It is always good to be back in Sydney - the city of my birth, upbringing and education. And it is particularly good to be here at the Sydney Institute which has contributed so productively over many years to an informed public debate about Australia's past and about ideas for its future.
I had the good fortune to have a university education here at Sydney University, and to have it supplemented later at Oxford. Some people used to ask me about how teaching varied in each place and I always felt that a story best epitomised the difference.
The story relates to an occasion - very worryingly as I now add it up - almost thirty years ago to the day. I had just arrived in Oxford keen to make a good, immediate impact as I began my course in Philosophy, Politics and Economics.
The Oxford tutorial system entailed one-on-one sessions in which students would read an essay on an assigned topic followed by a period of dissection and discussion. My first such tutorial was focused, as I recall, on a comparison of the foreign policies of Disraeli and Gladstone. And I laboured long and hard on this particular essay, determined to make a good first impression.
I had well-sourced intelligence that the tutor to whom I had been assigned was highly knowledgeable as well as very knowing, and that he was also a devotee of the game of cricket. I read my essay to him and - with a quiet, but as it turned out mistaken, confidence - I awaited his academic verdict. There was a long, seemingly interminable, silence before my tutor looked me in the eye and said: "I have an important question for you - do you think Greg Chappell or Ian Chappell has a better cover drive?" I knew instinctively that this was not a good sign! After an extended discussion on the history of Anglo-Australian cricket, the focus drifted back to the history of British foreign policy. What followed was a gentle, but nonetheless fairly wholesale, demolition of my first essay! I have somehow always thought that the verdict at Sydney would not have been that different in substance, but would have been far less elliptical and gentle in its delivery!
One of the ironies of my period of education in the United Kingdom was that the greatest intellectual impact on me there was made by another graduate of Sydney University, Professor Hedley Bull. As Professor of International Relations at Oxford, Hedley Bull's teaching and writings inspired in me a deep interest in what he famously described as ‘the anarchical society' of sovereign states and in the means whereby order, justice and stability are pursued within it. For me, the deep interest in the international system and Australia's place in it, that was sparked in those years, became an enduring one.
Hedley Bull had strong, powerfully argued views on a wide range of strategic issues of his time. My intellectual debt to him lies not in the fact that I shared all his views on those particular issues - because I did not. For me, what set Hedley Bull apart was the deep wells of historical and philosophical analysis on which he drew, the clarity and elegance of his writing, the encouragement he gave me to think through for myself what had changed and what had not in the international system, and - in a personal sense - the great warmth of his friendship.
Tonight, I want to focus on elements of continuity and change in the pursuit of Australia's international interests. In particular, I want to address the broad international context in which those interests are pursued and the key policy priorities for Australia in relation to them.
Before doing so, however, I would like to reflect very briefly on the year and a half in which I have now held the position of Secretary of the Department of Foreign Affairs and Trade. I came to the position of Secretary by a "road less travelled" compared to the career path of my predecessors. But it was a well-known world that I entered in January last year. In various capacities I had worked closely with the Department's officers for a good deal of the period since I first became involved in public policy work back in 1981 when I joined the Department of the Prime Minister and Cabinet. But there have been particular aspects of the job which have opened my eyes in some respects.
One such perspective relates to ‘whole of government' realities. There was a time in public administration in Canberra when matters to do with ‘foreign policy' were clearly demarcated from those relating to ‘domestic policy'. Those days have long gone. And the Department of Foreign Affairs and Trade has been in the vanguard of change. We have been there because so many aspects of the world in which we operate have been transformed. Globalisation has driven much of that change. Australia's international and domestic interests are significantly more aligned today - whether it be in relation to security issues or economic growth or national competitiveness - than they have ever been before. That is why the Department of Foreign Affairs and Trade attaches such priority to developing close and effective interaction across the board in relation to the many departments and agencies which have important international operations or comparative benchmarks that increasingly share areas of intersection.
The Department contributes importantly to these whole-of-government realities and we rely significantly on them.
A second perspective which has clarified for me in the period that I have been Secretary relates to the work of officers in the Department of Foreign Affairs and Trade. Their responsibilities relate to issues affecting a wide range of Australian diplomatic and security interests, the welfare of Australians overseas, and opportunities for Australian exports and investment. They also - regrettably too often - relate to the provision of support on the ground in response to natural disasters or terrorist outrages in which Australian lives are taken or traumatised.
In carrying out these responsibilities, we require of those who work today for the Department of Foreign Affairs and Trade a wide range of attributes. We require of them diplomatic skills - not of an effete, outdated or arcane kind but of a practical, hard-nosed and outcomes-oriented character. We require informed judgment and carefully focused activism. We require of our officers high quality advocacy skills to be applied within and beyond government. We require of them an awareness of appropriate opportunities for Australian export enterprises and a capacity to support them. And we require of them personal qualities that enable them to support and assist Australians in times of emergency or tragic loss, and to cope themselves with the pressures that they and their families come under in particular parts of the world.
The position of Secretary provides unique insights into the scale of the difficulties, dangers and personal risks that officers of the Department can face in carrying out these diverse tasks. The insights that I have gained as Secretary have served to broaden my awareness of and deepen my appreciation for the skills, professionalism and commitment that the Department's officers bring to their diverse responsibilities, and the often very difficult circumstances in which they do so.
The International Environment
The broad framework for international relations today embraces many familiar historical patterns of strategic engagement and competition between states. But two influences, more than any others, have made the current international environment qualitatively different from what has existed previously.
The first transforming difference is the reality of global terrorism. History records instances and periods in which acts of terrorism - sponsored sometimes by states but more often by non-state groups - has been used in an attempt to affect outcomes in relation to particular confrontations or in support of particular causes.
But the terrorist attacks on the United States in September 2001 - and the terrorist attacks in Indonesia, Turkey, Spain, Britain, Egypt, Jordan and elsewhere that have followed - constitute a qualitatively new challenge to international security.
New vulnerabilities for all states and their citizens exist as a result. A new kind of extremist threat has been created - global in its reach, utterly ruthless in its intent, indiscriminate in its targeting, fanatical in its opposition to liberal democratic values, committed to inflicting as much loss of life and dislocation as possible, and constrained only by its accessibility to weapons with maximum destructive effect. It is these realities which reinforce the historically unprecedented threat which modern global terrorism poses to international security and to the lives of people around the world.
Terrorism is being increasingly confronted but its eradication will require a long-term, sustained commitment of resolve, resources and international cooperation.
The second major transforming influence in the international environment is the broader phenomenon of globalisation.
At one level, globalisation encapsulates the processes of market-driven economic interaction and integration between economies across borders - a process that is being driven by a revolution in innovation and commercialisation which is continuing to drive down the costs of transportation and communications and to set new benchmarks for economic competitiveness.
In that sense, the concepts underpinning economic globalisation are not new. Cycles of dramatic expansion in trade, commerce and investment across borders have occurred for centuries. And prior to the late twentieth century, the most significant and productive such cycle occurred from around 1870 until the First World War.
What is new is not the idea of globalisation but the forces of change that drive its current transforming momentum across so many areas of international activity, both economic and non-economic.
Globalisation is not an inevitable defining characteristic of the international environment into the future. But globalisation has, in a significant sense, won an important battle of ideas. It constitutes a galvanising, highly effective framework for economic development and poverty alleviation, and no alternative framework of ideas or action provides any comparable coherence or scale of practical gains.
Under the impact of globalisation, economic growth has accelerated. Trade barriers have been reduced. Openness in the international economy has been enhanced. And poverty levels have significantly fallen. Total exports which constituted just five per cent of world GDP in 1950 have grown now to 29 per cent of world GDP.
All the world's great and emerging powers are committed to the market-led dynamic that underpins modern economic globalisation. China and India, in particular, have been great beneficiaries of globalisation as well as significant drivers of the process. China's share of world exports has risen from just over one per cent in 1981 to just under seven per cent in 2005 making China the world's third largest exporting nation with its economic growth over that period averaging nine per cent. Similarly, India's long-term trend rate of growth has increased from an average of 3.5% between the 1950s and 1970s to 7-8 per cent over recent years.
It is relatively easy to assemble a convincing array of technical detail about the transforming impact of modern globalisation. What is more difficult, however, is assessing whether and how those changes are in fact changing the international system itself, and how Australian interests are best pursued within it. In making such assessments, it is necessary to be clear-eyed about what globalisation has in fact changed, and what it has not.
Modern globalisation has clearly mobilised new sources of influence and new dimensions of interaction in international affairs. There are those who argue that by acting as a catalyst for the expansion of transnational business networks and international organisations, globalisation has had the effect of significantly eroding the traditional role of the nation state in the international system.
I do not share this view of the impact of globalisation.
Non-state groups are not a new phenomenon in the international system. They have many antecedents which include the great European trading companies of the eighteenth and nineteenth centuries, political movements of various kinds, great religious traditions and many other influences that have cut across national sovereignties. It is the number and purposes of non-state groups which have proliferated under the influence of globalisation. And it is that proliferation which has added a new dimension to an old phenomenon in the international system.
The world does confront the serious challenge of the erosion of capacity among particular states. But failed and rogue states are not the inevitable consequence of globalisation. They are a consequence of ineffective and often corrupt governance, or a self-defeating economic introversion, or a dependency culture, or particular perceived grievances, or outdated ideology, or other related factors.
In my view, the impact of globalisation has been to enhance the role of nation states rather than to diminish it.
Globalisation puts a special premium on states pursuing sound policies of transparency, accountability, openness and international engagement built on competitive domestic infrastructure and the pursuit of comparative advantage.
For all the dramatic economic changes that have flowed from globalisation, it is nation states that continue to be the central agents of international order, and it is rogue and failed states that can have a significant capacity for disorder. It is also states that most powerfully influence the context in which justice in the international system is pursued. And it is states that will determine the future of globalisation itself because globalisation depends ultimately on a global market framework which in turn depends on the policies of sovereign states and protectionist pressures within them. Where nation states are vulnerable, ineffective or failing, their incapacity results in declining security, living standards and opportunities for their citizens. It is an incapacity that is open to exploitation by agents of transnational crime, disorder and terrorism, which means that the consequences of state incapacity spread well beyond the boundaries of vulnerable, ineffective, failing or failed states themselves.
Globalisation has also encouraged some policy responses at a regional level, and this has been the case in various regions in relation to issues such as trade and investment access, energy, health, the environment, contingency planning and other issues. But there is no inconsistency between the effective development of regionalism along these lines and the continuing central role of states within it.
The real transforming momentum of globalisation, and its biggest impact on the international system, come not from its impact on structures of international decision-making but from its role as a decisive catalyst for economic growth and poverty alleviation.
Over the past two decades developing countries which increased their exposure to international trade grew about four times faster than those that did not. Over the same period the faster income growth of globalising economies reduced the number of people in the world living in poverty by about 200 million, even though poverty increased in more closed economies. In East Asia, in particular, this period of globalisation has seen more people brought out of poverty more quickly than ever before in history.
But globalisation also brings challenges because the unprecedented movement of goods, services, capital and people across borders that has proved so productive in terms of economic opportunity and welfare has also had other far less desirable effects. It has facilitated the illegal movement of people, finance, weapons and drugs. It has engendered grievances among states which have not, for various reasons, had access to the full benefits of globalisation. It has accentuated the reach of threats posed by pandemics. And it has broadened the challenges presented by environmental issues.
In these ways, globalisation tests countries' institutions and governance in terms of their capacity to pursue policies that enhance not only economic openness and competitiveness but also security and accountability.
Globalisation also tests the resolve of the international community in addressing transitional issues that globalisation creates for many states.
That is why it is critically important to dismantle the international trade barriers that can prevent developing countries taking the first steps down the path of export-led growth. Those barriers and production subsidies cost developing countries much more than current aid flows benefit them. The World Trade Organisation's Doha Round of trade liberalisation negotiations is at a critical point and it is vital for all countries, irrespective of their stages of economic development, that the Round achieves the ambitious outcomes especially on tariff and subsidy cuts for which many countries, and particularly Australia, are working so hard.
The transitional issues that globalisation raises for some states are positively addressed when development assistance programs accelerate economic growth in recipient countries, when they improve governance and combat corruption, and when they invest in people's needs. These priorities are indispensable if developing and under-developed countries are to position themselves to achieve the full benefits of engaging in a globalised economy. And they are indispensable if globalisation is to achieve its full potential in alleviating poverty. For poverty alleviation, economic growth is necessary but it is not sufficient. Growth needs to be shared and sustained. And this will be one of the great challenges for the processes of globalisation in the period ahead.
The Pursuit of Australia's International Interests
What then do these elements of change and continuity in the international environment mean for the pursuit of Australian interests?
Those interests over a long period have been defined by a number of general objectives - to enhance Australia's security, to develop further Australia's prosperity and to project Australia and its values internationally. The means through which these objectives have been pursued reflect the character of the international challenges and opportunities that face Australia in any specific period as well as the particular priorities of the government of the day.
At the present time Australia pursues a wide range of bilateral and regional interests in their own right and because of their own significance. The wider point I also wish to make this evening is that the effect of globalisation has been to make the alignment between Australia's global interests and our regional ones increasingly complementary. Australia's international interests have always engaged regional and global dimensions. What is increasingly clear, however, is that the interaction between these dimensions is now closer than it has ever been.
Let me illustrate this by referring briefly to some of the current priorities in the pursuit of Australia's international interests.
Close practical engagement with the countries of the Asia-Pacific region continues as an abiding priority in Australian foreign and trade policy. That engagement is focused in a positive way on a wide range of issues including shared security challenges, investment opportunities, freeing up trading arrangements, countering extremism, development assistance, people-to-people links and co-operation in regional institutions. This is particularly evident in our relations with the countries of ASEAN and the South Pacific, and in regional bodies such as APEC, the East Asia Summit and the ASEAN Regional Forum.
Australia has a particular national interest in working with regional governments to address the challenges that confront vulnerable states in our region and that threaten to destabilise them. We are working at the request of the governments of those vulnerable states and in association with others to help meet challenges that relate, in the short term, to law and order, humanitarian assistance and effective governance, and over the longer term to enhancing sustainable economic development and building strong accountable national institutions.
The priority for Australia is to assist regional governments facing such vulnerabilities to assume the responsibility themselves for addressing the root causes of the challenges they face. This priority underpins, in particular, the work of the Australian Defence Force, Australian police, Australian diplomats, aid workers and others drawn from various agencies in the Australian Government on the ground at the present time in East Timor and the Solomon Islands. In a wider sense, it is a priority that also underpins our development assistance programs generally.
While important aspects of our regional engagement have a distinctive dynamic of their own, there is also an increasing intersection between many of our regional and wider global priorities.
One critical area of such intersection relates to the threats posed by terrorism and the proliferation of weapons.
Australia is committed to meeting the challenges of terrorism at a global level. We are doing so on the ground in places such as Iraq and Afghanistan as well as through a range of initiatives focused on multilateral diplomacy and action. There is also an important global perspective in our commitment to counter the proliferation of weapons, and particularly materials and technologies related to weapons of mass destruction. We do so in various ways including through supporting the strategies of the international community to address the nuclear brinkmanship of Iran and North Korea, through multilateral export controls and safeguards, and through practical measures such as the Proliferation Security Initiative to disrupt illicit trade related to weapons of mass destruction.
In a complementary way to these global dimensions, Australia's counter-terrorist and counter-proliferation priorities are also pursued through bilateral and regional initiatives - through bilateral counter-terrorist agreements and action agendas with a wide range of regional countries, and through regional co-operation to undermine the divisive messages of hatred, intolerance and violence propagated by extremists.
In both these key priorities for Australian national interests - defeating terrorism and limiting arms proliferation - Australian priorities at a global and regional level are increasingly interrelated because of the interlocking networks of terrorism, arms proliferation and fundamentalist ideologies that operate at both global and regional levels.
The same interaction between our global and regional interests is apparent in our relations with, and in relations between, the major powers of the Asia-Pacific region, and in particular the United States, Japan, China and India.
Australia has important but different relationships with each of these countries. We have a strong and expanding alliance relationship with the United States - an alliance of both interests and values. We have broadening dimensions of security and economic co-operation with Japan. We have an important and fast-developing relationship with China which has been advanced in a spirit of ambition without illusions. And we share significant new associations of common interest with India.
The character of Australia's bilateral relationships with each of these major powers reflects the different origins, dynamics and shared purposes that distinguish each of them. That situation will continue to apply in the future in which the United States will continue to be the pre-eminent global power, in which Japan's international role will continue to diversify, and in which the development of China and India will be one of the defining elements in international diplomacy and the international economy.
There are, of course, distinctive bilateral interests which we pursue in each of our relationships with the United States, Japan, China and India. But there are also important interests we seek to advance across all of them. Many of those wider interests - such as expanding and further liberalising trade and investment flows, focusing on the consequences of failing and rogue states, addressing challenges such as energy security, climate change and pandemic threats, and making multilateral institutions work better - are interests with increasingly complementary implications both globally and regionally.
Those implications are highlighted by the fact that, over recent years in which Australia's alliance relationship with the pre-eminent global power, the United States, has never been closer or stronger, our engagement with the countries of our region and with the region's institutions has never been more intensive and productive.
This increasing interaction between Australia's regional and global interests is also clearly apparent in our trade policy agenda. The global and regional dimensions of that agenda have a common and consistent liberalisation objective. It is an agenda that is an ambitious one because we believe that open markets best serve Australia's economic and wider international interests. It is an agenda which is pursued through different means but in a complementary way - multilaterally (especially through the World Trade Organisation), regionally (through bodies such as APEC) and bilaterally (through our activist strategy in relation to bilateral liberalisation and free trade agreements).
I referred earlier to the transitional challenge which particular states face in accessing the full advantages of globalisation. This is also a challenge with regional and global dimensions, and Australian policy meets that challenge in a direct and complementary way. We do so particularly through our advocacy and action in support of global trade liberalisation and through specific bilateral and regional trading arrangements. We do so as well through a significantly expanded Australian aid program focused on partnerships, particularly with the countries of our region, to enhance economic growth, good governance, poverty reduction and investment in the needs of people, especially their health and education.
I wish to conclude this evening with some brief comments about the conceptual framework in which Australia's international interests are pursued. Australian foreign and trade policy aims to advance those interests as effectively as possible in a way that is consistent with Australian values - values that derive from a commitment to democratic rights, the rule of law, an open society, tolerance and fairness, economic opportunity, an egalitarian spirit and strong accountable national institutions.
In the context of increasing globalisation, the values that underpin Australian foreign and trade policy are particularly well suited to the challenges of the times. In promoting priorities such as good governance, transparency, political accountability, the rule of law, economic openness, market competitiveness and practical support to enhance the capacity of states to benefit from economic globalisation, Australia is not only being true to the values it believes in itself. We are also maximising our own prospects in an increasingly competitive international environment, and by helping other states to do the same, we advance our wider interests in stability and development and in countering extremism.
The pursuit of any nation's foreign policy is always characterised by an evolving balance between ends and means, between aspirations and capabilities, between idealism and pragmatism. Current Australian foreign and trade policy brings to that age-old challenge a clear regional focus, a sense of realism and a multifaceted approach.
There is a clear regional focus evident in Australian policy priorities and in the scope of engagement with regional countries and institutions. It is a focus that reflects the particular structures, priorities and traditions of regional states. It is a focus that is neither artificially narrow nor constrained by geography alone because associated with it is a realism that reflects the increasingly complementary global and regional dimensions of many issues that lie at the heart of Australia's international interests. Australian foreign and trade policy is responsive to that reality in a multifaceted way seeking to advance Australian interests through a variety of means suited to different priorities and circumstances - means that include diplomatic activism, carefully targeted aid commitments, deployments on the ground, broad multilateral actions or specific initiatives.
I have spoken this evening about the challenge of discerning clearly the elements of continuity and change in the international environment. It is a challenge that bears very directly on the role and responsibilities of the Department of Foreign Affairs and Trade. It is not a new challenge for the Department but, in its modern form, it is a more complex, demanding and variable one than it has ever been.
Meeting this challenge requires the Department to show innovation and flexibility in responding to the dynamics of positive change. But it also calls for consistency, realism and steadiness of purpose in responding to the dynamics of continuity where the requirements for security and stability have not changed and where Australian interests are enduring.
That is why issues of change and continuity lie at the heart of the Department's responsibilities and why they are so critical to the advancement of Australian interests.