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Can Australia remain a top 20 nation?

Can Australia remain a top 20 nation?

A few times over the past year, Minister for Foreign Affairs Julie Bishop has referred to Australia as a 'top 20 nation' or a 'top 20 country'. She prefers this to the standard description of Australia as a middle power, a term she has mostly avoided. As she responded to the Sydney Morning Herald's Peter Hartcher: 'Middle of what? There are something like 186 countries, so that makes us the 90-something country.' 

For the conservative side of politics, the term 'middle power' is often seen as having been claimed by Labor for its multilateral-leaning internationalist agenda. To those of a proactive bent it can seem terminally unambitious, a supine acceptance of Australia's middlingness in the order of things. Alexander Downer famously pooh-poohed the term and presented Australia as a 'considerable country'.

Minister Bishop's use of the term 'top 20' raises the question of whether Australia is and can remain a top 20 nation. If the league table is about economic power, Australia is comfortably in the club: Australia has overtaken Spain and is the 12th largest economy in the world. Unlike some G20 members (I'm looking at you, Argentina and South Africa), there is no question that Australia is a top 20 economy. (Australia is also in the top 20 polluting countries). Australia is comfortably ranked in top 20 by military spending and development aid. Australia's diplomatic representation may be the lowest in the G20 and its international broadcasting has been cut, but overall there is no question that it's an accurate appellation. 

The issue then becomes whether Australia will stay a top 20 nation. Economic trends and demographics are against it. In purchasing power, Indonesia's economy passed Australia's years ago. PwC projects that Australia will remain in the top 20 in GDP by purchasing power in 2030 but will have dropped out of the top 20 by 2050. As other countries' economies grow, this will give them the funds to invest in greater military spending and even in development aid, as has happened with China and India.

So, is calling Australia a top 20 country just setting ourselves up for inevitable failure? [fold]

A more positive perspective is that it might act as an encouragement, helping Australia to commit to remaining a top 20 nation and taking the decisions needed to maintain this status. For example, the Defence White Paper process could focus on what investments would be needed for Australia to stay in the top 20 in military capability; this would give a hard-edged focus to the exercise (and probably throw up some uncomfortable truths).

There is no shortage of advice on what is needed to make Australia's economy internationally competitive, whether in trade, labour force, tax reform, productivity or science and innovation. What is usually missing is the political will to implement these prescriptions. A sense of Australia as a top 20 nation can help give political impetus to push for economic reform.

When I attended the Crawford Australia Leadership Forum – Gareth Evans' answer to the 2020 Summit – I was struck by the division of discussion into two streams: 'global realities' and 'domestic choices'. The international stream ('global realities') dealt with topics such as China-US relations, India, Indonesia and the Middle East, topics which are, for the most part, outside Australia's control; they are realities with which Australia has to deal. By contrast, the stream on 'domestic choices' dealt with issues such as productivity, competitiveness, energy, inequality and growth; these are all areas where Australian policy settings can have a major effect. 

If it is true that international power derives at its base from economic strength, as has been a popular refrain in the US, the 'top 20' tag can help us recognise this reality and the importance of a continuing focus on economic policy. It fits with the Minister's focus on economic diplomacy: of economic goals as a driver of diplomacy. It suggests the need to strive for a larger Australia in international 'weight'.

The question of whether Australia stays in the economic top 20 is likely to determine if Australia has the clout that enables it to contribute to a conducive international order. Focusing on being a top 20 nation may help keep Australia's eye on that prize.

The Australian Institute of International Affairs' National Conference 'Foreign Policy for a Top 20 Nation' will be held on Monday 27 October in Canberra with speeches by the Minister for Foreign Affairs and Lowy Institute experts Mike Callaghan and Rory Medcalf.

Photo by Flickr user Tal Bright.

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