CoverStory

The Pacific power

America’s renewed engagement with Asia comes at an opportune time

By Alan Dupont

So I don’t think there is any doubt, if there were when this administration began, that the United States is back in Asia. But I want to underscore that we are back to stay.

- Hillary Clinton, US Secretary of State, 12 January 2010

Hillary Clinton’s proclamation that the “United States is back in Asia” begs the question of whether the US could be said to have ever really left. Since its comprehensive defeat of Japan in the 20th century’s second great war, the US has maintained a substantial, unbroken strategic presence in Asia, fought in two other major conflicts (Korea and Vietnam) and is still engaged in a shadowy, ‘long war’ against terrorist groups in the Muslim heartland of Southeast Asia. For many Asians, the US is the principal guarantor of regional stability. Like it or not, America remains Asia’s indispensable power.

But in another sense Clinton is right. While president George W. Bush generally won high marks for the prosecution of his overall Asia policy, the perception in Southeast Asia was one of benign neglect—of a US administration overly focused on China and Japan which saw Southeast Asia primarily through the distorting lens of Bush’s self declared global war on terror. This essentially negative, defensive view of the region belied the reality of Southeast Asia’s thriving economy, underlying stability and the dynamism of its 600 million people.

Like all political leaders on assuming office, President Obama initially sought to differentiate his policies from those of his predecessor. Southeast Asia seemed to offer attractive possibilities, especially Indonesia where the president had spent part of his early childhood and could therefore claim to have special ties. Obama calculated that by reaching out to the world’s largest Muslim nation he could simultaneously burnish his Asian and Muslim credentials. And so it proved, as adoring crowds accompanied him throughout his first presidential visit to the Indonesian Republic. But Obama’s charm offensive had a more serious intent than merely image building; growing US economic and strategic interests meant that this neglected region was beginning to force its way up the administration’s foreign policy priorities, notwithstanding the considerable distractions of Afghanistan and Iraq.

However, the dilemma that Obama confronts is the gap between his aspirations and capacity to deliver. He cannot fully advance US interests in Southeast Asia while encumbered with a war in Afghanistan and residual but significant military commitments in Iraq. A further problem is American financial weakness and the gridlocked political system, which consumes most of the administration’s energy and reduces the scope and resources for strategic thinking and innovative diplomacy. As the US recovers, however, three mutually reinforcing trends will ensure that Southeast Asia assumes greater salience for Washington in the years ahead.

First, demographically, the US is being Asianised as it becomes more culturally and ethnically diverse. Whites will be a minority by 2042 as today’s minorities become the new majority. While the big demographic story is the Hispanicisation of the US, Asians are also becoming more numerous and their growth rates are higher than any other major ethnic group. According to the US Census Bureau, in 2010 there were 17.3 million Americans of Asian descent, a phenomenal 46 per cent increase during the century’s first decade. Migrants from the Philippines (3.2 million) and Vietnam (1.7 million) are among the largest groups. By 2050, nearly 41 million Americans are likely to identify themselves as Asian, a rate of growth four times faster than the national average which will give the US a larger Asian population than at least six East Asian states. Over time, this demographic dynamic will drive a new era of closer, more intense people-to-people ties with Asia, as well as trade and investment. Asian Americans will also be increasingly influential in shaping Washington’s domestic and foreign policy agendas away from the Atlantic towards the Pacific. For 21st century America, looking West means far beyond California’s iconic shores.

Second, Southeast Asia, including China, will be critical to future US prosperity and economic growth. Underdeveloped southern China, with a population of nearly 400 million—equivalent to the whole of Western Europe—is geographically and culturally joined at the hip with Southeast Asia and linked by an ever-deepening transport and communication network that traverses land and maritime borders. In continental Southeast Asia the contiguous states of Myanmar, Thailand, Laos and Vietnam are all moving to tap into the vast China market by integrating their respective road and rail networks as well as power grids. Over time, these developments will open up enormous opportunities for American trade and investment. While still modest, US trade with the 10 member states of the Association of Southeast Asian Nations (ASEAN) is expanding rapidly with exports growing twice as fast as they are to any other region in the world. Two-way US-ASEAN trade in goods reached $84 billion in the first half of 2010, a 28 per cent increase over the previous year, while US direct investment in ASEAN totalled $153 billion in 2008.

Third, as the locus of global economic and political power shifts inexorably to the Pacific, Southeast Asia’s geographical location at the maritime crossroads of Asia will invest the region with greater strategic significance for the US. Already 40 per cent of global merchandise trade and 50 per cent of energy trade passes through the narrow Malacca Straits to and from destinations in Europe, South Asia the Middle East and East Asia. These sea lines of communication have traditionally been protected by the US Navy, but Chinese leaders have made it abundantly clear that they are no longer prepared to outsource protection of these shipping routes to the US. China’s navy is gradually expanding its operational reach into the South China Sea, which has seen an intensification of geopolitical competition with several Southeast Asian states over disputed claims to ownership of small islands and coral reefs that sit astride rich deposits of oil, gas and fish.

Clinton and former secretary of defence Robert Gates aver that being back in Asia means a robust reiteration of US strategic interests in the region—specifically, the right of the US Seventh Fleet to untrammelled passage through the South China Sea and the Western Pacific more broadly; a multilateral resolution of the region’s maritime disputes rather than the bilateral solutions preferred by China; and a repositioning of its military forces to better advance US strategic interests. Gates even asserted that the US is a residential power in Asia, famously betting an interlocutor $100 at the June, 2011 Shangri-La Dialogue that five years from now, US influence in the region “will be as strong, if not stronger, than it is today.”

In the face of China’s rising might, most Southeast Asian nations have enthusiastically welcomed a stronger US presence in the region as a classic hedging strategy against the possibility that China’s rise may not be peaceful or benign, which has made for some strange bedfellows. It may well be that the Stars and Stripes could soon once again flutter from the pennants of US naval ships at anchor in their former Southeast Asian bases. Thirty-six years after the US beat a hasty and humiliating retreat from Vietnam, both countries signed their first formal defence agreement in Hanoi on 1 August 2011 following a rapid warming of defence and political ties that has seen joint maritime exercises in the Gulf of Tonkin and the possibility that the former US naval base at Cam Ranh Bay may be opened to ships from the Seventh Fleet. The Philippines is also pressing the US to strength defence ties, while Indonesia and Singapore have quietly indicated that they would welcome an enhanced US naval presence in the region that will probably lead to the stationing of new Littoral Combat Ships in Singapore.

The more congenial political environment in Southeast Asia comes at an opportune time for Washington, which wants to beef up its capabilities in Southeast Asia as part of a broader global force posture review. These periodic reviews are revealing indicators of changing US strategic priorities. What they show is a continuing evolution away from the large, permanent garrisons and bases that underpinned US hard power in Asia during the Cold War era towards smaller, more dispersed and austere facilities in friendly countries that provide greater operational flexibility without the high political and financial costs associated with permanent bases. Hence the mantra ‘places, not bases’, with US troops, ships and planes in and out as required. Southeast Asian facilities are attractive fallback options for the Pentagon, which worries that its forces in Japan, South Korea and Guam are highly vulnerable to the latest generation of Chinese missiles and aircraft. Having access to defence and port facilities in Southeast Asia would also improve the US Navy’s ability to control the critical sea lanes that run through the South China Sea and the Malacca Straits into the Indian Ocean.

LOCAL ALLIES 

The forthcoming global force posture review suggests a greater role for Australia which, alone among US allies, has deployed troops to every Asian conflict in which the US has been engaged since 1941. While shared values and strategic interests have long bound Australia and the US in an unusually intimate strategic embrace, Australia’s distance from Asia’s hot spots has limited the continent’s defence utility in the eyes of Pentagon planners. But from Washington’s perspective Australia’s geography now looks to be more of an asset than a liability in the new era of reduced US defence budgets and concerns about China’s growing power projection capabilities. The island continent is well beyond the range of most Chinese missiles and would be a relatively secure area for dispersed US military assets as well as offering useful logistics, training and port facilities, not to mention airfields. Unsurprisingly, the US is keen to see Australia acquire the ambitious, conventional defence acquisitions foreshadowed in the 2009 Defence White Paper, especially the more potent capabilities represented by the planned replacement Collins class submarines, air warfare destroyers and state of the art joint strike fighters. While a modest force, by the standards of Asia’s great powers, a bulked up Australian Defence Force would nevertheless be a valuable force multiplier for the US in any conflict with China in the Western Pacific.

Being back in Asia would therefore seem to be a felicitous outcome for both the US and Australia, reinforcing the importance of an alliance which has endured for nearly seven decades as the bedrock of Australia’s security. This certainly appears to be the judgement of the Gillard Government, which has unequivocally welcomed a renewed US strategic interest in Southeast Asia and shows every indication of responding positively to US requests for greater access to Australian defence facilities in exchange for financial assistance geared towards infrastructure improvements and even closer defence cooperation.

But there are some potential risks too. Given the fragile nature of her coalition government, the Australian prime minister will have to be vigilant that the so far quiescent Left is not galvanised into opposition by the conviction that the government is aligning itself too closely to the US. Such objections could be easily deflected if the government had a strong, parliamentary majority. But Gillard will have to tread warily on this issue given her precarious parliamentary position.

A second risk is strategic, and it has several interconnected elements. If the US is in decline, does it still make sense for Australia to hitch its wagon to the US horse? The US defence budget is under serious threat and Washington may no longer be in a position to provide the five-star security service to which Australians have become accustomed. At the very least, a financially stretched US will demand higher premiums from its alliance beneficiaries, adding to the pressure on Australia’s own defence budget. Moreover, Canberra needs to carefully weigh the regional costs of being seen as too close to the US, a frequently voiced complaint by China, which has a long-standing strategic interest in seeing Australia decoupled from the alliance but now has the trade and military clout to back its rhetoric with action. Many Southeast Asians also believe that Australia is too uncritical of the US. At times, this perception of dependence dilutes Australia’s Asian credentials and works against its regional diplomacy.

So the US being back in Asia may not be an unmitigated blessing for Australia if it means a substantially greater defence contribution and opposition from China, which is now Australia’s major trading partner and holds the key to its future prosperity. More generally, escalating US-China rivalry in Southeast Asia injects an unwelcome note of strategic uncertainty into a region that has been remarkably free of great-power tensions since the end of the Vietnam War. Unfortunately, Southeast Asia seems destined for an extended period of renewed competition between the US and China which will play out in quite different ways to that of the Cold War. Hu Jintao’s China is more formidable than either its Maoist predecessor or the former Soviet Union, and contemporary US-China rivalry will be complicated by the divergent actions and interests of other influential states, notably Japan, India and Indonesia. Unlike the Cold War, the geographical focus of this rivalry will be at sea, not on the land, driven by anxieties about resource security rather than ideology.

In order to minimise the risk of conflict and prevent a militarisation of Southeast Asia’s ocean highways, Australia and the US will need to do more than just tweak their long-standing alliance. They should certainly resist the temptation to respond to China’s new assertiveness by ramping up their defence capabilities without corresponding attention to the considerable diplomatic and soft power options at their disposal. A more efficacious approach would be to enlist the support of anxious Southeast Asians in developing a measured and comprehensive strategy towards China that rewards positive behaviour while putting Beijing on notice that defying regional norms will ultimately be counter-productive for everyone, including China.

This suggests much closer engagement between the US, Australia and Southeast Asia but in a qualitatively different way to that of the past in both scope and ambition. With the notable exception of Myanmar, most other members of ASEAN are united in their desire to see the US assert its traditional balancing role and default position as guarantor of regional stability. The empowerment of smaller states and the collective management of security problems is at the heart of Southeast Asian regionalism. No ASEAN state would want to cede their hard-won freedom to an aspiring hegemon or an Asian concert of great powers.

The challenge for the US is twofold. Its Southeast Asia narrative needs to more explicitly emphasise opportunities over threats and better capture the unrealised potential of ASEAN as a major market, a strategic partner, and source of people and ideas which, in aggregate, may one day eclipse Europe in importance. While Obama and Clinton are clearly open to these possibilities there has not been a great deal of substantive follow up to the ephemeral photo opportunities provided by Obama’s 2010 visit to Indonesia and Clinton’s regular attendances at regional fora. This attention deficit is unlikely to be addressed while the President has so many more pressing issues demanding his time and US resources. But by 2014, Afghanistan and Iraq will no longer dominate the US strategic agenda and the worst effects of the 2008 economic crisis should at last have dissipated, even if they linger for a time. So it would not be surprising to see the beginning of a decisive shift to Asia in Obama’s second term, or that of his Republican successor.

If the US is caught between its destiny and legacy, Australia has no excuse for ambivalence about the centrality of the US and Southeast Asia to its military and economic security. The critical challenge for Australia will be finding the right balance in relations with its principal ally, the US, and major trading partner, China, at a time when friction between them is likely to escalate over a range of regional disputes and their undeclared but increasingly obvious contest to be the dominant power in Asia. Historically, US-China competition has tended to play out in Northeast Asia, but as China’s ambitions and power grow, Southeast Asia may well become a second front with the potential to draw in Australia politically and strategically.

For their part, Southeast Asians have no desire to return to their bloody, fractious past, nor do they want to be supplicants to either the US or China after centuries of subservience to colonial and great power masters. This applies not only to democracies like Indonesia, the Philippines and Thailand but also the region’s authoritarian states, as Vietnam’s recent rapprochement with the US attests. Tighter strategic cooperation between Australia, the US and ASEAN will help to ensure that local disputes do not become the catalyst for wider conflict in Asia. But the stabilising and enriching effects of enhanced trade and investment should not be underestimated and here the US has a unique role to play because of its size and wealth. What has been lacking so far is a blueprint for US-ASEAN relations which can unlock Southeast Asia’s vast potential. The time has come for Washington to give greater prominence to a region which can only grow in importance for the US, and Australian leaders need to make this point to their American counterparts at every opportunity.