Australia's Soft ASEAN Approach
Amid the geopolitical tensions between Washington and Beijing, the strategic imperative to keep these superpowers happy will mean Australia starts at a disadvantage in this economic beauty contest.
Invested in Southeast Asia
The Australian Government has today launched Invested: Australia’s Southeast Asia Economic Strategy to 2040 to deepen Australia’s economic engagement with our region and ensure our shared future prosperity.
The strategy, developed by Mr Nicholas Moore AO, Special Envoy for Southeast Asia, was announced by the Prime Minister at the ASEAN Indo-Pacific Forum in Jakarta today.
It sets out a practical pathway to increase Australia’s two-way trade and investment with the region.
Southeast Asia is a centre of global activity and business, and one of the fastest-growing regions in the world. The strategy outlines how Australia can seize the vast opportunities our diverse and vibrant region presents. It also describes what Australia can offer our region, as a trusted and reliable partner.
The Special Envoy identified 10 priority sectors offering the most potential for growth: agriculture and food; resources; green energy transition; infrastructure; education and skills; visitor economy; healthcare; digital economy, professional and financial services; and creative industries.
The Prime Minister has committed to immediately support three initiatives that go to the heart of the strategy and are an investment in Australia’s economic future:
Investment Deal Teams ($70.2 million over four years) who will be based in the ASEAN region and will work with Australian investors, Southeast Asian businesses and governments to identify and facilitate investment opportunities.
Southeast Asia Business Exchange ($19.2 million over four years) to boost two-way trade and support Australian exporters to enter, compete and grow in the fast-growing markets of Southeast Asia. This will include a trade and investment campaign to promote opportunities in Southeast Asian markets to Australian business and consumers.
Placements and Internships Pilot Program for Young Professionals ($6 million over four years) which will help to build enduring links between Australia and Southeast Asian businesses.
This strategy reaffirms the Australian Government’s commitment to deepening our engagement with Southeast Asia.
The strategy is available at: Southeast Asia Economic Strategy | Australian Government Department of Foreign Affairs and Trade (dfat.gov.au).
Implementation of the strategy will be led by the Minister for Foreign Affairs, the Treasurer and the Minister for Trade and Tourism, supported by a joint taskforce between the Department of Foreign Affairs and Trade and the Treasury.
Quotes attributable to Prime Minister Anthony Albanese:
“Southeast Asia’s fast-growing economies present a major opportunity for Australian business, but we haven’t kept pace with their exponential growth.
“Our economic future lies with Southeast Asia. This strategy outlines how we can harness this growth, and seize the vast trade and investment opportunities our region presents.
“I thank Special Envoy to Southeast Asia, Nicholas Moore, for developing a comprehensive strategy based on extensive consultation across the region.”
Quotes attributable to the Minister for Foreign Affairs, Penny Wong:
“The Albanese Government is deploying all elements of our national power to make Australia stronger and more influential in the world, including by deepening our engagement in the region.
“Investing in priority sectors such as the green energy transition, infrastructure and food security is an investment in Australia’s future and the future of the region.
“The strategy reinforces that trade and investment diversification is key to our shared future prosperity and economic security. We seek genuine partnership with Southeast Asian economies to capture untapped opportunities for our mutual benefit.”
Quotes attributable to Treasurer Jim Chalmers:
“Australians can be the beneficiaries of the some of the big shifts that are underway in the region by deepening our engagement in Southeast Asia.
“Whether it be the energy transformation, high-skilled manufacturing or world-class produce, we have the goods and services that the region needs to power its growth in the decades ahead.
“Greater integration with the dynamic markets of Southeast Asia will ultimately help deliver better jobs and better opportunities here at home.”
Quotes attributable to the Minister for Trade and Tourism, Don Farrell:
“This strategy reinforces our intent and priorities to expand and diversify trade and investment between Australia and Southeast Asia.
“It charts a pathway to help Australian exporters, investors, tourism businesses, higher education providers, and creative sectors make the most of the booming opportunities in our region.”
Read more here.
Australia to double down on Asean pivot when it hosts March summit
By Shannon Teoh
KUALA LUMPUR – Australia will host, for just the second time, a summit with Asean on March 4 to 6, with expectations that it will make a concerted bid to restore its standing as a key economic partner.
Prime Minister Anthony Albanese launched the Invested: Australia’s South-east Asia Economic Strategy To 2040 report in Jakarta at last September’s Asean Summit, signalling his administration’s keenness to deepen trade and investment ties with its nearest regional neighbours.
Thus, the Australia-Asean Special Summit will be held in Melbourne, presenting an opportunity to lay the foundations of what Mr Albanese says is his country’s “economic future” in South-east Asia. The meeting also marks half a century since Canberra became the regional bloc’s first dialogue partner.
Invested – now widely known as the “Moore Report”, having been spearheaded by investment banker Nicholas Moore who is credited with building the Macquarie Group’s Asia-Pacific footprint – outlines how Asean member states have outpaced the growth of Australia’s traditional economic partners and will continue to do so.
Yet the region’s share of Australian trade has been stagnant for two decades and, as at 2022, hosts less than 3 per cent of Australian foreign investment, which dropped by more than half in the preceding five years.
Add to that tensions with China since the Covid-19 pandemic and the need for Australia to seek greener pastures, not just for continued growth but also to reduce concentration risk with its top trade partner, and the pivot to South-east Asia is seemingly a no-brainer.
Australian Senate opposition leader and shadow foreign minister Simon Birmingham, however, notes the challenge of overcoming “perceptions of political instability or risk” stemming in no small part from a “lack of cultural understanding or awareness” of Asean.
“But we’ve managed to overcome those things with the giant (of Asia) in China. We are lucky, in that for us, (Invested) brings us still back in many ways to the region that we’ve always sought to pursue the relationships with, but where we need to double down on pursuing them as strongly as we possibly can,” the immediate past finance minister told The Straits Times.
Still, Australia’s prestige as a regional economic powerhouse appears to have lost its shine, even though it is still a key defence partner and widely viewed as Washington’s “deputy sheriff” of the Indo-Pacific.
Most Asean leaders who will gather in Melbourne – six years after Australia hosted them for the first time – come with China as their largest trading partner and the United States among its top investors (the US invests more in Asean than in China, Japan, South Korea and India combined).
Amid the geopolitical tensions between Washington and Beijing, the strategic imperative to keep these superpowers happy will mean Australia starts at a disadvantage in this economic beauty contest.
“In certain circles, there is a prevailing complacency in acknowledging the benefit and the need to do the hard yards in getting to know new markets. Australian businesses have a lot to offer. At the same time, there’s work to be done to build ‘Asia Capability’ to support expansion into new markets,” Melbourne-based consultancy Asialink Business’ chief executive Leigh Howard told ST, noting that Australia is not the only country competing for engagement with the region.
He also pointed out how selling commodities to China has served Australia well, but “it is crucial to distinguish this from investing in a market (and) establishing a physical presence in-country”. He noted that “how you interact, foster relationships, and build a deeper understanding of the local market... will be critical to the success of Australian businesses venturing into South-east Asia”.
Read more here.