Published daily by the Lowy Institute

North Korea: The case for engagement

South Korean solider in the joint security area of the DMZ (Photo: Pontomax CCO Public Domain)
South Korean solider in the joint security area of the DMZ (Photo: Pontomax CCO Public Domain)
Published 14 Feb 2017 12:05    0 Comments

Earlier this month the Lowy Institute's International Security Program, supported by the Korea Foundation, hosted the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral security relationship. This is the seventh in a series of posts from Forum participants.

Many security observers and policy makers in Seoul could not disguise their disappointment when North Korea conducted its fifth nuclear test in September 2016.  North Korea described it as a 'nuclear warhead detonation test'. but also used the terms 'standardisation', 'miniaturisation'. 'lightweight'. and 'diversification'. None of these should distract from the import of the test: Pyongyang now must be treated as a de facto nuclear state and the approach adopted should be one of direct engagement.

Many observers have explored what the emergence of North Korea as a nuclear weapon state means for the Korean Peninsula and East Asia. They have examined such questions as whether these nuclear capabilities fundamentally alter the current security order on the Korean Peninsula, looked at the risks posed to the peace and security of the Peninsula, the region and the US, and considered the security implications of North Korea’s nuclear weapons to the South Korea-US alliance in particular and Northeast Asia in general.

While analysis on these topics is to some degree subjective, few could disagree that North Korea’s emergence as a nuclear state is a negative development in for Northeast Asia, a region known for its intrinsic instability. A nuclear North Korea is essentially reflective of the ways in which Seoul and Washington’s policy towards Pyongyang has failed for the past quarter century. North Korea’s fifth nuclear test and progressing missile technologies – clearly demonstrated in the latest launch over the weekend - speaks to a grim reality that has certainly complicated the deterrence paradigm on the Korean Peninsula.

The primary purpose for a weak power to acquire nuclear weapons is deterrence. But, while it is difficult to conceive of North Korea’s limited nuclear capabilities as offensive in nature, Pyongyang could become more provocative in its behaviour towards Seoul, depending upon the situation. North Korea is a bad country, but not a mad one; its leadership knows the potential consequences of unbearable retaliatory damage if it were to deploy its limited nuclear capabilities in a pre-emptive strike against South Korea. But its nuclear weapons will certainly work as a minimal deterrence measure against South Korea and the United States. In short, crisis stability in the Korean Peninsula will be sustainable, even if North Korea has nuclear weapons.

Assuming Pyongyang feels a greater sense of security and confidence because of its nuclear weapon, counter-intuitive dynamics open up a new set of opportunities for denuclearisation. The first priority has to be a freeze of North Korea’s nuclear program by directly addressing the security concerns of Pyongyang such as halting the Korea-US military exercises and hosting Six Party Talks. I am aware that engagement strategies alone do not guarantee successful denuclearisation. Such policies must be combined with sanctions and backed up by the threat of coercion if necessary. But in my view there is a compelling imperative to re-start engagement such as humanitarian assistance and cultural exchanges in order to restore confidence and trust on both sides.

South Korea and the United States have long sought to resolve North Korea’s nuclear ventures through a set of tortuous negotiations and audacious sanctions. All these efforts have essentially turned out to be futile. The lack of consistency in pursuit of denuclearisation let to a situation where it was impossible to implement a coherent set of policies. Moreover, the most recent presidential elections in Seoul and Washington greatly changed the scope and direction of their respective nations’ North Korea policy relative to their predecessors. In other words, this policy incoherence from negotiations to sanctions and vice and versa generated short-sighted policies reactive to Pyongyang’s delinquent behaviour. For nearly three decades, we have failed to deal with North Korea consistently with strategy aimed at constructing a positive outcome for Pyongyang as well its interlocutors.

If North Korea is about to emerge as an operational nuclear state - a highly unpalatable outcome for South Korea - then constructing a concrete roadmap of engagement for denuclearisation is the best option we have. This is the daunting security implication of North Korea’s nuclear conundrum to East Asia.

North Korea: Not yet ready to change from within

Mass games in Pyongyang  (Photo: Flickr/(stephan)
Mass games in Pyongyang (Photo: Flickr/(stephan)
Published 8 Feb 2017 17:00    0 Comments

Last week the Lowy Institute's International Security Program, supported by the Korea Foundation, hosted the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral security relationship. This is the sixth in a series of posts from Forum participants.

Recent history suggests an external shock won't lead to regime change in North Korea and, given the current political situation is not conducive to the rise of an ascendant class of political reformers, policy recommendations should focus on encouraging structural and behavioural change within the regime.

Some argue a crisis caused by an exogenous shock will create a split within the leadership and the state, in which case popular pressure might lead to the collapse of the regime. However, the North Korean regime has not only survived decades of economic difficulties, it appears to have become immune to both international sanctions and external shocks. Indeed, these appear to have strengthened cohesion amongst the elite. If the goal is internally-induced political change - as opposed to regime collapse -  we need to take a long-term strategic approach to create conditions in which the process of transition may take place, either top-down or bottom-up.

There are two major approaches to political transition which offer an analytical framework for both the agent and process of change. The state-centred approach considers the behaviour and actions of the political elite groups and the political culture imposed upon the polity as the major determinant of the transitional process, whereas the society-centred approach regards modernisation, and mass political culture as important socio-economic and cultural preconditions of transformation. In other words, the primary actor in the process of political change can come from either the political elite or the society if - and only if - there is an organised group or a new ascendant class that can challenge the existing leadership’s confidence. Overthrowing, or even meaningfully destabilising the regime, through implosion within the ruling elite or a popular uprising is unlikely under current conditions. North Korea's distinctive brand of integration, legitimisation, and political management has effectively halted the emergence of agents of change or alternative visions for change.

North Korea's durable political system which is based upon a single, deeply entrenched political party under an absolute ruler and cohesive political elite as the centre of power. In such a configuration, the possibility of society-driven change is low. The regime has a highly centralised and relatively closed polity, and a society largely devoid of both civic culture and distinct social strata with particular social interests or established political-ideological views. The North Korean leadership features a strongly united power elite and a compact-sized ruling coalition. The long-term consolidation of a monolithic leadership, the eradication of factional division or opposition, and the formation of the established ruling coalition that supports a father-to-son leadership succession scheme have together created an ideologically-united elite. This group has prevented any legitimacy crisis or loss of confidence in its own domination. In the early years of Kim Jong Un leadership, a succession throughout the three generations in a relatively short time put the legitimacy issue in question. Recent studies, however, suggest that regime has restored a stable power structure and a cohesive ruling group that provides a strong support base for the leadership.

A lack of political change owes much to the distinctive features of the North Korea regime and behavioural characteristics. Firstly, monolithic leadership has prevented the formation of an alternative to Kim’s political power or possible conflicts within the leadership. The father-to-son leadership succession helped eradicate a possible power struggle surrounding the succession issue. Secondly, building a closed but controlled society curtailed growth of civil society or any possibility of a societal force emerging that could challenge the existing leadership. In the absence of potential agents of change or alternative vision, any significant change in the existing system is unlikely.

This regime deviates from the global trend of post-communist transition towards political pluralism, democracy, and fully-fledged markets. The present leadership has little to no intent to head down this path, as demonstrated in the 7th Party Congress in May 2016. That the old system continues is not due to the superior functioning of North Korea’s communist institutions or rigid adherence to the utopian goal of communism, but because of the lack of an alternative vision as to how to restructure the system without risking regime collapse. The mission, therefore, is not to find a prototype of institutional change that could be recommended for North Korea, but to accept the country-specific development process and offer acceptable alternatives that could induce change in the behavioural features of the North Korean regime.

The impetus for political change has to come from within. The outsiders' role should be limited to providing favourable conditions for the agents of change to grow and rise. Encouraging market-based reforms and opening-up of its closed society would offer a better solution for political change in the long-term. The North Korean regime largely remains insulated from outside influence, thus, little information is available to leaders that could challenge the ideology of the regime. Market-based reforms and opening-up may not only offer North Korea a vision for the reform of the existing system in the post-communist era, but also generate structural change that would allow for a more balanced state-society relationship and a rise of ascendant class or political reformers necessary conditions for political change. Therefore, the answer is engagement not containment.

Let’s talk about Darwin: Australia, South Korea, and US basing

US troops arrive in Darwin, 2016 (Photo: Flickr/Department of Defense)
US troops arrive in Darwin, 2016 (Photo: Flickr/Department of Defense)
Published 8 Feb 2017 11:24    0 Comments

Last week the Lowy Institute's International Security Program, supported by the Korea Foundation, hosted the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral security relationship. This is the fifth in a series of posts from Forum participants.

To some, it might come as news that there were some recent bumps in the US-Australia defence relationship. In July last year Washington and Canberra were unable to agree on who would foot an estimated $20 million bill as part of $2 billion in facility upgrades in the Northern Territory to cope with an eventual planned peak deployment of 2500 US Marines and material.

While an agreement was eventually reached, could this have all been avoided? Simply, no. The art of hosting US forces is unfamiliar to Australia; challenges were inevitable. But Australia could have been better prepared for that steep learning curve. Australia enjoys close relations with countries such as South Korea with long experience in the tricky elements of US alliance management. It should take advantage of their experience.

It would be an understatement to say South Korea knows about US basing. As it stands, South Korea hosts 28,500 US service personnel and contributes US$821 million towards cost-sharing. Numbers aside, South Korea has persisted with US basing despite decades of fluctuating public opinion and dark periods in the bilateral relationship. For Australian defence and foreign policy officials, looking to South Korean counterparts to understand the complexity that comes with being a host state and its impact on overall alliance management would go far in keeping discussions with US counterparts grounded, productive and even-tempered.

But there are other reasons as well. For Australia, it would mark a much needed change in its conduct with South Korea. Traditionally, Australia has tried to deepen ties with South Korea by being proactive; the most recent Australia-ROK 2+2 joint statement shows agreement to cooperate on a wide range of issues, from transnational law enforcement to maritime security. The South Korean response to the enthusiasm has been politeness and acceptance, but it masks a growing weariness. As recently described by a former Australian senior diplomat, it is borne from 'initiative burnout'. Instead of constantly trying to prove its value so broadly, Australia could find initially narrowing the focus could improve receptivity and, in the long term, encourage openness.

Above all else, however, need must meet feasibility, and 2017 is already shaping up to be a politically challenging year for both countries. Australian Prime Minister Malcolm Turnbull began the year by confronting a scandal involving a senior minister, and has since lost a senator to the crossbench. In Seoul, Prime Minister and acting President Hwang Kyo-ahn is bound by a limited mandate. Given the circumstances, it would be better to focus on what can be achieved within established frameworks from past agreements and forums, such as the Australia-South Korea 2+2 dialogue.

During the Obama administration, there was a need for US allies to come together and work to future-proof US regional commitment; under a Trump presidency, it is an indisputable requirement. We should not forget that the US President has long questioned the utility of alliances (and specifically the US-ROK alliance). It is in Australia’s interests to deepen its relationship with South Korea, as both fellow middle powers and mutual US allies, and work together to keep the US both honest and aware that remaining committed and present in the Indo-Pacific is also in its national interest.

The limitations of framing North Korea as a risk

Photo: Flickr/ClayGilliland
Photo: Flickr/ClayGilliland
Published 7 Feb 2017 16:49    0 Comments

Last week the Lowy Institute's International Security Program, supported by the Korea Foundation, hosted the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral security relationship. This is the fourth in a series of posts from Forum participants.

In security studies circles, when it comes to the study of North Korea, shifting the question from 'what can the international community do to stop North Korea’s belligerent, bellicose behaviour?', to 'what is the relationship between the international community and North Korea and how might this be contributing to North Korea’s belligerent, bellicose behaviour?' is still viewed as a deeply radical proposition: naive at best, and potentially dangerous. Yet these are questions that bear asking: avoiding them at the level of strategic analysis does not help assist in the development of creative and responsible policy solutions.

Strategic policy is increasingly preoccupied with how to overcome risk and uncertainty. These are concepts that feature strongly in the most recent official articulations of US security and military strategy. Yet while 'risk' and 'threat' are often used interchangeably when we talk about security, they are in fact significantly different concepts and this has important implications for the pursuit of security strategy.

A key characteristic of risk - and one that is particularly relevant when considering North Korea - is that of future uncertainty; whereas a threat assessment deals with something bad that might happen, a risk assessment must face the possibility that something unexpected may take place. This leads to policies of pre-emption and reduces the tolerance for security strategies that include within them any amount of further 'risk' or uncertainty.

Past practice of assuming that North Korea represents a risk and acts like an outlier or 'rogue' has led to a series of policy failures. This has been evident over the past eight years of ‘strategic patience’, where placing the onus on North Korea to act – an approach which assumes that the only barrier to progress lies in Pyongyang – has seen the world stand by while North Korea has developed a significant nuclear capability.

Official US statements regarding North Korea during this time have tended to emphasise the country’s non-normative behaviour, weaknesses and potential riskiness. In Washington DC, concerns about North Korea’s human rights record have seeped into strategic policy circles. While the international community should certainly be working to bring about an end to Pyongyang’s horrific human rights record, linking the two issues has not been helpful for either human rights outcomes or strategic policy making.

Risk formulations have led to a strategic rationality that views any departure from the narrow range of behaviour deemed appropriate in international negotiations as a sign that Pyongyang is not to be trusted. Unreasonable demands, from Pyongyang – such as the 2015 proposal to suspend US-ROK military exercises in return for North Korea’s adherence to international law – are interpreted as extreme provocations, rather than as a potential diplomatic bargaining point. Rather than switching gears and dealing with North Korea 'as it is, not as we might wish it to be', negotiations break down. In this mindset, sanctions and isolation are seen as the only path to stability. Such stability has, of course, has failed to eventuate. Instead we have seen further proliferation and advances in North Korea’s nuclear capability.

US President Donald Trump’s statements towards Northeast Asian security, and towards North Korea in particular, suggest a wide range of options, from engagement and neglect to containment and even aggression. While suggesting that he would be willing to sit down one-one-one with DPRK leadership, possibly even in Washington, he has also hinted he would support South Korean or Japanese nuclear armament. In addition, he has called on the Chinese to directly intervene to bring an end to North Korea’s nuclear program. In short, it is hard to predict which way US-DPRK relations are headed, given Trump’s apparent ambivalence to the entire security architecture the US has constructed in the Asia Pacific as well as the inconsistency of his various statements on North Korea over the course of his Presidential campaign. What is clear is that unless the U.S. can break free of the risk presumptions that define decision making on its North Korea policy, little progress will be made on this front.

Time to harness the motivating force of fear

Published 7 Feb 2017 11:41    0 Comments

Last week the Lowy Institute's International Security Program, supported by the Korea Foundation, hosted the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral security relationship. This is the third in a series of posts from Forum participants.

The influential and respected defence and strategic policy expert Desmond Ball once described the 1970s and 1980s as representing a ‘golden age’ of Australian strategic thinking.

The spur for this innovation was fear. Fear of the cultural, social and strategic vacuum left by the British. Fear that the United States would soon follow in withdrawing from Asia through the 'Guam Doctrine' of President Nixon.

The results seem to justify Ball’s praise. The Australian Defence Force was born, the Defence Department overhauled, ‘engagement’ with Asia began and, for the first time, the intellectual and practical work of understanding how to defend this vast continent was undertaken.

Fear once again seems to stalk Australian strategic thought. The great powers look assertive, the rogue states resurgent. Non-state threats have expanded and our ally threatens to entrap. It’s easy to feel we are 'Present at the Destruction'.

Fear is often the enemy of clear thought. As Angela Merkel once said, ‘Fear is a bad advisor’. It can make judgements about risk and having the courage to change much harder. When confronted, people tend to stick to what they know.

In the short term, that is what will happen. There is no obvious policy alternative to keeping the US alliance and continuing the path we know. US allies in Asia lack the capability and relationships to substantially change how they seek their security. At last week’s ‘Australia-ROK Emerging Leaders Security forum’, there was little appetite from either side for large policy shifts to begin this week or even this year.

But while policy may have to adopt a holding pattern, our debates should be encouraged to flow free. Fear needs to become our motivation for change. For as bad as things look now, they could easily get a whole lot worse for the middle powers of Asia.

The first step towards steeling ourselves for those dark days is to embrace fear. For middle sized countries, periods of flux and uncertainty are the times of greatest opportunity. In 1944-1952 and again in the late 1980s & early 1990s, periods when the Cold War was at its beginning and end, Australia, Canada and other middle powers enjoyed their greatest influence. New ideas, new institutions and new relationships are formed at times like these.

Yet over the last decade, Australia’s strategic policy has been characterised by comfortable habits of thought and action ('let’s create new multilateral forums') and drift ('there’s no downside to closer cooperation with the US'). We’re not alone in this. South Korea has also stepped back from the global focus and energy that defined its behaviour just a few years ago.

Maybe then, President Trump is the spur both countries need to get our thinking, in political, policy and academic circles moving again. New ideas are rarely better, but we will never know how good our established ideas are unless we have a range of different options to test against. Nor will we be able to persuade the public to accept the rising costs of our current approach unless they know the alternatives are worse.

John F Kennedy once said that the time for fixing a roof was while the sun was still shining. That opportunity has passed. As the clouds loom and the storm brews, we still have time to think afresh. I’m optimistic the roof will hold, but incrementalism, even of the supposedly 'radical' kind will no longer suffice in deed let alone thought.

Fear has its uses. Half a century ago, fear motivated Australia to develop a bold new approach to its defence after its allies left in the lurch. Managing today’s equally fearful environment requires embracing that fear to think bold and afresh. Who knows, maybe another golden age is in the offering?

Quick comment: Kim Woo-sang on Australia and South Korea

Photo: Getty Images/Bloomberg
Photo: Getty Images/Bloomberg
Published 3 Feb 2017 11:30    0 Comments

In this podcast, International Security Program Director Euan Graham speaks to former Korean Ambassador to Australia and current Professor in Political Science and International Studies at Yonsei University Kim Woo-sang about the status of Australia and South Korea as middle powers in the Asia Pacific, and the challenges facing the region. Professor Kim is in Australia as a co-chair of the inaugural Australia-ROK Emerging Leaders in International Security Forum, sponsored by the Korea Foundation.

North Korea, the global economy and the role of the UN

Photo: Flickr/Ledge Biscuit
Photo: Flickr/Ledge Biscuit
Published 2 Feb 2017 14:44    0 Comments

This week the Lowy Institute's International Security Program, supported by the Korea Foundation, is hosting the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral security relationship. This is the second in a series of posts from Forum participants. 

As North Korea once again takes the spotlight with the possible test of an Intercontinental Ballistic Missile (ICBM), the eternal question re-emerges: what, if anything, can be done by the United Nations? The answer may lie in an analysis of how the North Korean economy has changed, and by examining the implications for the UN in their mission to find potential solutions to the 'North Korean question'.

North Korea has developed a surprisingly vibrant and diverse economy, with a mix of private, hybrid, and state actors able to operate in hostile environments and get around sanctions. In the wake of the 1990s famine and the accompanying collapse of the state economy, North Koreans have adopted a number of survival strategies. In the current political and economic context, North Koreans at all levels of society survive through entrepreneurialism.

North Korean trade networks are ruthlessly pragmatic and adaptable. At the lowest levels, average North Koreans buy and sell goods in black markets around the country, and engage in low-level trade, both legal and illegal, with China. At the highest levels, state companies sell anything that North Korea possesses and perceive as valuable to foreign buyers, and attempt to bring in supplies, technology and hard currency from outside the country. In between is a plethora of creative arrangements whereby state officials use state assets to make money on their own, private citizens buy official positions to operate 'legally', and businesspeople operate essentially private businesses with official imprimatur. Throughout all levels of the North Korean economy, officials and ultimately the central state take a cut for allowing what is technically illegal economic activity to take place.

North Korean state companies have also developed creative ways of bypassing sanctions, and have become adept at navigating hostile environments, which may actually make North Korean traders operate more effectively in certain circumstances. North Korean networks have become adept at blurring and shifting the boundaries between formal and informal trade, between state and non-state entities, and between licit and illicit activities, rendering sanctions that focus on specific companies and individuals, and sanctions that target state companies and formal trade (such as those targeting the financial sector) problematic. North Korean companies have diversified the sectors in which they operate, and are highly opportunistic in their business dealings. By importing dual-use technology, for example, North Korean companies have demonstrated an ability to operate overseas through brokers from other countries, to avoid customs enforcement, to strike deals where the opportunity presents itself, to make creative use of commercial and state-owned infrastructure, and to shift the countries in which they operate as the environment sours.

What does this understanding of economic change in North Korea mean for the UN’s role on the Korean Peninsula? First, analysis of the North Korean economy can provide insights into North Korea's strategic behaviour. Kim Jong-un may be willing to engage in routine provocations such as missile tests in part because the regime may believe that North Korean companies have become so effective at bypassing sanctions that new ones resulting from such provocations are unlikely to hurt. As the North Korean state takes a cut from the profits of entrepreneurial activity at each level, the regime has alternative sources of revenue to those targeted by sanctions (or that can realistically be sanctioned). This creativity and entrepreneurialism may also have freed the regime from whatever scant obligation it had to provide for the population; losing control of the economy may have politically emboldened the regime.

Secondly, although the UN will never realistically be seen as an impartial or independent mediator in North Korea, it does have a useful role to play. While North Korea may be strategically immune to sanctions, for example, it is not economically immune, as its trade networks are not infinitely malleable. From an examination of daily food prices in Pyongyang from 2010 to 2015 in ‘The Effects of Sanctions on North Korean Food Prices: Evidence from Pyongyang Markets’, my co-authors and I found that UN sanctions do have an effect on the welfare of North Korean elites: the prices of imported food increased in the wake of a round of sanctions, while the price of domestically produced food either showed no change or decreased in price. Though food has never been sanctioned directly, the sanctions do appear to inhibit trade sufficiently enough to affect prices, sending a signal to Pyongyang.

While the UN sanctions monitoring already provides information on sanctions violations, analysis of the effects of sanctions would better inform us of the next steps to take.  In addition, through the UN’s limited access to North Korea (through the World Food Programme and UNICEF, among others), the UN could also contribute to a greater on-the-ground understanding of how the North Korean economy has changed, and encourage North Korea to shift more of its economic activity into the formal sector. The UN could also contribute to rethinking the purpose of sanctions (whether they should signal disapproval of North Korean actions, impose economic costs, or physically prevent the import and exports of weapons and weapon components) and determining whether sanctions might have reached the point of diminishing returns, given North Korea's changing economy.

Australia and South Korea: Time to expand co-operation

One of the monuments fronting the War Memorial of Korea in Seoul  (Photo:Pixabay)
One of the monuments fronting the War Memorial of Korea in Seoul (Photo:Pixabay)
Published 1 Feb 2017 10:43    0 Comments

This week the Lowy Institute's International Security Program, supported by the Korea Foundation, is hosting the Australia-Republic of Korea (ROK) Emerging Leaders International Security Forum in Sydney and Canberra, bringing together scholars and future policymakers focused on the bilateral security relationship. This is the first in a series of posts from Forum participants. 

The world as we know it is experiencing fundamental change. This is particularly true in the Indo-Pacific region, where two variables are providing a significant challenge to the familiar security-economic operating system that defines the parameters of our known world – the rise of China and strategic uncertainty about the course of US foreign policy under President Donald Trump.

In the security domain, China continues to assert its strategic and military presence, especially in the South China Sea. The Philippines' legal victory at the Permanent Court of Arbitration last July has failed to deter China’s activities in the South China Sea, where Beijing continues to build up its artificial facilities and to display, through military exercises, its existing and new capabilities such as the Liaoning aircraft carrier. Simultaneously, China is providing significant economic assistance to particular Southeast Asian countries, such as the Philippines and Malaysia, while attempting to mend its relationship with Vietnam through high level exchanges. But China’s economic assistance to Southeast Asia is just one part of its One Belt One Road vision, which goes beyond economic statecraft to provide a geopolitical, or geo-economic alternative, to existing regional and global governance.

China has every right to secure its strategic and economic interests. But the intent underlying its initiatives – to promote a Chinese alternative to the US-led international order – raises big questions for many of its neighbours. What is the Chinese alternative to the existing regional operating system (ROS) that has been the basis of the region’s peace and prosperity since the Second World War? Do we have faith and confidence in Beijing’s motives? Can China assure other regional countries that a Chinese alternative would safeguard their interests?

At the other end of the spectrum is the US. As Kurt Campbell argues in The Pivot, the US not only built the existing international order and regional operating system but has operated as its lynchpin since its inception. Of course, Washington did not build and operate this system purely out of altruistic intent. The system has served US interests as well. The US has provided security assurances to the region, championed free trade and open markets and buttressed several economies in the region, especially during the Cold War. Peace, democracy, free trade, and open economies have provided the fundamental base for the existing ROS underpinned by the US. Regional countries have largely benefitted from the system, although to varying degrees.

Now there are growing doubts about the role of the US as a defender of the system, especially since the election of Donald Trump. Will Trump’s America remain the defender of the existing order? More to the point, can he abandon those election promises which contradict the existing order and system? Will the long-touted declinist argument finally come to fruition? Perhaps, if not a complete decline, could it be part of a long-term downward trend for the US? Neither the US nor China have clear answers to these questions. Meanwhile, the competition between the two powers is increasing strategic tension, uncertainty, and dilemmas in the region.

At this juncture, we have to ask ourselves: can we afford to simply say things are going to be alright? Can we risk the deterioration or collapse of the ROS? Can we place our interests in the hands of others? The regional system we have today has brought peace, security, and economic prosperity to many regional countries. Without it, this peace and prosperity will come under threat.

Because of Sino-US power rivalry, regional countries have been in a strategic dilemma for the past ten years. Now they have to decide who can best serve their security and economic interests. There are three possible scenarios for a power rivalry: a dispute that turns the region into a battlefield; continuing tension that will subject regional countries to enduring strategic uncertainty; or a compromise that results in two spheres of influence. None of these scenarios are acceptable for regional countries.

Australia and South Korea must come together to safeguard the existing ROS and the interests of small and medium regional powers. Why is an Australia-South Korea partnership important? As likeminded 'constructive' middle powers, both have a similar strategic outlook. Both are committed to a rule based international and regional order, open economy with free trade, and universal values such as democracy and human rights. Australia and South Korea are partners in regional multilateral institutions including the ASEAN Regional Forum, East Asia Summit, and Regional Comprehensive Economic Partnership. Moreover, Australia is one of only two countries with which South Korea has a 2+2 partnership. Finally, both Australia and South Korea are capable of economically, militarily, and politically contributing to the whole region and are willing to do so.

What do Australia and South Korea have to do to reduce strategic uncertainty and maintain the existing ROS? First, the 2+2 should be further expanded, as a vital platform for furthering Australia-South Korea cooperation across a broad policy spectrum (peacekeeping, defence exercise, education and training, defence science, non-proliferation, cyber security, police cooperation, border protection, maritime security and safety). Currently, the 2+2 focuses mainly on promoting functional cooperation, although the 'public goods' of cooperation are shared regionally. What is missing is a strategic discussion, consultation, and consensus on the landscape of the region; the central themes of which are the maintenance of the security and the economic futures through the ROS, as well as the impact of US-China relations.

Second, the two countries have to seriously foster strategic networks among regional small and medium powers. It is time for small and medium powers to go beyond either the existing US-led hub and spoke system or the Chinese alternative system whether it is OBOR or something else. While maintaining the existing relations with the US and China, small and medium regional powers have to form a denser, more interconnected, network of strategic cooperation. Australia’s National Security College recently published a report, calling for a resilient web of allies and partners in the region. I agree that we have to build an effective consultation and cooperation network among spoke countries in the region, but one which includes consideration of China. This is an advanced hedging strategy for small and medium regional powers that will not only secure and strengthen their interests, but also promote regional multilateralism.