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Risk nodes

National security strategy can help us build key alliances to counter China

By Peter Jennings

Even before COVID-19, Australia faced a deteriorating strategic environment driven primarily by a more assertive People’s Republic of China maximising its influence in the Pacific, Southeast Asia and Indian Ocean.

The federal government was reluctant to describe the PRC’s actions as being motivated by assertiveness, but Canberra was pushing back against Beijing’s domestic interference and asserting a more prominent role with the Pacific island states. At long last, a policy debate was shaping around the consequences of being too dependent on China.

Canberra’s worries were not only about the PRC. The Trump administration’s “America first” approach was generating some doubt about the reliability of the alliance relationship, even though day-to-day military co-operation was closer than ever. Assurances from diplomatic, military and intelligence channels that the alliance was iron-clad were compromised by a President who seemed to have more dislike for allies than authoritarian strongmen.

So, in 2019, strategic thinkers were asking whether our defence policy settings were right, and whether there was an immediate need to build stronger and more self-reliant military capabilities.

Self-reliance also applied to critical supply chains. Successive governments argued the case for “sovereign capability” across a mix of defence industry areas, but after risks to shipping in the Persian Gulf emerged analysts were increasingly asking about fuel security: would just-in-time supply always meet our requirements?

Defence Minister Linda Reynolds announced in October 2019 that “Defence is working through a reassessment of the strategic underpinnings of the 2016 Defence white paper”. She concluded the white paper had “underestimated the speed” of strategic change. That reassessment was due to be delivered to the minister early in 2020. The timing was no doubt derailed by the catastrophic bushfire season, when the ADF was called on at short notice to perform a mission for which it had little preparation.

COVID-19 has further accelerated strategic change...

COVID-19 has further accelerated strategic change, made the challenges of dealing with an assertive China more immediate and difficult, highlighted the inadequacies of the Trump administration and deepened worries about US capacity and intent to underwrite Indo-Pacific security. The virus may well cut even deeper swaths of destruction among our Southeast Asian and Pacific island neighbours, which could give rise to demands on Australia.

Amid the global wreckage of COVID-19, it’s hard to find any positive news to offer, but perhaps there is some.

First, in Australia and many other countries, a view is hardening that economic dependence on China is dangerous and steps must be taken to reduce that dependence, including walking back PRC ownership of critical infrastructure such as the electricity grid, IT assets, farmland, ports and medical facilities, and cutting university research links that help to enhance China’s capabilities.

Second, global dependence on China for medical protective equipment has highlighted the risks of the just-in-time delivery of material critical to security.

Third, the pandemic reinforces a hard reality that the nation-state is the ultimate provider of security. Australia’s alliance with the US is invaluable and must be maintained, but we can’t subcontract our security to Washington. We’ve ridden on Washington’s security coat-tails for too long. American distaste for that behaviour around the world has, in part, led to Donald Trump and his America-first orientation. To sustain US support, we need to do more for our own defence.

Fourth, we have a government that has been steeled by managing the most difficult crisis the nation has faced in decades. We must hope this government is ready to think big in policy terms and won’t be afraid to tackle urgent defence and security problems.

This is a time when the national security community needs to lean forward. Years of reviews and frequent changes of ministers have made this community risk-averse and more focused on cautiously implementing policy settings than on thinking big. Morrison’s task is to push his security advisers into breaking policy paradigms. Otherwise, we risk becoming a casualty of the sharper strategic competition that’s already pushing the Indo-Pacific into a new style of cold war.

I offer eight steps to reform our national security strategy.

Appoint a national security adviser

The position of national security adviser, reporting directly to the Prime Minister and situated in the Department of the Prime Minister and Cabinet, was done away with for unworthy bureaucratic reasons during Tony Abbott’s time as PM. The case for bringing the position back is overwhelming, not least because Morrison thinks of the bushfire response and the COVID-19 crisis in national security terms. The government should lift the position to the level of a senior departmental secretary and ensure it has enough resources to drive policy development, not simply be a point of co-ordination across the bureaucracy.

Develop a new national security strategy

Australia hasn’t had a full national security strategy since Julia Gillard’s statement in 2013 declaring Australia had a “positive” and “benign” security outlook.

A new national security strategy needs to bring together policy domains that often operate in stovepipes. This includes health and biosecurity; climate; human security; critical infrastructure; security of supply of petrol, oils and lubricants; the ever-expanding range of cybersecurity challenges; university and industry R&D; and more traditional defence, intelligence and foreign policy concerns.

A national security strategy must establish some difficult bottom lines. Is it acceptable for PRC and Hong Kong companies to own much of Australia’s electricity transmission capability? Can we live with the possibility of a PLA base in the Pacific? Is it fine to have lost most of our fuel-refining and storage capabilities? In each case, the obvious answer is “no”.

Develop a “production of critical materials” list

The national security adviser should also oversee the development of a critical materials list, which would determine supply-chain vulnerabilities and areas where stockpiling and domestic production should be supported.

A general principle should be authoritarian regimes with strategic goals antithetical to Australia’s are not countries we should rely on for critical materials. Whole sectors of Australian industry have been built around just-in-time supply of critical materials, and they’ll lobby for a return to those dependencies after the crisis. Forcing this change will be costly but necessary.

Strengthen the Foreign ­Investment Review Board

In recent years, the government has taken useful steps to strengthen the capacity of the Foreign Investment Review Board to address national security issues. But the FIRB remains ideologically wedded to the principle that foreign investment is to be facilitated at all costs. At least publicly, the board doesn’t acknowledge that investment from China carries greater risks than investment from democratic countries. The FIRB should be separated from Treasury, given its own statutory basis and report to the PM via the national security adviser.

A key task for government will be to work out how to unpick the consequences of past FIRB recommendations to allow foreign purchases of large parts of the electricity grid, gas infrastructure, seaports, airports, medical facilities and farmland.

A redesigned FIRB can be given a remit to promote an investment framework that builds partnerships with allies and democracies with strategic interests that align with Australia’s.

Produce a new Defence white paper

A new Defence white paper will be needed to rethink the strategic changes accelerated by COVID-19. Unlike the 2016 Defence white paper, which focused on long-term investment proposals for the ADF out to 2030 and 2040, this process needs to focus on the capability of the force and what can be done quickly to increase deterrent capacity and strike power. This includes looking at an industrial base rapidly able to produce critical inputs for war despite interruptions to global supply chains.

Unsurprisingly, China will be a major focus. While the public white paper may be more muted on this topic, the government can’t allow too substantial a gap to be created between its classified assessments and what it tells the people. This will require a dose of courage.

The 2016 Defence white paper took steps that strengthened and deepened Australia’s alliance with the US. That relationship remains vital and is of such a calibre that it will outlast the Trump presidency, but the theme of the next Defence white paper must be about building an independent and sovereign defence capability. This will require a lift in defence spending.

Invoke the Lombok Treaty

The Lombok Treaty signed between Australia and Indonesia in 2006 is intended to facilitate closer co-operation in a wide range of security areas. Article 18 of the treaty anticipated deepening “emergency co-operation”.

Canberra should open discussions with Jakarta now about invoking the treaty. It seems the coronavirus isn’t yet as advanced in Indonesia as in some other countries, but it’s certainly in the country and will surely be spreading, even if unreported.

I would advocate for a full-on effort to assist Indonesia to get ready for the spread of the virus. This isn’t simply a humanitarian imperative but also a strategic one, reflecting Indonesia’s long-term importance to our security. The closer and more trusting we can make our relationship, the better for both countries.

Turbocharge the relationship with Japan

This is also an important moment to deepen our already very successful relationship with Japan, which has a similar strategic outlook to Australia, is impeccably democratic and is a close ally of the US. Working together, Japan and Australia have the capacity to take on something of a shared leading role in regional security. We need to work hard to align our policy thinking, share information, train our forces to work closely together and complement each other’s efforts in dealing with other countries. Australia and Japan are America’s most effective allies in the Pacific, so closer co-operation will strengthen our alliance by giving America confidence we’re looking after our own security.

A formal defence and security treaty between Japan and Australia should now be considered. This would demonstrate resolve in the face of more assertive PRC actions in the region, underpin the drive to closer co-operation and show other countries in the region that there are options other than just yielding to Beijing.

Establish a defence treaty with key Pacific island countries

Building on the success of the Pacific Step-up, Australia could use this moment as an opportunity to seek to formalise a deeper defence and security relationship with key Pacific island countries. The PRC is doing everything it can to use the COVID-19 crisis to deepen unhealthy dependency on Beijing. In mid-April, a Royal Australian Air Force C-17 was unable to land at Port Vila airport in Vanuatu because an aircraft chartered by a Chinese state-owned entity was blocking the runway. Australians should be under no illusion that the PRC is using the crisis to try to establish dominance in the Pacific.

It will take a massive effort to reverse this trend, but that’s an effort we must make or else we’ll find the PLA establishing permanent presences at Pacific locations.

Canberra could look to rebase its relations with key Pacific island countries by offering treaty relationships that would underwrite the region’s military security. Australia is able to offer the Pacific island nations significant enhance­ment of their health security and human security capabilities. This will take investment and engagement to a level not seen since they assumed sovereign independence. In return, Australia needs to ask the Pacific island countries to support a shared approach to regional security that’s designed to reduce the malign influence of China. This could lead to joint defence facilities in some locations. If Australia has a compelling strategic interest in minimising PRC access and influence in the region, we need to understand that we have to be the chief provider of the alternative security presence.

Taken together, these eight steps will ensure the country has a more co-ordinated national security approach designed to strengthen defence capabilities, give Australia a leading role in the security of our neighbourhood, strengthen our sovereignty and reduce dependence on the PRC. These will be costly measures, but they’re essential steps to protecting our interests in an increasingly hostile strategic environment.

Originally published by: The Australian on 02 May 2020