the core interests that will continue to underpin the framing and delivery of a Labor foreign policy.

  • The security of the nation and its people.
  • The economic prosperity of the nation and its people, enabled by frameworks that will allow Australia to take advantage of international economic opportunities.
  • A stable, co-operative strategic system in our region anchored in the rule of law.
  • Constructive internationalism

I also pointed out that the realisation and advancement of these four core interests depend on our ability to harness the national power that gives substance to the national interest. And I suspect that this articulation of Australia’s national interests aligns reasonably well with how Singapore would see its national interests.

It is equally important that our foreign policy is consistent with our values.

Values are central to our national identity: what we stand for defines who we are as a nation. Our values give coherence and strength to all dimensions of public policy, just as they inform both the content and the conduct of our foreign policy.

That is why a nation’s foreign policy, axiomatically the protection and advancement of its national interests, also involves the expression of national identity and the projection of national values. Values define who we are. Values guide our behaviour as individuals and as nations, determining the moral compass that is as necessary for national leaders as it is for the individual.

When I use the term ‘values’, I mean the ideas – be they ethical or not – that motivate our action: ideas such as fairness and equality, or injustice and exclusion. Values motivate the pursuit of interests. If interests describe the reasons for action, values describe the motives for action.

As I mentioned earlier, ‘constructive internationalism’ is one of Australia’s core national interests. Focused as it is on the protection and promotion of an international rules-based order that helps to systematise international relations, constructive internationalism has its genesis in the policy formulations of an eminent former Australian Foreign Minister, Gareth Evans, a quarter of a century ago.

In my view, that is an approach that ASEAN knows a lot about.

We have developed the ‘good international citizenship’ idea further by placing our emphasis on an objective and measurable concept – constructive – and positioning the idea of citizenship within the broader praxis of internationalism. To be constructive, internationalism needs to be cooperative and collaborative, whereas to be good it simply needs to be ‘right’ – and views on what’s ‘right’ vary enormously.

There are, I suggest, two performance measures that underpin the value of constructive internationalism: how effective they are in doing what they are designed to do; and how long institutions and operating systems remain in place rather than how quickly they were put in place.

ASEAN’s success is measured much more in its durability and the preservation of consensus and respect as central to regional stability than in the more visible but often short-lived creations of less deliberate organisations. As I said in Yangon in June last year, the real question is not just ‘what has ASEAN achieved’ but ‘where would we be without it?’

This is important when one considers the achievements of ASEAN. You would know that there are some in the West who criticise ASEAN for too much talk and not enough action – banyak layar perahu sedikit (too much sail and not enough boat). That, I think, is more a tribute to Western impetuosity than it is a correct characterisation of ASEAN’s success.

Referencing potential counterfactuals is a perspective I found very useful as Finance Minister and it remains relevant to the foreign affairs portfolio. Too often we assess institutions or policies only against theoretical and conclusive benchmarks. In part, this might lie behind some of the negativity expressed by certain commentators about ASEAN. Instead, it is useful to consider what could have happened or could happen in its absence.

It is never necessary to remind Singaporeans of the central role that Asia now plays in the global economy. Professor Peter Drysdale captured the importance of this fact in an essay late last year. He wrote:

Asia’s economic dynamism depends . . . upon success with its own programs of economic reform. . . . Confidence in the global trading system is important to Asia. It has underpinned the growth of Asian interdependence, economic prosperity as well as its political security. In guarding these strategic global interests ASEAN has a critical role to play, through the ASEAN-led Regional Comprehensive Economic Partnership (RCEP).

ASEAN, in my view, is the lynch-pin in Asia’s role in a globalised economic world, and has a growing role in the maintenance of the global economic system and the rules that support it.

The ten nations of ASEAN bring together a diversity of languages and cultures that the naysayers claim dooms it to weakness and irrelevance. Yet, as Kishore Mahbubani and Amrita Nair wrote in the essay I mentioned earlier:

[ASEAN] is an inherently weak regional organization, but, paradoxically, its weakness has been a source of strength, for it has enabled all the great powers to trust it with providing a neutral political platform.

Unlike many other regional forums, it has no inbuilt bias.

You would all be aware that there is a deep reservoir of support for ASEAN in Australia, to the extent that some have argued that Australia should become a member. The ASEAN plus Australia and New Zealand “community of 12” discussions which occurred under Goh Chok Tong and Paul Keating may well be seen as an opportunity lost.

But to my mind, at this point what matters more is what we actually do together.

In a time of disruption, our interests are perhaps better served through improvements to existing institutions such as ASEAN, the ARF and the EAS than through the creation of new bodies that may only serve to dissipate the already overtaxed energies of our regional Foreign Ministers and diplomats.

In my opinion, the most important contribution that ASEAN can make to the region’s stability and prosperity in contemporary circumstances is to ensure that its institutions and operating systems are working effectively and to reinforce the external linkages it already has in place.

But I do think that challenging times themselves set new challenges, and that it is in the interests of Australia and its ASEAN colleagues to put more energy and imagination into addressing the economic and security issues that a time of disruption has created. A future Labor government will offer our ASEAN partners all the support and encouragement we can in order to enhance regional cooperation and harmony.

Australia has been blessed with an unexpected but valuable political buffer: ASEAN. With its diversity and heterogeneity, ASEAN has enhanced Australian security.

As Kishore Mahbubani and Jeffery Sng have pointed out, if the unthinkable were to happen, and ASEAN were to dissolve, one of the biggest losers would be Australia. If ASEAN were to do well, Australians would be amongst its biggest beneficiaries.

As many of you would know, Australia became the first of ASEAN’s strategic partners in 1974, a time of great importance in the Singapore-Australia relationship as Prime Minister Whitlam and Prime Minister Lee Kuan Yew cemented their close personal ties. They were both leaders and statesmen.

Labor, from Prime Minister Whitlam, through Prime Ministers Hawke, Keating, Rudd and Gillard, have been consistent proponents of strong regional institutions. They recognised that if you want a stable region, you need effective regional institutions.

Labor welcomes the ASEAN-Australia Special Summit, to be convened in Sydney in mid-March this year. A Shorten Labor government will certainly build on the outcomes of this Summit.

A future Labor government will also be working hard to implement the terms of the Plan of Action to implement the ASEAN-Australia Strategic Partnership agreed in 2014 at the 40th Anniversary meeting in Myanmar.

Labor’s focus will be twofold. We will focus on working with ASEAN to enhance the critical role that it has in maintaining a strong and inter-connected global trading system. And we will focus on the people-to-people links between ASEAN and Australia, particularly in the fields of education, commerce, investment and financial services, scientific cooperation, and collaboration in the arts.

As we move forward into the Asian century, the second track avenues will become increasingly important. So much of the business of international relations is conducted between civil society organisations, business ventures, corporations and individuals. They may consult with governments, but for the most part they are self-directing.

We need to encourage more of that, providing, where useful or necessary, a framework for progress and facilitation of effort.

I am particularly supportive of increased dialogue between our think tanks and our public policy schools, such as this one. The topics for discussion are not limited to the security domain, no matter how broad our concept of security might be.

We have much to share on how best to deal with climate change, both adaptation and mitigation. Education is, for all of us, the critical key to economic change and social advancement. Technological advances in the production and management of electrical energy affect us all, as do advances in water management, agronomy and food production, transport and public housing, health care and economic infrastructure.

Indeed, we need to collaborate in addressing the full gamut of public policy issues if we are to generate economic efficiencies and greater political effectiveness.

And, of course, given ASEAN’s centrality in the maintenance of regional stability and security, a Labor government will be working with the ASEAN partners to enhance the Association’s role and effectiveness in the strategic domain.

ASEAN already supports the two key institutions for addressing regional security issues – the ASEAN Regional Forum and the East Asia Summit. These, I think, are of critical importance, because they bring all the key protagonists into a common conversation about and in pursuit of regional stability and security. I suggest that there is enormous benefit in all of us talking to China, Japan, Russia and the US rather than simply talking about them.

And this is what ASEAN provides – a neutral but engaged forum for ventilating concerns and hopes about peace and prosperity in the region.