Demolition job

It’s now only about 16 months since the newly elected Joe Biden team created a ripple of excitement in Washington by registering buildbackbetter.gov as the first sign of the ambitious new “New Deal” underway.

The catchphrase for Biden’s roughly US$2 trillion Rooseveltian government-led recovery spending plan disappeared from his latest State of the Union speech in an apparently pragmatic reset ahead of the mid-term elections in November.

So, while foreign policy is widely held not to determine Australian elections, it was intriguing to see Prime Minister Scott Morrison this week roundly disparage programs such as Biden’s one-time flagship as “some government-centred reimagination of global capitalism.” This raises an interesting question, coming just a day after Morrison also used a separate speech to the Lowy Institute to redefine his 2019 assault on “negative globalism” in the wake of the realignment after the Ukraine invasion as support for positive globalism.

Morrison, a guest at the G7 summit, seemed happy to wrap himself in this mooted alternative to China’s Belt and Road Initiative.

In a new era when, as Morrison rightly says, global economics is increasingly hostage to global politics, perhaps foreign policy ideas are going to play a bigger role in the Australian election – just conveniently parsed by politicians.

Big plans and small targets

Biden’s campaign certainly implanted the term “build, back, better” in contemporary parlance as shorthand for government-led and coordinated recovery from not just the pandemic, but also years of disjointed social, environmental, and infrastructure policies.

And then it was seamlessly embraced at the global level during the Group of Seven Summit in the United Kingdom last June, when Biden was still riding high, as Build Back Better World (B3W). Morrison, a guest at that summit, seemed happy to wrap himself in this mooted alternative to China’s Belt and Road Initiative along with parallel Australian initiatives such as the Blue Dot Network with the United States and Japan, as the G7 countries supported Australia on Chinese coercion.

But the disappearance of the original BBB terminology from Biden’s State of the Union speech suggests it has now been supplanted by post-Ukraine national security issues or just by bread-and-butter voter concerns about inflation.

And Morrison’s move to contrast “big building back better rhetoric” with his promised “business-led growth” at The Australian Financial Review Business Summit this week looks like an attempt to associate Labor Opposition leader Anthony Albanese, a proud former infrastructure minister, with the perceived failed policies of the center-leftist Biden administration.

Anthony Albanese wears his former job as infrastructure minister on his sleeve (Peter Morris/Sydney Heads for the Lowy Institute)

While Biden might reluctantly own the term today, build back better does have a much older genesis in United Nations development rhetoric and then gained extra momentum in the framing of the recovery from the Fukushima earthquake in Japan. So, while it is clearly interventionist in a technocratic fiscal policy sense, it has been characterised by various observers as both neo-liberal and socialist from an ideological perspective.

And whatever Morrison really thought of the Biden’s BBB3 rhetoric at the G7, he really had a nuclear submarine deal in mind to keep him tracking along in the president’s slipstream.

However, it must be acknowledged he shifted camps on this issue well before Biden did last month, perhaps with the idea of targeting Albanese as a big-spending socialist in mind. In December last year Morrison told The Sydney Institute:

I believe that some on the left of politics will draw precisely the wrong lessons from this pandemic. Where it is viewed as a pretext for more expansive government. A greater government role and reach into society across economic, social and cultural domains. They sometimes refer to it as build back better or build back stronger.

The problem is this apparent criticism of the domestic flagship of Australia’s closest security partner and bid to present Albanese as more focussed on retro socio-economic infrastructure rather than national security spending, is a rather Damascene conversion.

In 2020 as Australia recovered from bushfires amid the new pandemic, the Morrison government was an apparent true believer in what would become Bidenesque rhetoric. On May 11 the prime minister said the new $650 million Regional Bushfire Recovery and Development Program would fund projects regions wanted to “get underway to build back better”. On June 20 he announced $86 million in rural recovery grants declaring they were “about helping communities build back better”.

Agriculture minister David Littleproud joined the fray declaring in this post bushfire interview: “We want to build back better. This is an opportunity to not just do the same thing over and over again.” And this ABC analysis of changing government rhetoric on the pandemic illustrates how “build back for the future” was a favoured Morrison phrase in late 2020 before much was being heard from Biden.

It’s all quite a contrast from his speech to The Australian Financial Review Business Summit this week where Morrison said in early media reports, but not so clearly in the official speech: “Frankly, I’ve never really been in the build back better camp.”

Albanese wears his former job as infrastructure minister on his sleeve, has a growing election agenda of national reconstruction programs and has been tagged with the build back better rhetoric in newspaper headlines. But he seems to have stepped around it in policy statements in his cautious small target approach to the election with his own “build back stronger” alternative.

It is a case study in how geo-politics is catching up with local politics ahead of a possibly fraught election in May held in the shadow of potential nuclear conflict.

Frenemies

The reported Biden administration moves to reach out to no less than Venezuela to buttress its oil supplies after the embargo on imports from Russia illustrates how fast the Ukraine invasion can cast new light on international relationships.

The United States broke off relations with the Nicholas Maduro regime accusing him of stealing the election in 2019 and Russia’s deputy foreign minister visited just before the invasion.

The three countries getting the most attention in the federal government’s economic diversification strategy – India, Vietnam and Indonesia – are among the most significant countries in the world taking equivocal positions on the invasion.

While the Biden administration is seemingly prepared to patch things up with one of the closest friends of its current biggest enemy in the new era of building trusted alternative supply chains, Australia faces a quite different dilemma as it tries to line-up with neighbours against Morrison’s threatened “arc of autocracy”.

The three countries getting the most attention in the federal government’s economic diversification strategy – India, Vietnam and Indonesia – are among the most significant countries in the world taking equivocal positions on the invasion. India and Vietnam both abstained from last week’s United Nations General Assembly condemnation of the violence. And this week Indonesian President Joko Widodo refused to condemn Russia in this Nikkei Asian Review interview and even said sanctions “are not the best solution to resolve the problem”. India and Vietnam have longstanding ties to Russia from when they were both at varying odds with China and the United States, and depend on it for military equipment.

Widodo prioritises economic links over just about everything in foreign policy, while his diplomats elevate non-alignment. But more importantly, he is chairing the Group of 20 Leaders’ Summit later this year where division over Russian participation will quite possibly kneecap the whole event.

Joko Widodo, President of Indonesia, addressing the World Economic Forum in January (Pascal Bitz/World Economic Forum/Flickr)

Australia is touting a trade agreement with India this month, has just launched an economic engagement strategy with Vietnam, and has a relatively new trade agreement with Indonesia. It was also hoping to use the G20 Summit as channel for broader new engagement with Indonesia.

The Asian economic equivocation on Russia extends deeper with high profile iconic Japanese companies such as Uniqlo and Mitsui dragging their feet on embracing Russia sanctions, despite their government position. These are the same sanctions that Treasurer Josh Frydenberg said on Wednesday were a cost that business had to bear “for the right to live free of fear and coercion”.  

The equivocation on the Russian invasion within Australia’s closest post-China economic interlocutors, doesn’t necessarily undermine the value or aim of the diversification strategy. In reality, India and Vietnam have bigger fears about China than they have faded old attachments to Russia.

And this is not an election issue with Albanese using his Lowy Institute speech on Thursday to line up with the government to attack China over its implicit support for Russia in the United Nations. There was no reference to the other equivocal neighbours in this issue, although he emphasised that relations with India and Indonesia were Labor priorities.

But in a world where sanctions on businesses and countries that provide any support to Russia are the new face of globalisation, it does raise interesting questions about what meets Frydenberg’s benchmark that “businesses must price in this new risk and seek out reliable and trusted partners to build more diversified and robust supply chains”.