Wednesday, January 27, 2021

Biden and the subservience of Australia

 Written by: (Contributed) on 28 January 2021

Two recent high-level statements released from Canberra have revealed a great deal about problems confronting Australia in the post-Trump world of US diplomacy.

The first, a statement about the incoming Biden administration in the US was both lengthy and deliberately misleading about key issues, which were not addressed. No information, for example, was given about present growing economic problems, and reference to the US-led military and security frameworks which form the basis of the so-called 'alliance' between Australia and the US were quickly glossed over.

The second, provided an assessment of the Pacific, an area of Australian direct regional involvement. It drew attention to problems confronting Australia without providing clarification of the economic models which remain the cause of many of the problems arising.

Both statements can be regarded as raising serious questions about present state of Australia-US diplomacy, the present Cold War and trade war with China.

To coincide with Australia Day celebrations, Australian Minister for Foreign Affairs, Marise Payne, released a major diplomatic statement about support for the incoming Biden administration in the US. It was carefully worded and designed to reassure the US that Australia would continue to support the so-called 'alliance', which has dominated foreign policy considerations for Canberra since the end of the Second World War. (1)

While the statement raised various questions and problems facing the US diplomacy it was light-weight on appropriate answers. Reference to how the US was now faced with 'a more complex and challenging world', was only addressed with continued support from Australia 'in the Pacific and South-east Asia', which, historically, has been the area allocated by the US for Australian involvement on behalf of 'US interests'. (2) Reference was provided, however, about the significance of the 'Quad', the US-led defence and security body composed of Australia and Japan as regional hubs, with the recent addition of India, without divulging too much incriminating information.

Three days earlier a media release issued by Prime Minister Scott Morrison claiming Australia's 'alliance' with the US was considered more vital than ever, was likewise, brief on meaningful content although punctuated with numerous obsequious and sycophantic references toward the Biden administration. (3)

The fact the main diplomatic statement contained no reference to deteriorating economic considerations, both regionally and globally, is therefore, an interesting omission, designed specifically to divert attention away from a serious problem.

Information from the World Bank has revealed global GDP contracted 4.3 per cent last year due to the COVID-19 pandemic when measured for Real GDP, with the percentage change from previous year being recorded:

                WORLD ECONOMY                    2018          2019          2020
                                                                       3.0             2.3            -4.3

                ADVANCED ECONOMIES:           2.2             1.8            -5.4

                EMERGING MARKETS /               4.3             2.3            - 4.3     
                DEVELOPING COUNTRIES                                                        (4)

While the economic situation in emerging markets and the developing countries has proved dire, the position in the advanced economies has proved far worse with lasting implications.
The global economy is expected to grow by only a maximum of 4.0 per cent this year; the global economy will be about 5.3 per cent or $4.7 trillion smaller in 2021 than previously planned with lower levels of investment considered a major factor. (5) The World Bank noted, in an official publication at the start of 2021, that 'prospects for the global economy are uncertain'. (6)

The present deep economic malaise, however, has rested upon longer-term problems, from previous decades when measured with annual recorded levels of GDP growth:

                 GLOBAL ECONOMY:          MID-1960s          about 7.0 per cent
                                                                 2019 / 2020         just over 2.0 per cent
                 AUSTRALIA:                        MID-1960s          7.0 per cent
                                                                2019 / 2020          just over 2.0 per cent  (7)             

It has been noted 'years of disappointing growth also followed the 2008 global financial crisis … global forecasts … falling to an average 2.4 per cent annually … from 3.3 per cent seen before the crisis'. (8) In the decade from 2018-28 they are now likely to fall even further.

With such dismal economic statistics revealing the deteriorating nature of much of the global economy, it was, perhaps, only natural that reference to the problem was not included in the recent Australian diplomatic statement from Canberra.

The second diplomatic statement from Canberra, was not a departure from the first. It dealt with problems arising in the Pacific; it acknowledged there was a need to establish 'greater Australian business and investment in an environment in which there's almost no Australian banking and finance presence' to facilitate economic development. (9)

Problems, however, have arisen.

Informed opinion, elsewhere, about the present US-led Cold War toward China has already drawn attention to the problem of Australian business interests pitted against 'so-called security hawks', which invariably take a pro-US position of diplomacy and view all developments through Cold War focus, particularly in the Pacific. (10)

Most of the small Pacific island countries have been hit particularly badly with the recent COVID-19 pandemic. Their economies have tended to be based on small-scale production of cash-crops or mineral extraction with foreign mining companies. The usual economic structures across the region are, invariably, neo-colonial and designed specifically to serve the interests of foreign investors.

The economic models were foisted upon the countries as they achieved political and diplomatic independence; their newly independent governments were never allowed to ask major questions about economic sovereignty or the nature of the massive flows of finance capital which entered their economies and silently departed with huge dividends for shareholders elsewhere.

In recent times, however, China has emerged as a major diplomatic player in the region. It has specialised in 'softer-style' diplomacy with massive infra-structure programs to facilitate economic development. China's ascendancy has proved both rapid and dynamic; in fact, it has already successfully dislodged traditional US hegemonic positions. Claims from a retired US military leader that the US 'had lost reassured command of the Western Pacific', have coincided with an official US Congressional report 'the US is no longer clearly superior', have revealed the implications of changing balance of forces for US diplomatic positions. (11)

The changing balance of forces has already started to dislodge traditional neo-colonial relations across the Pacific as countries develop more favourable diplomatic links with China.

It is, therefore, interesting to note the future implications for Australia in its nearby region, where the US economy might achieve 3.5 per cent economic growth rates this year after shrinking 3.6 per cent last year, while China's economy is expected to expand by nearly 8.0 per cent this year. (12) The imbalance has already been noted along the lines that 'the upshot is a world more reliant on China for growth than ever before', which would appear particularly the case in the Pacific. (13)

It does not take long to realise under such economic considerations, diplomatic tensions are likely to continue in Australia's immediate neighbourhood, even with the demise of the Trump administration and their trade war with China. At the end of the Trump administration it was noted in Australia's Defence Strategic Update, 2020, for example, that the Cold War polarisation between the US and China had the result that  'Australia's security environment … was ... increasingly characterised by grey-zone competition; state behaviour that is aggressive but often covert, or at least deniable, and falls short of acts of war.' (14)

No wonder the two recent high-level diplomatic statements from Canberra were so carefully worded when dealing with the US, the incoming Biden administration and problems in the Pacific which have a direct bearing upon Australia, they had a great deal to hide:

                                            We need an independent foreign policy!

1.     As Biden says, this great alliance will only grow stronger, Australian, 25 January 2021.

2.     Ibid.
3.     Our alliance is more vital than ever: PM., Australian, 22 January 2021.
4.     Global Economic Prospects, The World Bank, January 2021, page 4.
5.     World Bank warns, Markets Insider, 6 January 2021.
6.     Global Economic Prospects, op.cit., page 5.
7.     GDP Growth rates, country by country, annual percentage, World Bank.
8.     World Bank warns of a 'lost decade' ahead, Australian, 7 January 2021.
9.     Aussie businesses need to help check China in the Pacific, Australian, 25 January 2021.     
10.   We can't combat China's 'grey zone' war while polarised, Australian, 20 January 2021.   
11.   US losing control of Pacific to Beijing, The Weekend Australian, 5-6 December 2020; and, Study: US no longer dominant power in the Pacific, Paul D. Shinkman, Information Clearing House, 22 August 2019.
12.   Markets insider, op.cit., 6 January 2021; and, China only big economy to grow in 2020,  Australian, 19 January 2021.  
13.   China powers ahead while the world reels, Australian, 15 January 2021.
14.   We can't combat China's 'grey zone' war while polarised, op.cit., 20 January 2021.

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