Australia: Relations with our region and with the Philippines in particular
Speech by Ambassador Bill Tweddell
Guest of Honour and Speaker
Rotary Club of Manila's 11th for Rotary Year 2014-15
18 September 2014
• President Frank Evaristo and the Board of Directors and Officers for the Rotary Year 2014-15;
• District Governor Elect Obet Pagdanganan
• President Elect Ebot Tan and the Board of Directors and Officers for the succeeding Rotary Year 2015-16;
• Past Vice President Lance Masters
• Members of the Diplomatic and Consular Corps
• Other distinguished guests, including former Mayor of Manila Fred Lim
• Rotarians and guests
Good to see so many familiar faces.
Australia today is a stable, democratic and culturally diverse nation, with a skilled workforce and a strong, competitive economy.
Over the last 50 years, Australia has attracted migrants from all over the globe, in the process becoming one of the world’s most multicultural nations. While the majority of our earliest migrants were Europeans, these days our population includes a large proportion of Asian migrants, and a significant number of African and Middle Eastern peoples.
Migration to Australia has indisputably contributed to our diverse demographic. Nearly a quarter of our 23 million people were born overseas – 1.7 million of them in Asia. China and India are our largest sources of migration, and five other Asian nations, the Philippines, Sri Lanka, Malaysia, South Korea and Vietnam, constitute our top 10 source countries.
As our demography evolved, our economy also underwent important policy changes. Today, Australia has developed into an open, dynamic and highly productive economy with considerable strengths, particularly in mining and agriculture, although the services and manufacturing sectors also playing a significant role.
From the 1960s until the early 1980s, highly restrictive trade policies, inefficient public sector monopolies, low productivity and growth, and poor comparative economic performance resulted in a period of economic decline in Australia. Driven to become competitive domestically and internationally, our Government’s broad and aggressive reform agenda resulted in enduring gains in our productivity and growth, and a resurgence in our ranking amongst developed countries.
Now, as a nation, we are globally engaged, economically open and competitive, focused on Asia, enmeshed in the forums in the region, proudly multicultural and confident in our place in our neighbourhood.
Our strong international engagement allows us to maintain our position as the 12th largest economy globally, with the fifth highest GDP per capita. Australia’s trade with the world is equivalent to 42 per cent of our GDP and our economy’s reliance on trade accounts for a sustained GDP figure that has not gone below 25 per cent for more than a century.
Our robust financial foundations and favourable terms of trade made us the only developed country to avoid recession during the Global Financial Crisis. And as we enter our 23rd year of uninterrupted growth, Australia is forecast to have an annual real GDP growth of 2.8 per cent between 2013 and 2019, the highest forecast among major advanced economies.
The Australian dollar is strong and is the world’s fifth most traded currency. We are ranked third for economic freedom and eleventh for ease of doing business. Australian cities are consistently rated amongst the most liveable in the world.
Our economy has been given a Triple ‘A’ rating by three main global ratings agencies, one of a very small number of countries so recognised. We have the lowest financial risk factor in the world and the second most stable financial regulatory system.
Australia’s large and mature financial services sector has assets of more than A$ 5.8 trillion, nearly four times nominal GDP. The growth of our investment funds sector underpins this strength, having the third largest pool of investment funds anywhere in the world.
Australia’s economic success is widely attributed to the abundance of our agricultural and mineral resources. Our competitive advantage in the export of primary products is a reflection of the natural wealth of the Australian continent. And we are the world’s largest exporter of coal, iron ore, aluminium ores, zinc and beef; we are the fourth largest exporter of Liquid Natural Gas; and we are a major exporter of wheat and many other high quality food products.
Whereas mining and agriculture are popular drivers for the Australian economy, the services sector is in fact dominant, accounting for 80 per cent of Australia’s economic output – an outstanding by-product of our highly-skilled, well-educated and innovative workforce.
Australia and the region
These achievements demonstrate how far Australia has come. Our current economic prowess was set in motion by successive Australian Governments’ efforts continually to reform the economy and by their wisdom to adapt to our rapidly changing environment.
As it is, global political and economic influences have been gradually shifting towards our own region for the past half century. China’s ascent is the most significant strategic realignment of our time, but this is but one shift. The Asia-Pacific region, too, is transitioning and experiencing a series of vital economic, social and political transformations.
The economic revolutions in recent decades of Japan, Taiwan, South Korea, China and increasingly, the nations of South-East Asia, including the Philippines, have propelled Asia’s return to the world’s economic centres of gravity. Unsurprisingly, Australia’s proximity and comprehensive relations with the region have greatly benefited us. Seven of our top 10 trading partners now are in the Asia Pacific.
For decades, Japan was our largest trading partner, and remains our second largest. Notwithstanding this, China’s industrialisation and urbanisation have provided a clear advantage to our own economic prosperity over the past decade. Australia was well placed to meet a lot of the demand created by this Chinese boom – including for mineral resources and services – and it was a ready market for Chinese manufactured goods.
And while Australia-China bilateral relations have developed intensively, our relations with ASEAN are not far behind. Taken as a group, ASEAN is Australia’s second largest trading partner after China. Australia-ASEAN two-way trade has more than doubled in the past decade from A$ 45 billion to A$ 92 billion.
Recognising ASEAN’s potential for strong economic growth, which will ultimately lift living standards across South-East Asia, Australia is a willing and able partner in increasing our already significant economic engagement in this region.
Central to advancing Australia’s strategic and economic interests is South-East Asia’s strategic position between the Pacific and Indian Oceans, which serves as a pivot for the ever-growing exchange of goods, people and knowledge between East, West and South Asia.
Australia is of the view that a peaceful, secure, stable and prosperous neighbourhood will bring substantial mutual benefits to Australia and the rest of the region. We believe that these gains will only be fully realised where there is balance of power in Asia, and well-established mechanisms to support the region’s continuing transition and restructuring.
A strong foreign and trade policy focus for Australia is, consequently, on ensuring the region’s peace, security, stability and prosperity. This is highlighted by our support for regional institutions. Our engagements with ASEAN and APEC – which, of course, the Philippines will host next year – encourage economic integration and help build prosperity across the region. Our commitment as founding member of the ASEAN Regional Forum and dialogue partner in the ASEAN Defence Ministers Plus process complements bilateral alliances and dialogues that aim to enhance regional peace and security architecture. And our active participation in the East Asia Summit, not to mention our support for its membership to include the United States and Russia, is a step forward in strengthening our regional cooperation in strategic, political and economic issues.
During the 4th EAS Foreign Ministers’ Meeting held in Myanmar last month, the members reaffirmed their support for ASEAN centrality and the ASEAN community-building process. In the coming years, ASEAN members’ close cooperation with non-ASEAN members of the EAS will be critical to strengthening the EAS’s mandate in promoting the interests of all. And while it is certainly not Asia’s NATO, the EAS is acknowledged as helping to manage tensions arising from the powerful relationships of nations that have interests in the region.
Today, Australia has an expansive and deep relationship with ASEAN covering cooperation and engagement in a range of areas including security, culture, trade, education and development. The inauguration of a resident Australian Ambassador to ASEAN is providing an additional focus for relations. And, as this year marks the 40th anniversary of Australia’s dialogue partnership with ASEAN, we envisage an even stronger alliance towards regional economic and social integration.
Australia has continued its long-term support for ASEAN’s economic goals by participating in the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), ASEAN’s most ambitious and comprehensive trade deal to date. It brings together economies of more than US$ 4.1 trillion (2013) and around 654 million people, and has delivered trade outcomes of US$ 113 billion (2013) for Australia. And now we are also involved in ASEAN’s newest regional economic integration initiative through the Regional Comprehensive Economic Partnership (RCEP) negotiations.
The 40th anniversary of relations is an important opportunity for Australia and ASEAN to chart a new strategic direction to our partnership, complementing ASEAN's focus on strengthening regional integration through the ASEAN Community and the Master Plan on ASEAN Connectivity.
Australia’s development assistance to ASEAN continues to be a significant element in both humanitarian assistance and in helping to build the skills, infrastructure and institutions which can support further growth in the region. Total Australian Official Development Assistance to ASEAN countries in the 2013-14 Financial Year is estimated at A$ 1.3 billion. Aid projects funded by Australia range from providing clean water systems in Indonesia, to constructing bridges in the Mekong, and supporting governance and public financial management programs here in the Philippines.
Our friendships and people-to-people ties with ASEAN are the foundations of our prospering partnership.
Education is a highly important feature in this relationship, and constitutes Australia’s largest services export to ASEAN. Australia is a leading provider of both on-shore and off-shore education to the ASEAN region. In fact, there were more than 104,000 (2011) university students from ASEAN countries who have studied in Australia and approximately 600,000 (2011) enrolments in higher education in the last decade. ASEAN countries continue to be recipients of scholarships and fellowships under the Australia Awards scheme.
The Australian Government is focused on building on the success of this exchange, not only by providing study opportunities at Australian universities, but also by encouraging greater Asia literacy among Australian students.
The New Colombo Plan, the signature initiative of Foreign Minister Julie Bishop, aims to foster closer ties with the region and develop stronger people-to-people linkages by supporting young Australians’ study and internship undertakings in our region. The Government has committed A$100 million over five years to implement the New Colombo Plan; the first phase was successfully launched this year and the next roll-out will be completed across the region from 2015, including the Philippines.
Australia and the world
Australian foreign policy is clearly focused on our region, but we are also a country with keen global interests. Australia is strongly engaged with the rest of the world. Our long-standing links with other nations are distinguished by our solid commitment to global institutions and international law.
Australia is honoured to have been elected to serve on the United Nations Security Council. The importance of this multilateral system in the maintenance of international peace and security is as great now as it ever has been, and we are privileged to be given the opportunity to help shape decisions in this sphere. As a founding member of the United Nations, Australia is an enduring, reliable and consistent contributor to the UN’s work on conflict prevention, peacekeeping and peace-building.
Australia this year is also chairing the G20, the premier forum for international economic cooperation and decision-making, with representation from 19 countries plus the European Union. Our host year began last December 2013 and will culminate in a Leaders' Summit in Brisbane – the city of my birth – this November.
The G20 stands out as the most significant addition to the landscape of global institutions. Its contribution to the world economy is vast. G20 nations account for 85 per cent of global GDP, 75 per cent of global trade and two thirds of the global population. It is fitting that our Government’s objectives in our new aid policy align with Australia’s priorities for the G20, particularly in focusing on economic growth and building sustainable prosperity for all.
Australia plays an active role in a wide array of other multilateral forums, specifically those that help to modernise and liberalise our global and regional economy. Our membership of the World Trade Organization is at the centre of these efforts. Australia's profile as a trading nation means that it has a strong interest in ensuring that the international trading regime of the WTO is open, equitable and enforceable. Newer groupings like the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership also offer strong potential paths towards innovative economic growth – which will steer Australia’s economy in the 21st Century.
Australia’s reputation, and our influence in the international community in responding to challenges, is given expression in the tragic disappearance of Malaysia Airlines Flight MH370 and the more recent downing of Malaysia Airlines Flight MH17. Australia has given an assurance that we will continue our efforts to pursue the resolution of both unfortunate incidents. And this can be achieved by solidifying our collaboration with other nations and partner institutions.
Our commitment to work with the international community is further reflected in our response to humanitarian crises such as last year’s catastrophic Typhoon Haiyan/Yolanda in the Philippines. The response to this tragedy has been an uplifting demonstration of the importance of international cooperation. Many countries in the region and beyond offered their military and civilian assets, expertise and resources in a concerted effort to provide relief and emergency assistance to the victims of Typhoon Haiyan – one of the strongest and most destructive cyclones ever recorded in history.
Australia was one of the very first to respond to the calamity. On 9 November last year – only a day after the devastation – our Foreign Minister immediately approved the deployment of resources to assist in the relief and emergency groundwork.
Australia is providing up to A$ 102 million to support the people and areas affected. This contribution has helped the Government of the Philippines respond to immediate and life-saving needs of around 220,000 people and is now aiding their recovery and rehabilitation efforts.
These joint efforts underscore the habits of cooperation that countries in our region have long been working to build and nurture, through both our regional engagement and our broad-based bilateral ties.
Australia and the Philippines
Overall, I’m proud to say, Australia’s ties with the Philippines are in very good shape.
It is now nearly 70 years since Australia established diplomatic relations with the Philippines. Our two countries continue to enjoy a warm and close friendship, based on historical ties, common values and our shared national, as well as regional interests.
The breadth and depth of our relations cuts across numerous fields, ranging from development assistance and immigration issues, to regional and security cooperation, trade and investment.
One reflection of this breadth and depth is that Australia’s Embassy in Manila is our 7th or 8th largest anywhere in the world, with no fewer than seven federal government agencies represented on our staff: the Departments of Foreign Affairs and Trade, Defence, Immigration and Border Protection, Infrastructure and Regional Development; the Australian Trade Commission (Austrade); the Australian Federal Police (AFP); and the Australian Centre for International Agricultural Research (ACIAR).
The strength of our relationship is both exemplified and reinforced by the number of recent two-way high-level visits: in recent times, the then Governor-General’s visit to Manila in 2012; President Aquino’s visit to Australia in October 2012; the Foreign Minister’s visit to the Philippines in December 2013, and again in February with Trade and Investment Minister Robb for the Philippines-Australia Ministerial Meeting (PAMM); a couple of Australian multi-party Parliamentary delegation visits; and, on 4 September, a senior officials’ level strategic dialogue involving foreign affairs and defence officials.
In the PAMM in February, our Foreign and Trade Ministers committed to pursue an even more ambitious relationship and worked together to identify key areas for our increased cooperation and engagement, including in our development assistance, economic, defence, people-to-people and security ties.
The strong Australia-Philippines partnership in development cooperation – aid – spans more than 50 years. The program has grown to be one of our largest – and Australia is currently one of the Philippines’ three largest bilateral grant aid donors. The core of our aid program is geared towards the promotion of prosperity and stability and the reduction of poverty. With over $170 million in aid budget committed in the 2013-14 Financial Year, we have pursued these objectives in partnership with the Philippine Government through education reforms; sustainable economic growth; disaster preparedness; peace and security; and stronger institutions.
During her visit to the Philippines for the PAMM, Foreign Minister Bishop launched the Basic Education Sector Transformation (BEST) initiative. A six-year, A$150 million program, BEST is designed to benefit more than eight million Philippine students across 19,000 schools. Ms Bishop also announced our US$ 2.5 million support for the Philippine Public Private Partnership (PPP) Program, intended to encourage viable economic growth. And with the conclusion of the negotiations of the Annexes of the Comprehensive Agreement on the Bangsamoro, Ms Bishop further pledged an additional A$ 6 million to support the peace process. This will help boost institutional capacity to implement the Agreement. Australia has also provided assistance to the Independent Commission on Policing.
Bilateral trade and investment is gaining ground. Australia’s support to the AANZFTA will continue to play a key role in driving growth in and reinforcing our trading relationship.
AANZFTA saw tariffs go to zero on key commodities like wheat and beef, giving Australian exporters a significant commercial opportunity in this market. It is heartening to see that the Philippines has the highest uptake of AANZFTA in ASEAN, which signifies the advocacy work undertaken by the Embassy and the Philippine Department of Trade and Industry.
Our long history of defence ties with the Philippines dates back to World War Two.
We will soon be commemorating the 70th anniversary of the liberation of the Philippines during which the Australian Navy played an important role in the Allied landings at Palo, Leyte on 20 October 1944, the naval battle of Surigao Strait on 25 October 1944 and the Lingayen Gulf landings on 9 January 1945. Australian Army bombardment liaison teams ensured the accuracy of naval gunfire during landings. The Royal Australian Air Force’s contribution included specialised aerial photo reconnaissance and aerial mine laying aircraft, radar countermeasures and airfield construction engineers.
In recognition of Australia’s contribution to the liberation of the Philippines, in which 92 Australians lost their lives fighting alongside Allied forces, a memorial will be built at Palo, Leyte adjacent to the site where General Douglas MacArthur first came ashore after leading the advance from Australia.
This province of the Philippines was again to see the spirit of cooperation and camaraderie between Australia and the Philippines in 2013, when Australian Defence Force personnel were involved in life-saving operations to deliver aid to areas devastated by Typhoon Haiyan/Yolanda.
Today, our Defence Cooperation Program includes high level policy talks, training of Philippine defence personnel in Australia and visits by senior officials.
Australia and the Philippines have also signed a Status of Visiting Forces Agreement (SOVFA) which entered into force in September 2012. The SOVFA is envisioned to provide a more comprehensive legal framework to enable both our nations to enhance ties and lay the foundation for a stronger Defence cooperation in the years to come.
One illustration of its successful implementation was Australia’s ability to respond quickly to Typhoon Yolanda relief operations, in close cooperation with the Armed Forces of the Philippines.
In addition to strategic cooperation, education and training are major priorities for Australia’s defence engagement with the Philippines. In the last two years, approximately 170 Philippine Defence Personnel have undergone training in Australia. Our defence relationship also has a focus on counter-terrorism, maritime security and assistance to the Armed Forces of the Philippines Modernization Program. Cooperation in cross border challenges gain traction through our agency-to-agency, as well as whole-of-government, collaborative activities.
As with Australia and the wider region, a key linkage between Australia and the Philippines has always been our people-to-people ties which have been escalating through trade, investment, cultural exchange, education, tourism and migration. Since the 1960s, Filipinos remain one of the fastest growing immigrant communities in Australia and more than 250,000 Filipinos now call Australia home. In 2013 the number of Filipino students enrolled in Australian education jumped by 26.3 per cent from the previous year, and now stands at 8,400. We look forward to Australian students studying in the Philippines in the near future as part of the Philippines’ participation in the New Colombo Plan, to which I referred earlier.
To conclude my remarks, I allude to Foreign Minister Julie Bishop’s recent depiction of the “meta challenge” of Australian foreign and trade policy as maximising economic opportunity and minimising strategic risk at a time of transition in the geo-politics of our region.
Maximising economic opportunity means maximising our economic diplomacy: concluding bilateral Free Trade Agreements; pushing regional trade arrangements such as the TPP and RCEP; resisting protectionism; reinforcing the trade liberalisation and facilitation which has been so crucial to the Asia Pacific success story; and encouraging the economic reforms upon which the sustainability of Asian growth ultimately depends.
Minimising strategic risk means building strong relationships among the major powers of the region; shaping strategic behaviour through forging a consensus on core principles including resolving disputes peacefully and consistent with international law; and building regional institutions which reinforce the value of dialogue and the careful management of disputes while balancing between bilateral and multilateral relationships, as with working within existing institutions and shaping new ones.
These are the big challenges for Australian foreign policy. They are, in truth, the key foreign policy challenges facing other countries in the region – perhaps to varying lengths and with distinctive priorities. How well we and the rest of the region collectively address these shared challenges will be crucial to our future security and prosperity.
In the words of my Foreign Minister, “There are always challenges in the foreign policy arena. It's not a question of the challenges, it's how you cope with them, and how you manage them…”
Thank you for being a patient audience. I look forward to your questions.