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Putin and Australia · 29 September 2011

Vladimir Putin wants Russia to get the benefits of a stronger and more modern economy, while Australia under Julia Gillard wants to get the benefits of economic growth in Asia.

But like Putin, Australia under Julia Gillard, is somewhat afraid of the uncertainty that comes with economic change and wants to maintain the political/security status quo. The fears of both are rooted in the past. The fear of Putin is rooted in the chaos of the 1990’s. The fear of Australia under Gillard is rooted in the Asia-Pacific area fighting of the Second World War.

Thus, Putin wants to maintain the United Russia political movement as the preeminent force in Russia – with himself guiding the way. Australia under Gillard wants to maintain the US as the preeminent force in Asia with itself offering influential advice.

Both Putin and Gillard are pursuing aims that ultimately will fail because of their contradictory nature. This does not mean that these contradictory policies cannot co-exist for some time. It means only that – in the current circumstances – neither aim is likely to be more than moderately successful in the presence of the other.

The possible contradictions ultimately involved in the review of Australia’s relations in the “Asia Century” to be conducted by Ken Henry (a former Secretary of the Treasury), and the review being conducted by Allan Hawke and Ric Smith (two former secretaries of the Defence), have been highlighted by Graeme Dobell of the Lowy Institute.

The Henry review will be asked to assess:
• 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;
• The role of effective economic and political regional and global cooperation.

Note the emphasis on the word “economic”!

The Hawke and Smith report on the “Asia Pacific” has been asked to assess:
• The rise of the Asia Pacific as a region of global strategic significance;
• The rise of the Indian Ocean rim as a region of global strategic significance;
• The growth of military power projection capabilities of countries in the Asia Pacific;
• The growing need for the provision of humanitarian assistance and disaster relief following extreme events in the Asia Pacific region;
• Energy security and security issues associated with expanding offshore resource exploitation in Australia’s North West and Northern approaches.

Note the absence of the word “economic”!

Dobell says that “the agenda for the (Hawke and Smith) Review is all about moving more of Australia’s military to the north and west of the continent and aligning Australia with the US military Posture Review”.

He further notes that “not all parts of Canberra talk in exactly the same tongue. Treasury might be comfortable with the (term) Asian Century, but Defence wants the (term) Asia Pacific because it explicitly embraces the US.”

Note the use of the word “because”!

So there is every chance, in my view, that Hawke and Smith may turn out to be somewhat like Putin — “because” their emotional fears will mostly negate analytical ability (and Putin has as much of this analytical capacity as Hawke and Smith).

Dobell says that Gillard “put her own language, too, to the China-US conundrum when surveying what she called a vast landscape of change:

“...much is written on the potential tensions inherent in our economic relationship with China and our Alliance ties. I’m a decision-maker, not a commentator, and I don’t by nature reach for the jawbone or the megaphone. But I do say this: The Government’s approach comprehends the challenges and risks. Certainly, these relationships will not manage themselves and we are far from complacent about them. But we are far from pessimistic too. Because there is nothing in our Alliance relationship with the United States which seeks to contain China, because a growing, successful China is in the interest of every country in the region, including our own and because our national strength, and that of our ally, is respected in the region and the world.”

What!

“…..there is nothing in our Alliance relationship with the United States which seeks to contain China ….” ?

The Chinese will not be so stupid as to believe these words of Gillard. But large sections of the Australian population will be – just as large sections of the Russian population will believe Putin when he uses his own fears to justify counterproductive policies.

And then the words “because our national strength, and that of our ally, is respected in the region and the world”!

My jaw dropped! Can Gillard possibly be so stupid? These are exactly the things that China wants to have for itself – and China will think the US does not want China to have.

A smart Ken Henry will think beyond “economics” — but, in reality given his knowlege base as a numbers orientated economist, he may too easily be overwhelmed by the superficial arguments of the fearful conceptual minds who live in the past (quoting flawed historical examples) rather than the future.

For more on Russia see my writings at: www.russianeconomicreform.ru/

That both individuals and countries can ultimately be guided by the same fears and hopes that override rational analysis should not be a surprise, because the latter consists of the former. But this basic fact seems to be so often ignored in analysis of international relations.

As well intentioned as Putin and Gillard are, neither is psychologically well-equiped to lead a country living in the face of massive change. Because of their fears, neither has much vision beyond that of “control”— either of themselves or their surroundings.

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