A Southeast Asia 'Step-Up' - problems and opportunities

Jeremy Costa | Australian foreign policy fellow

Calls for Australia to engage in a Southeast Asia ‘Step-up’ akin to Canberra’s trademark Pacific Step-Up policy continue to grow. Economically, the region certainly presents as a lucrative market, but remains largely untapped by Australian business. Moreover, as Chinese trade restrictions mount and the government comes under increasing pressure to diversify the economy, Southeast Asia will likely receive even greater attention from policymakers.


But while Southeast Asia sits within Australia’s broader notion of the Indo-Pacific, it is a region of distinct diversity and should be treated as such. Unlike the Pacific, there will be no uniform political, security or economic policy toward the region which could satisfy the vastly divergent priorities of its encompassing nation-states.


Namely, Australia will be required to navigate an array of political systems, from the “electoral authoritarian” regimes of Cambodia, Malaysia, Singapore and Myanmar; to the closed autocracies of Brunei, Laos, Vietnam, and Thailand and the quasi-democracies of Indonesia, the Philippines, and Timor-Leste. Likewise, countries in Southeast Asia are varied in their perceptions of China’s rise. Compare Cambodia and Laos’ embrace of the economic incentives of Chinese markets to tension over Vietnam and the Philippines’ competing South China Sea claims, for instance.


Consequently, any Australian ‘Step-Up’ in Southeast Asia is more likely to look like a range of engagement strategies. With some countries this may include political and security arrangements, but with most it will focus on growing economic ties. Hopes for impactful regional arrangements with the Association of South East Nations (ASEAN) are unlikely to be met, for political priorities in the region are too diverse, governance structures too complex and developments too fluid for a set of unmovable strategies. Instead, Australian policymakers will need to be proactive, adaptive, and flexible to meet the challenges of complex regional dynamics.


Harnessing Australia’s Federal System


Navigating these challenges will require more than traditional foreign policy actors. While the Federal Government and the Department of Foreign Affairs and Trade (DFAT) will rightly lead the charge in bilateral and multilateral engagement with the region, Australia’s approach should not be limited to traditional actors. Modern diplomacy requires a range of different voices and relationships cannot exclusively be managed from Canberra.


The states and territories have long been undervalued for their contribution to growing economic partnerships. Victoria and New South Wales have developed Southeast Asia engagement strategies which seek to increase economic engagement with countries in the region. Western Australia, too, has sought to boost trade and investment ties as a part of its Diversify WA strategy – recently signing an MoU to strengthen economic and cultural ties with Ba Ria-Vung Tau Province in Vietnam. However, recently introduced legislation targeting these types of arrangements could discourage crucial domestic actors from seeking new economic partnerships.


The private sector and business community will also be crucial partners in any Australian step-up. Building on initiatives such as the ASEAN-Australia Business Summit, which brought together over 100 of the region’s top CEOs in 2019, Australia should continue to work with partners in the region to encourage Australian businesses to develop linkages with regional hubs.


Navigating ASEAN


Despite occasional speculation to the contrary, ASEAN centrality remains at the heart of Southeast Asian diplomacy and foreign policy. Working within its structures is certainly complex, particularly due to its consensus decision-making system. However, its continued importance in the region should not be understated.


Nevertheless, engaging with ASEAN is a necessity, even if Canberra would prefer to prioritise bilateral engagement. Fortunately, Australia has a number of mechanisms with which it can ramp up its engagement. The benefits provided by Australia’s nomination as a dialogue partner should not be undervalued. It already benefits greatly through participation in ASEAN-led bodies, events, summits and initiatives that provide a regular opportunity to deepen relations with Southeast Asian states. Prime Minister Scott Morrison’s participation in the virtual ASEAN-Australia and East Asia Summit in the midst of the COVID-19 pandemic is reflective of its enduring relevance.


Looking forward, Australia should not only be seeking to become more active in ASEAN’s array of diplomatic forums, but should be encouraging its allies, namely the US, to engage as much as possible.


Bilateral engagement certainly has its place, particularly as Australia navigates newly enforced Free Trade Agreements with Indonesia and ASEAN – but it should be as well as, not instead of, greater ASEAN participation.


Opportunity in a post-COVID World


The coronavirus pandemic provides Australia with an opportunity to re-calibrate its foreign policy with stronger engagement with Southeast Asia a focus. The announcement of Australian support for COVID-19 vaccine access in Southeast Asia as well as the Pacific is welcome news, and perhaps signals that Australia will seek to employ an outwardly facing Indo-Pacific strategy in response to growing challenges and tensions in the region.


Stepping up engagement with Southeast Asia should be priority number one in this new agenda. But expectations for a Pacific Step-Up style policy should be tempered. A successful strategy will require multifaceted engagement from national and subnational actors across the country and will require patience, precision and perseverance. Nevertheless, there is little doubt that now is the time for Australian engagement to step-up in the region. Australia’s future prosperity and security will rely on it.


Jeremy Costa is the Australian foreign policy fellow for Young Australian's in International Affairs.