TONY JONES: Now Labor has been talking for a long time about staying focused on our own region. What’s new about the new direction?
KEVIN RUDD: Well, around Australia we have what the strategic analysts used to call “the arc of instability”, that is across East Timor, Papua New Guinea, through Melanesia, as a strategic concept.
But if you look at it over the last 10 years, that concept has become a reality. East Timor, rolling military instability. PNG, continued challenges to domestic stability. Vanuatu, ethnic tension. Solomons, well we know what’s happened in the Solomons. Fiji, rolling military coup. Tonga, a mess. Nauru, becoming probably the region’s first failed state.
Now, that’s all happened over the last decade. So, the question I ask is given the Federal Government has been expending literally billions of dollars in civilian and military aid and costly military interventions, why is it that in fact, all the indicators are going in the wrong direction rather than the right direction for Australia. And therefore what I’m proposing tomorrow is a radical rethink of Australia’s engagement with these states that form part of our “arc of instability”.
(Kevin Rudd as opposition leader in an interview with ABC Lateline reporter Tony Jones on 04/07/2007)
So what is Labor’s new direction in the Pacific?
In January 2009 Mr Rudd wrote an essay outlining his idea for an Asia-Pacific Union for Foreign Affairs magazine (FA magazine). But FA magazine published by the Council on Foreign Relations decided not to run the piece.
Foreign Affairs editor, James F. Hoge Jr., is reported as saying that:
“Mr Rudd had intended the piece to coincide with his trip to the United States in March of  but there were “timing problems” between the magazine’s publication and Mr Rudd’s visit.”
Mr Hoge said that there was also “overlap” between the essay’s topic and similar articles recently published in Foreign Affairs.
But he described Mr Rudd as a “thoughtful statesman”.
This is the full response from Hoge to The Punch:
There were timing problems between Foreign Affairs’ bimonthly edition schedule and Prime Minister Rudd’s trip to the United States. But there was no problem with the Prime Minister’s topic or analysis, although there was overlap with recently published articles on the Asia-Pacific region.
Because Foreign Affairs comes out only six times a year, it regrettably cannot publish all the excellent articles that are available to it. Prime Minister Rudd is a thoughtful statesman, and we would hope for better circumstances concerning an essay at a future date.
James F. Hoge, Jr.
Peter G. Peterson Chair
Council on Foreign Relations
The revelation follows criticisms of Mr Rudd over the publication in February of an essay in The Monthly. Some commentators welcomed that essay as a valuable critique of capitalism but others panned it as amateurish and superficial, a bit like the ALP, really!
Mr Rudd has repeatedly refused to comment on the spiked article only to say that:
“editorial decisions regarding the publication of articles are matters for the editors of a publication.”
According to sources familiar with the essay it was considered by some at FA magazine to be “overly bureaucratic”, rather like the author, as later events would reveal.
In 2008 Mr Rudd came up with the idea for a European Union style community of states in the Asia-Pacific that would include Australia, South-East Asian states, China, India and the United States.
To say that the idea has not been widely embraced by the ASEAN community would be an understatement. What’s worse it has been criticised by former Labor Prime Minister and Asian policy guru Paul Keating as too difficult.
After his disaster with the idea of a European Union style community of states in the Asia-Pacific, Mr Rudd as Australia’s Foreign Minister has decided to have ‘a tilt’ at winning a prized non-permanent seat on the UN Security Council for 2013. To this end, Australia has invested substantial amounts of taxpayer money into areas of the globe that traditionally fall outside of Australia’s areas of interest.
Annmaree O’Keeffe is a Lowy Institute research fellow. She has served as Australian Ambassador for HIV/AIDS and Deputy Director General of AusAID.
The Gillard Government has been applauded for sticking by its commitment on aid in Tuesday night’s budget. In keeping with its election promise to shepherd Australia’s foreign aid budget to 0.5% of Australia’s national income by 2015, the aid budget increased by almost $487 million, bringing the total to more than $4.8 billion. This is expected to take the ratio from 0.33% of national income to 0.35%.
Laudable, but is it affordable at a time when many Australian families are being caught between Scylla and Charybdis of a rising net family tax take by the government and a simultaneous fall in net government services to offset that take.
When we take a closer look at the winners and losers from Australia’s $4.8 billion foreign aid largess, we can see another Rudd disaster looming.
While Asia and the Pacific still receive the lion’s share for long-standing and arguably very sound humanitarian and national interest reasons, there are some surprising winners found elsewhere. While the Pacific’s increase is just under 7% of what it received in last year’s budget, South and West Asia is up by 29% and Africa by 45%. Latin America stands out with an increase of 67%.
There are some even more surprising losers. The increase in aid to East Asia is close to 16% over last year’s budget estimate. Again, this is a sensible and welcome move given the extent of poverty throughout the region and its real strategic interest to Australia. However, two of the world’s poorest countries, Burma and Laos, are facing either a cut, in the case of Burma, or for Laos, a minuscule increase.
Surely in terms of Australia’s national interest Burma and Laos should rate higher on the needs scale than say Latin America, which stands out with an increase of 67%.
So what is behind Australia’s foreign largess?
TAXPAYERS will foot an extra $2 billion foreign aid bill because Labor feared the consequences of upsetting Foreign Minister Kevin Rudd, Government insider’s claim. So the Daily Telegraph tells us.
This explains why Australia is diverting aid spending to regions outside of Australia’s sphere of interest, including Africa and the Caribbean. Because Mr Rudd has gone and ‘tilted at another windmill’ by chasing votes for a seat on the 15-member UN Security Council and his colleagues in Cabinet are so scared of ‘dummy-spits’ and lack of honour and integrity that they won’t stand up to him. This is despite the fact that the Department of Foreign Affairs and Trade has advised the Government that it would have more chance at a seat if the 2013 bid was delayed until 2018.
So much for Mr Rudd’s idea for a European Union style community of states in the Asia-Pacific. It seems to have been superseded by his childish attempts to secure a non-permanent seat on the UN Security-Council, which is an accolade Australia should not receive because of its racism and xenophobia.
While Mr Rudd has been squandering Billions of dollars of Australian taxpayer money on his latest folly, resulting in an increase in financial stress in many Australian taxpayer households, because of his folly, what has happened in Australia’s backyard?
Well, China has moved in, hasn’t it!
In 2005, the Chinese government declared Fiji an ‘Approved Destination’ for Chinese tourists and this has paved the way for further developments between the two countries, followed in August 2006 by the opening of its very first, wholly-owned, mainland Chinese hotel – the SSS International, I Fiji.
China is boosting its influence in the Pacific through a secretive foreign aid program, offering “soft loans” that many nations will struggle to repay, a foreign policy think tank said Tuesday.
The loans amounted to a significant amount of gross domestic product (GDP) in countries such as Tonga, Samoa and the Cook Islands, giving Beijing powerful diplomatic leverage, said the Lowy Institute for International Policy.
In a report entitled China in the Pacific: The New Banker in Town, the Lowy Institute warned the soft loans, which come with a five-year interest-free period, could create a debt crisis when they fall due:
“China has pledged over US$600 million to the Pacific since 2005 and debt burdening will become increasingly pressing as Chinese loans accumulate and the five-year grace periods expire.”
According to the Lowy Institute China’s interest in the Pacific stemmed mainly from a race for diplomatic influence with Taiwan.
The rivalry saw some Pacific nations constantly change allegiance between Taipei and Beijing in return for increased aid, until Taiwan elected the China-friendly government of President Ma Ying-jeou in 2008.
While the diplomatic one-upmanship had cooled, China was “preparing for the worst” by offering soft loans that would ensure Pacific nations remained on its side if relations with Taiwan deteriorated, the Lowy Institute said.
“Should the warming in cross-Strait relations break down … these outstanding debts could be used as leverage against states looking to switch to recognizing Taiwan in future.”
The report said that Chinese loans to Tonga now accounted for the equivalent of 32 percent of the country’s GDP, with the figure at 16 percent for Samoa and the Cook Islands.
Former Tongan finance minister Josh ‘Utoikamanu said Tonga was currently meeting its loan obligations but the size of the debt raised concerns about the future…
“…This means that there is a very high possibility that Tonga will be unable to service its debts in the future…”
he told the Australian Broadcasting Corporation.
How much is it going to cost each and every Australian family to repair this latest Rudd disaster?
At least Mr Rudd’s ill-fated dream of a European Union style community of states in the Asia-Pacific cost Australia nothing more than embarrassment; his ‘tilt’ at the UN Security-Council could cost us a lot more than that.
Perhaps Prime Minister Gillard could make Mr Rudd Minister for spiked essays, or something like that!