Instead of the kangaroo,
Australia's national animal emblem should be the
platypus, an odd duck-billed, water-dwelling,
fur-wearing, egg-laying mammal. In much the same
way, Australia represents European values, or at
least tries to, in a region suffused with either
Confucian ethics, Islamic mores or spiritual
transcendentalism, depending on which Asian
country you choose for comparison. As US influence
in Asia ebbs away, does Australia gain an
opportunity to be the standard-bearer for the
West
in Asia, or does it face being consigned to the
peripheries of Asian strategic considerations?
From a purely economic perspective,
Australia's strategic position couldn't be any
worse. Half of its exports are primary products,
and roughly two-thirds of imports are manufactured
goods. This mix puts Australia in the same bucket
as other Asia-Pacific natural-resource exporters,
rather than in the value-added spectrum of
countries such as Japan and South Korea. Australia
also exports more than two-thirds of its total to
East and South Asia, with few products making it
to Europe or the Americas. This dependence on
Asian countries firmly puts the country in the
local rather than global sphere of influence.
The strategic rationale for any meaningful
Australian role in Asia is compromised by its
meager population, which at 20 million is
equivalent to a year's growth in the population of
China or India. Additionally, Australian
participation in the Iraq conflict has roused the
ire of Muslims across Asia, which precipitated the
deadly Bali bombings in 2005, while cultural
conflicts in the environment post-September 11,
2001, pushed the earlier Bali bombings in 2002.
Call me a skeptic, but somehow the strategic
equation of 20 million people facing off against
200 million angry neighbors fails to add up. In
essence, Australia has to choose a new role for
itself in the next few years, with a likely
acceleration in the time scale should the US
strategic withdrawal gather pace under Democratic
leadership. [1]
'Two Wongs don't make a
white' As if the strategic position
explained above were not challenging enough,
Australians have worked assiduously to cultivate
an image of being the region's bully. Their
behavior toward various neighbors is poor even by
the low standards observable across Asia, while
the country's politicians have managed to put many
a nose out of joint across the region. Famously,
Malaysia's Mahathir Mohamad pooh-poohed
Australia's role in the late 1990s, in essence
dismissing the country as a listening post of the
United States.
The reasons for countries
such as Indonesia and Malaysia to exercise
hostility against Australians are of course
related to Australia's long-standing animosity
toward Muslim immigrants. Racial riots in Sydney
aimed at Australians of "Middle Eastern
appearance" as recently as 2005 were but a
culmination of years of hostility shown by the
country's politicians to immigrants from Muslim
countries, including the infamous case of the boat
people from Afghanistan beginning in 2001.
Going further back in history, Australians
adopted greater animosity toward Chinese peoples
in the 1960s and '70s, which was exemplified by
the wide use of 1940s immigration minister Arthur
Calwell's quote "Two Wongs do not make a white"
[2] in both the media and political circles. Even
in the late '90s, Australian politicians such as
Pauline Hanson made substantial headway by
espousing racist politics. Interestingly, Hanson
went on to blame Prime Minister John Howard for
her subsequent election losses, claiming that he
had hijacked her own policies - indicating that
mainstream politicians had embraced the alienation
of Asians as a core value.
The ugly
Australian More recently, Australia's
cricketers kicked up a big hoo-hah in India [3]
after insulting the president of the cricket board
at an award ceremony. Gesturing with his index
finger (mercifully, not the middle one),
Australian captain Ricky Ponting motioned Sharad
Pawar, president of the Board of Control for
Cricket in India (BCCI), to hand over the team's
trophy, and subsequently other Australian
cricketers were seen pushing the elderly Pawar
offstage.
Indian media reactions to the
incident were predictably mixed. While many
commentators took umbrage at the staggering lack
of culture on display, others went on to use the
incident to attack the role of Pawar himself, who
as a politician had reportedly played some shrewd
tactics to usurp the lucrative role of BCCI
president from more qualified candidates. It is
often a feature of Indian media that someone comes
up with an "on the bright side" for disaster
stories. [4] On the Internet, Indian bloggers have
too often degenerated to referencing the "poor
bloodlines" of Australians, castigating them as
descendants of penal colonists, in essence
adopting the same racist attitudes as their
intended targets.
Whether or not the
cricket incident was a minor one that doesn't
merit longer introspection is moot to examining
what all this negative goodwill does for Australia
in the next few years, when I expect the country
to face an existential crisis.
Death of
a thousand cuts Looking through the next
few years, a few scenarios will likely push
Australia over the edge.
Locally, the
country's hyperactive housing market has already
shown signs of cooling off, because of the
leveling off in interest from foreign investors
and more aggressive interest-rate hikes than
originally expected. Second, the decline in
commodity prices over the past few weeks adds more
pressure to Australia, by trimming its export and
profits, in turn depressing stock-market
valuations.
Third, the yawning gap in
trade will likely cause the country's currency to
collapse in coming months, particularly if the US
dollar declines against Asian currencies as well.
This adjustment is sorely needed to improve
Australia's competitive position, although as I
note above, the lack of value-added exports makes
the impact less meaningful. The combined impact of
the decline in house, stock and currency values
could put the country into a recession.
Any downturn will reveal Australia's fault
lines clearly. Both sides of the country's
economy, namely services and primary, are
vulnerable. While advantages such as an educated
workforce and the rule of law are positive for
Australian service companies, competitors include
Asia's city-states [5] as well as emerging service
giants such as India. In primary businesses, such
as mining and agriculture, the country's cost
ratios are too high to sustain profits if
commodity prices drop further, thanks mainly to
labor - which has of course benefited from the
absence of imports of unskilled workers.
Confronted with an economic crisis,
Australian policymakers need to adjust their
priorities. As I expect the environment will also
include a gradual withdrawal of US presence across
the Asia-Pacific region, Canberra hardly has any
legs to stand on. [6] To recover, Australia will
need to enhance the value of its service exports,
where it faces tough competition from India, or
its manufacturing exports, where it faces even
tougher competition from China.
Immigration has been used as an effective
tool by many Asian countries, including Singapore,
to boost their economic fortunes. Given the
volatile political history described above, and
the poor image that Australians have across Asia,
the country will have to double its efforts if it
intends to attract any useful talent from the rest
of the region. Even if this change in policies
does prove successful, Australia will have bought
some time, but I very much doubt that a meaningful
longer-term solution can be worked out in the
current demographic/economic framework.
Basically, the best solution for
Australians is to sell their land to Asians and
move back to Europe.
Notes 1. China's four-play, Asia
Times Online, November 11. 2. Arthur Calwell
himself may not have meant the 1947 remark to be
racist. He explained later that the phrase was
intended to be at the expense of a member of
parliament, T W White. 3. This is all based on
media reports; I have not seen any of the
television footage myself. 4. Needless perhaps
to add, that feature is quite different from many
other Asian markets where the media tend to adopt
a more unified approach to specific issues. 5.
Death of city-states,
Asia Times Online, October 7. 6. The term
"legless" is often used to describe drunk people,
which is interesting given the Asian stereotype of
Australians as a hard-drinking crowd.
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