Australia continues to enjoy markedly better economic performance than most other wealthy countries. But problems are accumulating.

The 2010 federal election yielded a hamstrung, minority government. Neither of the major parties shows any real appetite for large-scale policy reform. One of the few areas of policy progress is on the international front, particularly Australia’s regional engagement.

Viewed from outside, Australia must appear to be enjoying ongoing prosperity and good fortune. And indeed it is, with a long boom that began under former Liberal Prime Minister John Howard, and has continued under Labor leaders Kevin Rudd and Julia Gillard – interrupted by only a brief dip in growth for the global financial crisis. It is a trajectory unmatched over the past decade among OECD countries. It reflects the fruits of policy reform back in the 1980s, sound economic management and conducive international conditions – especially in Asia.

Viewed from within, the scene is much less comforting. With a handful of exceptions, there is little real progress in addressing serious policy challenges facing the country. Major economic reform has stalled. Large-scale water management reform and preparation for possible climate change have been derailed. Comprehensive tax reform has been mooted and abandoned, and coordination between the federal and state governments on healthcare reform is a fading dream.

Part of the explanation for the policy malaise is the divided condition of the Australian Parliament. The federal election this August (following Kevin Rudd’s being dumped as party leader a month earlier) left Labor in power, but dependent on a handful of party independents and a member of the Greens for its survival, to say nothing of the passage of legislation through the upper house. While Gillard appears to have succeeded in crafting a political alliance that will likely see Labor hold power for a full term, the capacity for legislative action has been acutely constrained.

This is a far cry from the situation in Britain, where an unlikely coalition arising from a similarly divided election outcome has yielded extraordinarily decisive government. Inevitably, this invites questions about the calibre and competence of the current Australian government. But a growing number of seasoned commentators are digging deeper to make sense of the lack of commitment to ambitious policy reform. Some link it to an apparent decline of ‘values politics’ – of elected representatives driven by a commitment to advance a given agenda. Attention has focused on a narrowing of the parliamentary gene pool, with MPs and Senators coming not from across the spectrum of society, but increasingly from within their party apparatus or the union movement.

I would add one other underlying factor: a complacency that has crept into Australian society as a result of prolonged prosperity. Australian is no longer seized by the imperative of reform to secure international competitiveness as it was in the face of much more stringent conditions in the 1980s and early 1990s. While it may be comforting to blame a particular crop of politicians, in the end our parliamentary representatives are reflecting the level of commitment to reform that exists across society. As often happens, complacency is the fruit of prolonged good times.

Of course, not everything is adrift. There is significant action on some policy fronts. The most notable domestic example is the planned National Broadband Network. While there is intense controversy about aspects of the design of this massive undertaking, it is proceeding and signals a return of a national appetite for large public infrastructure initiatives of the sort not seen since the 1950s.

Although not well appreciated within Australia, there has also been progress on the international front – particularly with enhanced regional engagement. Kevin Rudd’s Asia-Pacific Community initiative has come to life – in the form of the expanded East Asian Summit – with the emergence of US support for it and ASEAN countries taking ownership of it. Progress with multilateral initiatives of this sort is inherently difficult, but it has come to pass. It remains now to be seen what supporters of the framework – such as Australia – can do to enhance the region through it.

Australia has also forged remarkably effective bilateral links with a surprising but effective trio of collaborators: Indonesia, Korea and Vietnam. Despite very sharp bilateral political disagreement between Australia and Japan over whaling, there has been progress made on strengthening defence collaboration between Australia and Japan.

Perhaps the most intriguing recent regional initiative from Australia relates to Prime Minister Gillard’s pursuit of a ‘regional solution’ to the steady flow of asylum seekers – legitimate and otherwise. Gillard has been widely ridiculed for her proposal for a regional processing centre in East Timor. There is no question that the idea has been presented in an artless, clumsy manner. The Government will, legitimately, continue to attract barbs for this. But that does not mean the underlying instinct – that a regional, rather than national solution must be found – is wrong-headed. The key to this, for Australia, is Indonesia and ASEAN more broadly. No country can handle this problem on its own. Australia’s geographic circumstances demand that it do so in concert with the countries to its north. As a recent and productive Australia-New Zealand-ASEAN Dialogue revealed, there is potential for a real strengthening of collaboration on this front.

While the good times continue to roll, unfortunately, Australia is likely to continue to experience domestic division and drift on many policy fronts. If so, let’s hope there is improvement on the regional front.

Andrew MacIntyre is Dean of the College of Asia and the Pacific at the Australian National University.

This is part of a special feature: 2010 in review and the year ahead.

1. Australia gets a Labor government and a more certain foreign policy
2. Kevin Rudd, Australian foreign policy and Asia
3. Seeing Indonesia as a normal country

Kevin Rudd’s political rebirth as foreign minister has been the subject of feverish discussion in Australia and some curiosity in the rest of the Asia. But it is more important for both Australian foreign policy and regional affairs than is at first apparent. In foreign policy terms, Kevin Rudd may be able to prevent Australia from following Canada’s ‘disappearing act’ in Asia. This matters.

Australia’s national conversation has been consumed in recent weeks with the unfamiliar intricacies and uncertainties of constructing a workable government following an extremely close election giving the balance of power to a combination of the small Greens party and a handful of individual political independents. With the Labor Party and its new leader, Julia Gillard, coming out on top, one of the politically juicy questions has been the role of former leader, Kevin Rudd. Gillard’s decision to appoint him foreign minister generated much public discussion. Would he be an effective minister? What would his legendary manic work habits mean for Australia’s foreign service? And above all, what would it mean for the dynamics of the Cabinet and Gillard’s authority as leader to have Rudd in such a prominent role?

None of these considerations are trivial, but there is a bigger issue that is only just now under examination. For a mix of reasons, foreign policy is at serious risk of being side-lined in Australia. This would be bad for both Australia and Asia. Kevin Rudd may be able to mitigate this threat.

Despite some differences, through the years of both Kevin Rudd’s and John Howard’s leadership, Australian foreign policy was characterised by a bipartisan activism in Asia. This took place on the back of a booming domestic economy and solid parliamentary majorities. The momentum for this activism could very likely dissipate now.

Partly this is because neither Julia Gillard nor her opponent, Tony Abbott, carries foreign policy high on their list of personal priorities. Both have solid core instincts on foreign policy, but their passions, strengths and experiences both point in a more domestic direction. But this goes well beyond just personal dispositions, for current circumstances demand a heavy domestic emphasis. A large backlog of complex and politically fraught problems demand attention – macroeconomic management post-crisis and post-fiscal stimulus, carbon pricing, mining taxes and assorted sectoral issues ranging from telecommunications infrastructure, to healthcare, to immigration completely dominate the political agenda.

More pointed still, the government’s precarious grip on power means that much more so than usual, it will be consumed with the day-to-day challenge of preserving a legislative majority. This week, for the first time in decades, the Australian Government lost a vote on the floor of the House of Representatives. The issue itself was relatively minor, but the result powerfully symbolises the fragility of the situation. No leader, in such circumstances, can afford to give the time that foreign policy would normally receive.

Enter Kevin Rudd. Whether one admires Rudd or not, some things about him are clear. He comes to the job with an instant mastery of the issues and, by Australian standards, unsurpassed familiarity and top-level access right around Asia and the Pacific. There will be no learning curve for Rudd. But more than this, while there may be no love between Rudd and Gillard, there is also no real disagreement between them on foreign policy. Gillard broadly endorses the mainstream (and largely bi-partisan) consensus in Australian foreign policy thinking, of which Rudd is a principal bearer. And in many respects, it is likely to suit Gillard and her senior colleagues to have Rudd out of the way domestically and busily engaged abroad.

All of this means that, through Rudd, there is a better chance of momentum being maintained in Australian foreign policy. Of course this matters for Australia. But it matters for Asia as well. Australia is one of a small number of countries that is disproportionately active and influential in focusing and advancing the regional agenda. This is typical of so-called ‘middle powers’. Australia’s recent success in pushing the reform of regional architecture to the top of the agenda and having it now carried forward by ASEAN is an illustration of this.

Canada used to be active in this space, but has been missing in action for some years now while its government has been consumed with domestic affairs. Japan too, has seen its regional influence diminish owing to a preoccupation with domestic issues. The region has become reliant on countries like Australia, South Korea, Singapore and now Indonesia again to help move common interests forward.

The tremendous changes going on across Asia create urgent need for collective engagement on big regional issues. For familiar reasons, the biggest players are often not best positioned to nurture this. Asia cannot afford to have too many constructive foreign policy activists side-lined simultaneously.

It is unclear how long the current fragility of government in Australia will last, but while it does, Kevin Rudd’s appointment as Foreign Minister is good news for anyone who cares about not just Australian foreign policy but the advancement of regional cooperation across Asia.

Andrew MacIntyre is Dean of the College of Asia and the Pacific at the Australian National University.

1. Exit Australia’s Kevin Rudd – Special editorial
2. Australia gets a Labor government and a more certain foreign policy
3. The Canberra policy circus: what’s wrong with Australian politics?

Barack Obama’s upcoming visit to Indonesia and Australia is likely to be one of the less difficult and more gratifying international missions he undertakes this year. But along with the surges of goodwill that will greet him in both countries, there will also be opportunities– in partnership with Susilo Bambang Yudhoyono and Kevin Rudd – to advance significant common causes in the region and globally. And Yudhoyono’s separate bilateral visit to Canberra the week before gives added weight to the moment.

With climate change sliding down the agenda in all three countries for now, the big issue on which the three leaders will find common cause is the G20. A much more difficult issue – but important in different ways for each of them – is the challenge posed by China’s continued rise. Also likely to flow through the visits will be consideration of the need for movement to enhance regional frameworks for multilateral cooperation.

Perhaps the most remarkable aspect of this trip is the ‘diplomatic dots’ it invites us to connect. At least at this moment in history, there is potential for these three countries to begin coordinating their efforts in some policy areas. This is not a possibility that could have been given much serious attention previously.

The Obama visit to Indonesia has unusually strong symbolic qualities: America’s first black president meeting Indonesia’s first democratically elected president. In Indonesia the trip is being billed as pulang kampung or visiting back home by Obama. This will be the most salient visit for ordinary Indonesians by any international leader in living memory. It will also be the longest visit any US president has made to Indonesia in decades.

Obama will want to bag some real gains to justify the political risk of being away from Washington while the very important health care debate comes to a new head. The emphasis will be on forging a new comprehensive partnership. This is good packaging. It plays to Indonesia’s desire to move up a level in world affairs – to get beyond aid and development assistance. It also plays to Washington’s interest in forging stronger ties with key Asian countries in response to Beijing’s expanding influence.

What are the prospects for leveraging substantive results from the Jakarta-Washington relationship? Indonesia has made significant progress on the counter-terrorism front for some years. Can it now rise to a new level in the spheres of international economics and even international security more broadly?

The shared international economic agenda relates principally to the G20. Indonesia (like Australia) can’t quite believe its good fortune at being part of the G20. Under Yudhoyono’s liberal internationalist leadership, Jakarta is strongly motivated to support all moves to strengthen the G20. But Indonesia ranks low among the twenty in terms of its ability to deliver consequential action. All the more so when the President and his otherwise highly capable team of top economic aides are deeply enmeshed in a murky political crisis about a bank bailout. On the international economic front, rather than any direct policy action, greatest value Jakarta that can offer Washington may actually be coordinated rhetorical support at the G20 summit in Seoul later this year.

Surprisingly, there may be greater gains to be had from cooperation in the security sphere. For more than a decade, the Leahy Act, prohibiting the US from training military units with a history of human rights abuse, has meant that security cooperation with Indonesia has been limited to police-based counter-terrorism efforts. Both sides now want to move beyond this. Driven by China’s growing regional weight, Obama seems prepared to go further than Bush in finding ways to restart military-to-military engagement. There are signs that the Obama administration may seek to re-establish training programs with Indonesia’s controversial elite commando unit, Kopassus, by engaging with younger officers who could not have participated in past abuses.

If so, this will be a significant change. While much of the fanfare of the visit will focus on the human interest side of Obama’s visit and major new American investment in educational and scholarship programs to help Indonesians study in the United States, the beginnings of a resumption of military cooperation between Jakarta and Washington may prove to be the most significant durable outcome of the visit.

The Washington-Canberra relationship is more stable and familiar. Indeed, a substantial component of the visit is routine alliance maintenance. The Obama-Rudd relationship seems to have become as close and dependable as the Bush-Howard relationship before it. But what Obama would most like from Rudd – an expanded and regional leadership role for Australian troops in Afghanistan – seems to be out of the question, especially with the upcoming Australian election. On the economic agenda of the G20, as earlier on climate change issues in the lead-up to the Copenhagen summit, senior Australian and American officials are working very closely. But there is such strong alignment between Canberra and Washington on these issues at the moment, that this is more a matter of fine-tuning than major breakthrough.

On security issues, as Chinese observers have recognised faster than most others, Rudd’s much-discussed linguistic abilities conceal somewhat hawkish instincts. At the same time as welcoming China’s deepening engagement with the international economy and its assumption of increasingly global significance, in common with a number of governments in Asia, Canberra is keen to see Washington renew its regional engagement. And here, too, interests seem likely to align.

Rudd remains strongly committed to strengthening the institutional framework for regional cooperation in Asia. Explicit support from Washington would be helpful now in accelerating this cause. While the precise institutional form for achieving this outcome remains an open question, anything that enhances America’s ability to advance its core interests in Asia is likely to find favour with Obama.

An upgrading of one or more of the existing pan-regional institutions is an attainable option for advancing this. Watch for coordinated advocacy from Obama, Yudhoyono and Rudd as an outcome of this flurry of visits in a fortnight’s time.

Andrew MacIntyre is Dean of the College of Asia and the Pacific at the Australian National University.

1. Clinton’s visit to Indonesia
2. Obama’s visit to Indonesia and Australia and the TPP
3. Anticipating Obama’s visit to Indonesia and Australia

So, the result is in and the huge wave of excitement about Obama continues to roll across America and the world.  What should we expect about his approach to Asia – both for relations with the big Asian states and multilateral enagement?

The first thing is to recognize that the crisis in the global financial system, the challenge of restoring economic confidence at home, the wars in Iraq and Afghanistan and the challenge of climate change are all higher on his agenda than focusing on America’s engagement with Asia.  And this is as it should be.  But questions about America’s engagement with Asia will be in the mix of other major issues that receives attention – it can’t be otherwise.  Of course the team of top officials Obama ultimately appoints will make an important difference to his Administration’s approach to Asia, but my reading of his approach and instincts suggest some interesting adjustments in emphasis.

The most conspicuous of these relates to India.  I expect India will receive increased attention.  Above all, it’s vibrant democracy and traditions of robust cultural pluralism will attract him to it. The potential for India to buttress American interests in Afghanistan and Iraq and in counter-balancing China’s rise will reinforce this.  All of these factors lead me to expect an intensified drive for engagement with India. 

I do not expect major change in America’s approach to China.  Two overarching factors are likely to continue to dominate: he will have growing need for China’s cooperation on economic matters and he will be unable to escape the inexorable challenge of China’s growing geopolitical weight for American strategic interests.  Beyond this, his instincts will be to reach out to social, economic and political reformers in China – to the extent circumstances in China afford opportunities for this.

Indonesia is an intriguing case. Although he has said very little about this during the campaign, there are indications that his time in Indonesia has strongly positive associations for him.  His willingness to make time during the presidential campaign for personal meetings with private Indonesian citizens who knew his mother from her years there, offers a small window onto this dimension of his background.  Published and private accounts suggest Indonesia carries very positive associations and experiences of cultural pluralism.  This is unlikely to have major consequences for America’s approach to Indonesia, but it could lead to efforts to ensure a particularly capable envoy is chosen as Ambassador and a heightened interest in engaging with Indonesia.

But the most interesting bilateral question, I think, will centre on Obama and Japan.  Obama appears to have no significant connection to or affinity for Japan.  His political instincts are unlikely to lead him to place the same heavy emphasis on Japan’s importance as ally as Bush.  And Japan is unlikely to put itself forward as a strong, active partner on the international issues that matter most for him. While I don’t expect any conspicuous change here, I would not be surprised if there is a subtle easing in American prioritization of Japan.

Finally, Obama’s interest in rebuilding America’s international image and relationships will almost certainly lead to a renewed emphasis on multilateral engagements.  I would not be at all surprised if – as part of this general orientation – he finds Kevin Rudd’s Asia-Pacific Community initiative a very convenient opportunity for advancing America’s collective engagement with Asia.  There is a strong chance of multiple interests coinciding on that particular piece of policy space.

1. Obama and Asia – Weekly editorial
2. What Obama means for Asia
3. Obama and East Asia – Weekly editorial

Four months ago, Australian Prime Minister Kevin Rudd publicly floated an initiative to develop what he called an Asia Pacific Community, through which leaders of all the key countries in the region would be able to come together.  His proposal was greeted mostly with a mixture of quiet puzzlement and outright scepticism.  But this is an idea that is not going away.  Over the course of the next twelve months or so I expect momentum will be built for taking it further.  As this happens, the emphasis in discussion will soon shift from whether or not this initiative will proceed to focus increasingly on the modalities how it will proceed.

Initial public responses to the proposal were wary. By far the most extensive discussion of Mr Rudd’s initiative – and the most sceptical commentary – has come from within Australia itself. This wariness had more to do with Australian domestic politics than the international politics of the Asia-Pacific region, as Mr Rudd’s announcement of the initiative came as the early ‘honeymoon’ phase of the new Labor government passed and complaints were beginning to emerge about ‘initiative overload’ across the policy spectrum and ‘under organisation’ in the Prime Minister’s own office. A wide array of Australian analysts, journalists and parliamentarians past and present were quick to criticise the Rudd proposal for being ‘half-baked’, lacking in detail and presumptuous for not having consulted other regional leaders in advance.  These complaints were not without some substance – not only was the initial articulation of the idea rather sketchy, with distracting references to the European Union, but even the distinguished former diplomat, Richard Woolcott, nominated to lead regional consultation process evidently learned about the proposal only a few short hours before it was announced.  

But none of these issues were decisive and as Richard Woolcott himself has said, the circumstances were much the same nearly twenty years earlier when then Prime Minister Bob Hawke tasked him with leading a similar initial consultation process on APEC.  Much more important than the flurry of debate within Australia has been the reaction within the Asia-Pacific region.  Some commentators were sceptical or even dismissive of the proposal, with most government spokesmen expressing polite, non-committal interest in hearing further details.  Significantly, no head of government spoke decisively against the proposal.  

In the world of multilateral diplomacy, that constitutes a positive outcome.  It is very rarely the case that proposals for large-scale multilateral engagement engender clear and strong enthusiasm – almost always the benefits are too diffuse for this to be the case.  Much more telling is whether they generate clear and strong opposition.  And that has not been the case.

The real diplomatic action – which for the most part does not appear in the newspaper headlines – is now underway. Rudd’s special envoy, Richard Woolcott, has undertaken a first consultative foray into the region, focusing on key Southeast Asian countries.  Subsequent rounds will see him working his way around the wider region. There have been no official statements from Rudd about progress, but informal indications are encouraging. This will help to build momentum.

Ultimately, the reason some version of Rudd’s proposal is likely to succeed is that there is an underlying need for it.  There is real scope for improving on the current situation of regional consultation arrangements to the advantage of all.  Notwithstanding the variety of existing frameworks for regional engagement along various dimensions – most prominently  ASEAN, the ASEAN + 3 framework, the ASEAN Regional Forum (ARF) and APEC – the inescapable problem is that none of these arrangements brings all the main players from South Asia to the Americas together. It makes no sense that there is no framework which also includes both India and the United States. While all existing frameworks serve some specific purposes, none adequately meets the needs of the region as a whole.  There is no particular virtue in preserving the status quo for its own sake; more than anything else it is inertia and the inherent difficulty of taking multilateral diplomacy into new areas that preserves it.

Leadership to overcome these problems could come from almost anywhere in the region, but as middle-sized player Australia is one of a handful of countries that is well-placed to offer it.  And with Rudd’s quiet persistence it is quite likely that we will see results.  Increasingly, the issue that is coming into focus is the modalities of just how a comprehensive framework for regional engagement might be developed from the status quo.

There are several broad possibilities.  One is that it could evolve by adapting one of the existing frameworks.  For instance, the membership of the East Asian Summit might be expanded eastward across the Pacific.  Or the membership of APEC could be adjusted and expanded westward to South Asia.  A second broad possibility is that a special gathering could take place on the coat-tails of an existing forum.  Here too there are several imaginable variants, but by way of illustration, an appropriately comprehensive gathering of leaders could be engineered at the same time as the ASEAN or APEC summits, and evolve over time from there.  Or third, an entirely new framework could be purpose built from scratch.  

None of these broad possibilities is clearly superior to the others.  Each has distinctive pros and cons. In the end, it is likely to be the path of least resistance that prevails.  And it may be that a one-off and more limited gathering of pivotal leaders is needed to kick start the process and help cut through some of the initial complications.

To succeed, Rudd’s initiative will need to evolve into something much broader than just another proposal from a regionally activist Australian leader.  At least some countries and some other leaders will need to come to view it as advancing their interests.  This is quite likely to happen and in the process the character and form of the initiative will evolve as ‘authorship’ widens.  Indeed, that is what happened with all previous efforts to build frameworks for regional engagement, from ASEAN and APEC onwards.

The absence of a vocal chorus of public support for Rudd’s initiative might be thought of as telling evidence of a lack of demand or even interest.  It is not.  Frameworks for multilateral regional engagement – whether in the Asia-Pacific region, or any other – are not essential elements of international engagement.  That is why there is almost never overt demand for them.  But they can be very helpful, even if in quiet and low-profile ways.  There was no great demand for ASEAN at the time of its birth, but all Southeast Asian countries place value on it now.  Similarly, for all its limitations, heads of state continue to invest time and effort in the APEC process.

Kevin Rudd’s proposal has already evolved somewhat since his first speech in June.  It will continue to do so as momentum gradually builds behind and as an informal coalition of leaders willing to support its development emerges.  It is an idea whose time is coming.

1. Rudd in Singapore on the Asia Pacific Community idea
2. Realizing the Asia Pacific Community: geographic, institutional and leadership challenges
3. Kevin Rudd’s architecture for the Asia Pacific

Is politics in big democracies necessarily slow and messy?  I’ve found myself increasingly thinking so.  In the last couple of weeks I’ve been fortunate to have a series of up-close meetings inside the political engine rooms of the United States and India.  And for all the many and important differences between the world’s two largest democracies – from culture to constitutions – I have been struck by an underlying similarity.  Decision-making in both is fundamentally fragmented.

Forging the necessary agreement to achieve reform involves cutting deals among multiple and diverse players and is inherently difficult. Very occasionally rapid consensus is possible.  For instance, moments of great national emergency (as when US politicians united in response to 9/11), or when some powerful self-interest effecting all players is at stake (as when Indian politicians united in response to the threat of uncomfortably revealing campaign disclosure requirements).  But mostly the political process is grindingly slow as the numerous tactical deals needed to enact change get squared away, with marginal change or no-change being the default position in both places.

Usually we think of this as depressing.  We’re struck by all the opportunities for enhancing the provision of this or that public good that go begging for far too long.  But perhaps the price of a democracy that can hold big – and therefore, in all likelihood, socially and regionally diverse – countries together is indeed fragmented and slow politics.  Watching Manmohan Singh smash his parliamentary coalition over the proposed nuclear deal with the US and then scramble in search of a new one in India’s multiparty maze and wondering about how either Barak Obama or John McCain would go about constructing deals with Congress in a time of social division and partisan bitterness, I found myself starting to conclude as much.

One could debate the virtues of economies from political scale as opposed to more timely delivery of public goods.  But in these two big democracies that’s not where the action is.  For all their differences, in both cases it’s all about who can find ways of negotiating a saleable vision through in inescapably fragmented power structures to achieve some semblance of a coherent policy outcome.

1. China-India ties: Wen Jiabao in India – making nice slowly
2. India after the elections
3. Crooks a blight on India

Kevin Rudd’s visit to Indonesia generated little media interest in Australia. Much more attention was focused on the more contentious Japan leg of his trip, reflecting the bilateral difficulties that have emerged between his and Yasuo Fukuda’s governments. This is a reversal of the pattern of much of the last 10 years, where Japan visits usually had a routine quality and Indonesia visits were usually related to drama of some sort. There had been little excitement or energy in the Japan-Australia relationship whereas the Indonesia-Australia relationship was driven by a seemingly never-ending series of disasters and worries.

This is about more than the micro-causes of what catches the interest of the mass media or even early diplomatic stumbles on Japan as the young Rudd government has sought to find its feet. At a deeper level this reflects changes in Asia, in particular the quiet transformation of Indonesia and the crystallisation of the geopolitical consequences of the long-term changes in China’s and Japan’s developmental trajectories.

As Doug Ramage and I have recently argued, we need to start thinking of Indonesia as a “normal country”. Indonesia is no longer in turmoil and is making steady if unspectacular progress in consolidating democratic governance and lifting living standards. While it does not enjoy the magnetic attraction of China or India, nor does it suffer from the uncertainties of Pakistan, the Philippines or Papua New Guinea. It is certainly not impossible that Indonesia will again experience political disjunctures, but for the foreseeable future it is steady sailing and therefore increasingly trusting bilateral partnerships. Rudd and Yudhoyono were able to reach easy agreement not just on sensible longer-term development assistance programs, but also creative initiatives such as a forest carbon partnership and joint-chairing of a major international democracy forum later this year.

In Japan, by contrast, a long-standing strong bilateral relationship is facing new challenges as a result of Japan’s uncertainty about itself and its understandable unease about how others are re-calibrating the relative emphasis they give to Japan and China as the coming power in the region. Although the economic driving this shift have been at work for a long time, the geopolitical consequences have only recently come into sharp focus. This goes way beyond the individual contributions of Rudd and Fukuda. Of course Japan and Australia will remain very close partners into the future – we simply have too many deep interests and shared values for it to be otherwise. But, Australia – like all other countries in Asia – will continue to graduallyl adjust to China’s rise and make greater room for it.

Significantly and tellingly, both Tokyo and Jakarta have kept the door open to Rudd’s Asia-Pacific Community initiative. Australian commentary on the idea has been distracted by its hurried development prior to Rudd’s departure. While not trivial, these considerations will evaporate soon enough. More important is that Japanese and Indonesia interests – like Australian interests – would be advanced if there were a framework that all the major players in the region to come together and talk about any and all of the major issues. That’s why Rudd’s idea won’t go away. No doubt it will evolve and others will end up sharing authorship of it, but ongoing change in Asia makes it likely this proposal will continue to gain momentum.

1. Rudd in Singapore on the Asia Pacific Community idea
2. Kevin Rudd, Australian foreign policy and Asia
3. Asia and the United States: A changing relationship