in the plenary session on
Deterrence and Regional Security
11th International Institute for Strategic Studies
Asia Security Summit
The Shangri-La Dialogue
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Thank you Dr. Chipman for your warm welcome.
Fellow plenary session panel members, Deputy Prime Minister and Minister for National Defense of Cambodia General Tea Banh and Minister of Defense of Myanmar, Lieutenant General Hla Min.
Ladies and gentlemen.
Thank you very much for inviting me to the 11th International Institute for Strategic Studies’ Shangri-La Dialogue and to present in this plenary session on Deterrence and Regional Stability.
I am pleased to attend my second Shangri-La Dialogue and, more importantly, pleased to keep up the Australian Defence Ministers’ record of attending every Shangri-La Dialogue since inception.
At last year’s Shangri-La Dialogue I spoke of the historic shift of strategic weight towards the Asia-Pacific and the Indian Ocean Rim. This continues.
The rise of China is a defining element of Asia’s growing influence, but one that is far from the only or whole story.
Everyone sees the rise of China but the rise of India is still underappreciated, as is the rise of the ASEAN economies combined.
The major and enduring economic strengths of Japan and South Korea also need to be acknowledged.
So must the great individual potential of Indonesia – as it emerges from a regional to a global influence.
Economic, political, military and strategic influence is moving to the Asia-Pacific and the Indian Ocean Rim, or as some now say, to the Indo-Pacific.
Whatever the label – Asia Pacific, Indo Pacific, Asian Century – it’s moving to our region, to our part of the world.
The ongoing shift in influence is, however, not just about economics or demographics.
Economic growth has underpinned military modernisation and military capability growth across the region.
The Indo-Pacific is also home to four of the world’s major powers and five of the world’s largest militaries – China, India, Russia, the United States and North Korea.
The implications of the historic shift to the Indo-Pacific continue to unfold. No one can say with precision or certainty what the new international or regional order will look like.
Our response to these challenges will be critical and will in many ways help determine the outcome.
Australia is optimistic and confident about that outcome, and believes that our region’s response must be based on respect for the international legal framework, positive and constructive bilateral relationships between key players – such as China, India and the United States – and support for dialogue within our regional architecture.
Australia has greatly benefited from the Asia-Pacific region’s long period of peace, security, stability and prosperity.
We owe this in great part to the creation and growth of regional institutions like ASEAN and its related forums, such as the East Asia Summit (EAS), institutions that continue to build habits of dialogue and cooperation in the region.
Upon coming to office in 2007, the Australian Government advocated the need for a regional Leaders’ meeting which could consider both strategic and security matters, as well as economic matters, with all the relevant countries of our region in the same room at the same time.
That is why Australia very much welcomed the entry of the United States and Russia into an expanded EAS last year. The United States and Russia joined with ASEAN countries plus Australia, China, India, Japan, New Zealand and the Republic of Korea.
As a result of an expanded EAS, Presidents and Prime Ministers, Foreign Ministers and Defence Ministers from all key countries in our region can now meet to discuss the full gamut of issues, from the economy, trade, investment and prosperity through to peace and security.
Australia strongly supported the inaugural meeting of the ASEAN Plus Defence Ministers Meeting (ADMM Plus) in Hanoi in October 2010 and looks forward to the second meeting in Brunei in 2013, and more regular meetings thereafter.
Australia is pleased to co-chair with Malaysia the Maritime Security Expert Working Group of the ADMM Plus.
This now works is alongside the other expert working groups: on Counter-Terrorism chaired by Indonesia and the United States, on Humanitarian Assistance and Disaster Relief, chaired by Vietnam and China, on Military Medicine chaired by Singapore and Japan and on Peacekeeping Operations chaired by the Philippines and New Zealand.
The establishment of the ADMM Plus offers real opportunities for enhanced practical military to military and defence to defence cooperation, including for disaster relief and humanitarian assistance.
In recognition of the growing strategic importance of India itself and the Indian Ocean – one of the busiest highways for global trade – Australia joined the Indian Ocean Naval Symposium (IONS) in 2008 and will host the IONS Conclave of Chiefs in Perth in 2014.
India and Australia are also leading the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), a Ministerial level forum with membership ranging across the Indian Ocean rim.
With India the current IOR-ARC Chair and Australia the Vice Chair, we are jointly leading efforts to strengthen regional security architecture, with a particular focus on maritime security.
After India’s two year period as Chair of IOR-ARC, Australia will serve as Chair for the subsequent two year period, with Indonesia expected thereafter.
India, Australia and Indonesia can all provide regional leadership through a forum that has much potential to deal with regional challenges. This also reflects a natural extension of significant and growing bilateral relationships between all three countries.
The IOR-ARC Ministerial Meeting in India late last year agreed to examine renaming the forum, including the option of an “Indian Ocean Community.” This is consistent with efforts, including by India, Indonesia and Australia, to lift the organisation to greater prominence and reflects the need to further develop the security architecture of the Indian Ocean Rim.
Another important regional security forum for Australia is the Five Power Defence Arrangements (FPDA).
The FPDA, established in 1971, to provide transitional security assurances for the newly formed independent states of Malaysia and Singapore, brings together Australia, Malaysia, New Zealand, Singapore and the United Kingdom.
As Singapore and Malaysia’s Defence capabilities increased, the FPDA has developed into a forum for multilateral Defence interaction.
The FPDA celebrated its 40th Anniversary last year, which saw FPDA militaries conduct Exercise BERSAMA LIMA in the Malaysian Peninsula area. The Exercise involved around 4,000 personnel, 19 warships, 68 military aircraft, as well as support elements from the FPDA countries.
Today, the FPDA retains conventional capabilities while also adapting to deal with modern non-convention challenges, such as counter-terrorism, maritime security, humanitarian assistance and disaster relief.
I turn now to the positive impact the United States’ presence has had on our regional stability over a long period of time.
Some seem to assume that the economic and strategic influence of the United States, the world’s largest economy and superpower, will somehow be rapidly eclipsed overnight as a result of the new distribution of power to Asia.
That is not Australia’s view.
I have referred earlier to the seminal importance of the bilateral relationships between the United States, China and India. That importance will continue.
In Australia’s view, the United States has underwritten stability in the Asia-Pacific for the past half century and will continue to be the single most important strategic actor in our region for the foreseeable future, both in its own right and through its network of alliances and security relationships, including with Australia.
The 2011 annual Australia-United States Ministerial Consultations (AUSMIN) marked the 60th Anniversary of the Australia United States Alliance, at the Presidio in San Francisco, where the ANZUS Treaty was signed in September 1951.
The Australia-United States Alliance is the indispensable, enduring feature of Australia’s strategic and security arrangements.
With the Asia-Pacific region going through a period of significant geopolitical change, it is important to ensure that our Alliance continues to grow and develop to meet the strategic and security challenges we face.
The Force Posture initiatives recently announced by Prime Minister Gillard and President Obama, have enhanced practical defence cooperation between Australia and the US, and represent an important step in renewed and enhanced United States engagement in our region.
In April, Australia welcomed the first rotational deployment of 250 US Marines to Darwin and northern Australia, growing to a rotational deployment of 2500 over the next five year period.
This represents an evolution of existing exercises and activities that the United States has conducted with the Australian Defence Force pursuant to our Alliance.
Over the six month rotational period, US Marine Corps will undertake bilateral training in Australia with the Australian Defence Force and also conduct unilateral training in Australia.
The US Marines will spend that time in Northern Territory training areas and ranges.
The intent in the coming years is to establish a rotational presence of up to a 2,500 personnel Marine Air Ground Task Force (MAGTF), rotating into Northern Australia in the northern dry season. A full MAGTF includes a Command Element, Ground Element, Aviation Element and Logistics Element. Equipment to support the MAGTF includes vehicles and some aircraft, in addition to personnel.
This initiative will provide tangible benefits for Australia by increasing the number, variety and complexity of training opportunities for the ADF, particularly ship to shore exercises, further developing our interoperability with US forces.
It also supports Australia’s long-held strategic interests in supporting US engagement in our region in a manner that promotes peace and stability.
The initiatives are also acknowledgement that our respective military forces must be postured to respond in a timely and effective way to the range of contingencies that may arise in our region, such as humanitarian assistance and disaster relief.
We expect that this deepening practical cooperation with the United States will also reinforce existing relationships and provide opportunities to enhance cooperation with our security partners in the region.
Australia is exploring these possibilities with the United States and our regional partners.
For example, at the inaugural Australia-Indonesia Foreign and Defence Ministers (“2+2”) Dialogue in Canberra in March 2012, Australia and Indonesia discussed the possibility of drawing on the US Marines Corps rotational presence in Australia to hold in 2013 a trilateral Australia-Indonesia-United States humanitarian assistance and disaster relief exercise under the general auspices of the East Asia Summit humanitarian assistance and disaster relief framework.
Australia is responding proactively to this historic shift in strategic weight towards the Indo-Pacific.
The scale and pace of Asia’s transformation is unprecedented and the implications for Australia are profound.
In September last year, the Australian Government commissioned a White Paper on “Australia in the Asian Century” to consider the likely economic and strategic changes in the region and what more can be done to position Australia for that Asian Century.
The White Paper is broad in focus and will consider:
• The current and likely future course of economic, political and strategic change in Asia, encompassing China, India, the key ASEAN countries, as well as Japan and the Republic of Korea;
• The domestic economic and social opportunities and challenges of the Asian Century for Australia;
• Opportunities for a significant deepening of our engagement with Asia across the board, including in the economy, science and technology collaboration, clean energy, education, business-to-business and people-to-people links and culture;
• The political and strategic implications of the Asian Century for Australia; and
• The role of effective economic and political regional and global cooperation.
The White Paper will, most importantly, consider current Australian policy settings and make judgements on:
• A high-level strategy to enhance Australia’s navigation of the Asian Century, including appropriate policy settings. The focus will be on opportunities to increase the economic and other net benefits to Australia from the global economic and strategic shift to Asia in the short, medium and long term;
• Early actions which are able to be taken within five years of the submission of the review; and
• Further policy initiatives, which may be developed over the medium-to-longer term, out to 2025.
The Asia Century White Paper will be released by the Prime Minister, later this year.
In early May, the Prime Minister and I announced that a Defence White Paper would be produced in the first half of 2013.
The Australian Government remains committed to delivering the core capabilities identified in the 2009 White Paper and to delivering one of the most capable defence forces in our region, with the people and equipment needed for the task.
The Australian Government is also committed to making strategic, risk-based decisions about Australia’s long-term national security and defence needs.
This means that Australia needs to periodically and methodically review the future capability requirements of the Australian Defence Force to ensure that they are appropriate to changing circumstances.
As outlined in the 2009 Defence White Paper, this process involves a new White Paper at intervals no greater than five years.
Because of a number of significant developments internationally and domestically since the 2009 White Paper, the Government is bringing the next Defence White Paper forward to 2013.
These developments are on several fronts:
The Indo-Pacific has risen as a region of global strategic significance including the growth of military power projection capabilities of countries in the Indo-Pacific.
The Indian Ocean and the Pacific Ocean spanned by the South East Asian archipelago is emerging as a single strategic system.
Extreme events in this region have also highlighted the growing need for the provision of humanitarian assistance and disaster relief.
Australia has committed to long-term support for Afghanistan. But our training and mentoring forces in Afghanistan will draw down and return to Australia in line with the International Security Assistance Force (ISAF) transition strategy.
As well, it is more likely than not, the Australian Defence Force deployments in stabilization missions in East Timor and the Solomon Island’s will start to draw down during 2013.
These transitions will involve a major readjustment to Australian Defence Force posture and Australia’s defence priorities. The Australian Government needs to carefully work through what impact this will have on the Australian Defence Force.
Again in early May, the Prime Minister and I released also released the Australian Defence Force Posture Review.
The Force Posture Review assessed whether the Australian Defence Force is correctly positioned, geographically, to meet Australia’s current and future strategic challenges.
It was the first review since work done in the mid 1980’s by Professor Dibb for the then Defence Minister Beazley.
The Force Posture Review addresses the range of present and emerging global, regional and national strategic and security factors, which require careful consideration for the future.
The Force Posture Review concluded that the Australian Defence Force needs a force posture that can support operations in Australia’s northern and western approaches, as well as operations with our partners in the wider Asia Pacific region and the Indian Ocean Rim, the Indo-Pacific.
The 2009 Defence White Paper noted that the Global Financial Crisis was the most serious economic and financial crisis in decades, and that its strategic impacts were still unfolding.
Since then, the Global Financial Crisis has continued to have a significant, adverse impact on the global economy.
Following the Global Financial Crisis, the defence forces of major developed counties have both increased efficiencies and reduced their budgets, including the United States, the United Kingdom and Canada.
Australia’s 2009 Defence White Paper was completed before the unfolding of these events. Financial circumstances clearly present a real challenge to the 2013 White Paper, as our recent Defence Budget reflected.
In 2011, Defence commenced implementation of a wide ranging reform program, including in the areas of capability development, procurement and acquisition, the Defence Budget and the strengthening of personal an institutional accountability.
The Defence Planning Guidance is Defence’s lead strategy document. It articulates the strategic priorities that guide Defence to produce the military outcomes sought by Government.
The Defence Planning Guidance includes analysis of the future strategic environment, identifying the contingencies Australia might face in the bracketed timeframes of the next five years, five to 15 and 20 years and beyond.
The Defence Planning Guidance is updated annually to set strategic guidance for force structure and capability development, corporate planning, resource planning, preparedness management and critical enabling functions.
The update to the 2011 Defence Planning Guidance has been completed and will be considered by Government in the near future, and now in the context, of the 2013 Defence White Paper.
In the 2009 Defence White Paper, the Government determined a development process for future White Papers, with Defence to prepare, prior to a White Paper, a Force Structure Review.
The Force Structure Review will provide costed force structure options for use in developing the White Paper, assessing the equipment and capabilities the ADF needs to deliver national security and defence priorities.
Defence has completed a full review of its Defence Capability Plan including an audit of the plan and the development of new frameworks and methodologies for its management.
The Defence Capability Plan Review was considered in the 2012-13 Budget process.
The Australian Government’s economic priority this year was to return the Budget to surplus in the 2012-13 Financial Year, which has been achieved in the recent May Budget.
This is part of a strategy to ensure the strength of our economy, a strategy which is essential for the future of Australia’s economic security.
The Government has returned the Budget to surplus on time and as promised.
A surplus is appropriate given our strong economic fundamentals and an economy returning to trend growth.
The return to surplus, ahead of any other major advanced economy, sends a strong message to international investors on the Government's commitment to fiscal discipline and provides a buffer in uncertain economic times.
The 2012-13 Budget reaffirms the Australian Government’s long standing commitment to protecting Australia and our national security interests.
The 2012-13 Budget also maintains Australia’s efforts in confronting global security challenges, including maintaining our presence in Afghanistan and supporting stability in East Timor and Solomon Islands.
The Government is funding new defence capabilities that are expected to be in high demand now and into the future.
These investments include vital air and sea transport platforms which support current operations and build on Australia’s capacity to respond to humanitarian crises and natural disasters domestically and in our region.
These investments are balanced by deferring some Defence acquisitions, adjusting the Defence capital equipment program and delivering further operating efficiencies while delivering priority 2009 Defence White Paper capabilities.
The 2012-13 Budget also provides enhanced law enforcement and border protection capabilities, which will maintain a strong surveillance presence in Australia’s northern waters.
Following a comprehensive review of the Australian Defence Budget, Defence made a contribution to the Government’s fiscal strategy of $5.4 billion across the Forward Estimates and will see Defence contribute $971 million in 2012-13.
Importantly, we ring-fenced key priorities from these savings:
• there will be no adverse impact on operations in Afghanistan, East Timor or the Solomon Islands;
• there will be no reduction of the number of military personnel in the Army, Navy and Air Force;
• there will be no adverse implications for equipment for forces about to be deployed or on deployment; and
• there will be minimum impact on the delivery of core Defence capabilities.
There is no fundamental change to our Defence Budget from a strategic perspective:
• in the 2009-10 Budget, the Government, for the first time, budgeted over $100 billion for Defence across the Forward Estimates;
• last year in the 2011-12 Portfolio Additional Estimates Statements, Defence’s Budget across the then four years Forward Estimates period was $103.4 billion;
• in this year’s Budget, the Government has budgeted $103.3 billion for Defence across the Forward Estimates period;
• this level of funding will maintain Australia’s status in the top 15 nations in terms of world Defence expenditure, along with Canada either 13th or 14th in that list; and
• in comparison to G7 nations and China, Australia continues to be 2nd on the list of military expenditure per capita basis, with only the United States spending more per capita.
The Asia-Pacific and the Indian Ocean Rim is undergoing significant economic and strategic change. The changes in our region do present strategic challenges but also enormous opportunities in the years ahead.
We have all greatly benefited from the Asia-Pacific region’s long period of peace, security, stability and prosperity.
We owe this in great part to a long period of substantial adherence to international law and the international legal framework and the creation and growth of regional institutions that continue to build habits of dialogue and cooperation in the region within that context.
Our regional institutions continue to develop and we now have Presidents and Prime Ministers, Foreign Ministers and Defence Ministers from all key countries in the region meeting to discuss both issues of prosperity and investment and peace and security.
We must continue to invest our effort, energy and resources into our regional institutions to ensure that we are best equipped to manage the challenges that lie ahead.
As well, practical Defence to Defence and military to military cooperation in our region – in humanitarian assistance and disaster relief, peacekeeping training and operations, exercises and training and maritime security – will help build habits of mutual respect, trust and cooperation between our militaries and our nations.
This building of mutual respect, trust, confidence and adherence to international norms will minimise the prospect of tension and miscalculation.
Continuing to build support for our regional institutions and habits of dialogue will help us withstand and resolve tensions if and when they arise.
This is the best collective approach to deter conflict, enhance regional security and maximise prosperity for the people of our region and our nations.