Are Australia’s neighbours ready for AUKUS?
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Are Australia’s neighbours ready for AUKUS?

The AUKUS fallout has not prevented positive momentum in Australia’s relations with South-East Asia, yet regional concerns still lurk below the surface, and Canberra needs to strike a careful balance. Originally published in the Australian Financial Review.


Australia’s diplomats in Jakarta and Kuala Lumpur could be forgiven for feeling a little nervous ahead of the looming announcement about the AUKUS “optimal pathway” for operating Australia’s fleet of nuclear-powered submarines.

Ties with both Indonesia and Malaysia have been tracking well under the Albanese government. But when AUKUS was first announced in September 2021, neither country was happy. Both worried about the potential for AUKUS to contribute to a regional “arms race”, and about nuclear proliferation risks.

The lack of consultation rankled, especially in Jakarta. While China sought to amplify these concerns, regional objections were not simply the product of disinformation but of genuine disagreement and divergence in worldviews.

Australian officials have spent much of the intervening period seeking to reassure South-East Asia about what AUKUS is and is not. They emphasise that AUKUS is a technology sharing partnership, not a new alliance, and that Australia is steadfastly committed to nuclear non-proliferation.

Australian public statements have also carefully sought to distinguish AUKUS from the Quad: while the Quad is a “normative” grouping that sets out a vision for the region, officials cast AUKUS as a more technical arrangement. Australian embassies carefully “pre-brief” regional countries ahead of other defence announcements.

Beyond this “reaction management”, the Albanese government has also sought to put ties with South-East Asia on a more positive footing. Foreign Minister Penny Wong has visited nearly every South-East Asian country and tasked her department with finding new ways to deepen Australia’s economic relationships, with the region a priority.

South-East Asian officials and analysts ask whether the defence capability conferred by AUKUS outweighs the downside of tensions with China.

Even on security issues, the AUKUS fallout has not prevented positive momentum. Australia’s defence and foreign ministers recently hosted their Indonesian counterparts, which notably included the first visit to Australia in his capacity as defence minister by Prabowo Subianto.

The two sides flagged that they would upgrade their defence co-operation to treaty level and discuss issues like reciprocal access to each other’s military facilities. Even if not much transpires in practical terms, this proposal is important: it shows that Australia is focused on maturing its defence partnership with Indonesia, and that the Indonesian side is willing to engage.

Yet regional concerns still lurk below the surface. There is a risk that the announcement about the AUKUS pathway could again disturb them.

Consider Anthony Albanese’s comments at the National Press Club last week. AUKUS, he said, “formalises the common values and the shared interest that our three nations have in preserving peace and upholding the rules and institutions that secure our region and our world”.

It is hard to square this with the line that AUKUS is not a normative arrangement.

Strategic reassurance necessary

Australia’s regional position is more directly affected by perceptions of AUKUS than that of either the UK or US, so it must push to ensure that strategic reassurance is not forgotten in the months ahead.

The announcement in Washington should avoid undue pomp and ceremony. Excessive flags and pageantry accompanying the initial AUKUS announcement in 2021 clashed with officials’ more modest descriptions of the arrangement as a “security partnership”. The medium must match the message.

More importantly, Albanese and his government must find a clear explanation for why Australia needs nuclear-powered submarines. Some Australian officials have couched the acquisition in terms of Australia’s ability to project power in the waters to our north. Vice Admiral Jonathan Mead, the chief of the government’s nuclear-powered submarine taskforce, recently described the submarines as necessary in a region that was becoming “more complex, more fragile, less secure, less stable.”

In private, South-East Asian officials and analysts ask whether the defence capability benefit conferred by AUKUS outweighs the downside of ratcheting up tensions with China. They also ask how AUKUS aligns with traditional Labor foreign policy towards the region.

Australia would not help itself by speculating about how the submarines would be used in a Taiwan or South China Sea contingency. But it must find a way of explaining the rationale for AUKUS that treads a middle ground between counterproductive detail and platitudes about regional stability. This message needs to be consistent and led from the prime minister down.

Defence review and Quad summit

Australia must also consider regional perspectives in two other important upcoming events: the response to the defence strategic review led by Stephen Smith and Angus Houston, and the hosting of the Quad summit in Sydney.

Australia’s most recent major defence policy paper, the 2020 Defence Strategic Update, did not encounter opposition in South-East Asia, though the document did not pull its punches in describing regional challenges, or the more ambitious role that Australia should play in response.

The response to the Smith-Houston review, however, will need to tackle sensitive issues that legitimately engage the interests of our neighbours, including the use of military bases in northern Australia and long-range strike capability.

Finally, Australia will host Quad leaders from the United States, Japan and India in late May. The Quad is an easier sell than AUKUS: we are in good company with India and Japan, as well as the US, and the group lacks an overt security agenda. But many in regional capitals still worry that the Quad raises the risk of confrontation, and comes at the expense of engaging South-East Asian countries on their own terms.

The Albanese government has made a good start in South-East Asia. But the coming months will put this to a test. Australia must ensure that other priorities, including management of the US alliance and deterrence of China, do not drown out its positive message in the region.


Areas of expertise: Indo-Pacific strategy; Australian foreign policy; Southeast Asia.