Australia leans into ASEAN

Growing diplomatic role in region stressed at summit as Albanese announces investment fund

The ASEAN-Australia Special Summit, which ended on March 6, is being seen in many quarters as a significant achievement for Australia’s Labor Prime Minister Anthony Albanese at a time of heightened global tensions.

These include maritime and regional security concerns, challenges posed by climate change on water and food security, and issues surrounding cybersecurity and AI.

Professor Zhu Ying, director of the Australian Centre for Asian Business at the University of South Australia, said the summit was “largely symbolic”.

“But it did point to the fact that Australia has a very important role diplomatically in the region because of its close security relationship with the United States and its relationship with its biggest trading partner, China.

“The summit gave the ASEAN countries an opportunity to let it be known that they will not be pushed around by the big powers, and (that they) have their own positions on security issues that affect the region,” he told China Daily.

Zhu said the Summit reminded Australians that Australia is an active partner with the Association of Southeast Asian Nations and that Canberra continues to engage with ASEAN and its leaders.

Australia’s Foreign Minister Penny Wong was clear on where Australia stood in the region, Zhu said, adding: “I think the ASEAN leaders appreciated that.”

In her March 4 keynote address to the ASEAN-Australia Special Summit Maritime Cooperation Forum, Wong said: “Australia doesn’t just acknowledge, we embrace. We share a region, and we share a future.

“We are bound by the geography that fate has chosen for us, and we are strengthened by the partnership we choose for ourselves,” she added.

The March 2-6 summit in Melbourne brought together political and business leaders from nine of the 10 ASEAN members, except Myanmar, plus Timor Leste, New Zealand, and Australia. It also marked the 50th anniversary of Australia becoming ASEAN’s first dialogue partner.

One of the most significant announcements of the summit saw Albanese announce an A$2 billion ($1.3 billion) investment fund to help Australian companies invest in ASEAN.

The move was suggested last year by Nicholas Moore, Australia’s special envoy for Southeast Asia, in his ‘Invested: Southeast Asia’s Economic Strategy for 2040’ report.

The recommendation was aimed at countering the reported view of some Australian investors that ASEAN’s risk-return trade-off was unattractive.

Tim Harcourt, industry professor and chief economist with the Institute for Public Policy and Governance at the University of Technology Sydney, said: “I think the summit will be seen as a success for the government.”

“Basically, you had two parts to this summit — defense and security; (and) trade and investment,” he told China Daily.

“On defense and security, you have regional consensus, but it is in trade and investment areas you had a great deal of interest.

“There is a perception that Australian companies are not interested in the region, which is wrong … The problem is (in) trying to attract smaller companies. While big companies can afford to make one or two bad investments small companies cannot afford to do that,” he said.

“That is why the fund is such a good idea … It will help those smaller companies who are interested in investing in the region to make the jump.”

In announcing the Southeast Asia Investment Financing Facility on March 5, Albanese said it would provide loans, guarantees, equity, and insurance for projects to boost Australian trade and investment in Southeast Asia, particularly in support of the region’s clean energy transition and infrastructure development.

Albanese noted that Australia’s economic future lies in the region.

“Australia wants and needs ASEAN to be an effective anchor for the security order in Asia,” Peter Drysdale, emeritus professor at the Crawford School of Public Policy at Australian National University, and Mari Pangestu, former Indonesian trade minister, noted in a joint commentary for the East Asian Forum.