Enhancing the long-term economic opportunities for the Indo-Pacific region to ensure it remains safe and prosperous was at the core of the agenda for the annual Australia-US foreign and defence ministerial meeting (AUSMIN) in Sydney on Sunday. We can expect that leveraging of private sector engagement in the region to be a key focus for both countries going forward.
The complexity of the challenges that the Indo-Pacific region is experiencing provides the context for AUSMIN’s discussions and workplan. These challenges include an increasingly fraught security environment, China’s assertiveness and the growing infrastructure and energy needs of the region. The United States’ ongoing strong and unwavering commitment to the region is essential. However, there have been moments where their reliability as a continued steadfast partner has been called into question. Australia again pressed the need for that commitment on Sunday, and while the US demonstrated they ‘get it’, the next step is deciding how to act at an accelerated speed on the challenges flagged.
Both countries are looking at ways in which to achieve greater presence and impact in the region by leveraging stronger country groupings, private sector engagement and by identifying very specific and focused streams of work. For example, both countries agreed to enhance critical mineral supply chain resilience by holding the Australia-US Critical Minerals Dialogue in Washington DC, which will be preceded by stakeholder engagement in Perth. Another example is the commitment to hold the second Australia-US Energy Dialogue, building on the 2018 Turnbull-Trump United States-Australia Strategic Partnership on Energy in the Indo-Pacific region, which is designed to promote energy infrastructure, low emissions technologies and global gas markets.
In the coming decades, Asian economies will create over half of global GDP. As a result, it is estimated that the Indo-Pacific will need to attract over $25 trillion in order to fund critical needs including energy and infrastructure. The business and investment opportunities for Australian and US companies will become an increasingly significant and enhanced business engagement is encouraged and welcomed. Take for example the Australia-Japan-US Trilateral Infrastructure Partnership, which both countries committed further towards during the ministerial consultations by intending to hold a mission to Southeast Asia later in 2019. This Partnership is designed to invest in projects in the Indo-Pacific region that build infrastructure, address development challenges, increase connectivity and promote economic growth.
Governments like those of the United States and Australia cannot meet the needs in the region alone, and even if they could, they cannot necessarily move fast enough to compete with investments or loans coming from China. Leveraging private sector investment in the region is one mechanism to counter-balance Chinese investment in the region. In this case, the future geo-strategic benefit is further accentuated by the investment partner’s aligned values and operating principles. Delivering long-term quality solutions that genuinely engage regional partners will be an important characteristic of US-led private and public sector engagement in the region.
At the conclusion of AUSMIN in a public speech, Secretary Pompeo directly invited Australian companies to look into in the Indo-Pacific Business Forum in November to be held in Bangkok, which will promote private sector investment into the region.
Going forward, something to watch will be how both Australia and the United States ensure long-term, genuine and sustainable engagement in the region based on the principles set out at AUSMIN. There is merit in having a strong workplan and it will be both countries challenge in the year ahead to adhere to it, and work closely with regional partners and businesses. The upcoming US presidential election will hopefully not distract from this much-needed agenda in the Indo-Pacific.
Leading into Prime Minister Scott Morrison’s state visit to the United States, scheduled to take place next month, these discussions and workplan set a strong agenda from which to deepen our collaboration in the region, bolstering the economic and security capacity of the Indo-Pacific.
Although, perhaps the first issue that Australia has to navigate following AUSMIN is whether it joins the US-led global coalition to protect Gulf shipping, at their direct request. Of key consideration to Australia in this decision-making process will be how much of the US strategy is focused on de-escalation of tensions through diplomatic means.