Australia

Laura Rosenberger: Open v Closed? Securing democracy from misinformation and foreign interference

Laura Rosenberger is the director of the Alliance for Securing Democracy and a senior fellow at The German Marshall Fund of the United States (GMF).

Laura is a global expert in foreign interference and misinformation campaigns.

Before she joined GMF, Luara was foreign policy advisor for Hillary for America where she coordinated national security and strategy for Secretary Clinton.

Misha Zelinsky caught up with Laura for a chinwag about the escalating threat of foreign interference, whether social media giants are doing enough to prevent misinformation, if Tiktok should be banned, what democracies must do to defend themselves and how they can turn the tables on autocracies, the crucial roles that alliances play in defending liberal society and why democracies must renew themselves internally if they want to project themselves to the world.

Misha and Laura get into some real mind bending conundrums and really dive into the practical as well as the philosophical challenges presented by autocratic misinformation and social media manipulation.

If you’re interested in the work of the Alliance for Securing Democracy and misinformation campaigns, please check ot the Hamilton 2.0 dashboard. It’s an incredible resource that details narratives being pushed by autocratic regimes such as the Russian Federation and the Chinese Communist Party.

https://securingdemocracy.gmfus.org/hamilton-dashboard/

Please be sure to rate and review the episode! And thanks to the German Marshall Fund of the United States for supplying this image of Laura.

 

TRANSCRIPT

Misha Zelinsky:

Laura Rosenberger, welcome to Diplomates. Thanks for joining us.

Laura Rosenberger:

Thanks for having me.

Misha Zelinsky:

Now, for the benefits of this recording, you’re of course in the East Coast of the United States, in the morning. I’m on the East Coast of Australia in the evening, but we’re brought together by the magic of the internet. So, first question, a good place to start, for those who in Australia may not know the Alliance for Securing Democracy. What’s the mission of the ASD?

Laura Rosenberger:

Well thanks, Misha, and thanks again for having me on for this conversation. The program I run, the Alliance for Securing Democracy, it’s about a three year old program housed at the German Marshall Fund of the United States. The mission of the program is to better understand, analyze and develop the means to counter the tools and tactics that authoritarian regimes use to undermine and interfere in democracies. And I think this is a topic that becomes more salient by the day, and one where we find that the breadth of the issues we’re looking at, whether it’s from information operations, and cyber intrusions, to belying financial influence, corruption, economic coercion, subversion political groups. A wide range of tactics that are used here, and the number of threat actors that are using these kinds of tools to weaken democracies and democratic institutions just continue to grow as well. So a lot of ground that we cover on our team.

Misha Zelinsky:

And so, I’m curious here. And this is a bit of a personal issue for you. I mean, why did you decide to build program focused on these issues in particular?

Laura Rosenberger:

Yeah, thanks, Misha. So, maybe I’ll rewind the tape actually just a little bit to how I even got into National Security in the first place. I’ll sort of date myself here, people can do some math. I was a senior in college on 911. And I had been studying all kinds of issues of public policy, and knew I wanted to go into the public policy space. Had a lot of interest on both the domestic and foreign policy side. And felt really conflicted about needing to choose between domestic and foreign policy. And when you’re a senior in college, September of your senior year you’re thinking about what the next steps are. Started thinking about applications for various things. On September 12th, the morning after that horrible day, but I started to see my way clear of just the anguish. Realized that I felt the need to dedicate my career focus to doing my small part to see that that sort of attack never happened again.

Laura Rosenberger:

So I pursued a career in foreign policy and National Security, and went into this space. But it was really that attack on America that for me was an animating focus. A feeling that we had failed in a number of ways. And of course the 911 Commission really looked this, we had failed in so many ways to prevent and foresee that attack, and to halt the forces that were aligning against the US and our allies. And so, I spent quite a while in government and moved through a number of different issue areas. But towards the end of my time in government, one of the things I was working heavily on was Russia’s intervention in Ukraine and all that it was doing there. And getting to understand the tools and tactics that Russia was using there as well as elsewhere on it’s periphery.

Laura Rosenberger:

And had a feeling that in government and in National Security we didn’t really have the tools we needed to be able to both understand and analyze, as well as respond to this asymmetric tool kit, if you want to think of it that way, right? These pieces that some people talk about is the gray zone, but they’re short of war, they’re non-conventional. They challenge our typical responses, and in many cases they put Democracies in quite a bind. Because they would push us to close off often as the easiest response, sort of respond tit for tat. But that I think is not the right course of action. So I had this feeling that we really didn’t have the toolkit that we needed. I left government, and I went to work for Hillary Clinton on her 2016 Presidential Campaign as her foreign-policy advisor. And of course from that vantage point got an even more personal and front row seat to the kinds of tactics that Russia was using to interfere in American Democracy.

Laura Rosenberger:

I think we had been a little it naïve perhaps that, a lot of assumptions were made who might be using these kind of tactics on his periphery. But you know, we have this vast big ocean here between us and Russia. And so somehow that makes us more protected. And in fact what we found in 2016 was that was not at all the case. And so once again, really felt that as a National Security community, we didn’t have the kind of tools and tactics that we needed to contend with these asymmetric tools that were being used to attack our democracy, and felt very much like I did actually… When it became clear, when it kind of came into focus in summer of 2016 probably just about four years ago the breadth of what was happening in Russia’s interference in the US.

Laura Rosenberger:

Really felt actually like I did after 911, that sense that America was under attack, that we had failed, and that I needed to do my small part to help prevent that kind of thing from happening in the future. So that’s basically the sort of personal version of the story of why I decided to build a program focused around these issues.

Misha Zelinsky:

Yeah, well I mean, certainly an extraordinary set of events in 2016. We’ve talked about the election there. And in the washout I mean, it’s been relatively well-established now that there was a high degree of Russian interference in the 2016 US Presidential Election. How concerning in your mind is lack of bipartisanship in the United States, and sort of countering foreign interference? And what did you say more broadly about US Democracy and the state of democracy in the US?

Laura Rosenberger:

Yeah. One of the things I should have said about the program, the Alliance for Securing Democracy, is in fact that it is a bipartisan program. And I felt very strongly when we were launching this and building this program, that countering foreign interference could not be undertaken as a partisan mission. That our democracy and threats to it have be a unifying thing across the political spectrum. And in fact, that because so many of the foreign interference tactics that we see, seek to exploit partisan divides, or other sorts of divides in our society, right?

Misha Zelinsky:

Mm-hmm (affirmative).

Laura Rosenberger:

Many different fissures are used in these kinds of operations. One of the most important things that can be done to make ourselves more resilient to foreign interference tactics is in fact, to come together across these divides. And that politicizing or allowing these issues to become partisan ones, in fact plays directly into the hands of our adversaries. So for me, I think the degree to which I’d hoped for bipartisanship three years ago, and then comparing that to what we’ve seen materialize in terms of actual bipartisanship is pretty disappointing. I don’t want to sound completely pessimistic. There’s been a few bright spots. So, the Senate Select Committee on Intelligence has been leading bipartisan investigation for several years. It’s released four or five volumes of it’s report on that investigation. We’re expecting the fifth to come very soon. And there has been some small bits of hope out there on the bipartisanship piece.

Laura Rosenberger:

However, I think we have seen unfortunately, a situation in which not only has there been a failure to come together for instance in congress to pass many of the pieces of legislation that have been proposed actually, proposed on a bipartisan basis, but have not been passed. Many of which would just do basic things, a closing off and knowing vulnerabilities and our democratic institutions that have been exploited. And beyond that, one of the most concerning things to me is that we’ve actually seen the questions of foreign interference being weaponized for political purposes. And that to me is deeply concerning. Because it’s basically doing our adversary’s… It’s not just playing into our adversary’s hands, it’s doing our adversary’s work for them.

Laura Rosenberger:

So I truly believe that if we’re going to be able to counter these sorts of tools and tactics, we’ve got to be able to come together across the political spectrum. And you know, Australia is actually a great case study for this. I mean, not that they’re a sort of unified perspective across every individual within the Australian political system on these issues. But in Australia we really have seen a remarkable degree of cross partisan cooperation and unity on these issues. I think it’s one of the reasons that Australia has been successful in what it’s done far. Not that… There’s a lot more work to do to counter these issues from Australia. But I do think that some of the stuff that have been taken there, they are things I often point US policymakers to. Because it demonstrates that in fact you can come together across the political spectrum of these issues.

Misha Zelinsky:

Now it certainly is… Well, to take your point, it’s not complete anonymity, but it is relatively bipartisan, and certainly the responses thus far at the last sort of few years particularly. But we sort of talk a lot about interference and conceptualize it around elections. One thing I talk about a lot on the podcast, and certainly I know the ASD is looking at it, is the more the geopolitical contest behind authoritarian regimes and democracies. How does interference fit in within that broader context? And what are the other ones, all that kind of interference, and what’s it’s goal I suppose is the… What’s the assistance approach to this rather than just trying to make mischief?

Laura Rosenberger:

Yeah, absolutely. I have to laugh on the side for one second. It’s so funny. Whenever I have conversations with Australian colleagues and I hear ASD said in an Australian accent, I always feel the need to clarify, that your ASD it’s the different…

Misha Zelinsky:

That’s true.

Laura Rosenberger:

Our acronym similarity there. But anyway-

Misha Zelinsky:

And there’s so many acronyms to go around. And Australians are acronym obsessed in fairness as well. We’ve never met an acronym that we don’t like.

Laura Rosenberger:

Yeah, yeah. But back to your question. I mean, I think it’s a really important one. So I think there’s like a couple different layers there maybe for me to unpack. So the first is, your point that a lot of the conversation I think particularly in the US about foreign interference is framed around elections. And I think that that’s frankly unhelpful for a couple of reasons. I mean, I think it’s both unhelpful and inaccurate I guess I should say. I think number one, it’s unhelpful because really and to our last discussion there, I think that seeing it primarily through election focus actually reinforces or plays into the politicization of the issues, right? Elections are naturally where everybody gets into their most partisan corners.

Laura Rosenberger:

And the more that we frame this issue around election outcomes in particular, I think it just drives people more naturally to partisan positions. It’s not an excuse for that, I think it’s just a dynamic occurs. But I think, as I said as well from a sort of analytic perspective, I also think it’s inaccurate. And one of my colleagues had the phrase that I have abused religiously, which is that, elections are not a starting point or an end point for these operations, they are flashpoints. And I think that that’s a really, really good way of thinking about it. In the sense that, if we just take the US 2016, the Russian campaign aimed at the 2016 election, there’s a few things that we know about that. One, it started at least as early as 2014, 2013, there’s even some social media data that indicates it could have been as early as 2012. So a lot of work that was done several years in advance to lay the groundwork for the operation, again, in particular on social media.

Laura Rosenberger:

Number two, that in fact, not only did these operations start well before, but the operations actually continued and increased. Again, if we want to talk specifically about the social media operations which was just one piece of it, but they actually increased after the 2016 election. So, the amount of activity we saw from this sort of internet, Russian internet research agency, fake accounts, fake pages, all that, they really ramped up after the election. Really seeking to exploit the anger of many Americans on the left, to gin up emotion, to sow dissension, to create chaos. And that was actually even more obvious in the year and a half after the election before a lot of this contact was finally taken down by the social media platforms.

Laura Rosenberger:

So, you have it starting well before an election, continuing well after an election. And then I think the third piece is to understand what the goals of these operations are, right? So while I do think that in some instances, and certainly the US Intelligence community has concluded that one of Russia’s goals in 2016 was to help Donald Trump, to help his election chances. The Russians had two other goals. One was to discredit American Democracy, and the other was to hurt Hillary Clinton in the thinking of, not just as a candidate, but assuming if she won that she would be a weakened president. But to me that first piece, the discrediting of American Democracy is really the overarching piece of what… at least in our analysis, we see from Russia’s operations.

Laura Rosenberger:

But also I think it’s an area where we see some overlap with the Chinese Party-State’s intentions, which we can talk about a little bit. But, I think China’s… The goals of the CCP are different than Russia’s in terms of long-term goals. But there is some intersection. And in particular this discrediting and weakening of democracy is an area where there’s some intersection. And I think that relates then to your larger question, which is interference as one piece of this broader competition between authoritarian and democratic systems. And in that sense, I think interference is one line of effort that we see from regimes like Russia an China. I think that again, they probably take a even bigger share of what we seen from a country like Russia that’s a declining state, right? You know, Russia’s objectively declining economically, geopolitically, other ways, right?

Misha Zelinsky:

Demographically, yeah.

Laura Rosenberger:

Yeah, exactly. So the sort of range of options that Putin has in front of him to actually gain power or leverage are more limited. And the interference piece is a big one. I think from the CCP perspective there’s a broader range of tools. And it has I think a bigger interest in shaping rules and norms, and things like future information architecture, aero technology, and other pieces of that. And I think that the interference piece for both of them, is one piece that’s brought our effort to make the world more favorable to autocrats. And weakening democracies had the big piece of that. So interfering in democracies and undermining them is one set of tools that are used there.

Laura Rosenberger:

But there is also a broader competition and effort to try to shape the rules based order in a way that is less favorable to democracies and more favorable to autocrats. And I think for me, we could talk about this in particular dimensions, but I think this is particularly important to bear in mind when we talk about things like information manipulation. And I think we have a tendency to think about that issue in very tactical terms. People are very focused on specific disinformation campaigns, or even down to the bots and trolls and all that, which really is just a small part of what we see in these operations. But in thinking about the responses to information operations, I think it’s really important to pull back the lens a little bit and understand that, that’s a tactic that autocrats use to actually enable a more authoritarian friendly information environment that is defined by control and manipulation.

Laura Rosenberger:

Autocracies and democracies see it for rich and very, very differently. And that bigger picture frame of what autocrats are trying to achieve in the information space is really important to understand, and fundamentally at odds with the democratic information system.

Misha Zelinsky:

I think that’s right. One of the things that I think is difficult to grapple with if you’re a person who lives in a democracy and used to being in a democracy, authoritarian regimes pose some kind of threat to democracies. But democracies through their very existence are enormous threats to authoritarian regimes. So, just by exiting and not touching an authoritarian regime, the very existence proves that there’s another way of doing. Which you can understand why if you’re an authoritarian regime, you may want to discredit it. Now just want to dive in a little more into misinformation campaigns. Thinking about your 911 example and why that shocking set of events occurred. No one really conceived that planes could be used in the way that they were in weaponization.

Misha Zelinsky:

Social medial in many ways was relatively, and still is relatively new. But it was a fun thing, right? The 2016 election was… People started to see problems with social media, for the first time seeing perhaps the weaponization of social media, and this sort of open access to Western society’s provided by these platforms. I mean, since the election, do you think social media companies are doing enough to stop misinformation of this kind?

Laura Rosenberger:

Yeah, you know, I think the analogy is right. That just as we didn’t anticipate airplanes could become weapons, we didn’t see social media becoming weaponized in the way it has been. Obviously there was some sense of that around the way that ISIS for instance was using-

Misha Zelinsky:

Yeah, that’s true.

Laura Rosenberger:

… social media for radicalization and recruitment purposes, right? And so there was a sense that indeed there was a downside risk to some of these platforms. But I think it was seen in pretty narrow terms. So, I think that you’re absolutely right that this is something that we didn’t really anticipate in the more sort of geopolitical competition space that we should have. On the question of what the companies are doing, I think there’s a couple of ways of thinking about this. And of course, we just here in the US, we’re speaking on July 30th. Just yesterday we had these big tech hearings in Congress-

Misha Zelinsky:

That’s right.

Laura Rosenberger:

… with several of the large social media and Allied Information Platform heads testifying. And it wasn’t really focused on disinformation issues per se. But of course it came up. And you know, it’s very interesting to me to look at how these leaders are framing themselves in the roles of their platforms. I thin that, look, the platforms in general… And I should say that while I’m talking sort of generically about the platforms, it’s important to acknowledge that they are not all created equal either in their role in this ecosystem, nor are they equally taking steps to address it. So, I wanted to just like be very clear on that point upfront. I do think that we’ve seen progress by most of the platforms. So there’s no question that… In late 2016 Mark Zuckerberg thought it was ludicrous the idea that somehow Facebook could have been used to influence the election.

Laura Rosenberger:

Which is ridiculous that he would have ever thought that, given how much they had built infrastructure to support political campaigns using the platform. Clearly this is something that they knew. But, putting that to the side. We’ve gone from a basic rejection to the premise that this even happened, to an acknowledgement, to investigations, to marginal steps being taken to address some of the abuse of the platforms. Twitter similarly has taken action, and I’ve actually suggested, especially over the past six months, Twitter has become far more aggressive and assertive in going after a wider range of different kinds of activity that we see. I think one of the challenges… well, several challenges here, a few. Well, I think in so many ways the platforms have not gone far enough. I’d also do acknowledge that they face some difficult challenges here.

Laura Rosenberger:

I mean, my own view is, as I mentioned earlier, that needing to understand the sort of information environment that authoritarians want to create, one that’s controlled and manipulated… I do think it’s really important that in responding to these kinds of information operations, governments and platforms ensure that they’re not taking steps that actually help create that sort of controlled information environment, right? I think the tendency here is to want to just remove all content that we don’t like and really lockdown the systems. And I think that that’s the wrong instinct. Because I think it’s fundamentally undemocratic, and it will actually… I think a lot of that is what autocrats would like to see.

Laura Rosenberger:

They’d like us to become less democratic. And so, I don’t think in every instance there are easy answers for some of these platforms. A lot of us in this community that work on these issues have really come to the view that behavioral and actor-based interventions are the most appropriate and effective ones, versus content-based interventions, right? That it’s not so much that [crosstalk 00:25:13].

Misha Zelinsky:

And what do they want that, sorry?

Laura Rosenberger:

Sure. So, I think in some places there’s still a sense that a lot of what we’ve seen happening in the online information space is about purely false information. And that somehow if you get rid of the false information, then you’ve taken care of the problem. And of course, one of the things we knew about what the Russians did in 2016, as we see China getting much more into the online information manipulation game on Western platforms, we see similarly that the vast majority of this is not about content that is demonstrably false. Now, there are other aspects of the mis and disinformation problem where we do see that. So, antivax kind of content, and all the stuff about different cures, supposed cures for COVID. There are in certain spaces more of a problem that does have to do with the false information. But in a lot of cases, this is not either demonstrably false information. Sometimes it’s more opinion-based-

Misha Zelinsky:

Opinion, yes.

Laura Rosenberger:

… for a lot of times. A lot of what we saw from the Russians in 2016 and afterwards was memetic work there. The use of memes and other kinds of more pictorial kind of things that actually have much more emotional resonance, to kind of gin people up. But you can’t say like this is false. And there’s a whole different… We could go through different categories of content. But I think for me, the harm is not necessarily the content in most cases. Again, there are some exceptions to that. But in a lot of cases it’s the behavioral manipulation of the platforms, right? It’s the use of computational strategies. It’s the use of swarming. It’s the use of Astroturfing. It’s the use of all these different kinds of tactics that are used in order to manipulate algorithms, manipulate individuals, manipulate groups.

Laura Rosenberger:

The use of false personas, all that kind of stuff, we see all that as well. But to me then, when we want to talk about how the platform’s done enough, part of the problem with that is that, if you’re thinking about behavioral interventions, and you’re thinking about the approaches that actually get at the systemic aspects of a problem. And a lot of those actually begin to bleed into solutions that would really challenge the business model of some of these companies. Where you had algorithms that have been trained to promote virality, to promote content that makes people angry. To promote-

Misha Zelinsky:

Yeah, outright [crosstalk 00:28:15].

Laura Rosenberger:

… content that pulls people to extremes, right? And so to me, honestly, that’s where we need to be getting at in a more systematic way to address this problem. It feels at the moment like a lot of what we do is play Whac-A-Mole, and that does not seem to me to be sustainable.

Misha Zelinsky:

It’s an incredibly challenging kind of philosophical and technological problem as you start to unpack a bit. We sort of focus a lot on the role of I suppose US tech platforms in the global democratic discourse. What about, the big discussion point at the moment is around Chinese platforms, specifically TikTok. Personally, I mean, do you think there’s a case to ban TikTok? And then secondly, shouldn’t we be taking a closer look at things that are state-owned Chinese Communist Party tech, like Kwai, like other platforms such as that. I mean, is there a case for looking more deep with them, given their links to the party-state?

Laura Rosenberger:

Yeah. I think it’s one of the most important and challenging questions that we’re going to be seeing right now. And you know, look, I’ll be candid. I don’t think I totally feel like I know what the answer is to TikTok and to similar platforms. I will say that I have a lot of trepidation about the idea of banning TikTok. And the reason that I say that is that, again, if we look at what the Chinese Party-State has done with it’s own information environment, and the way that it bans or blocks platforms. The way that it tries to close off it’s information environment to one that it can control, I think that when we start talking about systematically banning platforms from other countries, I have a little bit of a concern that we are starting to head down a path that looks very similar to the sort of cyber sovereignty, information sovereignty doctrine that the CCP has advanced.

Laura Rosenberger:

Now, I completely take the point that the reasons that the CCP does that are fundamentally different than the reasons for which democracies are talking about banning TikTok. But that’s the reason that it gives me some significant pause. I have similar concerns for instance about talk of banning for instance Chinese Government officials and party officials from platforms like Twitter. Twitter is the platform that’s banned in China, or blocked in China. And there’s been some discussion about, now that these officials have become much more aggressive in using that platform as a way of weaponizing information against democratic audiences, given the asymmetry there, should we ban them? And again, I just worry that at the end of the day that ends up leading us down a path for creating an information space that looks a lot less democratic and a lot more authoritarian. That-

Misha Zelinsky:

Is the… yeah.

Laura Rosenberger:

Go ahead.

Misha Zelinsky:

No, no. Because these are… I mean, one of the biggest challenges here, you’ve sort of zeroed right in on it. It’s these challenges within authoritarian democracy, but open closed systems. And so, at the moment you’ve got this lack of reciprocity where essentially you’ve got the great firewall of China, you’ve got the Russians essentially disconnecting their incident in part. And then the openness and permissiveness of Western society, the Western information systems, it feels almost like closed systems are winning. And you just wonder, how ca open systems prevail without losing it’s sense of self.

Misha Zelinsky:

But you’ve identified all the right areas. You know, we want things to be open, we want discourse to be free, we want things to be contestable. And yet, the closed system doesn’t permit that. And so, we’re allowing, on one rating of it, you’re allowing this sort of gaming of your system without a reciprocal relationship on the other side. It’s very difficult. How can we win that battle as Western open societies?

Laura Rosenberger:

Yeah. I mean, I think that’s exactly right. The asymmetries here are profound, and they are significant challenges. I think there’s a couple of things that we need to do, right? One of the things that goes alongside with openness in democratic systems needs to be transparency. And I think a lot of times we have moved away, in a lot of different areas, we’ve moved away from transparency as a guiding principle in our systems. And so, whether that’s around financial flows coming into politics, or into lobbying spaces, or political campaigns, or business deals or whatever. I think there’s challenges there. I think in the information space, there’s lack of transparency about how algorithms work, why do we see information, where information is coming from originally?

Laura Rosenberger:

I mean, and I should stipulate on that, that I think the ability to be anonymous online is really important, especially in closed spaces. So I think again, there’s transparency in figuring out where information comes from while preserving some ability to be genuinely anonymous. But that’s sort of a small but important point in my mind. But I think the transparency piece here is huge for me. Now, there’s limits to it, I grant that and acknowledge that, and there’s a lot of literature around that. But I think that the problem with seeing this just in terms of reciprocity… I mean, you’re right in terms of analyzing the problem in terms of the lack of reciprocity.

Laura Rosenberger:

My problem with seeing reciprocity necessarily at the answer, is that if we’re playing on reciprocal terms to autocrats, definitionally we are going to end up being more closed off. Because we’re letting them pace set, right? We’re letting them set the terms that the status quo is a closed system. And we’re reciprocating in a way that will close us off more. And I think that that fundamentally weakens us. It’s great this is just like a values question of, we need to be principled on these things. It’s actually that I think it fundamentally weakens us, and that we… The source of our strength really is our democratic values and principles with openness and transparency, and civil liberties, and all these different pieces.

Laura Rosenberger:

And so, I think one of the pieces that we need to do is actually look inside our own depth democracies. The US for sure faces a lot of challenges at the moment with living up to our democratic principles. And that’s not just a recent thing. We’ve had challenges for quite some time in our democratic institutions that we’ve left unaddressed. And that makes us more weak an vulnerable, and open to exploitation. I think again, we can look at a lot of what Australia’s done in some of the steps it’s taken to respond to CCP interference tactics.

Laura Rosenberger:

And a lot of those have focused on a variety of transparency regimes, other kinds of disclosures, et cetera. So I think that’s a big piece of it. But think the there piece of it for me is that, as I look at this competition right now, this broader competition we talked about earlier between autocratic and democratic systems, is democracies right now are very focused on responding to autocratic advances, right?

Misha Zelinsky:

Yeah.

Laura Rosenberger:

We are looking at this primarily through a framework of countering what autocracies are doing. And of course that’s got to be part of it. But, that framing is fundamentally defensive and reactive. And it’s not actually enabling democracies to articulate an affirmative vision of what they are trying to achieve. And I’ve done some writing for instance, around again the information space. And in that area, democracies need to acknowledge some of the ways in which the free and open internet that we envisioned 20 years ago is falling short. The rise of surveillance capitalism and all these ways that we just talked about, that the online information platforms we’ve designed are falling short of democratic principles. We’ve got to acknowledge that. But we can’t just focus on countering what autocrats are doing in this space. We’ve got to figure out our affirmative plan of what we’re trying to achieve. I think that’s how open systems prevail.

Misha Zelinsky:

So how do we do that? I mean, yeah, if you think about the last time they had genuine systems competition was the cold war, and the West was pretty bolshie so to speak, in how it projected it’s values. I mean, how could, in this contest, how can we turn the tables? You’re right, because it does feel like one-way traffic, that’s how I describe it. It’s all one-way traffic at the moment with the West trying to play catch-up. I mean, how can we turn the tables in a way that… What are the tools we can use the same or different tactics against autocrats to make their lives a little more difficult so to speak?

Laura Rosenberger:

You know, I wish I could give you a concise and easy answer on that.

Misha Zelinsky:

It’s a podcast, so you can take as long as you want, but you know…

Laura Rosenberger:

You know, this is a… I think that’s a huge question. I think it’s the right question. It’s a question that I’ve been doing a good bit of work around. And I don’t think I fully have all the answers yet. I think, I guess I would sort of bucket it into a few categories. The first is that it starts I think where I was noting before, that we can’t just… The tendency in these kinds of competitions is to look outward, and to focus the competition in that outward space. And that’s certainly a part of it. But, I think that democracies first of all just really need to get their own houses in order. I mentioned in my sort of personal story at the beginning that when I was back in college, before 911 feeling really conflicted choosing between domestic policy and foreign policy.

Laura Rosenberger:

And at the time it felt like this artificial thing to me. But career track wise you have to choose, right? And 20 years later I feel like I’ve come full circle on that. And in the sense that, I still think that the distinction between domestic and foreign policy is pretty artificial. And I fact, it’s partly what is hindering our ability to compete in this contest effectively is that we don’t necessarily see the way that these spaces are integrated, right?

Misha Zelinsky:

Mm-hmm (affirmative).

Laura Rosenberger:

So that’s one piece of it, but that’s, I mean [crosstalk 00:40:12].

Misha Zelinsky:

And this is kind of like… It’s a JFK thing, right? Like we don’t need to build a wall to keep our people in.

Laura Rosenberger:

Right, right. Yeah, exactly. But I think beyond that, there’s a couple of things. Two is like, we need to focus on where our advantages are, and do a much better job at harnessing that. So obviously in the US despite advances by the PRC, we still have the strongest economy in the world. We have a lot of challenges to our economy, and COVID is certainly exacerbating those. But we need to be better about figuring out how do we harness our economic strength in a strategic way? And I think a lot of that relates to technology. Where again, I think we still have a huge technological edge in a lot of areas. I think we are at risk of losing it or falling behind.

Laura Rosenberger:

But I think if we actually do a much better job of partnering with our democratic partners and allies in a systematic way to leverage our collective strengths, both in a technology space and the economic space and more broadly. We can do a much better job at thinking about how to actually effectively leverage one another and build that collective strength. I mean, I think that if we think about where… I mean, the vast majority of the US alliances are with countries with whom we deeply share democratic values, right?

Misha Zelinsky:

Yep.

Laura Rosenberger:

But the formal parts of those alliances have all been built around the military dimensions of our strength.

Misha Zelinsky:

Yeah, that’s right, yeah.

Laura Rosenberger:

And you know, the challenge is that, it’s not that the military domain does not remain an important one, it certainly does. But so much in this competition is playing out in the spaces that are non-military. And so-

Misha Zelinsky:

We haven’t military at all up until now, and it’s all been highly contested, right? So you’re completely correct.

Laura Rosenberger:

Right. Right, exactly. So, I think we need to do a much better job at thinking systematically about how do we build out our alliances in more formal ways to compete in those non-military spaces? And to build that tissue. I have to other things I would say on this. One is that, with the US retreat from multilateral institutions has been deeply, deeply damaging. And it’s just created huge space for Beijing and Moscow in particular to really, really gain traction in those institutions, and to manipulate them in a way, or influence them I should say, in a way that’s it’s more favorable to them. And there’s no question that these institutions have problems. And there’s no question that they need to be reformed and updated.

Laura Rosenberger:

But the US and our democratic allies should be driving that process of reform and update. Not seeding it to the autocrats. And right now that’s the position that we’re in. So that’s a huge problem. And we’ve got to engage there. And then I think the last piece I would say is, again, this goes back to this question of, where is this competition taking place? And there’s actually going to be a lot of areas where government is not the right actor to be leading the charge. Given how much of this competition is playing out on private sector terrain or civilians are the targets, and all this. You know, there are places where government can lead the charge. But government should not necessarily be in the driver’s seat on all these areas. Especially when it touches on issues of civil liberties, or the free market, or all that.

Laura Rosenberger:

So what we need to do… But we can’t completely say, okay, well governments hands off, somebody else is going to sort it out either, right? And so the challenge is to figure out, how do we build meaningful cross-sectoral cooperation on these issues? Again, not in a way that ends looking like the CCP where government is heavily intervening with private companies to direct where they go, and all this stuff, right? But we need to figure out meaningful ways of cooperation. It’s become really trite to talk about these issues, the whole of society problem, requiring whole of society solutions. That’s great. What does that mean, right?

Misha Zelinsky:

Yeah, that’s right.

Laura Rosenberger:

Let’s actually build the mechanisms that facilitate that kind of cooperation. So, I don’t think that at all satisfactorily answers the question that you posed of, what does it look like of democracies to articulate this affirmative vision? But I think those are some of the means to do it. Actually, one last point, sorry. This is an important one. We forget sometimes that autocracies have a lot of weaknesses. And again, there’s no question that many of them are very effectively leveraging their strengths, and prosecuting our weaknesses. We need to be much better about systematically prosecuting and going after autocratic weaknesses. And most of the ways that we would do that I think are leaning into democratic strengths. I mean, I am not all suggesting, and I do not believe that we should be adopting the tactics that autocrats are using. I think that’s a race to the bottom in which democracy loses.

Misha Zelinsky:

That’s what I think.

Laura Rosenberger:

But I do think that harnessing democratic values an institutions is very much a way that we can help go on offense if you will. To your point earlier about the existence of democracies posing a threat. Our free press is not at all looked up on favorably in most of these closed spaces. And there’s a lot more we can be doing in some of these areas to enable that kind of approach.

Misha Zelinsky:

And so, it’s important too. But though I told you you’d get there with a podcast answer. But in terms of, jumping forward now, a little bit forward, it’s kind of scary to think, we’re kind of less than 100 days to the US election. I mean, how worried should we all be about 2020 election and potential foreign interference from Russia or others, CCP or others? I mean, people would have looked at the playbook from 2016. And should we be worried about it, is it going on now? Give me a positive picture or not.

Laura Rosenberger:

So, we should be worried about it. It is going on now. But this again, I think goes back a little bit to your important point about, how we see a lot of this through an election lens, but that may not always be the right lens. I don’t think any of these activities ever stopped after 2016, right?

Misha Zelinsky:

Yeah.

Laura Rosenberger:

It’s not like it’s stopped and then it restarted. These are ongoing operations. And not all of it’s aimed at the election. That doesn’t mean it won’t affect the election in one way or another. But I think, I have a sort of variety of concerns, and I’ll just kind of quickly summarize. I will note that an official, and the Director of National Intelligence last week released a statement talking about 100 days out and the concern from China, from Russia and from Iran. Now, they all had… They were characterized differently in terms of what their goals are. And in my view, so far what I’ve seen from the PRC is that, it’s effort largely remains still at cultivating friendly voices, cultivating narrative space that is favorable to the CCP, and discrediting democracy.

Laura Rosenberger:

But I really don’t think that we are going to see, or that we are seeing anything from the PRC that looks like what Russia has done in the US, election context, right? I just don’t think that’s in Beijing’s interest per se. And I think they’re playing a slightly different game. You know, with Russia, Russia’s the chaos agent. Putin’s Russia is a chaos agent, right? And so I think we see the same thing going on. Four years ago, so much of what we saw in the space of chaos was exploiting issues and party-system in the United States. And of course those issues have really come back to the fore here. But interestingly enough, a lot of what we’re seeing at the moment, and there’s been some recent reporting on this, is information operations that are really around the coronavirus. Which has of course become a very politicized issue in the United States.

Laura Rosenberger:

And seeking to exploit that is a means of undermining people’s faith in the process in the institution. Not about reelection per se, but it’s about persistent pulling Americans apart from one another and pitting them against each other. So I think that, I am concerned about that. Your Iran I think is a sort of much smaller player here that does have potential to do some things, we’ve seen them do some things. I think their goals are largely similar to Russia’s, and that sort of chaos agent space. But I think, honestly my biggest concern is, especially coupled with the domestic challenges we’re facing here in the US, all the challenges that we’re going to face in the voting process with coronavirus. And changes that are having to be made is in fact that, we’ll sort of get to the immediate aftermath of election day, election night, next day, and start to have a lot of information operations that are basically aimed at discrediting the process itself.

Laura Rosenberger:

Whether or not there’s any evidence to back that up. And I certainly see directions could play heavily in that. And I think that we’re a little bit primed right now frankly, to question the integrity of the process. And so, that to me is actually one of the most concerning scenarios. Not necessarily that there’s interference in the actual voting process, but that doubt is cast on the outcome itself. And elections are an institution that are based on trust, right?

Misha Zelinsky:

Yeah, absolutely.

Laura Rosenberger:

And so, if that’s thrown into doubts and people start to… don’t believe it he legitimacy of the outcome, that could throw the US into a real crisis.

Misha Zelinsky:

Yeah. Particularly if say, you have a long process of counting postal ballots or mail-in votes over a period of days, that would certainly… You could imagine that would create a window of chaos. Now, I could obviously go all night my time, or morning your time, but I’m sure it’s very early where you are, and I’m sure you’re desperate to get some coffee. But I can’t let you go, Laura, without asking the trademark Diplomates hokey Australian lame question as part of the seque from heavy foreign policy misinformation campaign leads to very boring trite questions about barbecues and people. But I’m here at Laura’s, three Australians, who’s coming along and why?

Laura Rosenberger:

Now, it’s a tough question. It’s a very tough question.

Misha Zelinsky:

It’s the toughest one of the night, so far, so yeah.

Laura Rosenberger:

So many to choose from.

Misha Zelinsky:

Crocodile Dundee and many others.

Laura Rosenberger:

Yeah. I promise you, I won’t go down that path. So I think, my first would be Cate Blanchett, who’s amazing for so many reasons. But in particular having earlier in the pandemic binge watch Mrs. America, and watch her play Phyllis Schlafly who for anybody in Australia who’s not familiar, was a very conservative anti-feminist activist in the US who I actually had the chance to meet when I was in college. I was a very, very active feminist on campus. And Phyllis Schlafly came to speak. And I remember it very vividly. And so watching Cate Blanchett sort of transform herself into Phyllis Schlafly was quite the amazing thing.

Laura Rosenberger:

So really, really appreciated her in that role. And I think that story of the fight for the Equal Rights Amendment in the United States, and this very virulent anti-feminist movement is something that I think a lot of people don’t really know. And so I was really glad to have that story told. The second, I will confess to have consulted with my sister on this question, having gotten a slight heads-up from you to expect this.

Misha Zelinsky:

Oh, you can’t listen to [crosstalk 00:53:45] on how this is done. You’ve ruined the entire premise of the show.

Laura Rosenberger:

Oh no!

Misha Zelinsky:

I’m joking. I’m joking, joking. Yes folks, I do give the questions in advance, there it is. Anyway, so keep going, you and your sister…

Laura Rosenberger:

My sister tells me that Hugh Jackman, I cannot leave Hugh Jackman off my list. She thinks he’s the ultimate showman, and I think of course this is also very, very true. And I think the last one I would say is from a very different angle. Penny Wong, Senator Penny Wong. I just think she’s been such a powerful voice on these issues that we’ve talked about today in this conversation, right?

Misha Zelinsky:

Absolutely.

Laura Rosenberger:

These challenges that we face as democracies from autocrats, and I just really admire the way in which she has approached these issues, and her principle commitment to them. So that would be my third sort of curve ball example there, or invitation there.

Misha Zelinsky:

Oh, I think Cate Blanchett and Hugh Jackman will have their work cut out keeping up to a Penny Wong cross examination. But it’s up to them. We can just sit and watch. But look, Laura Rosenberger, thanks so much for joining us. It’s been a fascinating chat. And I look forward to catching up again soon.

Laura Rosenberger:

Wonderful. Well, thank you. Thank you so much, Misha. This was great fun. I really enjoyed it.

Misha Zelinsky:

See you next time. Cheers.

 

Bonus Content: Kristina Keneally and Misha Zelinsky talk COVID-19, immigration and trade policy as panel guests

Bonus Content: Senator Kristina Keneally and Misha Zelinsky in panel discussion on COVID-19, immigration and trade policy.
 
This is a special content episode!
 
Senator Kristina Keneally is the Shadow Minister for Home Affairs and Immigration and Citizenship. Senator Keneally is Labor’s deputy leader in the Senate and also served as the first female premier of NSW.
 
Misha Zelinsky and Senator Keneally appeared as guests on a NSW Young Labor panel session discussing the future of immigration and trade in a post COVID-19 world.
 
This is a recording of that live panel session.
 
Senator Keneally gives some fascinating insights into the economic and migration challenges facing Australia, discusses the shocking fact that Australia has the second largest guest worker program in the OECD, tells us why Australia should always be a nation of permanent and generous migration and explains how COVID-19 gives us a chance for a policy reset.
 
Misha talks about the sovereign capability challenge facing the world and why Australia can no longer rely on just-in-time supply changes to deliver the things it needs when it needs them.
 
We apologise in advance for the BBQ question making its way into the program; don’t blame us!
 
Enjoy!
 
(We hope to have Senator Keneally on soon as a guest!)

 

TRANSCRIPT OF PANEL

Brandon Hale:

I’d like to firstly acknowledge that we’re meeting on the lands of the First Nations people and want to acknowledge any First Nations people emerging. So tonight, we’re joined by Kristina Keneally, the senator for New South Wales who is also the shadow home affairs minister, and was of course a former premiere of New South Wales. We’re also joined by Misha Zelinsky, who’s the assistant secretary of the Australian Workers Union, who also runs a podcast called Diplomates, which is a foreign policy podcast.

Brandon Hale:

Tonight, we’re going to be talking about immigration and trade policy. Kristina will be focusing on any questions about immigration policy and Misha will be focusing on any trade policy. So I’d like to just begin by just asking Senator Keneally how she thinks COVID-19 can change immigration policy first in Australia for the foreseeable future.

Kristina Keneally ::

Thanks, Brandon. Thanks everyone for being here. Thanks, Misha, as well, for joining the conversation. Clearly, COVID-19 is having a massive impact on immigration and migration, and that starts with the fact that the borders are closed. They’ve been closed now for almost two months. They look likely to remain closed for the next 12 months. There may be some small changes in that in certain ways to allow people in safely, if it’s safe to do so, but if you look at what is happening in the United States, in Indonesia, in India, in China, in Port Moresby in Papua New Guinea, in Western Europe, you only need to realize that Australia’s relative success in flattening the curve would be undone if we were to reopen the borders to the type of free movement, relatively free movement, of people that we had prior to COVID-19.

Kristina Keneally :

Now, this stoppage of migration means that at some point over the next 12 months, most likely, and we’re not entirely sure when yet, we will as a country do something we have never done before, which is restart a migration program from a standing stop. That gives us an opportunity right now to be asking, what kind of migration program do we want that to be? This is, I believe, an opportunity for the country to take stock of what’s been happening in the migration program for the past two decades and for us as a political movement, particularly one that is concerned about not only a progressive future for our country, but also the rights and conditions of working people, of all working people.

Kristina Keneally ::

This is an opportunity for us to argue, to reset a migration program, international interest, and when I say that, I mean in the interest of working people, in the interest of social cohesion, in the interest of economic growth, in the interest of the budget bottom line. Now, let me be clear. We are a country built on migration. You only need to think about the story of Australia, particularly since the war, since post-war Australia, were we have seen successive waves of migrants come here from every corner of the Earth, settle permanently, and build this country. Raise their families, build the infrastructure. Think of the Snowy Hydro scheme. Start small businesses, send their children to school, join their local churches, political parties, community groups, and become part of the fabric of this nation, which makes us the most successful multicultural nation on Earth.

Kristina Keneally ::

All of us, no matter how long or short ago, our ancestors came here. Unless we are First Australians, unless we are aboriginal or Torres Strait islander, we are all part of that immigrant story to this country. I also acknowledge that Australians celebrate that Australians are enthusiastic welcomers of new migrants, and I myself experienced that in the sense that I came here in 1994 as a permanent resident, as a migrant. We know that our national benefits when people come here and are able to join in, make that contribution, and become part of the story of Australia and have a stake in its future.

Kristina Keneally ::

Now, what this COVID-19 stoppage gives us a chance to examine in detail is really a case portfolio. Our full unifying idea, a nation built by migration, where people come here, settle down, and become part of the Australian community, is an idea that risks becoming nostalgia rather than our ongoing reality, and that is because since John Howard, we have seen a shift in our migration program, away from that pathway to permanency. And successive governments, including labor governments, but I really have to acknowledge that it’s been under liberal governments that these settings have been ramped up, we have seen the pathways to permanency narrow. We have seen temporary migration expand. We saw it come to almost its logical and perhaps almost absurd conclusion under Scott Morrison last year when he said he was capping permanent migration at 160,000 people per year.

Kristina Keneally ::

This was a congestion-busting measure. But yet he has allowed temporary migration to continue uncapped and be demand-driven, which means that really, the government towards migration policies, they’re not determining who comes to this country and the manner in which they come, to borrow a famous phrase. What we are really seeing is businesses, universities, state governments, and other forms of employers make that decision about who they’re going to allow into the country, and we are also seeing an expansion, a real significant expansion, of schemes like the Working Holiday Maker Program and the Seasonal Worker Program, and of course, international students and the work rights that they have.

Kristina Keneally ::

Now, all of these things might be useful, and there is a role for temporary migration in certain places and in certain contexts, things like seasonal work, fruit picking, where it is hard sometimes, quite often, to get Australians to take on a seasonal role in a regional area. There might be reasons, say, in cyber security, where we need a lot more people qualified in that area and we can train up quickly. And so temporary migration, skilled or unskilled, has a role to play in our economy and it always will. But, we are now, our island home, is now home to the second largest temporary… Excuse me, the second largest migrant workforce in the world, sorry, in the OECD, I apologize, behind the United States. So we’re the second largest migrant workforce in the OECD. We are right behind the United States.

Kristina Keneally ::

One of the largest groups within that is, of course, international students. There are over 600,000 young people from around the globe that come to study in Australia. The majority of those are in New South Wales, and what have we heard over the past few years? Example after example of wage theft and exploitation. We should remember that, the first serious case of wage theft that really brought this problem into prominence was 7-Eleven, did involve migrant workers, international students, temporary visa holders. What we know from the multiple consultations, reports that have been tabled in Parliament and the like, is that the temporary nature of these workers’ visa adds to their vulnerability, makes them vulnerable to exploitation, and creates the conditions whereby employers use that temporary status to drive down wages and to take advantage of their circumstances.

Kristina Keneally ::

While many of you may not think that this impacts you directly, although I acknowledge there may well be people on this Zoom meeting who are themselves international students, but many of you will be students or you will be of just left training or skills training or university, and I want to remind you that the treatment of younger workers has an impact on all workers. That is, if we are seeing, and we are seeing, exploitation occur, particularly amongst temporary visa holders, and quite serious as well, that starts to take hold across the economy and across employment. So when we have things like wages being undercut, people being told they have to work for cash in hand from below [award 00:10:46] rates, it is harder for every other young person in particular to get a good, well-paying, and secure job when that becomes the economic model.

Kristina Keneally ::

I would argue that in the name of lower wages and cheap labor, the government is risking a new and damaging form of social exclusion. We only need to look at COVID and the response to that to see how excluded these temporary visa holders are. The government has absolutely refused, and again today, in the COVID-centered hearing, the minister for finance, Mathias Cormann, made clear the government has absolutely no intention to provide any form of support to temporary visa holders who are trapped here during this pandemic. His only argument was, “If they can’t support themselves through a job, they should go home.” Never minding that some of them, their borders will be closed. Some of them can’t actually physically get a flight, and some of them will be on a path to permanency, not many, but some will, and that would mean they would actually have to forfeit that path to permanency.

Kristina Keneally ::

My concern has always been that we risk becoming a two-tiered society, where we have Australian citizens and permanent residents who are able to access rights, to assert their rights at work, to access services, to access support, and then we have another group of workers, guest workers, temporary migrant workers, who are locked out, locked out of those same rights, locked out of those same services, and locked out of having a stake in the future of our country. When we have a crisis like bushfires and again with COVID-19, we have seen how temporary migrant holders have been disproportionately impacted, and we talk about we’re all in this together, well, a virus doesn’t check your visa status before it infects you.

Kristina Keneally ::

We are not all in this together if we have some one million workers who live in Australia who are unable to access support and services during this time. No less than Peter Costello said back during his time in office that Australia will never become a guest worker nation. I’ve got news for Mr. Costello and the liberals, that is precisely what we are turning our country into, and I’ll end on this point. I think in this period, while the borders are closed, this is an opportunity for us to look at a range of policy settings, whether we have truly independent labor market testing, whether we are truly providing a pathway to skills and training for Australians to be able to work in these jobs.

Kristina Keneally ::

Workers don’t just pick fruit. One in five chefs, one in four cooks, one in six hospitality workers, one in 10 nursing and personal care support workers hold a temporary visa. Now, if the borders are going to be closed and we are going to have workforce shortages as the domestic economy reopens, this is the time to be saying, “How do we scale Australians up? How do we fill those skill shortages?” And do look at our skills and training systems so that we can provide pathways to employment, to good jobs, secure jobs, for Australians. But we should also think about when we reopen up migration, what do we want it to look like?

Kristina Keneally ::

I would argue that we would want it to provide more pathways to permanency, to encourage more higher skilled, younger workers to come here, settle permanently, establish families. They have the least impact on the budget, they have the greatest contributor to economic growth, they grow jobs and opportunity, and they help us build up again, that sense of a holistic society where we all have a contribution, we all have a go, we all get a fair go. I will end on that point. There’s a whole range of other things I could talk about in terms of some of the industrial relations policy settings that would help us drive down exploitation and particularly wage theft, but I will end on that point. I’m mindful there will be questions, and I know that Misha has things to say as well. So I’ll stop there, Brandon, but hopefully that gives people good context in terms of how I’m thinking and we here in Canberra in the federal opposition are thinking about these questions.

Brandon Hale:

Thank you very much, Kristina. I’ll pass onto Misha now. So Misha, how will COVID-19 change trade policy in Australia for the foreseeable future?

Misha Zelinsky ::

Well, I think what COVID-19 has done is shown how interconnected the world is. Clearly, trade is important, has always been important for Australia, and will always be important for Australia. Australia’s as a trading nation is a cliché. But trade is critical to our standard of living. But there’s probably four things that I think that are important when you think about the impacts in respect to trade policy and what’s happened with COVID-19. The first one I think is that it’s shown up the danger or how fraught these free nation states have been relied on just in terms of supply chains. So essentially, you can’t run a nation state like it’s a local service station. You can’t just have things turn up in the morning and be dropped off. It’s a far more complex enterprise than that.

Misha Zelinsky ::

Fundamentally, the basic principle of economic sovereignty and your basic expectation of citizens is that the country can produce the things and deliver the things it needs when we need them. The one that everyone’s focused on in this instance has been personal protective equipment, PPE. It just so happens that when the virus broke out in Wuhan, Wuhan’s essentially the world’s factory, so 90% of face masks are made in Wuhan, which is probably suboptimal when you need to have masks urgently for everyone around the world when you’re dealing with a respiratory illness. The other issue, and again, it was particular to this supply chain relating to health, but the number two place after Wuhan when it comes to ventilator manufacture is actually Northern Italy.

Misha Zelinsky ::

Now, it’s kind of peculiar that it happened that way, but it’s just very interesting that suddenly, you can very quickly find yourself not having the things you need when you need them. I think it’s something that’s been a real wake up call for Australians, and we actually commissioned some polling the other day, we literally asked that question, “Has COVID-19 been a wake up call for you as an Australian about Australia’s reliance on global supply chains?” And 90% of people responded yes to that, either strongly agree or agree. I think that principle, relying purely on just in time supply chains, I think is a critical change and one that we’ll see us have to make some serious decision about how we’re managing our supply chains.

Misha Zelinsky ::

PPE on this occasion, but with fuel security, for example. Australia only has 28 days of fuel. The 90 days is what the International Energy Agency mandates to have in storage. We have 28 maybe. In certain types of fuel, it’s as low as 18 days. Without fuel, you essentially can’t feed yourself, you can’t transport yourself, you can’t defend yourself. Again, on this occasion, it was health, but on other occasions, there are, and you can talk to experts in this area, but wouldn’t take much to think about the disruption that you would get throughout our fuel supply chain to very quickly Australia would be out of fuel and in dire straits really is the truth of the matter. It’s something that we need to urgently look at, but there are a whole host of other areas.

Misha Zelinsky ::

Which kind of brings me to the next point, which is that supply chains are sovereign, and what I mean by that is, look, economists talk about supply chains in high level manners over there, this kind of thing that exists above nation states. Ultimately, they are still controlled by nation states, not by corporations. And so countries make rational decisions, they make rational decisions in their own self-interest to fulfill the needs of domestic citizens before others. That’s completely okay, we would expect the same thing if there was an international shortage of a particular item and Australia was a prominent exporter of that good, we would expect that our government would say, “Hang on a minute. We got to sort out our domestic needs first before we’re going to sell this,” and that’s just the nature of things.

Misha Zelinsky ::

Nations trade in their self-interest, not doing other nations a favor. It’s done in the national interest or economic hard nosed way. So those two things in combination I think again have made a real wake up call for how the world actually works, and that globalization is not something that is beyond anyone’s control, and that the nation state is still powerful in the way that goods are exchanged internationally. The third point that I would make, it’s related to the first and the second, and it’s about whether the sticker price is the actual price. A lot of people when it comes to trade will say, “Well, you just take the lowest price that you can get.”

Misha Zelinsky ::

Now to use a wonky term, what we’ve now seen is that the risk premium adjustment for goods or more, to put it into kind of normal language, is that the real price is the price that you pay when you need it. When shit hits the fan, that’s the price. The price isn’t when there’s lots available. The price of a face mask, you could see what the price people were prepared to pay in the black market for these goods online and in other ways, and the desperation… Toilet paper, right? We laughed about it, but when that level of panic goes through communities, that’s the real price for the good. And so again, it’s about making an assessment of what are the things that we need when we need them? Who supplies them? How can we get them? And what are we prepared to pay for them? And not actually just looking beyond the sticker price to say, “No, well, the real price for this good is what we need to have in storage or in production and we need to have it when we need it.”

Misha Zelinsky ::

Those three things in combination, I think you’re going to have a profound, profound change in the way that countries trade with one another, the way that Australia trades with the world, and I think that when you used to have this debate within the labor party or within the broader public discourse, people used to think that it was kind of in the abstract, that yeah, yeah, yeah, it’s never going to happen sort of thing. So this national security augment or sovereign capability augment was dismissed as essentially a fortress Australia type thinking, scaremongering. We’re essentially ransacking, trying to promote domestic industries at the expense of the consumer.

Misha Zelinsky ::

Well, it’s shown up now, on this occasion we got relatively lucky. It was quite scary there for a period obviously, but I think the nature of the goods and the way that we’re able to respond worked out okay, but wouldn’t always. The fourth point I’d make, and this is the last point, but this is the foundational, critical point, it’s played out recently in some of our foreign policies, that it’s absolutely critical for Australia that a rules-based trading system is maintained. Australia can’t… We are a middle power. We are a rich trading nation. We benefit greatly from a rules-based trading system, whether it’s a grade set of rules, and those rules are enforced by an independent umpire and everyone observes the rules.

Misha Zelinsky ::

But we also don’t benefit. Australia can’t hope to exist in a situation or in an economic trading system where might is right. Essentially if the big dog wins, that’s a problem for Australia, given our relative size and given our reliance on trade internationally. So when we’re seeing things like trade being used in a form of foreign policy coercion, as we’re seeing from the Chinese Communist Party, or when it comes to dumping of goods into Australia, which essentially dumping is selling goods into another country with the express theme of destroying that market, so that way you can continue to sell, right? Those two things are not in our interest.

Misha Zelinsky ::

When you look at the question of barley, when it comes to the tariffs that have been placed onto barley by the Chinese Communist Party of 80%, they’re just not based in any sort of reality. Australia places zero tariffs on our barley. It’s the most competitive barley producers that come from Australia. We have zero tariffs on it. China, and other nations frankly, are notorious subsidizers of their agricultural sector. So when you look at that argument, you can see what it is. It’s Australia being punished for its foreign policy decisions, on this occasion, the decision to call for an independent inquiry into COVID-19 and the origin. But there are also other decisions that Australia has made that have been threatened, the 5G network with Huawei and other things of that nature.

Misha Zelinsky ::

Not having an independent umpire in place is a very, very dangerous place for Australia to be, and so we absolutely need to preserve a rules-based trading, because it’s good or Australia as a trading nation and it’s good for Australia as a middle power to have a well-supported, multilateral global system, not just for trade, but for all things. So I think trade’s absolutely critical for Australia, but we need to be a little bit more clear-eyed about exactly what is that we want our country to be, what are the things that we need it to have, what are the expectations of the things that we need to have at the pivotal moments, and as it all becomes more uncertain, that we are sovereignly capable in critical industries and in the things that we rightly expect to have when we need them.

Misha Zelinsky ::

So I’m happy to take questions, but I think that probably is a snapshot of where I think it’s heading. It’s heading into an area where I think Australia can actually leverage it to our advantage. We’ve got everything we need in Australia, yeah, to produce much more than we currently do. Currently, we trade a lot of primary produce, which is good in terms of mining and agriculture things, but we can definitely make a lot more finished product with everything we need from energy to raw materials to the people, apart from the vision. It’s not all doom and gloom. We can certainly use this time to retool our manufacturing sector, and in the process create lots and lots of jobs for average Aussies who can work in regional communities. So I’ll leave it at that, but happy to take questions, Brandon. Thanks.

Brandon Hale:

Thank you very much, Misha. We’re now going to move onto answering some questions that were submitted on the Google forum. Senator Keneally – how long should Australia’s international borders be closed during the pandemic, even after the numbers are heavily reduced, if not eradicated, by this year?

Kristina Keneally ::

That question that’s going to be determined by what’s happening in the rest of the world and safe for us to do. Yeah, we might want to open up borders for, say, a particular skill need. I mentioned cyber security earlier. Today, the ASIO director general made clear that we are at even greater risk of cyber security attacks and online manipulation, foreign interference, and it may be that we need to bring in more people in that particular skillset, with that particular skillset. And so do we do that with the two week quarantine? Who pays for it? Same thing with international students. There may come a time where we feel comfortable or we have a desire to facilitate the reentry of international students to universities, but again, how do you do it? How is it safely done? Who pays for it? Is that attractive to people?

Kristina Keneally ::

There may be the opportunity for somewhere like New Zealand, where people talk about this trans-Tasman bubble, that may be a possibility. But I think the question about how long our borders stay closed is really going to be determined by what’s going on in the rest of the world. It still remains the case that we have had community transmission, but a significant amount, and I need to go back and double check, but I believe it’s still the majority of our cases did come from an overseas, so we’re trying to make sure that does not spike again with the second wave.

Brandon Hale:

Thank you very much. Just to Misha, so what can the [AOP 00:29:08] do to support regional jobs in the rice industry and improve Australian trade in the face of China extorting countries that Australia export rice to?

Misha Zelinsky ::

Thank you for that question. It’s a very esoteric question. I should just note that I’m not an agricultural economist, but I’ll do my best to answer the question. I think going back to my comment about barley, look, Australia is an extraordinary competitive agricultural economy. Our farmers are the world’s most competitive, and we export to the world all sorts of produce, right? In terms of rice, I think there’ll be some ongoing challenges for Australia making sure that our farmers are able to access water when they need and we need to continue to be very innovative in our use of water for water-hungry crops like rice or cotton.

Misha Zelinsky ::

But certainly, the expectation would be that in a rules-based, going back to my comments about a rules-based trading system, if nobody is subsidizing rice, then Australia should be essentially the world’s rice bowl, to the extent that we can produce it, the world should be able to buy it. Now, from memory, and I’m just going off the top of my head, but China subsidizes agricultural sector quite significantly. I was looking at this recently, I’m pretty sure it’s about… I might have these numbers wrong, so for those listening on the tape and Googling, wanting to hang me on this, I’m pretty sure it’s about 25% that they subsidize their rice industry to that extent.

Misha Zelinsky ::

Again, if you don’t have an umpire in place to say, “Well, hang on a minute. You can’t subsidize your goods here and then use that subsidy to take market share off not just Australia, but other countries that are producing rice, or you use that 25% advantage to dump into another good.” So for example, let’s just say we had a situation with Chinese rice was subsidized, and then it was dumped into Australia below cost with that subsidy, so therefore, the domestic industry can’t compete and has to close down, and suddenly what was a completely competitive industry is now being closed through basically legal cheating. It’s effectively, and when you look at dumping, it’s the same way as using steroids at the Olympics. You’re using an unfair advantage to cheat.

Misha Zelinsky ::

There are ways to, in Olympics, we drug test. In trade, we put in place anti-dumping duties to basically say, “Well, you’re dumping. So you guys put 25% on a subsidy or you’ve undersold it for 25%, we’re going to whack that back on, and we’re going to equalize it back to where it’s supposed to be.” And then the World Trade Organization sits at the top of that, and enforces those rules. So really, back to the beginning, which is the way that we would do that is we would get a competitive industry. We support that with I should also say very good, strong labor laws in agriculture, because that’s an area that I’d like to see some improvement from our farmers. I think, unfortunately, there’s a lot of exploitation that occurs within the agricultural and the horticultural sector, particularly with migrant workers, as the senator talked about earlier, and it’s shocking actually.

Misha Zelinsky ::

But parking that, looking at the macro economic argument, we want to see a competitive industry here. We want to make sure that there’s a global system of rules in place, and that Australian farmers are able to compete, and then if we apply that to every other industry, Australia’s very well-placed to export all sorts of things, and so the critical piece here is countries not cheating and there being an umpire to enforce when they do cheat. Currently we’re getting to a stage where countries are cheating and they’re also just basically thumbing their nose at the umpire. That is not a game that we can win. And so whether it’s rice or anything else, it’s a big concern for Australia as a middle power trading nation if we don’t have the rule book enforced.

Brandon Hale:

Fantastic. Well, thank you. So I’ve got another question for Senator Keneally, just from Aden. So how do you see labor confronting anxiety immigration in broad electorates, particularly key seats?

Kristina Keneally ::

I think you froze a tiny bit on me there, which I mean, Parliament has-

Brandon Hale:

Oh, sorry.

Kristina Keneally ::

We have terrible… No, Parliament has this terrible connection, so I hope I’m coming through all right. Yeah, this is a really good question, because at one level, immigration becomes at times a political touchstone. I would recite that towards the end of last year, the Scanlon Foundation poured out their annual report, which really surveys the electorate across Australia on their attitudes towards a range of issues. Go and find it if you’re interested, it showed that there’s incredibly high support for migration, that overwhelmingly Australians celebrate our cultural diversity and multiculturalism, and think that it makes Australia a stronger place. What I do think a road support for migration is when we see that shift away from permanent migration to that two-tiered society that I spoke about earlier.

Kristina Keneally ::

But I do think we can take some comfort in the fact that Australia is not like our American or Western European cousins, where immigration has become what is blamed for a range of other ills or economic challenges. I think we start off in a positive space. I think we have to advocate for a positive view of migration. We have to articulate how it benefits the country economically and socially, and we have to in some sense appeal to people’s sense of pride and nostalgia on who we are and who we were and how we want to define ourselves into the future. I don’t like the notion of thinking about it just in terms of key seats, but I’m not naïve to the fact that it plays itself out differently in different communities.

Kristina Keneally ::

I would point to this, a lot of people might think that when we’re talking about regional communities that there might be an instant kind of resistance. In fact, if anything, regional communities very much seem to want migrants and permanent migrants to come and settle there. They help bolster the population, they create economic opportunity. Misha just mentioned the exploitation of farm workers. I went to a regional town, I went to Shepparton in Victoria, and visited there one of the biggest apple growers in the country. They were frustrated because all they can get in terms of labor is temporary migrants or undocumented workers that come from labor hire companies. They know the labor hire companies are exploiting them. There’s very little they can do about it.

Kristina Keneally ::

When I said, “What can we do to solve this?” They kept saying to me, “The Albanian solution,” and I had no idea what the Albanian solution was, except it turns out under the Fraser Government, there was a program to bring Albanians to allow them to come to Shepparton and to work in the orchards to learn skills, because there were some problems going on in Albania at the time. If they wanted to, they could settle down and stay, and many of them did, and they spoke glowingly about how these were the best thing that had happened to the town, that many of them stayed, started their own businesses.

Kristina Keneally ::

I think Australians understand the benefits of migration. I think where we get into dangerous territory is when we do see an erosion of wages, when we do see a lack of independent labor market testing, when we don’t have a robust industrial relations framework, when companies are making a choice, offering wages that they know that an Australian won’t work for or conditions they know won’t appeal to an Australian, so they can say, “Oh, we’ve done labor market testing and we’re going to now bring in a migrant to do this job.” That’s when we start to erode away support for multicultural communities and for migrant communities to come be part of us. So I think that’s what we have to safeguard.

Brandon Hale:

Absolutely. Thank you very much for that. So we’re going to move onto a bit of a fun section now. A lot of people in young labor have been following the US-

Kristina Keneally ::

[crosstalk 00:38:25] Oh, I was not told there would be a fun section, so I’m very excited.

Brandon Hale:

[crosstalk 00:38:28] quite a bit now.

Misha Zelinsky ::

Anything fun about politics [crosstalk 00:38:31].

Brandon Hale:

Yeah, so just going to ask Misha, just have a question from Dillon just about who Misha would have supported in the Democratic primaries and what he thinks the Democrats need to do to win in 2020.

Misha Zelinsky ::

Right, well, it’s an interesting question. As a faithful New South Wales right winger, I actually was on team Biden from the beginning. I’m going to be honest though, I thought they were going to sink him as the primary went on and those big stats on Biden. I quite liked Pete Buttigieg. I think he was a really interesting and exciting candidate. But I think they’ve… Look, I think this election’s important. Every election’s the most important election, but I think this election is a critical election in terms of the future of the United States, but also it’s profoundly important for Australia and the world in terms of US leadership of some of these things we’ve talked about, in terms of multilateralism.

Misha Zelinsky ::

I was in favor of Biden. I took a little Buttigieg, but I think he actually got a bit unlucky, too. I think the way Iowa played out I think was bad luck for him. He didn’t get that Iowa bounce into New Hampshire and then Klobuchar kind of touched him up in that debate. Anyway, so he very nearly could have jagged it, but he’s got about 40 years on his side as a competitor to Biden, so I’m sure he can have at least one or two more shots. It was third time the charm I think for Joe. So I think Biden is a good candidate. I think I was pleased to see that they went with a moderate candidate and didn’t go down the Sanders path or the Elizabeth Warren path, because I think that would’ve been very jarring and I actually think it would have become a referendum on the Democrats and not being a referendum on Trump, which I think is kind of critical here.

Misha Zelinsky ::

We could go, we could do an entire conversation on this, but I think what’s going to be critical, clearly the Rust Belt States, the question of trade’s going to be very important, how managing that issue. When you look at the states and the regions that swung to Trump, when you actually overlay trying a suspension to the World Trade Organization, they’re called the China Shock, which essentially was the loss of all the manufacturing work in those areas and they all become extraordinarily economically distressed. Trump promised, rightly or wrongly, and whether or not you believe he’s actually done any of these things, he promised people that he would stand up for them in their economic interests, and I think it’s critical that the Democrats have got a really good answer when it comes to manufacturing policy, industry policy, jobs policies for people in those swing states, and the Rust Belt States, the so-called blue wall that crumbled.

Misha Zelinsky ::

I should preface, well, not preface, but I predicted Hillary Clinton would win, so you can take all that with a grain of salt. Now we can perhaps defer to Senator Keneally, who’s probably a little closer to home to these matters than I am.

Kristina Keneally ::

Brandon, [crosstalk 00:41:53].

Brandon Hale:

… same question to Senator Keneally.

Kristina Keneally ::

All right.

Brandon Hale:

[crosstalk 00:41:58]

Kristina Keneally ::

In my fantasy football league, I would have gone for Elizabeth Warren, but I knew that was never going to win. I think Misha’s really covered it all well there.

Brandon Hale:

Absolutely. In terms of Australia’s immigration strategy, I’ve got another question. Can you see an Australian government, particularly a labor government, using immigration as a strategic tool to drive growth while bundling out the domestic labor market? If so, how?

Kristina Keneally ::

Yeah, look, I think we had seen under particularly this government since Malcolm Turnbull created the Department of Home Affairs, we have seen migration downgraded as a key economic tool. This government through the creation of the Department of Home Affairs has securitized migration. It talks about it in terms of the threats of people who might come in. It talks about it through a security lens. I’m not saying security isn’t important. It has always been an important part of migration. The immigration department has always been two sides of one coin, who we let in and who we don’t. On the who we let in, it has always been about why we let people in, how we integrate them in, what skills they bring in, how it grows the economy in our community.

Kristina Keneally ::

All out of that has just been so lost under the creation of the Department of Home Affairs where you’ve got a real security gloss that cuts across the whole department. You only need to look at the Department of Home Affairs to see it ranked 93rd out of 93rd in terms of morale. A third of the people who work there wish they worked somewhere else. It has had an exodus of people who understood how to use migration as an economic and community building tool. Anthony has created here in the Parliament a group, we’ve got some working groups that are working on policy as we go toward the next national platform.

Kristina Keneally ::

We are very much looking at migration as an economic tool, because this government has just… The immigration minister doesn’t even sit at the cabinet table. So nobody is really talking about immigration in that context. But that is a fundamental important part of why we have a migration program, is to grow the economy. I think you do remember that under Hawke and Keating in particular, we did rely on migration, and we did use it to grow the economy. We did use it to create a sense of successful multiculturalism in our community. That is there, and Australians are ready for that message, I believe. I think it can be done, but I think because we bring a real focus on skills, training, fixing up the vet system, investing in education, investing in public education.

Kristina Keneally ::

We had a whole range of policy settings at the last election that I think you will see similar or same variations are that the next one in terms of Australian skills authority, about labor market testing, about a national labor hire licensing scheme, and the like that I think will help us really promote the opportunities to grow the skills of Australians and yet argue for the importance of migration to grow the economy and create opportunity.

Brandon Hale:

Thank you very much, Kristina. I’ve just got just one final question for Misha. China allows the flaunting of intellectual property rules in order to allow Chinese industries to have unfairly competitive prices at a global stage. Is it ethical for Australia to buy these products? Should Australia do more to clamp down on this? And what does this say more broadly about China’s trade practice?

Misha Zelinsky ::

Yeah, you went out there a bit, but I think I understood the thrust of the question, that IP theft. Look, the question of… Technology is kind of critical to economic success, right? Every country strives to out compete other countries and to essentially have a tech advantage, and then economic advantage comes from tech, as does military advantage. So the Chinese Communist Party has made an absolute art form out of IP theft. It was described, I can’t remember who said it, but it was essentially described that the intellectual property theft by the Chinese Communist Party is the single greatest transfer of human wealth in human history.

Misha Zelinsky ::

The capacity to make intellectual advances and technological advances and protect that intellectual property, that’s critical to the way that we understand how the principles of economics work and that’s how it’s worked, and making those rights enforceable are critical to making sure that people spend their time and effort and energy investing into research, investing into innovation, investing into improvements. So again, not to go right into… You can spend a lot of time talking about the various strategies, for example, if you want to set up a business in China, they make you essentially force transfer your IP across to an adjunct venture partner, and then over time, once the domestic firm has worked out all your secrets, it should be often that they then deny you market access.

Misha Zelinsky ::

China, when it comes to IP, is extremely ruthless, and every country I think should be thinking about its own system and making sure it rigorously defends those from incursion and cyber incursion. Going right back to my original comment, the critical piece here for Australia, for everyone, is that we’ve got a rules-based system. So be it IP law, be it trade law, etc., that we respect one another’s sovereignty, that there’s a rule book in place, and that there’s an umpire, and that when the umpire makes a decision, we respect that decision. And so IP theft is a huge concern, it’s particularly a concern when it’s occurring auto credit regime, stealing text secrets, military secrets, and then using those to either further enhance its own military or repress its own people. I think that’s a further concern to what is already an economic concern.

Brandon Hale:

Thank you. With that, we’ll have to end, but we have one final two questions for both of you, just as Misha does with all his podcasts. If you were to choose three historical figures, international relations, who are dead or alive you could have at a barbecue?

Kristina Keneally ::

Are you going to me first? All right. Well, I have just finished watching Mrs. America on Foxtel, and Gloria Steinem, who I have met and have had lunch with, is from my hometown, Toledo, Ohio, and I did reflect after watching that show that I would love to have dinner with Gloria Steinem, Betty Friedan, and Bella Abzug. That’s just my moment, that’s where I’m at at the moment. I’m sure if you asked me at some other time, I’d have a whole ‘nother list. But they would be a rocking dinner party, as a child of the ’70s, I would love to do that.

Brandon Hale:

That’s a great lineup. And what would yours, Misha, be?

Misha Zelinsky ::

I should just point out that this is meant to be the fun section, and I painstakingly point out that this is the world’s lamest question in my podcast. So the fact that someone has decided to take me up on this is… Anyway, look, give yourself an uppercut, whoever’s written that question in. But look, so for me, funnily enough, I probably haven’t spent enough time thinking about this, notwithstanding that its my show. Winston Churchill would be someone that I would have on there. I think particularly one of the things that troubles me these days is that it doesn’t seem to be abundantly clear that the Nazis are the bad guys. So getting the guy that essentially kicked the Nazis’ ass back to the Stone Age I think would be a person that I would definitely love to hear from, and plus hearing a few of his witticisms would be great.

Misha Zelinsky ::

Another person would be Bobby Kennedy. I’d probably spend all the time asking him about JFK, but what I love about Bobby Kennedy particularly, I don’t know if any of you have seen it, but I’ve been thinking back quite a bit with his speech that he gave the night that Martin Luther King was assassinated, if you haven’t seen it, I encourage you to watch it. It’s a very, very, very powerful speech, and I think particularly timely with things that we’re seeing at the moment with the protests in the United States and in Australia as well about race relations, and I think had Bobby not been assassinated in 1968, I think things might have been very different in the United States. I think he’d be a great person to have.

Misha Zelinsky ::

And probably lastly, I’m reading a lot of Ernest Hemingway at the moment, so I don’t know how much Bobby Kennedy drinks, but Hemingway and Churchill [crosstalk 00:52:20]-

Kristina Keneally ::

You’re saying this is an alcoholic dinner.

Misha Zelinsky ::

Well, he’s Irish, Irish-Catholic, so maybe he does drink as well. Look, yeah, and an Australia union official, so it’s definitely going to be we need to have a well-stocked bar. But they’re my three for the extraordinarily lame, not fun time question.

Brandon Hale:

Well, there you go. Well, we’ll have to leave it there, but thank you so much, Senator Kenneally and Misha, for coming.

 

Richard McGregor: The war within the war on COVID-19

Richard McGregor is an internationally recognized expert on the Chinese political system and a senior fellow at the Lowy Institute.

McGregor’s book, The Party, on the inner-workings of the Chinese Communist Party is considered the pre-eminent text for understanding the CCP and was called a “masterpiece” by The Economist and a must read” by the Washington Post.

A former Bureau Chief for the Financial Times in Beijing and Washington D.C., Richard has been published in the Wall Street Journal, the New York Times and The Sydney Morning Herald and The Australian. He is also a regular commentator on the ABC, CNBC and Bloomberg TV.

Misha Zelinsky caught up with Richard for a chinwag about the COVID-19 crisis and what this means for the world, including the escalated US-China rivalry and who is winning, how Xi Jinping is using the crisis to his advantage, how fake news is making the problems worse in the west, how democracies are struggling under the weight of the challenge and losing soft power, the pivotal battle underway in the pacific and why its critical we engage the Chinese diaspora in western values.

Episode Transcript:

Misha Zelinsky (host):

Welcome to Diplomates I’m your host, Misha Zelinsky. I’m joined today by Richard McGregor. Richard, are you there?

Richard McGregor:

I’m here. Thanks for having me on.

Misha Zelinsky (host):

Thanks for joining us. Of course, we’re doing this live from both of our socially distant bunkers, vice the beauty of Skype, which everyone’s now very acquainted with over the last couple of weeks working from home, those who are. But thanks for joining us and obviously your expertise is in foreign policy and in particular the Chinese communist party. But given we had been talking about all things COVID, I thought an interesting place to start. You’re an expert in the CCP and you’ve written a book about the workings of the party. What does the handling of the virus tell us about the way the party does or does not function? And how did that impact on the, I suppose early stages of the outbreak in the Wuhan province.

Richard McGregor:

Well let me start at what might sound like an old place. But there’s a phrase in the US politics, it’s called the permanent campaign and that comes from the late 60s when politics basically got out of the old ways and old boroughs and things like that. Got into the hands of professionals and politics became a permanent occupation. Parties were running for election permanently in many respects. And I think that’s a good way to explain how the communist party in China works. And it’s one reason by the way, that why Western countries struggle to keep up with it. They are like a political organization running for election 24 hours a day, seven days a week, every day of the year. And so they’ve got remarkable skills and faults. We’ll come back to that as a result of that. So look at the COVID crisis is a bit of a classic case.

Richard McGregor:

The start of this, China mishandled it, however you want to put it. They lied. It was the virus in its early stage was covered up. This is not just Western propaganda, it’s all on the record in China. The outbreak and the spread of the virus would not have been nearly as bad in China and then to the rest of the world if it hadn’t been covered up in Wuhan initially. But look what happened, once they acknowledged it. They basically locked down first a city of 11 million people, Wuhan. Then they locked down a province of about 50 million people in Hubei. And after that they locked down the country.

Richard McGregor:

One of the funny things about this is, we’ve all come to know a lot of epidemiologists on TV and radio and the like, and they’ve become household names and none of them said, quarantining the source of the disease is basically a textbook way to handle it. But I guess, the textbook didn’t quite envisage quarantining about 760 million people, which was probably had the idea of a medieval village in France, but the CCP had the capacity to do it.

 

 

Richard McGregor:

Because they don’t just have a strong central government when they get their act together, they were able to exercise their power right down to every neighborhood committee and street and keep people indoors. So that’s state in genuine power state capacity. The second point on this is look how quickly they’re able to turn on a dime. We can come back to the issue about whether the latest Chinese figures are right on that, but once the Chinese got the spread of the disease under control and there were much fewer new infections.

Richard McGregor:

It is just amazing to me how quickly they turned on a dime and then their focus was outward propaganda. In other words, we want to tell the world not how we covered up the virus, but how we beat the virus. And we are now in this process now where China is running an incredible global campaign as a good global citizen to underpin public health. And you can only do that if you’ve got a political organization which is both top-heavy but flexible and fleet of foot, not bound by any law, can turn on a dime and that’s what we’re witnessing at the moment. So that’s what I mean by the sort of the permanent campaign.

Misha Zelinsky (host):

Now that’s actually a perfect way to turn to I suppose the war within the war. I mean, we’ve got the war against the virus itself, but there’s this I suppose the contest that’s underway and it’s perhaps another front for a contest that’s already been underway between the United States and China. Do you think that this is going to be a decisive battle between the U.S and China or is this just a skirmish of a broader play? Because there’s a real big focus now in the United States about blaming China, then China is now of course putting out misinformation suggesting that the disease came from the United States military. How do you see that war within the war at the moment between two superpowers?

Richard McGregor:

Now I think just about everything is a contest between the U.S and China in many respects. There’s very little cooperation at all and it’s not just a contest between two countries, it’s a contest between two systems. Because China benchmarks itself against democracies, for its own citizens it demonizes democratic system. What’s the most important democratic system in the world? And that’s the United States which sadly at the moment it’s doing very poorly in handling this crisis. Now, as you and I know there’s many different democracies and there’s many different types of democracies.

Richard McGregor:

And many democracies in the world Taiwan, South Korea, Japan to some extent, Singapore, which we might call a guided democracy. Maybe Australia we’ll see how we go there have handled this crisis in a very different fashion and relatively speaking, touch wood successfully. Not the U.S though, so China is focused on the U.S. Both sides have stepped back a little from the rhetorical war, but it was only about two weeks ago that an official Chinese foreign ministry spokesman as you alluded to, started tweeting out that this virus had probably not originated in China but it had probably been bought to China by a U.S military serviceman, a woman actually.

Richard McGregor:

There’s no basis to this, it’s the product of fettered conspiracy sites, one in Canada, some in America, all around the world. And this was quite a remarkable thing for the foreign ministry to do. Now I think there’s been a split in China within the foreign ministry over these tactics. But nonetheless, the fact that an official foreign ministry spokesman was authorized to do this tells you that the system in China is hardening up against the U.S. They wouldn’t have done this 10 years ago, they wouldn’t have done it five years ago but they are feeling pretty confident now and pretty involved in and pretty assertive and aggressive all under Xi Jinping. And so they are willing to take on the U.S in any form possible and that includes spreading fake news almost from the very top of the system.

Misha Zelinsky (host):

So I’m curious just to dig into that about this total campaign or this information war by China and the Chinese Communist Party. I mean, one of the things that I think the difficulty there is that the system tended to reward, or at least at the beginning was that misinformation or managing perceptions rather than truth. Where people in Wuhan doctors were arrested and journalists were arrested for reporting on it almost at the beginning for political reasons. I mean, is it possible do you think that China is going to be able to position itself as a savior globally, and can we really believe the narratives of the infection rates, the mortality rates out of China? And is that something that’s going to be effective for them?

Richard McGregor:

Yeah. Well the jury is still out on that. I would say not completely effective, but there might… I’d say two things. It might be more effective than we think or would like, and remember all this propaganda is also internally directed to the Chinese people themselves. The Chinese people have just gone through an absolutely brutal experience with a really tough quarantine. You think of yourself how much you might be sort of champing at the bit at the moment, after a few weeks-

Misha Zelinsky (host):

I’m climbing the walls here mate.

Richard McGregor:

Well, right. You think of Wuhan you weren’t allowed out at all, if you were you were severely punished, people were dying all around you and like. So there’s been a lot of civil unrest in China since then at various different places, you can see it on the internet. They were for example, outside the provincial headquarters, sorry the city headquarters of party organization this week. There was a massive protest calling for rent relief, something that people in Australia are going to be sort of angst that they will be very familiar with very soon. So going back to the start as you alluded in Wuhan and the origins of this and whether that really undermines China’s claims to soft power.

Richard McGregor:

I mean, I think it does overseas but let’s see how it plays out. For example I think one of the major battlegrounds right now is Europe. We’ve got terrible situations in Spain and Italy to France and also the UK, and China has been making extremely high profile air lifts of masks and protective equipment and gowns and that sort of thing for the use of medical professionals. And this has really caused quite a stir. If you look at Macron, president Macron from France recently he’s had to make very statement saying well, “Look, we’ve given as much to other countries in Europe as China has, stop this propaganda.”

Richard McGregor:

So it might work in a superficial way at the start, but I think it really alerts the leaders of other country like Macron who’s been thinking deeply about China. That they’ve really got to wake up to themselves and just see the attention and focus of what China is doing and they have to respond. We’ve been through this same debate in Australia, so the coronavirus has been important in that respect. I should say one other thing though, that on the figures you mentioned. Look, the quarantine was brutal in China but there’s no doubt it worked to a degree. Now, is it true, as they were saying a week or two ago that there were no new cases in China? Obviously that’s not true.

Richard McGregor:

Is it true that the death rate in Wuhan was as low as they suggested a few thousand? I think there’s no doubt that under counts the death rate. But having said that, I treat the Chinese figures to a degree like I treat Chinese GDP figures. They’re not right to the decimal point, but they’re broadly right as to the trends because I think with the virus, it’s something you simply you can’t sort of cover up for good. And another way of judging it is an old thing with China, don’t watch what they say, watch what they do. Now Xi Jinping has been out and about, he was into Zhejiang yesterday the province near Shanghai. He’s been to Wuhan. There’s no way they would put Xi Jinping out in public unless they were pretty confident that they’d made massive progress in containing the virus.

Misha Zelinsky (host):

Yeah. So just turning to Xi Jinping, your essay recently the backlash essay, you’ve written that Xi was under pressure internally and that perhaps China isn’t an unstoppable monolith that we sometimes perceive it to be. What to your knowledge has been the response in China by Chinese people? Are they buying the narrative from the government that things have been well handled by the Chinese Communist Party? And is this information war, you mentioned some of it’s being projected externally for soft power reasons to manipulate the global narrative, but a lot of it is for the domestic audience. How much is that of confidence as how much is that of fear in your mind?

Richard McGregor:

Yes, that’s a very good question and hard to be definitive in answering it. Before the coronavirus I had a very simple crude rule of thumb and emphasis on crude, and that was that the people, the citizenry liked Xi Jinping, the elite disliked him. Now why would I say that? Xi’s anti-corruption campaign is highly popular amongst people because that’s something that people have been angry about in China for a long time. Saying public officials get rich at their expense so bringing these people down works for him. The elite it’s a bit different. There’s a lot of criticism of him for his management of the economy, favoring the state over the private sector.

Richard McGregor:

You obviously upset a lot of powerful people with an anti-corruption campaign. Most of all I think the elite technocrats are absolutely furious with him about making himself president or leader in perpetuity, that was really the turning point. I don’t see at the moment, there’s no way at the moment Xi Jinping has his hands firmly on the levers of a power in every sector, nobody’s going to knock him off or anything that. It’s very hard to mobilize even elite opinion against him because you can’t. If you form a group to criticize him or a ginger group against him you’ll be shut down, you might be arrested and the like. Look at what’s happened in recent weeks after Wuhan.

Richard McGregor:

In the initial stages of the virus in Wuhan, we had an extraordinary display of public opinion on the internet criticizing the government, mourning the death of doctors who tried to speak out and like. Citizen journalists going around giving us fresh reports daily about what was happening on the ground. Well, that’s all stopped. The system’s got his act together, those citizen journalists are basically in detention. Other people who criticize Xi recently, most famously a big time Beijing property developer who was always a bit of a rat bag commentator but he was well-connected. He’s been detained.

Richard McGregor:

So anytime there’s any outbreak of criticism against Xi before it can take grip, before it can gain an audience at the top, before it can embolden people, he shuts it down and that’s what’s happening now. Whether the impact on Chinese people, people in China haven’t gone through a deep recession before, they probably about to go through one now. So we’ll see. The system will be tested but the propaganda system will also be working over time to convince people that they did the right thing with a lockdown. China did better than other countries, particularly America and they should stick with Xi and they should stick with the CCP.

Misha Zelinsky (host):

Yeah, that’s interesting. You sort of touched earlier on the contest between systems and that’s very much evident now. I mean, it was emerging before, but we’ve now got a full blown struggle between democracy and authoritarianism. And we talked about the limitations around why the authoritarian regime might’ve led to a cover up at the beginning, but the ability to turn on a dime as you said. I mean, what is the response to the crisis tell us about democracies struggling to get the balance right between I suppose, the repression of people and rights of individuals and the suppression of the illness?

Misha Zelinsky (host):

And the other thing I think is perhaps troubling people that are in favor of democracies as I am. When you look at the United States response to some other democracies in Europe, basic competence appears to be in question here. I mean when you look at the United States, a lot of their soft power came from being the country that put the man on the moon and being the global leader. They’re certainly not stepping up in a global leadership capacity, but also in basic competence capacity there’s certain question marks there.

Richard McGregor:

Well that’s right. When you let the state wither, and when you attack the state for decades, and when you load them up with all sorts of things that the bureaucracy in America is loaded up with by Congress, you undermine the effectiveness of the state. Whatever you say about China, they’ve got enormous state capacity. They can mobilize resources, they can mobilize people, they have a extraordinary ability, logistical ability to get suppliers here or there. That sort of thing has been corroded over many years in the U.S. We could go on about that about that tribal political culture. You’ve seen a bit of sclerotic democracies in Europe as well struggling at the same time.

Richard McGregor:

And this is all grist for the Chinese mill. I mean, the context for the Chinese is, the turning point of the Chinese confidence in their system compared to America was obviously first of all in the global financial crisis in 2008. The Americans had been coming over and lecturing the Chinese about how to run a modern financial system and the like. Then of course, we had the GFC and the Chinese saw okay, thanks America no more lectures from you on how to run banks and the like, we’ll do that ourselves. After that, that was the start of Chinese hubris after that under Obama and American made a bit of a comeback. You can criticize Obama, but the economy did start to recover and that Chinese notice that.

Richard McGregor:

I think this second point of Chinese hubris was the election of Donald Trump. The Chinese have always said we’re meritocracy and look you’ve just selected as your new president, a real estate celebrity developer from New York. So thanks very much, we’ll stick with our meritocracy. Now, I think that came off again because Trump in his initial stages really destabilize the Chinese, they didn’t know how to handle him. I think they got a better grip on him as of about last year. But now I think we’re getting maybe to a third point of Chinese hubris. In other words, if America really suffers and it looks they’re going to from this virus, both economically, societally and the like.

Richard McGregor:

All the holes in the health system, all the impact on poor people and the like in U.S. The way that the rich will be able to protect themselves in the U.S and poor people won’t. Well, that’s going to be another high point of Chinese hubris and this is at a time when compared to 2008, they’re a really powerful country. Their economy 2/3 the size America’s, their military I think they’ve got a bigger Navy these days than America’s, untested obviously. So we’re getting to a point where China will feel even more assertive and they’ll feel their able to be more assertive because the U.S more so than in 2008, will be really turning inward angrily. We hope not, but that’s the direction it’s heading in.

Misha Zelinsky (host):

And so just turning to you mentioned I suppose, China in the context of its military and forward projecting foreign policy. How worried should we be about the Pacific during the pandemic? I mean every country at the moment is grappling with the COVID-19 outbreak. We’ve gone through a big focus where we’ve done the Pacific step up because we took the view, we’d taken our eyes off the prize with our Pacific partners. And China had been doing a lot of soft power, a lot of debt diplomacy through it’s a belt and road initiative there. I mean, how worried are we generally right now about the Pacific? And should we be more worried about China’s activities there during the COVID-19 situation?

Richard McGregor:

Well, I think we’re worried about it. To be fair we are focused on it, whether we’ve got the capacity to remain competitive it remains to be seen. But let me give you one story. About three weeks ago I was actually in Papua New Guinea giving talks on China and the like and this was just when the situation was starting to turn in China, in other words they thought they were getting on top of the virus. And at that point the Chinese convened a teleconference with the entire cabinet of P and G and I think the Solomon Islands, to give them a talk about how to handle COVID-19. And I thought that was just remarkable. They were so fast, they’d barely drawn breath from battling back the virus and they’re on the front foot in this propaganda campaign.

Richard McGregor:

And it was obviously a global campaign because the Pacific Islands are important, but they’re not the biggest front for China’s global push. And there they were convening the entire cabinet and the Solomon Islands to in an exercise of what we might call soft power, teaching them about the virus. Now since then, for example Solomon Islands tests for the virus where were having to be sent to Australia. The Chinese said, “Oh, we’ll come and do them for you.” As a response to that, Australia has actually sent the Solomons their own test kits so that they can be done there. So, yeah there’s definitely a contest going on. In Port Moresby you can see Chinese construction sites everywhere, that they look just the construction sites I used to see Beijing.

Richard McGregor:

For good reason they’ve got the exact same signs outside them, the same companies, the same sort of safety signs in Chinese and bad English. And of course, Chinese workers were drawn and imported at the expense of the locals. I asked many of the Papua New Guinea friends up there why do you allow this? What about you’ve got massive underemployment in your country. And they said that well, the Chinese just insisted on it. So yeah, it’s a big contest in the Pacific and fundamental one for Australia. I think the federal government has done the right thing to focus on it. The problem with Australia I think often is we have excellent well-meaning policies, but then the execution falls away. And China isn’t going away from the Pacific so we’ve got to stick with it for a long time.

Misha Zelinsky (host):

No I think it’s absolutely critical, it’s one area hopefully that there’s bipartisan support. I mean the Pacific essentially is Australia’s geopolitical neighborhood so it’s something that we need to keep an eye on. I’m curious about your take on criticism of the CCP regime by those in the West. Clearly at the moment Donald Trump for the reasons we’ve already discussed, that Macron story but also he’s domestic political reasons he’s been calling COVID-19 coronavirus and calling it the China virus. I mean, where do you see the differences between criticisms of the Chinese Communist Party, China as a nation state? What’s fair and what delves into racism? Because often you have a situation where the regime, the CCP very quickly come out and say any criticism amounts to racism. Which is clearly untrue, but where is the line there and how do we manage that when we’re looking at both our domestic politics but also geopolitically in this contest between democracy and autocracy?

Richard McGregor:

Yeah, it’s a bloody hard question. In Australia, we have a very sort of racist history in Australia at the gimps, that’s obvious to anybody. We had an anti color bar in immigration till about ’65 or ’73 or however you decide to define it. Since then I think we’ve opened up remarkably and I’m sort of a glass half full on all this, but we’re being tested right now. I guess there’s two things to mention here. It’s very painful to see all the headlines in papers in Australia now about Chinese profiteers on masks and this, that and the other as though the only carpetbaggers in the world are Chinese and not of any other race or color.

Richard McGregor:

I have some sympathy for the Chinese companies in Australia, which sort of bought up all the masks and the PPE equipment in January and sent to China. Well, there was an emergency then, they’re now bringing it back here. I don’t know whether they’re price gouging or not, and if they are price gouging then something should be done about them. But it’s just seems a really easy, cheap, free kick in the tabloid and newspapers and maybe sort of you know prodded on from his sick bed by Peter Dutton. And I think we have to be really careful about that because we end up with people of Asian descent no matter where they’re from, being screamed at on the streets and the like and that’s bad all round.

Richard McGregor:

On the issue of the so called China virus, Chinese virus or Wuhan virus now look, I would never call it that and I don’t know whether it’s racist on not I mean. But I’m a little bit reluctant to allow the Chinese to play the victim card on this account. We have Japanese encephalitis, that’s what it’s called in Chinese newspapers. We had the Middle Eastern respiratory syndrome, We had Spanish flu, which by the way started in Kansas in America, not in Spain.

Misha Zelinsky (host):

It is that right? That’s interesting.

Richard McGregor:

Yes it is. It was only sort of came up and was reported in Spain. But the WHO I think because the Japanese complained about Japanese encephalitis I think tried to encourage people as of a few years ago, not to attach geographical names to diseases and fair enough. I think. But it is funny or interesting I should say, not funny. If you look at Chinese papers from say five weeks ago The Global Times, some of the headlines there talked about the Wuhan virus. And guess what? They’ve gone back in recent weeks and changed the headlines on the online stories and they are no longer calling it the Wuhan virus.

Richard McGregor:

But personally, we should speak truthfully don’t shy away from the fact about where this started and the problems of the initial cover up. That’s all fair game, but trying to use this as some sort of political cajole as U.S Secretary of State Mike Pompeo did recently at the G7 meeting. He wouldn’t agree to a communique until the word Wuhan virus was in there and of course there wasn’t a communique as a result. I think that’s pointless and not the main game and unnecessarily stigmatizing.

Misha Zelinsky (host):

So I mean, one of the things I think we’re grappling with here. I mean, traditionally people sending I suppose goods back to their homeland probably not an uncommon event in Australia’s history. The difference I suppose here is we’ve never had a situation where we’ve had an authoritarian regime which seeks to control its diaspora in other nations. So I mean, I’ll be curious to get your take on how worried we should be by CCP interference in Australia’s institutions, the United Works Front Department which is the propaganda wing of the CCP. How worried should we be about that when you’ve got former ASIO head saying look, “Essentially we’re being overwhelmed.” I mean, how concerned are you about things that? And then how do they play into things where you have seemingly China on a global scale, not just from Australia using its it’s diaspora networks to essentially source goods from beneath the nation states.

Richard McGregor:

Yes. Well once again, it’s a really difficult issue. On the issue of diaspora network sourcing goods, sometimes that can be great for trade. I mean, people have complained, I’m sitting in Sydney as I talk to you and Michelle and I listened to Alan Jones and Ray Hadley in the morning, the shock jocks, and they’re often complaining about the so called diagos the people who grab milk powder off the shelves here and send it back to China knowing that they’re getting a higher price. Now that’s no good price gouging but the other way of looking at it, these people have established what could be a lucrative trade for Australia.

Richard McGregor:

So instead of sort of demonizing why don’t we take them over? Why don’t we use it? Why don’t we make ourselves a base for which the Chinese would be dependent on to buy these things? So I kind of think in some respects we approach it the wrong way. Now onto your bigger point of how we handle the diaspora issue, it’s a really difficult issue. A lot of Chinese in Australia feel singled out over a lot of heavy press reporting in recent years about overseas Chinese and infiltrating the Labor Party and the Liberal Party of course.

Richard McGregor:

And not being loyal to Australia and that’s extremely hurtful thing to be told. But the truth is the problem starts in many respects in China, in the CCP with Xi Jinping because they’re very experienced at this kind of work. Saying that to these people your Chinese, your first loyalty should be to China. So how do we respond to that? It muddies the waters, it makes it very difficult for Australian institutions to manage when the CCP is quite openly targeting these people to support China. So it’s a day to day proposition and a very hard one to get right on every single day.

Misha Zelinsky (host):

The other difficulty of course is essentially the CCP has been very good at infiltrating all the I suppose the ethnic groups, the Chinese ethnic groups and taking control of those institutions. I mean, how do we push back on the independence of those institutions including things the Chinese language media in Australia, which a lot of it is a mouthpiece straight from the party? How do you see that challenge?

Richard McGregor:

Yes. Well the Chinese community in Australia is actually extremely diverse, some have been here for decades. The 70s we got a lot of people after the Beijing crackdown in 1989, we’ve had waves in more recent years. We’ve got rich people, we’ve got poor people, a lot of the Chinese middle class as well, very varied. A lot of the evangelical Christians and the like. So it’s a diverse community but as you say, the community groups which represent them and the newspapers which speak to them are not diverse. They are almost entirely pro PRC and the newspapers in fact basically censor themselves along PRC lines. Now, I want to make an important distinction here. There’s nothing wrong with being proud of China’s success since 1980, that’s quite natural.

Richard McGregor:

That doesn’t make you a CCP student and we’ve got to be careful about that. But nonetheless as you say, the control of the key groups or the mollifying of them if you like, is really striking. So we’ve got to be very aware of that. Where it’s a problem, we’ve got to be very open about it, sunlight helps. Everybody needs to understand how the Chinese political system works so we can get a bit of, a hate to say this, nuance into the debate. We can make judgments about whether something is in the interests of Australia and whether it’s not. But don’t target the entire community with a single brush because the community is diverse and we would like them to stay diverse in both their political opinion, especially I would say in the political outlook.

Misha Zelinsky (host):

I think that’s a really critical point. I mean, I think one of the mistakes we make in the debate is treating “the Chinese community” as a monolithic group. So I think it is very important, but it is also kind of that challenge between that pointy end that seems to be controlled by the CCP and how we navigate around that. The other question I want to ask you and sort of going back to some of the things we were talking about earlier relating to a repression and use of information in this total campaigning both globally and domestically. How do you see technology now seemingly… Once upon a time we thought technology and information was going to favor democracies. Now it seems democracy is being overrun now by misinformation, challenging of sources, impossibility of working out what truth is. The Chinese are very good at it, the Russians are excellent at it. I mean, how do you see that challenge and how do democracies push back against that?

Richard McGregor:

Yeah, very good question because you can make sure that the Chinese are pushing on all fronts. They’ve got their domestic internet locked down. They want to at the same time I would say transform or reform in their words, their global internet governance. They’ve got this thing called cyber sovereignty. In other words, they resent the fact that the internet having been set up mainly by the U.S and Western countries has been sort of governed by NGOs set up by those countries at the time. China wants to change that.

Richard McGregor:

Twitter is a great example of how China has it both ways. Inside China Twitter is banned outside China the Chinese government through its various ambassadors use Twitter remorselessly to promote their cause and spread all sorts of information. That same kind of access to Chinese citizens on Chinese social media, on Weibo and things that, the Twitter equivalent is not available. One of the big things you touched on there of course is Western countries being awash with misinformation and not much of it comes from China and Russia.

Richard McGregor:

And I think one of the big tasks is particularly to if not reform ourselves, is to get better ourselves. To make sure our institutions are protected and resilient, that we have a free and open media that is both sort of independent and healthy. In other words, that should, not entirely help crowd out as much misinformation as possible. And if we’re successful our rivals will be less successful. That applies particularly to America, but it certainly applies to Australia as well.

Misha Zelinsky (host):

Yeah. I wanted to get your take on… I mean, China and the CCP will have to focus a lot of the debate when in discussions about the economic benefits to relationship with the Chinese state. I mean, how critical do you think the issue of human rights is? It’s dropped away now with COVID-19, but the way your issue was certainly getting a lot more attention probably in 2019. How do you see the importance of continuing to challenge China’s human rights record? A lot of countries shy away from it. Do you think it’s important that we continue to step up in that space?

Richard McGregor:

Well, it’s certainly important, but I do think Australia’s ability to lead on this is limited. Unless other bigger Western countries are taking the lead, then it’s going to be very difficult for us to do that. The Chinese don’t even bother to have the bilateral dialogue with Australia on human rights, which we conducted for a number of years. They steadily downgraded the level of representatives they would send to it, now they don’t bother with it at all. In the case of the Uyghurs for example, yes we should continue to pursue that, particularly in where Australian citizen involve, we should continue to publicize it.

Richard McGregor:

The media should continue to write about it. Think tanks like mine should continue to have events about it as well. But we don’t want to have too much expectations about what we will be able to achieve other than keeping it on the agenda. Now I may sound a little bit not as tough as some people would like, but this is not a new issue. China when it was much weaker and poorer didn’t respond very much to what pressure we were able to mount then and what pressure of course the U.S was able to amount then. And I’d say that’s even more the case now.

Misha Zelinsky (host):

But certainly, I mean and I think it’s really troubling that use of the technology in repression of Uyghurs in particular with at least one million people locked away it’s something I think we need to keep striving to draw attention to. But you’re right, it is extraordinarily difficult certainly from Australia on its own, but even from a global coordinated effort. Lastly, I just want to ask your opinion. I mean, we’ve got this big contest, you’re an expert in the CCP and its workings and it appears like this perhaps and it’s of their narrative to project themselves as a irrepressible monolith. But are you confident or an optimist when it comes to democracy prevailing in this contest or are you bearish at the moment in terms of us getting our act together and prevailing?

Richard McGregor:

I’m a little bearish. I do think China’s going to have many more problems than people appreciate or not every… For example, demographics. They’re going to get old very rapidly before they’re rich in a per capita basis. They’ve got enormous environmental problems particularly with water. The economy will not grow even at 6% a year for too much longer. So they’ve got enormous problems, but they’ve had enormous problems for years and they keep exceeding expectations in their ability to manage them. So in that respect, I don’t underestimate them and I think we shouldn’t underestimate them. So then it comes back to your question, can we get our act together?

Richard McGregor:

Well, if the U.S doesn’t get its act together, then it’s a whole new world. We’re already sort of part way down there in Australia by trying to establish much more regional multi-lateral partnerships, tighter relationships with Europe perhaps as well. That is going to be a whole new ball game once the Ex-Americana doesn’t so much fall off the cliff, but no longer becomes the dominant force in the region. This is a once in a two or three generational change in our foreign policy situation, and this it’s going to be a tough struggle I think some decades to come. So I just hope Australians can step up to the mark really and be prepared for it.

Misha Zelinsky (host):

Do you see the election in 2020 in the U.S in November as critical to that then? Given that second Trump term could really lock in a lot of those trends you just discussed?

Richard McGregor:

I totally do. I’m sorry to say, but if Trump is re-elected that is a disaster. I’m not saying everything he’s done is bad, but he’s just corrosive for U.S institutions, the importance of at least some level of truth and transparency in a democracy, in stability, in using expert advice. I don’t know what’s going to happen in 2020. I’ve always thought he’s going to lose actually because I think there’s so many Americans, you can look at all sorts of elections which have taken place, the democratic primaries, the midterms two years ago. So many people want to vote him out, it’s just a matter of the candidate who the Democrats field on the day, most likely Joe Biden we’ll see can get those people out. But I think you won’t undo the damage that Trump has done quickly and I should also say of course, Trump might be a symptom as much as a cause. He didn’t land in American politics a spaceship, the circumstances, the soil had been tilled for many years making way for him. But if he gets another four years then I think that will be devastating for global democracies.

Misha Zelinsky (host):

Well, Richard on that very happy note, I’m going to switch to our final question that I ask every diplomates and I was trying to find something positive to switch us to, but you’ve defeated me. But I’ll get across there in an enormously clunky Segway, but three people coming to a barbecue or foreign guests coming to a barbecue at Richard’s place in Sydney. You’ve noted that you’re in Sydney, so who would they be and why mate?

Richard McGregor:

Okay. I guess we want a Chinese guest. Let’s get Deng Xiaoping along with an interpreter because of his sheer sense, the arc of history of his life is quite remarkable. I think he would be terrific. I would like, and this is by the way I’m not saying all these three people would get along. I’m just telling the people I think-

Misha Zelinsky (host):

It might make it more interesting-

Richard McGregor:

More interesting. I think this is a great man of the old elite foreign policy, but a great thinker was a Harry Truman’s Secretary of State Dean Acheson who was pivotal in setting up the post war world. And a third person who I think might be a good peace maker amongst those or somebody who could step in when the conversation froze would be the late Kofi Annan from the UN, a great African diplomat. Many people would criticize him over many different things. He was in a job where he was never going to please everybody, but I think he also had a fantastic career as well. So he’d be my third guest.

Misha Zelinsky (host):

Well, they’ll be fascinating conversations around that table. So we’d love to get a podcast of that one mate so make sure you record it if you do happen to get everyone on.

Richard McGregor:

That’s true, yeah. I’m sorry to sound so gloomy, I’m really sounding gloomy these days and maybe it’s been locked up inside and I can’t exercise enough.

Misha Zelinsky (host):

What is that? In fairness Richard, we are in the middle of a global pandemic so you are entitled to be a little gloomy right now in mate.

Richard McGregor:

Yes. Well, next time I’ll be happier, I hope.

Misha Zelinsky (host):

Indeed. But look, thank you so much for joining us. You’ve given a lot to think about and I really appreciate the chat. So thank you so much.

Richard McGregor:

Thank you very much for having me on. I appreciate it.

 

 

 

Dr Michael Fullilove: Why middle powers matter – managing China in an era of Trump.

Dr Michael Fullilove is the Executive Director of the Lowy Institute. An adviser to Prime Minister Paul Keating, Rhodes Scholar and renowned foreign affairs expert, Dr Fullilove is a widely published author and a much sought after global commentator.

Misha Zelinsky up with Michael for a chinwag about how Australia should interact with a rising China under Xi Jinping,  the madness of US politics and what a second Trump term might look like, how open systems of government still have the upper hand, why the world might be one elected leader away from a new sense of calm, and why – despite everything – Michael remains an unabashed optimist about the future. Be sure to listen to Michael’s special shout out to the ‘Deep State’!

 

EPISODE TRANSCRIPT

Misha Zelinsky:             Michael, welcome to Diplomates. Thank you for joining us.

Michael Fullilove:          Thank you for having me.

Misha Zelinsky:             Oh, pleasure’s all mine and listeners. Now, so many places to start obviously, but you’re a noted internationalist and probably a tough time to be an internationalist with global politics being as they are. There’s so many reasons to be pessimistic.

Michael Fullilove:          Yes.

Misha Zelinsky:             You talk a lot about being pessimistic, would you consider yourself a pessimist or an optimist about the future of our foreign policy and the world more generally?

Michael Fullilove:          I’m an optimist by instinct and by nature. I think there’s lots of reasons to feel down at the moment because you’ve got a leader of the free world who doesn’t believe in the free world and doesn’t want to leave it. You have a West that is stepping back from its traditional role, you have non democracies up on their hind legs, you have an international organization in the UN that’s sort of unable to solve the global problems that we it tasked with solving.

Michael Fullilove:          So there are a confluence of factors that make one pessimistic, but as against that, I never underestimate the genius of humanity to get its act together and solve problems when they come into focus. And also never underestimate the role of individuals because I think structures matter, structural reason, the world changes for vast impersonal reasons, but also because of individual decisions that individual leaders make.

Michael Fullilove:          If Donald Trump, for example, I’m sure we’ll come to him later, if Donald Trump is not reelected president, if a Democrat of any stripe really is a reelected president, I think that would be a burst of adrenaline for the international system. I think a lot of the world would say, “Wow, maybe we’re getting back on track.” Maybe they’d be more impetus to solve some of these bigger global problems.

Michael Fullilove:          Similarly, if we go to the UK, I don’t think Brexit would have happened. You can’t explain Brexit without the role of one or two individuals, David Cameron and Boris Johnson. If Hillary Clinton had won the election four years ago rather than Donald Trump, then we’d probably be living in a different world. So we are at… the sort of pendulum is swinging in a bad way at the moment, but I always believe the pendulum will come back.

Misha Zelinsky:             And so do you think though, this period that we’ve had, this 30 year period that people seem to want to hark back to around the liberal world order, is that an anomaly though? Are we just going back to the way things always have been, which is big power politics and big strategy or strategic role rather than the world harmoniously operated by one hyper power?

Michael Fullilove:          I think that it’s all to be played for. We don’t know the answer to that. It’s obvious that power politics is rushing back, and if America is considering America first, then it’s natural for other countries to do that. But I do think that the benefits that were provided by the liberal international order that existed came into being sort of after the second World War were incredible in terms of economic growth.

Michael Fullilove:          There were so many wonderful things that were achieved in that period that I’m not ready to write it off and say, “No, we’re out of the garden, went back in the jungle.” I think we can get back to the garden, it’s all to be played for. but there are a few big decision points coming up and one of them is the U.S. election.

Michael Fullilove:          I think if Donald Trump is reelected, I think it becomes much harder to maintain that garden. Suddenly the world will adapt to that, they will start to say the United States, which is in the cockpit of the world order has really changed, it’s a different country from what we thought it was, and that will have all sorts of flow on effects.

Misha Zelinsky:             Let’s talk about us politics. Politics has gone a little bit mad in United States. You heard the Iowa result, one result, we’ve had the president recently acquitted by the Senate, Republican Senate of largely partisan basis apart from Mitt Romney. What do we make of the madness of U.S. politics leaving aside global politics? And how does that flow into… Because you’ve painted the positive picture, but let’s talk about the negative picture?

Michael Fullilove:          It’s very hard for an America far like me. Bear in mind that I spent a lot of my life reading about the U.S. politics and the U.S. role in the world. I wrote a book on Franklin Roosevelt who helped to establish the international order that we see crumbling in front of us.

Michael Fullilove:          So for me to go through even just the last week or two, the incredible incompetence of the Democrats in Iowa, the sort of partisan acquittal of the president really after really atrocious behavior in relation to Ukraine. And then the state of the union, the garishness, the grotesque circus-

Misha Zelinsky:             Is almost like an Oprah Winfrey TV special.

Michael Fullilove:          And I don’t acquit the other side either. I thought-

Misha Zelinsky:             Tearing up the space?

Michael Fullilove:          … Pelosi’s bit tearing up the space. The whole thing, it feels like the country’s coming apart at the seams, doesn’t it? So look, voters of New Hampshire, we look to you to restore some order.

Misha Zelinsky:             And so, you’re an avowed Americanist, everyone knows that. How does the world operate without its traditional leader? Or can it operate without its traditional leader?

Michael Fullilove:          It’s hard and it’s a challenge that we have been trying to come to terms with really since the second half of the Bush administration, I would say. I think in the first administration of George W. Bush, the first term they overreached, and then in the second term they started to step back.

Michael Fullilove:          Obama for all his qualities had a much more limited view of America’s role in the world and he hoped that as America did less, other countries would do more. You remember that was the sort of the hope that in the middle East that the Europeans and someone would step up as Americans tried to lead from behind.

Michael Fullilove:          And what actually happened was that as America did less, everyone else did less too. So this is the problem, it’s hard… I think middle powers like Australia should do more with other middle powers.

Michael Fullilove:          I think we should do our best to hold the system together until the fever passes in Washington, but it’s hard because middle powers don’t make the international system great powers, super powers make the international system. The international system tends to acquire some of the features of the most important powers.

Michael Fullilove:          So I don’t know the answer to your question, Misha, we’re living through an experiment. I think all of us have to do what we can to hold the system together and hope that America returns to some form of normalcy.

Misha Zelinsky:             And you’re absolutely right, history is governed by events that are these pivot points, Brexit, which we’ll come to, the 2016 election is perhaps one of the most classic in contemporary politics, but let’s fast… And you’ve painted a rosy picture potentially of what a democratic presidency could do for America, but the global mood so to speak, but let’s fast forward to a second term of a Trump presidency.

Misha Zelinsky:             Strikes me that much of Trump’s worst do you think have been largely contained by the institutions? May be almost struggling to the point now he’s busting out against them. Can the institutions survive a second term of Trump?

Michael Fullilove:          It’s the big question and having just come back from the United States, it feels like we’re probably more likely than not to have to grapple with that question. Look, the glass half-full view says that as you say, “The institutions have more or less held together the free press, the U.S. civil service to some extent, the deep state [crosstalk 00:08:24]”-

Misha Zelinsky:             The national security systems.

Michael Fullilove:          Thank God for the deep state.

Misha Zelinsky:             I’m going to end up with a lot of [ATMS] from some interesting people on Twitter, but anyway.

Michael Fullilove:          Bring it on, bring it on. So that’s the positive view, and of course… I’ve said to my American friends, “Don’t forget halfway through a second term, a president tends to enter the lame duck phase and event start to move on, and often the most important changes that a president brings in happen in the first term.” So that’s the glass half-full.

Michael Fullilove:          The glass half empty version says that we will have Trump unleashed, the deep state will wither away. It will be impossible to… We’ve already seen him come back at issues again and again like free trade, and alliances, and other things and this time he will overcome the resistance. I suppose we also have to think, even if he limits himself to two terms and you’d have to say based on everything you see about him, I don’t know why he would think the constitutional limitation should apply to him.

Michael Fullilove:          What happens after Trump? Does the Make America Great Again movement survive Trump? Does someone else called Trump run for president in four years time? What does that do to the democratic party? This is the fear that if you have two terms of Mr. Trump, does that really knock the country off course? And does it start to spiral away like Darth Vader’s TIE Fighter? No.

Misha Zelinsky:             He goes from being an anomaly to systemic-

Michael Fullilove:          Yeah.

Misha Zelinsky:             … force.

Michael Fullilove:          The new normal.

Misha Zelinsky:             That’s right. And so that I think is an interesting question to pose. We could probably talk about Trump all day and we will return to U.S. politics in a global context. Jumping across the pond as a word to the UK, Brexit. It’s now done. One of the things that people feared was that the UK leaving Europe would be the first of a domino effect. Next would come in France after that might come Germany.

Misha Zelinsky:             Do you think there’s more to come in Europe? And what’s the net impact of Brexit on Britain, but also on the European union, which is critical to the liberal world order? It’s a sleeping giant in many ways.

Michael Fullilove:          I think the good news is that Brexit has been such a shamble that no one in Europe wants to follow the Brits. And so you remember after the Brexit vote, people were talking about Frexit, and Grexit, and Spexit, and all the rest of it. But now I don’t think… I think everyone looks at that and says, “No, we don’t want that.”

Michael Fullilove:          Now, one possible wrinkle on that is Scotland where suddenly you’ve got a country in a nation in Scotland that is in a very different place on Europe and many other issues from England, so that’s a caveat. I don’t think Brexit will break up Europe, but I think what Brexit will do is first of all, it will make Britain poorer and more distracted than it would otherwise have been.

Michael Fullilove:          And as you say, we’ve historically relied on Britain to be one of the tent poles of the international order, the most internationally focused European country, the one with the greatest, with big economy and outward-looking economy, trade dependent, strong military and intelligence services, and it has been blown off course, it’s been heavily distracted for five years and it will continue to be that way.

Michael Fullilove:          I’m not a total bear when it comes to Britain’s future, I think Britain’s got a great future, but I think it’s going to be less than what it would have been if it had stayed in Europe. And to come to the other bit of your question, I think Brexit will make the EU smaller by definition, weaker, poorer, less liberal, more statist, less pro American, less willing to stand up to Russia.

Michael Fullilove:          So I think the net effect of all this is to benefit enemies of the West, adversaries of the West in the Kremlin or [Xiao Nan Hai 00:12:48] and elsewhere.

Misha Zelinsky:             And so do you think a Scottish independence vote is likely? It’s interesting question, isn’t it? Because the Scots voted to stay perhaps principally because they want to stay in the EU and then their friends down South have now taken them out of EU, it’s interesting problem politically.

Michael Fullilove:          I hope it doesn’t. Look, I hope it doesn’t because all the… I just think Scotland adds so much to the United Kingdom that… My people are from Ireland and England, not from Scotland, but I just think it would be a shame for Britain as a country, but also again, it would further distract, it would be more lead in the saddles for Britain.

Michael Fullilove:          And really someone like me wants a Britain that gets over this, that does get Brexit done and gets over Brexit and comes back to playing a confident outward looking role in the world. We need that. And another extended debate about Scotland and the impoverishment of the country that would come from Scotland, exiting can only be bad news for that.

Misha Zelinsky:             And so you mentioned the Kremlin and Russia, and clearly they had a hand in Brexit, and they had a hand in the 2016 election famously, and there’s talk that they might have a hand in the 2020 election. But I want to talk a little bit about open and closed systems because this seems to be the big trend we’re heading towards is that for a long time we had a globalization led by United States and more democracy and there’s going to be integration, et cetera.

Misha Zelinsky:             And what we now have is two worlds, one that’s characterized by a liberal openness of information, of people, of exchanged and increasing closed essentially autocratic systems. Traditional theory has been the open systems would win. Bill Clinton nailing jello to a wall, good luck with that. If you want to control the incentive, of course, it appears to be the case that the closed systems are winning and using the openness against them.

Misha Zelinsky:             Why do you think that is the case and what’s the way for democracies to guard against that without losing the closing themselves?

Michael Fullilove:          I think in the end, open systems work better, and I think to return to the metaphor of the pendulum, the last 12 months or 24 months, we’ve gone through this period of the strong men where we were worried by the rise of the strong men. But if you look at how countries like Russia and China are doing now, would you say that closed systems are working when you look at Russia’s economy, the fact that it’s in a demographic death spiral?

Michael Fullilove:          Russia has an economy not much larger than Australia’s.

Misha Zelinsky:             That’s right.

Michael Fullilove:          Now, Mr. Putin plays a poor hand well, and he invests heavily in his military, in his ability to cause problems and cause mayhem elsewhere. But in terms of delivering economic growth, and happiness, and good health to the Russian people, that system is a failure. If you look at China, it’s a different story I think.

Michael Fullilove:          You have to acknowledge the success of the Chinese system in the last few decades as it opened up, but if you look at coronavirus and you look at the reporting now about how Chinese bureaucracy has refused to come clean quickly, you can see that that closed system to come to answer your question, doesn’t respond well to these shocks. An open system that is open to science and open to transparency will work better in the long run.

Michael Fullilove:          So I believe in our system and I sometimes I want to shake people in the West stop, and shake them out of their topper and say, “Don’t underestimate the system that our fathers and mothers fought for and our system is better than their system.” And I’ll tell you what, if we could elect a couple of leaders in big Western countries that would change the psychology.

Michael Fullilove:          To come back to the structural versus individual, don’t underestimate that the fact that Mr. Trump is the president of the United States, the fact that Merkel who was so impressive for a long time is fading out of the picture, there’s not that many big Western leaders that you can look to and say that they’re really impressive.

Michael Fullilove:          Whereas as I said, say Putin seems to play weekend well, Xi Jinping is obviously sort of a world historic figure. I admire Macron in many ways, and I think if we could get a couple of other Western leaders out there that might change the psychology a little bit.

Misha Zelinsky:             It’s interesting though, isn’t it? How much do you think the crisis of confidence within the West, not just in the leadership, but almost in the system itself? You look at polling, which says, “Younger people have concerns or they don’t think democracy is the best system.”

Misha Zelinsky:             Or just generally that the West doesn’t seem to have the swagger it once did maybe in the Cold War days where literally believed in the system and self-evidently projected in that way. Do you think there’s something to that? So that may happen?

Michael Fullilove:          I do. I think that… What’s happened is first of all, the forever wars that disenfranchised a whole generation of people around the West who didn’t believe in those wars, and also who not only thought the wars were wrong, but then watched as the Wars were not won. And their system seemed unable in Iraq and Afghanistan and elsewhere to win those wars.

Michael Fullilove:          And then the global financial crisis I think was the second blow of the hammer and the ongoing effects of that’s had, inequality. I think these are the problems that these have shaken our faith in the system. Now, it’s interesting when you mention that polling.

Michael Fullilove:          The Lowy Institute polling for a number of years has found those concerning results among younger Australians that they don’t necessarily believe that democracy is the best system, but what’s interesting is that we dove deeper a couple of years ago and did qualitative polling as well to try to work out why we were getting those quite shocking results.

Michael Fullilove:          And younger Australians didn’t say that they necessarily believe that authoritarian government is better, it was more to do with disillusionment about how Australian democracy is working. So concerns that the parties were not different from each other, or the politicians were only in it for themselves, or that the system seemed to be broken.

Michael Fullilove:          I think there’s a grain of hope there. I don’t think young Australians want an authoritarian system, but they want our system to work better, and so do I. I would like to have politics in Australia and around the world that is solving the problems rather than being concerned with their own position in the hierarchy.

Misha Zelinsky:             You’ve spoken a couple of times about inspiring leaders. Are there any leaders that you can see on the horizon you think that man or woman is someone that get us to this place?

Michael Fullilove:          Well, I mentioned Macron. I love the audacity of Macron, I love saying-

Misha Zelinsky:             Starting a party from nowhere and just-

Michael Fullilove:          Incredible, amazing. Imagine that in the Australian context, not just becoming president under the age of 40 have a nuclear power, but shattering the old parties hold on the political system. Buttigieg is showing similar-

Misha Zelinsky:             Yeah, he’s interesting.

Michael Fullilove:          … audacity in a way. But I think it’s too soon to put our hopes in him. So I like Macron, I like the fact that he thinks big, he thinks about these big issues. I would also say I wouldn’t again, at the risk of getting mobbed on Twitter, I have much more time for Boris Johnson than the many people, and I think that I disagree with Boris on Brexit completely and I think Brexit was totally wrong headed for the UK.

Michael Fullilove:          But I think Boris is more of a liberal, cosmopolitan leader than many people think. I think his instincts on immigration and questions like that are much more liberal than people think. I think there’s a glimmer of hope there and just to offer a third leader if I can. For some years I’ve had an eye on Keir Starmer who seems to be the front runner at the moment to lead the labor party in the UK.

Michael Fullilove:          Starmer is someone of real… who had a distinguished career as a prosecutor, someone who’s a sort of fully formed human being with a hinterland. Very interesting guy, and I’ll tell you, if he could… To go from Corban to Starmer, that would be a big battlefield promotion, so fingers crossed.

Misha Zelinsky:             Okay. You’re clearly passionate about democracy and someone believes in heavily. How concerned you about this notion of political warfare and the border [Kratz] dabbling in Western democracy using social media or weaponizing institutions against Western liberal democracy? How concerned are you about that advent because it’s reasonably new, but it seems to be getting worse not better?

Michael Fullilove:          It is concerning, but here’s the good news story is that Australia has responded. The whole Australian system has responded to attempts by foreign interference, especially from the Chinese party state in the last couple of years in a way that’s very interesting. People overseas often talk about Australia as the canary in the coal mine, but I say to them, “Some canary.”

Michael Fullilove:          The problem with that is a canary has no agency, does it? It’s just a bird in a cage and it either dies or it doesn’t die. Whereas actually what Australia has done is stood up for itself, and that’s partly policy changes at a government level. It’s partly the political class on both sides coming up with a new bipartisan approach. It’s also the media.

Michael Fullilove:          There are probably half a dozen journalists in Australia whom I won’t embarrass by mentioning, but it’s the scoops that they have led, especially in the old Fairfax press actually and in the ABC, not exclusively, but especially there that has thrown light on some of the problems in the system.

Michael Fullilove:          So if you ever thought that an individual can’t make a difference in society, that’s not true because those stories forced the political class to focus on it first, forced all of us to focus on it. And now a lot of countries abroad are saying, “Okay, Australia seems to have done a few things right here.”

Michael Fullilove:          And you start with transparency and throwing some light on what other countries are trying to do, how they’re trying to get their hands in the stuff of our soul.

Misha Zelinsky:             I think you’re absolutely correct about the press. I think we are critical of the press and its role at times, but I think they’ve done an outstanding job in that context. Now, switching to China and the critical nature of the Chinese relationship to Australia’s future. How do you see Australia managing its relationship?

Misha Zelinsky:             Is our relationship with the U.S. central to this? Because a lot of people say, “We don’t have to choose between the economic trade relationship and our security relationship.” But increasingly those two countries are choosing at least strategic rivalry for not shifting towards some kind of cold war. What is our position within that?

Michael Fullilove:          I think on China, I think our policy is properly a mix of engaging with them battles so hedging, and it has to be an intelligent mix of those two, and you’ve got to work out when you engage and when you hedge. I think we should cooperate with China where our interests overlap, and sometimes our interests will require us to say yes to China even when the United States says no to China.

Michael Fullilove:          So I don’t think we should look at China always through an alliance prism. I think we should be ambitious when we see opportunities to pursue our interests. But I think when our interests diverged from China’s interests, we have to be very tough minded and very clear and consistent about why we’re doing something, we’re going in a different direction.

Michael Fullilove:          And that’s very hard to do, especially when your own politics is as fragile as ours. We’re not in the freezer with China, but we’re kind of in the bar fridge where they’re not that happy with us, and that’s fine. We’ve stood up for ourselves, but Beijing hasn’t really put the weights on us in the way that it has put the weights on the South Koreans and a couple of other countries. So it will be interesting to see how we respond if they ever do.

Michael Fullilove:          I think the other thing is to say that the U.S. matters because like most Asian countries, we want a U.S. engaged in the region because it helps to provide some balance to the force if you like to go back to the Star Wars metaphor. And it’s easier to maintain our freedom of movement and independence when there’s at least two big States in the region.

Michael Fullilove:          And the other thing that I think is important for us to think about when we think about China is not to shrink Asia to the dimensions of China. And not to forget that there are a number of other big Asian countries including Japan, and South Korea, and Indonesia and Vietnam, and others, and we need not focus on China both in positive and negative ways to the exclusion of those other countries.

Michael Fullilove:          We need to thicken those countries and have a sort of a balanced Asia relationship and not too focused on China.

Misha Zelinsky:             That’s interesting because one of the things undercooked is clear relationship with India. Certainly, our relationship with Indonesia, Japan, South Korea, but do you think there’s a case for deeper links between the democracies of the Asian and Southeast Asian region and working together, not necessarily as an avert way to the Chinese Communist Party, but just as a way of promoting democracy in the region?

Michael Fullilove:          Yes, I do. I think that it’s totally legitimate for democracies to get together and to work out where their interests overlap, and if we believe in our system, we shouldn’t be embarrassed about saying that. I would also say though that there are some countries that are not democracies but are not necessarily in the China camp as it were.

Michael Fullilove:          And it’s useful for us also to thicken our links with those countries, so yes, I think we should be… I think India is a big opportunity for us, but I’d also like us to do more with a country like Vietnam that’s certainly not a democracy, but that has different interests from China’s.

Michael Fullilove:          And the more we can thicken those connections, the more we can complicate the region, the harder it is for any one state to dominate the rest of us. And that’s what all of us want, we all want the freedom to make our own way. None of us want to live in another big State’s shadow.

Misha Zelinsky:             That’s a really interesting point. Speaking of big States and in the shadow, what’s your take on the Pacific in the way there’s been the Pacific step up, which is arguably Australia has been a little bit of sleep slip of the wheel given our importance in that region, but China has been exceptionally assertive in that area.

Misha Zelinsky:             How concerned are you about that in that particular context?

Michael Fullilove:          I think we’ve got a lot of equities in the Pacific and I don’t think we should get jumpy about China. I do think it would be inimical to our interests if a country like China were to establish a military base in the Pacific, and we need to be very nimble about how Pacific Island States are relating to Beijing.

Michael Fullilove:          But let’s not underestimate the strength of our connection to the Pacific, and one of the research products the institutes put out recently that I’m very proud of is the Pacific Aid Map where we tracked all of the aid to the Pacific from all the donors around the world, including China.

Michael Fullilove:          And one of the highlights from that index… from that map, I should say, is that Australia provides 45% of total aid to the Pacific, and if you add the Kiwis, it’s 55%. But if you read the papers, you think China’s aiding our lunch in the Pacific, but actually more than half of the aid comes from Australia and New Zealand.

Michael Fullilove:          And we still have these very thick person ties to China, and most Pacific elites know that sure there’s money to be had, there are commercial opportunities with China, but that in the end, Australia is a better longterm bet. Again, to go back to what we were discussing earlier, we have to be confident in ourselves, confident in our history and confident in what we bring to these other States.

Misha Zelinsky:             Just circling back to United States and Trump in the context of Pacific and Asia Pacific politics. One of the things that is notable about the Trump presidency is how transactional in nature it is. How concerned should we be about the nature of the alliance given the isolation, tendencies of the Trump presidency, given the transactional nature?

Misha Zelinsky:             How concerned should we be about the formality of the [inaudible] alliance in that context? Is it bankable? Can we take it to the bank or is it ultimately going to be another deal to be made or broken by Trump?

Michael Fullilove:          It’s a very good question. You’d have to say that the relationship between the Trump administration, the Morrison government is very strong really. So we’re not at risk in the way… The Eye of Sauron is not on us. But having said that, the truth is that Mr. Trump doesn’t believe in alliances and he’s said that consistently for 30 years.

Michael Fullilove:          Let me put it this way, it’s hard to think of a less reliable Alliance partner if your country was in trouble, someone who is less disposed to risking American lives and spending American blood and treasure in defense of an ally on the other side of the world.

Michael Fullilove:          Now, of course, you can’t shrink the American system to the president, and in extremists there’d be lots of people around the president saying this is important.

Misha Zelinsky:             And the links are deeper than the presidency.

Michael Fullilove:          The links are very deep and the deep state, again, thank goodness for the deep state and the deep states, but it has to be admitted that I think… Of course, every country, there’s like an Abacus in the capital and they’re constantly assessing other capitals in terms of reliability, and an intention, and capability and all that.

Michael Fullilove:          And of course, allies around the world are looking at the United States and looking at the president’s instincts and it doesn’t us more confident. That’s true.

Misha Zelinsky:             One thing that’s been very consistent about the Trump presidency has been his approach to the Chinese Communist Party, particularly the Chinese Communist Party under Xi. It’s a very different beast, modern China to even to China of five, 10 years ago. Do you think the world was naive about the rise of China and wasn’t live to the changes under Xi’s regime?

Misha Zelinsky:             Or have we been asleep at the wheel and say that the South trying to see, should we have been Sterner there? Could some of these sudsiness we’re seeing now had been dealt with by being a bit stronger earlier on? How do you see that?

Michael Fullilove:          I think that Obama for example, could have been firmer with China definitely, and I think Obama had unrealistic expectations. And I remember this because I was in Washington when he came into office and he really felt that the United States and China could form a group of two at G2 and they together solve all the problems. And I don’t-

Misha Zelinsky:             Which is funny, he was an optimist about these things.

Michael Fullilove:          He was. He was an optimist, yeah. But I think that was too optimistic. Yes, I think we misread it, and a lot of analysts misread Xi Jinping in particular, a lot of analysts. Most China analysts thought he would be a steady as he goes leader and not a transformational leader. So I think that’s true.

Michael Fullilove:          The question is now how do we deal with this new China under Xi Jinping where more and more power is being concentrated in the person of the president, where the country has great strengths as we see in military expenditure, and confidence and so on, but also has great weaknesses as we’re seeing in the coronavirus.

Michael Fullilove:          This is the big challenge for leaders, getting the mix of hard and soft, standing up where we feel that China is overstepping the appropriate bounds for a sovereign country, but on the other hand, not squeezing China and not acknowledging that. Of course, it’s a great power and it deserves certain progressives and it deserves respect. The mix of hard and soft is very difficult one to get.

Michael Fullilove:          And on Trump, I don’t really know what Trump’s settling point on China is because he’s very tough on China when it comes to trade, but I don’t think he really cares about security issues when it comes to China. Very hard to imagine Trump caring about half submerge water features in the South China sea. So let’s see where he comes down.

Michael Fullilove:          Today, he’s been tough on trade but not on other [crosstalk 00:35:54]-

Misha Zelinsky:             He’s been tough on 5G though, on techno nationalism, but arguably that’s a trade that he sees it as but.

Michael Fullilove:          There was that tweet, remember when he kind of hinted that if Xi Jinping gave him a good trade deal, maybe Huawei could get it back in. To go to your earlier question, the problem is everything is transactional for Mr. Trump. Everything is a deal waiting to be had.

Misha Zelinsky:             And so what would that mean for something let’s say Taiwan or Hong Kong? He was reasonably firm on Hong Kong, but do you think Hong… sorry, Taiwan is as big a red line for the United States as it is used to be under Trump?

Michael Fullilove:          That’s a very good question. That’s a very good question. I would defer to specialists on it because there’s so many different angles to it, but starting from first principles, not withstanding the vibrancy of Taiwanese democracy and the legitimacy in my view of Taiwan playing an important part in the role in the world, I think if it came down to a sort of a crisis and Mr. Trump had a 3:00 AM moment, I think he’s much more attracted by the idea of doing deals with Xi Jinping, the leader of a giant superpower than he is about defending a scrappy, tiny democracy.

Michael Fullilove:          That’s sort of from the first principles, but of course, as you know, the relationship between the militaries of Taiwan and the United States are very deep as well, so it has a lot of support in Congress in the media. So it’s a complicated question, but I don’t think Trump’s instincts play well for the Taiwanese.

Misha Zelinsky:             A sobering point to leave the formal part of our conversations, but we’ll now switch to the real meat of the debate, the thing that everyone’s been waiting for is barbecue of Michael’s three guests, alive or dead, but they’ve got to be foreign, they can’t be yours. I’m sorry to say [inaudible] but who would you have and why?

Michael Fullilove:          First of all, I like the fact that you do it as a barbe because everyone has who do you want to invite to a dinner party or whatever? And barbes are more fun than dinner parties anyway.

Misha Zelinsky:             It’s true. There’s more beer.

Michael Fullilove:          First of all, I would have to have FDR because I spent years writing about FDR, first of all for my Master’s thesis, then my PhD, then a book. And when you spend so long thinking about someone, you wonder always what would the guy be like, what would actually be like to meet. So that would answer that question for me.

Michael Fullilove:          I would have a strong hypothesis, which would be that he would be great fun because he always mixed the drinks in the oval office at about 5:00. He’d mix the martinis and have everyone in for cocktail hour. And he was just a charming personality, which is one of the reasons I wanted to write about him.

Michael Fullilove:          In fact, Winston Churchill said of FDR that meeting him for the first time was like opening your first bottle of Champagne.

Misha Zelinsky:             That is a hell of a rap.

Michael Fullilove:          Now of course we’re going to serve beer at our barbecue, but having someone who has a bit of bubbly to his personality would be good. Secondly, I would probably invite Grace Kelly because I’m a big Hitchcock fan and I loved her. She was such a charming, interesting, intelligent figure with such a crazy life story, and I love that period of all Hollywood. I love Hitchcock movies, and Billy Wilder movies and stuff like that.

Michael Fullilove:          And thirdly, to round it out because we’d need someone to entertain us, I’d have Bruce Springsteen because-

Misha Zelinsky:             Boss.

Michael Fullilove:          … I’m a big longterm fan of the boss. Love his sentimental blue collar view of American democracy, I love his love songs. He’s such an authentic character that I think he would ground this otherwise highfalutin barbecue, and I think he’d be the kind of guy who’d be fun when you’ve got a couple of beers into him. So that’d be my barbe.

Misha Zelinsky:             Or Champagne as it were, but that sounds fantastic. Look, Michael, thank you so much for coming on the show.

Michael Fullilove:          Thanks, Misha.

Misha Zelinsky:             It’s been a fantastic chat and good luck with everything [crosstalk 00:40:38]-

Michael Fullilove:          It was a lot of fun. Thanks.

Misha Zelinsky:             Cheers.

 

Alex Oliver

Alex Oliver is the Director of Research at the Lowy Institute where she oversees the annual Lowy Institute Poll.

Alex in an expert in foreign affairs and has authored several major studies on Australia’s diplomacy. She is a prolific author for international press including Foreign AffairsForeign PolicyThe Wall Street Journal and BBC.com, and for all major Australian publications.

Misha Zelinsky caught up with Alex for a chinwag about how the Australian public see the world, the politics of climate change, what’s driving attitudes on immigration, why Aussies are so worried about the CCP and just what the hell is going on with polling results.

EPISODE TRANSCRIPT

Misha Zelinsky:             Alex Oliver, welcome to the show.

Alex Oliver:                   Thanks very much Misha.

Misha Zelinsky:             It’s great to have you along. There’s so many places we could start. One of the places I thought we could start was, the concept of how Australians see themselves vis-à-vis the world. Perhaps some people say, “Australians aren’t interested in the world”, what is your research and work tell you about Australian’s general attitude? Are they interested in the world? And how are they interested in the world?

Alex Oliver:                   It’s a very good question and for an organization that’s been taking public opinion polls on Australian’s relationship with the world for 15 years, you would think it would be easier to answer. But in some ways it depends on how you ask them that question. So if, as we did in 2016, we ask the question of whether Australia should play a more influential role in the world or whether Australia should mind its own business, and concentrate on our national problems, you’ll get a really divided population. Australians don’t know if they want to be forward-leaning in the world. They don’t know if we should just be insular and inward looking.

Alex Oliver:                   If you ask a question in the way that big American think tanks have asked the question, which is perhaps slightly less pointing, which is, “Should Australia take a more active part of world affairs or should it stay out of world affairs?” And you’ll get a much stronger response. So that suggests to me, and that response is sort of 80 to 15, with a few undecided, so that suggests to me that Australians don’t want to be too much of an active middle power, if you want to use that expression, that can be quite politically loaded, whether we’re a middle power, whether we’re an influential power or a significant power, there had been some disagreement about that. But we do want to be internationally engaged.

Alex Oliver:                   So that’s my long answer to your short question. We do see ourselves as having a role in the world, but we don’t want to be too forward-leaning as far as being too aggressive in the way that we prosecute our interests. And then there’s the other question, which is a geographic or geopolitical question, which is, where are we in the world? This is more a question of international identity, and this was a really interesting question we asked in 2010 and I’d really like to ask it again, except every year, in a 20 minute survey, it’s very hard to squash everything you want to ask into all one poll. So it’s a question that we need to revisit. But it was a really interesting set of responses in 2010.

Alex Oliver:                   When we asked Australians, “Do you think you are part of Asia, part of the Pacific, part of Europe or not really part of any region?” 30% said, “We are a part of Asia”, 30% said, “We are a part of Pacific”, and 30% said, “We’re not really a part of anywhere.” So that suggests our response, which is, we still are a little bit undecided of our place in the world. So not how view the world, but a really big question about our own identity. And Paul Keating of course said that Australia is, you know, this is the Asian … It wasn’t the Asian Century then, but we should be considering ourselves a part of Asia. And-

Misha Zelinsky:             You see, he was saying, “of Asia”, not “from Asia.”

Alex Oliver:                   Yeah, that’s right. And we had an Asian Century whitepaper and we had a whole, a political era of when we were thinking ourselves as part of Asia, and as far as I can tell, Australians are not really quite sure about that still.

Misha Zelinsky:             And so then, in that context, given there is a bit of confusion and perhaps space in the politics of the country for this, what do you make of Scott Morrison’s recent discussion about this sort of anti-globalist thing that we shouldn’t be accountable to unelected bureaucrats, presumably, a global institution like the United Nations or the WTO, they didn’t name them, what do you make of that? Firstly, what should we make of that generally? But is there a constituency for this in Australia more generally?

Alex Oliver:                   Another very good question. This was a speech that the prime minister made at the Lowy Institute just last week and I think we need to understand the context in which that speech was made, because that element of it was a little bit surprising, a little bit new and certainly quite different from the speech that he made to the Asia Society just a few months before up at Bloomberg, when it seemed to be a much more conventional and quite disciplined sort of approach to our various relationships in the world. This was a bit new and I guess, it could be read as being a bit reactionary, having come back from a very successful trip to the United States, well at least the first part of that trip was, with the State Dinner and only the second national leader to have been invited by President Trump for an official visit, and then going straight from Washington and that very positive affair, to the United Nations in a big climate change meeting, some criticism of Australia’s climate policies. Morrison not going along to that particular forum and having taken some criticism from that both internationally and domestically.

Alex Oliver:                   So it might have been a bit of a reaction to that, but I think that probably he’s a strand beneath that immediate context, which suggests something of the way the government is currently thinking about where we sit in the foreign policy firmament. On these issues, it is getting hard for Australia now, our stance on climate change and emissions, and on some of our immigration policies, but our asylum seeker policies, where we have been held up to criticism by some of those, I guess he calls or thinks of as sort of faceless international organizations. So I think there probably is something beneath just a reaction to a particular visit and him feeling a bit irritated by that and wanting to answer that.

Misha Zelinsky:             Well it was consistent with what Donald Trump said to the UN where he said that the future belongs to patriots not globalists.

Alex Oliver:                   Yes, but I wonder whether it’s that …? I would hope that that’s not where we’re headed, into that sort of populous, isolationist, inward-looking policies, because we’re not America, we’re much smaller than America and we’re a trading nation, we can get on to that later. Or we can actually get on to it now if you like.

Misha Zelinsky:             Well I was just curious about-

Alex Oliver:                   Australians understand that we have to be an international, an outward looking country, because we rely on free-trade, globalization has been good for us and we consistently get those sort of responses in our polling. We’d have close to 80% of Australians saying that globalization is a good thing. We have three quarters of the population saying that free trade is good for our national interest, it’s good for our economy, our standard of living, it’s even good for job creation, which is where there is sometimes some point of disagreement on whether if we have all these international relationships and allow all this freedom of movement and freedom of trade, that that will somehow impact our jobs for native Australians.

Alex Oliver:                   So we have been very outward looking and it’s been very consistently, if not actually growing. So if it is about a sort of an Australia-first, a move in an Australia-first direction, well then I don’t think that will resonate with Australians. If it is just about not being dictated to by … or being criticized by those multilateral organizations for specific, very difficult policy issues that where Australia’s interests differ from the interests of other nations, as the government sees them, and I think that’s probably where the government, where that Morrison speech was pitched.

Misha Zelinsky:             Now, in terms of you’ve talked about polling already and you’re obviously responsible for managing the Lowy Poll. I mean firstly maybe, for people that aren’t policy nerds like me, what is a Lowy Poll? How does it work? Maybe just give a little bit of background on that?

Alex Oliver:                   Yes, well firstly, I have to fess-up, and that is that now I’m a director of research at the Lowy Institute, and I’m not personally responsible for the poll anymore, I’ve handed that over to our very capable new pollster Natasha [Kasam 00:08:34], but obviously I supervise the whole research program, and I’ve had a long time dealing with the Lowy Institute Poll, so I take a particular interest in it.

Alex Oliver:                   Right, well, 15 years of polling. Our first poll was in 2005, the Institute was set up in 2004 and the then executive director and the team at the Lowy Institute thought that we really needed an opinion pool, which gauged Australian attitudes to the world, because those sort of questions were rarely asked of Australians. Not just to understand how they feel about these issues, but also to give them a voice on these issues and get these sort of issues into the public domain, get them talked about in the press. And then convey those to the political guys who make decisions on the basis of them rather than making decisions on some sort of instinct, which it may have been doing a decade and a half ago.

Alex Oliver:                   So the first Lowy Institute poll was pretty controversial. It was at a time in 2005 when we were headed towards the end of the Bush presidency. There was some very unpopular foreign policies then.

Misha Zelinsky:             The Iraq war.

Alex Oliver:                   Just to name one. The president himself was not particularly popular in Australia and for the Lowy Institute to come out with a poll, which probed that, a whole lot of things, but also that American relationship and, which found that Australians ranked American foreign policy at about the same level of disfavor as they ranked Islamic fundamentalism. It was quite shocking, I think, to politicians who, and even to the bureaucrats who may have known about these sort of undercurrents in Australian public opinion, but to have it boldly stated out there on the front page of a newspaper was confronting.

Alex Oliver:                   Since then we have taken public opinion polls every year. It’s one of our flagship products. It has evolved methodologically and I kind of think we probably need to get to that point, which is that every polling organization has faced some methodological challenges.

Misha Zelinsky:             Well let’s talk about that. You’re a pollster. It probably started with Brexit, into Hillary Clinton’s loss and then polling has been heavily discussed in Australia in light of some surprising result with the federal election in May this year. Is polling still something that we can put stock in? Or has it been somehow bastardized by the way people conceive of it? Because the maths underpinning it are not necessarily … The way pollsters conceive a polling is not the way the public interprets it … and others.

Alex Oliver:                   Well, I like to see the polling world in sort of two spheres. One is political polling, and as you say, the Brexit vote was surprising, because none of the polls really predicted it. It actually started before then. There was the 2012 election where most of the Republican pollsters predicted a Romney win.

Misha Zelinsky:             Yeah, that’s right.

Alex Oliver:                   There was a Scottish referendum where that was all completely unexpected. There was the 2015 UK election and that was a very notorious polling error.

Misha Zelinsky:             But Labor believed it was going to win.

Alex Oliver:                   Correct.

Misha Zelinsky:             Yeah, and Ed Miliband had prepared a victory speech-

Alex Oliver:                   And it was a Tory win by a wide margin. That in fact prompted a government ordered independent inquiry, the Sturgis Inquiry, which reported back in 2016, and raised some of the issues, which polling organizations the world over are encountering and, which we then encountered in our election in 2019. The sort of things that the Sturgis Inquiry reported on were … it’s overall finding was that the poll samples were unrepresentative, that it inadequately represented older demographics and over-represented younger demographics, because most of those polls were using internet-based polling methodologies.

Alex Oliver:                   Now, the Lowy Institute poll, and most of Australian political polling has been using phone polls. In the last few years, as everybody knows, almost nobody uses a fixed line phone anymore. The NBN has exaggerated the effect, because most people when switching over to the NBN don’t even bother with their fixed line phone anymore, they just use their mobiles. It’s really difficult to get people on their mobile phones, because they can screen calls and they don’t pick up, and also, they don’t want to sit with a mobile phone on their ear for 20 minutes, which is how long our surveys are.

Alex Oliver:                   So we’re all grappling with the same problems and the result of that has been that, depending on the polling organization, they’re either using a combination of phone and robo-polling or they’re using internet-based polling or they’re using a combination of internet and phone and SMS polling and so this is all in flux. When you put a cycle together and you’ve got a mixed set of methodologies like that, you need to weight each, because how do you know which bits are more important? Is each sample exactly equivalent?

Alex Oliver:                   So there’s a series of sets of post-weightings that you apply to the results to get the right answer and that can make a big difference. It can make several percentage points difference if you weight one part of the sample more than the other. What we’ve done in the last couple of years, is made, knowing that we have to make a transition to online polling, because otherwise you can’t get young people, because you can’t get them on the mobile phone either, we’ve made a graduated transition. So we’ve moved from a telephone-only poll including mobiles, to a part-online, part-phone model to, this year for the first time, a fully online model and we’ve been able to see if there have been any remarkable differences that will help us to decide how to apply the weightings to the results to get the most accurate result.

Alex Oliver:                   Now the other point, and the one that I said about the two spheres, is there are political polls and then there are issue polls like ours. A political poll, you can get sort of distorting factors like the so-called Shy Tory.

Misha Zelinsky:             The Shy Tory, yeah.

Alex Oliver:                   … which you’ve obviously heard of.

Misha Zelinsky:             Well, and maybe explain those?

Alex Oliver:                   There’s also the Lazy Labor. And the Shy Tory is the person who, when particularly on the phone, because it’s quite confronting talking to a human on the other end of the phone, and in this era of political correctness, are sort of unwilling to admit that they will vote for something like Brexit or a conservative party that doesn’t believe in climate change or whatever the factor is. So those things that they’re kind of a little bit shy about or embarrassed about saying on the phone. They’re probably actually much more prepared to do it online, because it’s a much less personal forum.

Alex Oliver:                   Then there what they call the Lazy Labor voters. Now this is a factor, and you could say the same in America about Democrats. This is a factor that refers to nothing about their work effort, but actually about turning out to vote. Now that is relevant in America and in the United Kingdom, because they don’t have compulsory voting on these things and they might a turnout of anywhere between 60% and 70%. We have compulsory voting, it’s much less of an issue. But it is a small issue and we do have turnout issues and we also do have informal voting issues. So there might be a small factor there.

Alex Oliver:                   Anyway, they’re the sort of issues that we’ve had to grapple with as an industry in the last 15 years, but it’s become particularly difficult in the last five years as we’ve made the move. Really, it was a wholesale move from doing our business on telephones to doing our business online.

Misha Zelinsky:             We still rant about politicians and union officials, so you guys are doing okay, but … I’m curious, I mean, diving into the Lowy Poll, you’ve said it’s been going since 2005, so 15 years, right? What are the big shifts in Australian attitudes over the time that you’ve noticed in running the poll?

Alex Oliver:                   I’m going to nominate, and I have thought about this, since you asked me the questions, three big shifts. But firstly, I wanted to just make a point, that 15 years is, in the way that we segregate our demographics in our polling, is about one generation. So the 18 year olds that we polled in 2005 are now 33. So they’ve really sort of grown-up.

Alex Oliver:                   That gives us an opportunity to look back over those 15 years and trace those attitudes. It’s not a strictly longitudinal poll, we don’t poll the same person. It’s not like the Seven Up program where we poll the same person every year. But we do poll the same demographic groups every year and we make sure it’s a representative sample in terms of education levels, gender, age obviously, income level … Have I missed anything? I think they’re the … Oh geographic location, urban, rural, metropolitan, the city centers versus regional centers.

Alex Oliver:                   Then whatever we don’t use that as a way of sort of measuring, in the pre-polling part, we then weight for it afterwards. Weight, W-E-I-G-H-T. We do a post-weighting process afterwards to make sure that the sample we’ve got is completely representative of the national population. So some of the shifts that we’ve noticed, and this is where the generational thing comes in, are on climate change, immigration, and I think we are just beginning to see in the last couple of years, some emerging shifts on attitudes towards China. Now I’ll start with climate.

Misha Zelinsky:             Yeah, that will be great.

Alex Oliver:                   There is a real gap between younger generations and older generations on climate, but more importantly than that, I think, is this … Can I use the hockey stick imagery? We’ve got a hockey stick picture when you look at our pictures and I’d encourage people to go online and have a look at all these numbers in pictures, because it becomes so obvious how things have changed over a 15 year period.

Alex Oliver:                   In 2006 when we first asked the question we now still ask on climate change, 68% of Australians said that global warming was a serious and pressing problem and we should do something about it, even if it involves significant cost. From that very high result, which I think the Rudd campaign then used and talked about climate change as being the greatest moral challenge of our times, and as the drought waned in the late 2000s, so did concern about climate change on the question that we asked.

Alex Oliver:                   We’ve asked the same question every year in exactly the same way to technically the same group of people. That almost halved, the concern about climate change. That’s a huge movement in six years. Now we’ve seen it swing upwards again, to the point where 61%, not quite at the same extreme level as we were back then in 2006, but 61% of Australians say that global warming is a serious and pressing problem, and we need to do something about it, even if it involves a cost.

Alex Oliver:                   There are three questions that we ask. It’s a three part question, you can choose one of three responses. There’s a middle response that says, yes, it expresses some concern about climate change, but that the problem will be gradual, and we can do something, like taking gradual steps and then the bottom one is, “We shouldn’t do anything until we know it’s really a problem.”

Alex Oliver:                   So 61% of Australians saying that, is a significant response now, and that’s actually up 25 points since 2012. So in seven years, we’ve seen the tick back up on the hockey stick to a really strong level of concern. Now the generation thing, which is that, when we ask that question for the first few years, there was very little generational difference. It was sort of surprising. You would sort of expect that the younger generations would be more concerned about that sort of thing because it concerns the future, whereas the older Australians who are less obviously personally physically affected by it, would be not quite so concerned, or to bring their old understandings of industry and coal and science and mining and all of that sort of thing.

Alex Oliver:                   But in the last two or three years, we’ve noticed a really big demographic divide on this, where 81% of 18 to 29s take that strong response, a serious and pressing problem. But only 43%, so half the number, of people aged 60 and over say the same thing. So there is a divide. Overall, the overall average is 61% and that’s where the other two age groups kind of fit in to that. So overall, you would say this has become a really pressing problem, except perhaps for that 60-plus age group. So that’s the first big shift, and one we’re we’ve seen, well, not just a shift in attitudes, but a shift in the way that generations are responding.

Misha Zelinsky:             So just on climate, I mean I think, perhaps a lot of Labor people might tear their hair out in frustration to hear that there’s 61% of people support action on climate change, and yet it seems to bedevil the party politically at most elections, including the last election. Is that young person, old person divide also, is there a similar divide on a rural regional, urban divide? Or is that almost represented by the fact that young people often live in cities? I’m curious about it because, that 61% arguably, I mean we’d have to look at the numbers are probably not overlaid across the majority of federal seats.

Alex Oliver:                   The rural, urban thing isn’t as clear-cut as the generational divide. We’ve got a bit of a problem with an error margin because with the sample, we’ve got a pretty big sample, it was 2,000 people, but once you start dividing it down into rural and urban, unless there’s a very big difference in attitudes, we can’t say that that is statistically significant. And that’s the issue with that one. So it’s the generational divide that is more important than the urban, rural split, from our interpretation of the results.

Alex Oliver:                   The other thing to note about climate change is that it’s, now we ask a question almost every year as well about what are the threats to Australia’s vita interests? And these threats are not confined to foreign policy threats. So we do ask about climate change, we ask about cyber-attacks, we ask about terrorism. This year we asked about North Korea’s nuclear program. We ask about the Australian economy. In the past we’ve asked about water issues. But this year for the first time, climate change was the number one threat. Equally ranked with cyber-attacks and just above terrorism, whereas in previous years, terrorism has been the foreign policy threat that most Australians are concerned about.

Alex Oliver:                   Then we’ve asked a different question, and we’ve only asked this once, which is to your point, which is, “How do you situate all of these threats in terms of Australia’s policy priorities?” What make them decide to vote for a particular party and for a particular policy-

Misha Zelinsky:             That’s right, because you can have all these issues at once, and they kind of compete with one another. You can be concerned about climate change, but worried about your job, and then, how do you vote?

Alex Oliver:                   It seems to me, and based on this question, which we asked in 2016, which we might revisit and we asked it in a different way in about 2007, with not much different results. Education, health and the economy, not in any particular order, but those three issues are the things which Australians rank as the most important issues facing Australia.

Alex Oliver:                   Once you get down to things like immigration, climate change, terrorism, more important than both of those, but less important than education, health, and the economy. There you start to see what actually might drive votes. Foreign policy in Australia, it’s possibly different in America, where foreign policy is a big issue and the Iraq war was obviously a huge issue there and America’s sort of global interventions generally, but in Australia, foreign policy is less motivating in terms of getting people to decide where they put their tick on the ballot box.

Alex Oliver:                   Except, and there have been a couple of exceptions, and one was the Whitlam election and the other I think probably was arguably the Rudd election, although it’s hard to know there whether that was a time, it was time to move on from a very long Liberal government to a different government. It’s hard to say and I have been grappling with this question about, you know, do these issues like climate change, which repeatedly come back to us in our polling as being a really quite serious concern and in this years poll, the most serious concern, far more so than the prospect of a downturn in the Australian economy. When do those issues actually start to drive votes, and obviously not in 2019.

Misha Zelinsky:             I mean you touch on the fact that in 2005 climate change was very concerning, then it dipped down, the drought broke, it rained significantly and then now we are in another period of drought. The polling would at least, on an anecdotal basis or a correlation basis, seems to be-

Alex Oliver:                   It correlates with the weather.

Misha Zelinsky:             … moving together. Yeah. It’s interesting that people seem to need a measurable or visible demonstration of what can be an abstract concept of carbon emissions. You can’t sort of see or touch it, but you can certainly see the consequences through drought.

Alex Oliver:                   I think that’s probably the most important factor driving concern about climate change, is the very physical, confronting presence of a drought, and I think that’s one of the main reasons why we’ve seen rising concern about climate change since 2012 to the point where it is now and if the drought continues, I expect it will keep going up.

Alex Oliver:                   The other factor I think is the policy environment and if, you know between 2007 and 2014, when attitudes about climate were much less concerned, there was sort of a sense that there was some policy movement happening. There was all sorts of prospects of a carbon tax, a carbon pollution reduction scheme. The carbon tax was eventually introduced, it was then dismantled, but in those years when concern about climate change was falling, there was a lot of policy activity.

Alex Oliver:                   In the years after the election of the Abbott government 2013 to now, I think there’s been a sense of either policy vacuum or a policy paralysis or a policy indecision, probably until the last couple of years when we’ve talked a lot more about a climate policy with the Finkel Review and now, we have an energy policy now, not so much as a climate policy. So I think the policy settings, the policy environment has something to do with it as well, but I think, you’re right, the driving force is the climate, funny enough.

Misha Zelinsky:             Now, so the next big one you mentioned was immigration. Maybe you can take us through how the attitudes are shifting there, because I’m sure it’s not just an Australian phenomenon, we’re seeing this all around the world.

Alex Oliver:                   Well yeah, so this one’s hard to read here. I mean it’s easier to say that we’re suffering the same sort of anti-immigration backlash as is being reflected in the populous politics of other western nations, the United Kingdom, the United States and across Europe. What we saw last year was a big spike in anti-immigration sentiment in that, we went from 40% in 2017 who said in response to a question, “Do you think that the immigration rates to Australia are too high, about right or too low?” 40% said that they were too high in 2017, and that shot up to 54% in 2018. Now a 14 point rise in one year is something we consider quite dramatic.

Alex Oliver:                   We then of course asked the same question in 2019 and we found that that response had moderated. It had then dropped seven points in one year. Now, we changed methodology in the middle there, where we shifted from a 50/50 panel online and telephone to a completely online panel. That may have had something to do with it, but I suspect not all to do with it, because we had had that spike and then a moderation, in that second result there, where 47% of Australians say that our levels of immigration are too high, is still significantly higher than the 40%, so seven points higher than the same people we said that in 2017 and 10 points higher than when we asked the question in 2014.

Alex Oliver:                   So there does seem to be some underlying rise in sentiment against high levels of immigration, but not as dramatic as we might have thought last year. Now, the sort of things that we were talking about last year when we polled that in 2018, where we’re talking about house prices, we were talking about Chinese investment in residential real-estate, a question we’d asked the year before and we’ve got very strong responses on that. We’re talking about congestion and crowded cities and urban overcrowding and all those sort of things. There was a lot of conversation about it, and it seemed that the respondents might have been responding to that sort of debate that was happening in front of them.

Alex Oliver:                   That debate seems to have eased as house prices, as we all know, came off the boil. But there is still a conversation, very much a conversation about congestion and lack of infrastructure and urban crowding and that sort of thing, so I think that is what is driving this concern about immigration, is that Australia can’t sustain those high levels of immigration, unless we have some really positive, strong policy responses that address overcrowding in our cities.

Misha Zelinsky:             It’s interesting isn’t it that what’s essentially an urban planning question, capacity around roads, rail et cetera, has a sort of a dimension that’s related to foreign policy or immigration, but I mean, do you have a sense of how much of it relates to …? You know, because often people say, well it’s an economic scarcity argument or it’s a cultural backlash or it’s a racism question. I mean, Australia has a rather vexed sort of background relating to immigration, particularly with the White Australia policy. It’s very difficult to get to the bottom of what is truly driving that question. I mean, you seem to be saying congestion, but could it be those other things as well?

Alex Oliver:                   Well, we have asked the question. We’ve asked it a couple of times, about a range of aspects of the immigration question to try and find out what might be driving attitudes towards the rate of immigration, but overall, we get overwhelmingly positive responses on the idea of immigration. That it makes the country stronger, that it’s good for the economy, we get very low responses on things like, “Immigrants are a burden on social welfare systems”, or “They take away jobs from other Australians.” That they respond to the idea of sort of a cultural mix making Australia a stronger place. So as far as we can tell from our polling consistently over the last few years, is that generally attitudes towards immigration are very positive. That the problem is not immigration per se, the problem is the rate of immigration and that’s why I came back to overcrowding and lack of infrastructure.

Misha Zelinsky:             That’s interesting, because one of the other things that people that talk about these issues, discuss them, is that there seems to be a correlation between, and certainly a thing at 2010 and 2013 elections, around the question of refugees and control of migration. Now Australia has relatively settled that political debate, but you’re seeing this backlash of nativism in Europe. It seems to have correlated with a sharp up tick in refugees out of the Syrian crisis. Is there a link between those things? Between control of migration, refugees and immigration at all? Or-

Alex Oliver:                   Well, I don’t know-

Misha Zelinsky:             … is it hard to know?

Alex Oliver:                   Yeah.

Misha Zelinsky:             I appreciate that you’re correlations, not causation et cetera-

Alex Oliver:                   Correct.

Misha Zelinsky:             … but I’m just curious.

Alex Oliver:                   I mean John Howard always used to say that unless you have control over your borders, you won’t have any confidence in your immigration program. From what I can see, that’s probably right, in the sort of results that we get from the questions we ask about immigration. I mean, obviously the refugee flows in Europe are nothing like the refugee flows we get to Australia, so we’re talking about magnitudes, orders of difference. But I think he was right to say that if we don’t have that, in the coalition sense, that control over the borders, then that does undermine confidence in a strong immigration program. His expression of a view, which I think probably resonates with the Australia public based on those sort of results.

Misha Zelinsky:             And John Howard, not to speak for John Howard, or advocate for him, but he of course, said that by being tough, some would say too tough on refugees, that Australia was able to sustain a large intake of permanent migrants and skilled migrants. So it’s an interesting nexus there. That-

Alex Oliver:                   We’ve asked a number of questions about offshore processing and about the treatment of asylum seekers. We noticed a softening of attitudes. We got very, very strong responses to Operation Sovereign Borders around the time of the Abbott government’s election, sort of just after say in our 2014 polls.

Misha Zelinsky:             That “Stop the boats” rhetoric?

Alex Oliver:                   Yeah. “Turn back the boats when safe to do so”, the idea of protecting Australia’s sovereignty, that was a strongly favorable policy. 70% of Australians agreed with that. Where there is much more division is on the idea of offshore processing about never allowing asylum seekers to come onshore regardless of their refugee status. Those policies were much more polarizing. Temporary protection visas, going back through the years, we’ve asked a dozen questions at least on this and there was much more division about that.

Alex Oliver:                   What there was a strong response was on the idea of turning back boats and I’m pretty sure we used the expression Operation Sovereign Borders and I think that was a clever piece of policy naming because it really seemed to resonate with the people we asked that question to.

Misha Zelinsky:             You might accuse the Liberal party of polling their policies but … So just turning to the third big trend you talked about, which is the relationship with China and I thought that this really stood in the last poll, in the 2019 poll. Was the way the Australian public perceives the relationship with the Chinese government and how China it acting in the region. I was curious about, do you think that Australians are somewhat ahead of the political class in this? Because it was interesting that big shift that we saw in those numbers, maybe you can explain that?

Alex Oliver:                   Yeah, this was a really interesting year to be asking questions about China. We’ve asked questions about China since 2005, but this year we really noticed a shift. So in the past I wouldn’t have characterized Australian’s relationship with China, not the government’s relationship with China, but the Australian people’s relationship, as a little bit bipolar. So on one side of that center line, the strongly positive responses, really strongly positive responses on the Chinese people, its history and culture and China’s economic performance.

Alex Oliver:                   On the other side, and very strongly negative responses, so you’re really seeing that sort of polarization of attitudes, were on things like China’s political system, its record on climate policy, and I think that relates to actually just its sheer size and the fact that it’s a big emitter, even if it’s not per capita. The strongest negative response is on China’s human rights record. In the mix there also, is a little bit of anti-Chinese foreign investment in Australia.

Alex Oliver:                   What we’ve noticed this year is that there are some real subtleties starting to emerge. We asked a couple of years ago for the first time, about foreign interference and this was about the time when the first political scandal emerged about Chinese attempts to influence, operators, businessmen attempts to influence through political donations and through their own networking, the attitudes and stances of Australian politicians. It was front page news and there were ABC documentaries about it and it was a very prominent debate, and yet when we asked that question, we found that in the hierarchy of things that Australians were concerned about as a threat to our vital interests, it came very low down in the list. And in fact when we asked the question first, we asked about foreign influence from China and we also asked about foreign influence from the United States.

Alex Oliver:                   Now in the context, where nobody was talking about America’s foreign influence in Australia at the time, and they were obviously talking about influence from Chinese businessmen and the Chinese government, that was a pretty weird response, that the reaction was about the same. It was, “I don’t like the idea about foreign interference, but I’m not really sure where it’s coming from.” Two years later, we find that around 50% of Australians think that foreign interference in Australian politics is a threat to our vital interests, but overlaid on that, a whole lot of other really equivocal if not very negative responses on things like foreign technology, which was obviously a question geared to the Huawei issue and the way that the government has responded to that.

Alex Oliver:                   When we asked about whether in considering such an issue of bringing sophisticated technology to Australia, “Should you be most concerned about protecting Australians from foreign state intrusion, or bringing the most sophisticated technology to Australia, or whether cost to the consumer is the most important priority?” The highest response there, with nearly half of Australians saying that the most important thing is to protecting Australians from foreign state intrusion. So it’s not about costs, and it’s not about technology, it’s really about the idea that there is some sort of threat to our sovereignty and our freedoms if we are to allow a foreign company like that to come in and potentially undermine our security.

Alex Oliver:                   We also see some strong concerns about the Pacific and China’s increasing presence and influence in the Pacific, where 73% said that Australia should try to prevent China from increasing its influence in the Pacific. That China’s infrastructure projects, so that’s the Belt and Road initiative, where China is building these big infrastructure projects across Asia and more broadly, and nearly 8 in 10 Australians said that those infrastructure projects are part of its plan for regional domination.

Alex Oliver:                   Then I think the final one was, a question about Australia’s economic relationship with China and this was very striking, because in the past, there have been some clear results that suggest that Australians see China as having been very positive economically for us, that it has been the reason why Australia has avoided a recession through the Global Financial Crisis and that the Chinese economic story was a positive one, whenever we’ve asked about it.

Alex Oliver:                   But, this year we asked about Australia’s economic dependence on China and we’re finding 8 in 10 Australians who say that we’re too economically dependent on China. The economic story has shifted from being a positive story, and a very positive story to being quite a negative factor in the relationship. Then of course, finally, human rights. There’s been a lot of discussion about the Uyghurs internment camps, reeducation, and then-

Misha Zelinsky:             And the Hong Kong situation?

Alex Oliver:                   … now, the Hong Kong situation, but that’s actually emerged post our policies.

Misha Zelinsky:             Well that’s interesting. Could we even [crosstalk 00:42:30].

Alex Oliver:                   But I suspect if we asked the same question about Australia doing more to protect human rights in China, we will get an even stronger response on that post-Hong Kong.

Misha Zelinsky:             I think what was interesting, and you’ve sort of taken us through a great tour of the numbers, but the one that stood out to me was that nearly the same amount of people that said that Chinese investment in the BRI was a part of regional domination, nearly the same number said that Australia should do more to resist China’s military activities in our region, even if this affects our economic relationships. That’s quite interesting that security, and the sense of the Chinese Communist Party’s intentions in the region are being viewed with a lot of suspicion. I think a lot of people maybe underestimate how sophisticated the Australian public are in viewing the behaviors of the Chinese Communist Party and the Xi regime. Would that be a fair thing to say do you think?

Alex Oliver:                   Yes, and I often say that when people talk to me about polls, and they’d say, “Well, do Australians really care about this stuff? This is all very complicated.” One year we asked them about freedom of navigation operations, and we got a 75% response saying, “Yes, we should be conducting freedom of navigation operations.” So I say, underestimate the Australian voter at your peril, because while they may not devote a huge amount of time thinking about it, when they do think about it, and they’re asked questions about it, they respond with some sophistication.

Alex Oliver:                   You’ve raised a point that was a result that I didn’t mention, but it’s exactly in the same lines as the ones that are concerned about Belt and Road, who are concerned increasing China’s influence in the Pacific and who are concerned about Australia’s economic independence, is yes, that its military presence in the region is of concern and that we should be doing something to stop that, even if that’s going to involve some economic hit to Australia and that’s of course new.

Alex Oliver:                   The concern of the business community and industry in Australia and any exporter, is that if Australia sticks its head above the parapet, and responds to China’s moves in any sort of … In a way that China would read as aggressive or interfering, is what is going to be the blow back?

Misha Zelinsky:             Well that’s right, yeah.

Alex Oliver:                   The retribution on Australian business. So will there be more coal held up in Chinese ports? More wines stuck on Chinese ports, unable to get to its markets.

Misha Zelinsky:             And fewer students being sent here-

Alex Oliver:                   Fewer students being sent here. I think that’s our third-largest export, foreign students, so we’re at a point where there are some very serious tensions between what we do in a policy sense towards China and how that impacts on our economic relationship. Two years ago I would have said Australians would have said, at almost all costs, the economic relationship must be preserved. 8 in 10 Australians say it’s possible to have a good relationship with China and a good relationship with the United States at the same time. Any sort of question like that, they’ve always leaned very strongly. They would have said, a year ago in fact, when we asked a question about whether it’s the economic relationship, or the military threat from China was the biggest factor, most people would say, 75% of Australians would say, China is more of an economic partner than a military threat.

Alex Oliver:                   I think that’s changed, and I think that will be interesting for the government to weigh into its policy settings, when it starts considering this balance of having the cake and eating it too, and just how much will we allow China to make those incursions on our sovereignty and constrain our freedom of expression and choice in relation to these issues.

Misha Zelinsky:             It’s interesting the way that Australians seem to have responded to the concept of a foreign power interfering in our way of life here, and I think that that seems to have manifested in the numbers. One of the things I’d be curious about, you’ve talked about the Chinese relationship. I suppose the other side of the coin is the US relationship. At the beginning there, we talked about the negative views of the US president at the time, and US foreign policy, the Bush administration, 2005. How much has the Trump administration undermined the perception and prestige of the United States in the Australian mindset? It’s something that I think is a challenge for the United States in that context.

Alex Oliver:                   It is, and they’re obviously very concerned about the numbers coming out of Australia, including our own public opinion work, which shows that the American president is actually less trusted than the Chinese president. With only 25% of Australians saying that they have confidence in Donald Trump to do the right thing regarding world affairs, whereas 30% will say that about Xi Jinping, which is interesting, but when you look at the picture overall, Australians seem to be able to separate out their views about an individual who is sitting in the oval office from the relationship as a whole.

Alex Oliver:                   When you look at the relationship as a whole, well we can look back 100 years, but I’ll confine that to the 15 years we’ve been taking public opinion polls, overall, never fewer than 90% of Australians have said that the alliance is important for Australia’s security. Overall, attitudes towards America on our feelings thermometer, where we measure feelings on a scale of 0 to 100, so 100 is warm and 0 is freezing, never have feelings towards the United States fallen below 60 degrees.

Alex Oliver:                   This year the gap between the United States and China are on that thermometer, which is a basic question, but really quite revealing, the gap there is around 15 points, so the warmth towards the United States, despite the fact that we have two very unpopular presidents, or one very unpopular president and one president that Australians might be slightly scared of in Xi Jinping, the relationship between the United States and Australia operates on many different levels and not just about the interpersonal relationship between our prime minister and their president or the character of their president.

Alex Oliver:                   So it has weathered those changes in presidents, yes President Obama was very popular here and yes, the relationship with America generally warmed during those Obama years, and it was warmer than it was during the waning years of the Bush presidency. The Iraq war was an unpopular policy. Here in Australia, we wearied of our engagements in the Middle East and the American relationship and our feelings towards it took a hit, but never severely and never to the point where we felt less of it than we did of China, our other major partner. So I guess we are at a bit of a delicate balancing point in the relationship in that at some point where our relationship has been grounded in similar values, and we know that Australians have responded to that sort of question when we ask about what underpins attitudes towards the United States.

Alex Oliver:                   It’s not just the idea that they’re our security guarantor, or that they’re going to come to the defense of Australia, but that we have similar histories, we’ve been involved in wars together, that we have similar values and political systems, we are like-minded in many more ways obviously than we are with the Chinese. The question I guess is, if Australians start to perceive the values of America as diverging too far from ours, will we start seeing that relationship falter? At the moment, I don’t see any evidence of it. At the moment, I think there’s an unpopular president, well he’s unpopular here anyway, and that-

Misha Zelinsky:             His popularity hasn’t gone above 50% of the US either, but, on approval, but …

Alex Oliver:                   Yeah, Republicans love him though, 90% of them say he’s doing a good job.

Misha Zelinsky:             Indeed.

Alex Oliver:                   But at the moment, the relationship is solid. There a bit of a difference in generational attitudes towards the United States, so younger people are less favorable towards it and older people are much more favorable towards it, but the young are not negative towards it, so that’s an important point. The other important point is that it’s quite a non-partisan relationship as well, in that if you look at the responses from people who identify as Greens, who identify as Labor, who identify as One Nation, Liberal, National, across all of that political spectrum, the results are still positive towards the United States. So it’s not a particularly partisan relationship.

Alex Oliver:                   We see that, and in that we see both Labor and Liberal spokespersons on foreign policy talking about the US alliance as the bedrock of our foreign policy, so around the bedrock of, the foundation of Australia’s security.

Misha Zelinsky:             One thing I saw in the poll and I’m curious to get your take on this. It was the perceptions of how much of Australia’s budget is made up by foreign aid spending and what does that tell us about the way Australians perceive foreign aid? Is it possible that it might shift over time as we see these threats emerging in things like the Pacific or in our neighborhood? Australians have identified, I think 55% have said they’re very afraid of a Chinese base being built in the Pacific, in our region and it was reported that they had contemplated doing that via the BRI in Vanuatu. So the perceptions of foreign aid and cutting things like the Australia network, how can those attitudes … Do you think they’ll shift over time? How can policy makers convince Australians of the need to be more invested in our region? A big question.

Alex Oliver:                   Well there’s a couple of questions. You’ve got a couple of points here to your question, which is a tricky one and that is, if you ask Australians about the proportion of budgets that is spent on foreign aid, they will grossly overestimate it. But that’s unsurprising because nobody knows how the budget is cut up. The government is not particularly transparent about the way that it cuts it up. There’s a pie chart every year in the budget papers, well who looks at that?

Misha Zelinsky:             Joe Hockey looks at it I think, but that’s it.

Alex Oliver:                   Apart from the bureaucrats, and obviously the expenditure review committee or whatever goes into making up a budget every year, what a nightmare. I’m not surprised that Australians get that wrong. They do think we’re more generous though than they think we should be, so on average in 2018, the average response when you ask them what they think is spent on foreign aid, they’ll say 14% of the budget. When you ask them what they think should be spent on foreign aid, they say 10% of the budget. So they actually think that we’re being a bit more generous than we should be, even though the numbers are completely wrong. The actual amount that Australia spends on aid is less than 1% of the budget, so they’re wrong by a factor if 10 at least.

Alex Oliver:                   The other question is, do they actually characterize support for the Pacific as foreign aid? I think it’s the way that you talk about it. If you just say foreign aid, they’ll say, “We’re giving money to starving people in Africa”, or whatever it is, drought relief in some other country. Once you make it very specific and you say, “We want to help the people in our region to do better in life, to give them better development outcomes, to support them to become stronger countries”, then I think you get a much more positive response.

Alex Oliver:                   Whenever we’ve asked, and this is before the Pacific step up of the current government, whenever we’ve asked about Australia’s responsibility towards the Pacific, we always get a very strong response, as in 8 out of 10 Australians say that we have a moral obligation towards the Pacific. If you talk about specific obligations with aid and whether we should be spending money to help our nearest neighbors, you’ll get a very positive response. I think the step up has obviously made a difference and I think the idea of a potential Chinese encroachment into, and I say, a port in Vanuatu or in PNG or some other Pacific nation, then it starts to get more pressing, but I think Australians generally feel generous towards the Pacific, even if they don’t feel generous more generally with respect to aid.

Misha Zelinsky:             So it’s the context right? I mean, take for example-

Alex Oliver:                   I think it is the context and I think that governments focus on the Pacific and on our near region in terms of spending our development dollars-

Misha Zelinsky:             Because that feels tangential and you know?

Alex Oliver:                   … is something that will be much more present, pressing, relevant for the Australian public, than spending it … dispersing it more broadly across the globe.

Misha Zelinsky:             So we just sort of for the tape, we just knocked over a bottle of water, but everything’s fine, everything’s fine. So on that, I know you’ve spoken about this in the past, but how important is something like the Australia network in the role that you play in that soft power part? The American government for example is very concerned with the soft power it projects. The Chinese government is very concerned about the soft power and it’s united front work, the way it projects itself. I mean are we doing enough to forward project our soft, benefits of Australian way of life and values in our region?

Alex Oliver:                   Well, no. We don’t have a huge amount of public opinion data on this. I did ask the question, I think it was back in 2011 before I was running the poll, and my colleague Fergus Hansen was drafting the questions and I said, “Can you please ask a question about public diplomacy and international broadcasting?” And the response was very positive. It’s hard to disagree that we should be projecting a positive presence of Australia abroad, but again, it comes down to budgets and priorities and this government has not prioritized Australia’s international broadcasting. That’s a completely different and very complicated story.

Alex Oliver:                   We’ll be releasing a paper on it actually later this year. We did a big study on it in 2010 and we’re now updating that, looking at how the countries as you mentioned, who really do prioritize their public diplomacy and their international broadcasting as a way of communicating their soft power to other countries around the world in the idea that that will warm them to us and it will make it easier for us to get the thing done that we need to and to build international constituencies for policies that are favorable towards us.

Alex Oliver:                   I mean I think it’s a non-brainer, it’s not that expensive, it’s an incredibly cost-effective way to reach large audiences, and the fact that we have not even been able to do that in the Pacific, and that we’ve cut the budgets. Having cut the Australia network, which was a program that was funded by the Department of Foreign Affairs, that was cut by the Abbott government and now the ABC’s international division has been disbanded and its budgets for international broadcasting cut even further to the point where we don’t even broadcast shortwave into the Pacific anymore for vast parts of the Pacific, which can’t receive any other forms of communication, that certainly don’t have effective broadband connections, is kind of a travesty to me. But that’s my personal view.

Alex Oliver:                   I think that we should be doing much more to project Australia’s values, way of life, political system, democratic ideals around the region. If this is what everybody else is doing, it’s what China is doing, it’s what America is doing, and we need to be part of that story, particularly in our region, obviously particularly in the Pacific. So I have torn my hair out, I actually do still have some hair, but … over the last decade about this. This really difficult policy issue, but really, it shouldn’t be that hard.

Misha Zelinsky:             Yeah, because if we don’t do it, someone else will, right? There’ll be a vacuum that will be filled by another country no doubt.

Alex Oliver:                   Well that’s what the issue has been with the dropping of our shortwave frequencies. We had shortwave frequencies where we broadcast in many languages actually, eight languages, into the Pacific as soon as just about five or six years ago, and now we broadcast in two languages, Tok Pisin and Australian and we don’t broadcast in shortwave anymore. The risk always was that all of the countries, and some other countries, not just us, are dropping their shortwave frequencies and opting for cheaper FM and long-line “broadcasting”, that China would pick up those frequencies, and China has been picking up those frequencies. There’s actually no evidence that they’ve picked up our frequency to broadcast into the Pacific. We haven’t seen any evidence of that. They’ve certainly picked up the frequency, what they’re using it and where they’re broadcasting it to is another question. But yes, of course, that is the risk.

Misha Zelinsky:             Now, the next question I want to ask you about, and I know you’ve spoken about this publicly, but the question of gender balance in foreign affairs, it’s a, dare I say it, a very blokey world? It still remains that, of course, we had our most recent first ever female foreign minister Julie Bishop and now we have another one, Marise Payne, but that’s the first two ever in very near time. Now how do we get more gender balance in foreign affairs, but also, how do we encourage young women, young girls, to get more interested in it at an early age, and build that pipeline?

Alex Oliver:                   Very good question. We released a paper on this, which was a three year study that dredged up all this data, which is not particularly easy to find, from intelligence agencies, defense agencies, foreign affairs. We did some comparisons with other countries, and we found out that overall, Australia is neither particularly better nor particularly worse than any of its international counterparts. If you look at America and the United Kingdom, Canada, we might be marginally worse than a couple of them, it’s not dramatic.

Alex Oliver:                   But yes, the overall picture is that this is a sector of Australian society that is blokey, it’s male. About two thirds for example, of appointments to ambassadors positions, our ambassadors abroad, are male and Australia has never appointed a female ambassador or high commissioner who’s the equivalent in the Commonwealth countries to the United States, United Kingdom, Indonesia, Japan and Thailand. The exception was China.

Alex Oliver:                   Part of this problem is political appointments. We also have a very blokey politics and so when you’re looking at appointing a plum political position to one of your political mates, then it’s more likely to be a male than a female, because there’s just simply more. So it’s sort of a vicious cycle.

Misha Zelinsky:             Yeah, one begets the other, sort of thing, yeah okay.

Alex Oliver:                   So that has a real impact. The male political appointments has real impact on the gender balance of our ambassadorial makeup and Department of Foreign Affairs, with its professional appointments, so professional diplomats, has been doing its level best to get a better gender balance, but it’s kind of hobbled by these political appointments. But there are other parts of the sector, which still need a lot of work. The intelligence sector is dramatically male. Security clearances could be part of that. We did look in detail at security clearances. If you’re going to work for an intelligence agency or the Defense Department in a classified kind of role where security clearances are necessary, there was a clear correlation between the higher security clearance and the number of, and the proportion of males and females. It may be that women are kind of put off by the whole security clearance process, which can be quite invasive. Once you actually got into the process, we didn’t find any gender imbalance in whether you were awarded, whether a male or a female was awarded a clearance once they were in the process. But that might be a deterrent factor.

Alex Oliver:                   I think more broadly the sort of things that you see across all sectors of society in the male female imbalance, if you’re looking at accountants or lawyers or other professionals where males dominate, you find the females dominate at the graduate level, you’ll get more women law graduates for example, coming in to work, that you will male graduates, but by the time you get up to the senior levels, you’ve lost half of the women, then you’ve only got a third of the leadership group being women. Some of that you can sheet home to families and family responsibilities, but some of it you can also sheet home to, it’s much more difficult for women to work and mange childcare and manage home responsibilities. They are the sort of things that are not unique to this sector, but really need to be looked at.

Alex Oliver:                   Networks, men are good at networking, it comes naturally. I’m making gross generalizations, but we did a survey on this, we got about 600 or 700 responses, and that was a consistent theme was that, male networks are effective, women are not as good at leveraging those. That suggests that there’s an opportunity for better mentoring programs, for coaching through the promotion processes. How do you apply for a promotion? How do you perform in an interview or a promotion round? Looking at the way that you measure merit.

Alex Oliver:                   Now merit is one of those things that some are constantly harping on about, while we always … We rely on merit as if that is some sort of gold standard. Without acknowledging that built-in to the concept of merit, is a whole lot of and potentially biased measurements of what actually good performance is. Is good performance presenteeism, is good performance going out for a lot of networking lunches or bringing in potentially lots of new clients when, in fact, it might have been a lot of the background work that made that happen. It might have been a lot of the work at home, if you were able to work flexibly, that you weren’t able to be physically present.

Alex Oliver:                   The idea of merit can be quite a loaded concept, and we should be aware of that when we say that we promote on the basis of merit. The other thing is, and particularly for this sector, is overseas placements. So it’s very important if you’re working in this sector, to get an overseas posting. So if you’re a diplomat or a defense expert, or somebody who, like me, works in foreign policy in a think tank or in an academic institution, then it’s really important for your career that you go abroad.

Alex Oliver:                   There are all sorts of misperceptions about whether women, like me, with children, would actually want to go abroad and sometimes they’re just simply overlooked and discounted for those sort of placements. Or they are told that, you wouldn’t want to do that, or you couldn’t do that or it’s a six month placement or it’s a three year placement or whatever. We get quite a lot of feedback about those sort of misperceptions of females motivations, in terms of overseas placements. They were just a few of the things that we were looking at in ways to address this very obvious imbalance.

Alex Oliver:                   Then finally, transparency. A lot of this data was very hard to find. One of the reasons why we spent so long on it, was we got really stuck on digging out some of the data. It’s there, but it’s hard to find and sometimes, particularly across the intelligence sector, it’s quite secret and you have to ask for it. Now if the data is public, then the issue is in the spotlight and there’s a continual pressure to maintain and to keep working on, you know, continuing to work on your gender balance. If the data is secret, well there’s no pressure at all. So I think one of the most simple steps is actually to make this data public.

Misha Zelinsky:             Well, that’s a lot of good lessons there. Now, just to round things off, we’ll pivot to, seamlessly as I always do, to the final question I ask all my audience members. I’m quite eager to hear your answer to this. So a barbecue at Alex’s place, three foreign guests, alive or dead, who would they be and why?

Alex Oliver:                   Oh, well you didn’t say alive or dead. Well, that’s a whole different question.

Misha Zelinsky:             Oh well, alive, then it might be more interesting!

Alex Oliver:                   Let’s just focus on the live ones. Well, because you know, I like having friends at a barbecue.

Misha Zelinsky:             Yeah, you do.

Alex Oliver:                   And I would never have described myself as a good networker, so my first person would be Mana Rawlings, who was the UK high commissioner here for a few years, she left last year. She’s a great girl. She became a friend while she was here. She was a fantastic ambassador for the United Kingdom or high commissioner, as they’re called. She’s now what we would call a deputy secretary level. They called her director general at the Foreign and Commonwealth Office, so very senior in the role. She’s got responsibility for Asia Pacific, The Americas, whole parts of Asia and global Britain and of course that’s a very-

Misha Zelinsky:             A tough portfolio.

Alex Oliver:                   … that’s a very tough portfolio in the context of Brexit, but I admired her enormously, apart from the fact that she was very good fun. She was such a valiant promoter and defender of Britain, even in the face of a very contorted and convoluted and complicated and at times, shocking Brexit process, which she was here as high commissioner. That, she would be a great person to have around, particularly around about the time of the Brexit vote, to get her interpretation of it all.

Misha Zelinsky:             Absolutely.

Alex Oliver:                   I’m going through a bit of a spy frenzy at the moment. I seem to be reading a lot of spy novels and watching a lot of spy TV, The Bureau, was the last one, the French one, and I’m currently reading a book called, The Spy and the Traitor, by Ben Macintyre.

Misha Zelinsky:             A great book.

Alex Oliver:                   You read it?

Misha Zelinsky:             Yes.

Alex Oliver:                   I’m about a third of the way through it. It’s absolutely fascinating. Oleg Gordievsky I assume that’s how you pronounce it, was a Russian-

Misha Zelinsky:             Defector.

Alex Oliver:                   … KGB colonel who defected to the United Kingdom, but he was a double-agent for Mi6 on behalf of the British for a whole decade. He’s now 81, and I would kill to sit down and have a conversation with him. He sounds like an absolute character.

Misha Zelinsky:             A fascinating story, yeah.

Alex Oliver:                   I don’t know, that’s a tough one with the rest. I met only once, briefly, but would love to get together with her again, Kelly Magsamen, who’s the vice president of national security and international policy at The Center for American Progress, which is sort of a fellow think tank in America. She’s a real dynamo, she doesn’t mince words, and I would love to have a chance to sit down and have a drink and a good chat with her. Pete Buttigieg.

Misha Zelinsky:             Yeah Pete.

Alex Oliver:                   I’m intrigued at how a mayor of a small town in Indiana South Bend, runs for president. The youngest-

Misha Zelinsky:             A 37 no less-

Alex Oliver:                   … mayor of a US city with at least 100,000 residents, which is not very big. But, supremely qualified, Harvard, Oxford, Rhodes Scholar, McKinsey, intelligence officer, having served for I think for seven months abroad. I think that would be a fascinating chat too.

Misha Zelinsky:             Well, I tell you, so we would have an ambassador, a KGB spy, the head of a think tank, and a presidential candidate and then-

Alex Oliver:                   Pretty good huh?

Misha Zelinsky:             … all at a pollster’s house.

Alex Oliver:                   And all alive.

Misha Zelinsky:             At a pollster’s house, so it’s almost like you feel like as though, there’s a good focus group there, but look thank you so much for joining us Alex. It’s been a fantastic chat and I hope everyone’s learned just as much as I did.

Alex Oliver:                   Good luck with the editing. Thanks Misha.

Misha Zelinsky:             Thanks.

 

Wayne Swan: Economic inequality and the global rise of right wing nationalism

Wayne Swan is the President of the Labor Party. He served as Australia’s Treasurer from 2007 to 2013 and was Deputy Prime Minister. Wayne is credited with helping save Australia from the GFC and in 2011 was crowned World Finance Minister of the year.

As the author of numerous books on social policy, he has lead the domestic and global debates on the dangers of economic inequality. 

Wayne joined Misha Zelinsky for a chinwag about what went wrong at the 2019 federal election for Labor, why fiscal policy still matters in economic management, how far right nationalists are using inequality to win government around the world, why big philanthropy is a big problem for democracy, how Australia should manage an assertive Chinese Communist Party and where to from here for social democrats around the world.

 

Misha Zelinsky:             Wayne Swan, welcome to Diplomates. Thank you for joining us.

Wayne Swan:                Good to be here.

Misha Zelinsky:             Now, what a place so we could start. It’s been a few months since the 2019 federal election. It was a difficult one for Labor Party people, the Labor Party supporters and members. I’m kind of curious, firstly, did you see it coming? And then, to your mind, what went wrong is the big question. But we can start there maybe.

Wayne Swan:                Well, I didn’t think we were going to have an easy victory. And I think the way in which the opinions polls were hyped up and the expectations got out of control and the bookies got it all wrong simply heightened an inevitability about our victory that wasn’t there in the foundations. And indeed, I don’t think it was there in the published opinion polling either.

Wayne Swan:                Yes, it was wrong, but it was not out in many respects and there’s no way in the world that anyone who was studying the opinion polling closely could’ve formed a conclusion that we were headed for a massive victory. Changes of government in Australia are always difficult, particularly for the Labor Party, and that applied last time. There are some things we did well, there are some things we did badly. We’re having a review about all of that, but I don’t think that there should be any automatic knee-jerk reaction when people are analyzing the result.

Misha Zelinsky:             So there’s been a lot of talk, I mean, your state of Queensland, Labor did most poorly there until in terms of our primary vote, but there’s a lot of discussion about labor’s performance in regional areas, outer suburban areas and this sort of discourse that we’ve lost touch with traditional labor voters, more working class voters. Is that something that you think is true or something you’re concerned about?

Wayne Swan:                Well, there’s no doubt that the Liberal Party campaign managed to dislodge many low-income, insecure and loosely politically aligned voters from the labor camp. No doubt about that at all. I think part of that was a very effective scare campaign, and particularly a campaign run under the radar via social media, which was promoting an economic Armageddon through death taxes and other claims that were terribly effective, got under our guard and dislodged those voters from our camp.

Wayne Swan:                So we’ve got some fundamental reassessment to do there, because if you look around the Western world and you look at the progress of social democratic parties, there’s no question that what I call the radical right, and I include the Liberal Party of Australia, which has now been taken over, if you like, by hard right elements. There’s no smaller liberals in it. Around the world, those groupings have been successful in removing voters, particularly lower income working people, from support for social democratic parties through the use of wedge politics, through the use of race, through the use of gender and increasingly through the use of climate change to pull those voters away from their traditional social democratic support.

Misha Zelinsky:             And so, you talked a little bit about this, yeah, the online campaign that we saw, but also there was the impact of the Clive Palmer money.

Wayne Swan:                Sure.

Misha Zelinsky:             How much did that influence the outcome [crosstalk 00:03:03]?

Wayne Swan:                Well, there’s no question that the Clive Palmer money supercharged the themes that the Liberal Party were running. The Clive Palmer-

Misha Zelinsky:             Which was $80 million spend, right?

Wayne Swan:                Yeah. The Clive Palmer money was part of the conservative spend, so the biggest single spend that I can find in the Western world by a single person in an election campaign was turned into a preference recycling scheme aimed particularly at those groups that I spoke about before and it was very successful. So when people are evaluating this result, you can’t ignore the impact of this big money, which certainly had an impact in my home state.

Wayne Swan:                But I don’t believe the results in Queensland, putting aside the central and North Queensland seats, were any different to what we saw anywhere else in the country. It’s true, we did lose the outer suburban vote and we lost a regional vote, but that was no different in Queensland than it was anywhere else bar in Queensland the three seats that you would describe as directly affected by the issue of coal, where there were separate circumstances. So I don’t think the result in Queensland was little different to the result that we saw in outer suburban Sydney, regional Victoria or regional New South Wales. Or, for what matter, in cities like Perth.

Misha Zelinsky:             Now, unpacking this. You touched on the global phenomenon. I think that this is a challenge for all social democratic parties around the world since global populism. In many ways, I think this is almost the U.S. 2016 election result or the Brexit result arriving in Australia, it has similar characteristics. So I’m kind of curious, firstly, what’s driving this global populism? And then why is it that the right, and the far-right, seem to be able to dig into it a bit [crosstalk 00:04:41]

Wayne Swan:                This is the critical question. The fact is that the Great Recession, or otherwise known here as the global financial crisis, really shattered the foundations of modern capitalism, which had already been loosening through 40 years in the growth of income and wealth inequality. And that growth of income and wealth inequality has bred resentment. And that resentment has materialized in the form of much more insecure work, the disappearance of what were once solid career opportunities with decent pay.

Wayne Swan:                And that, in many ways, shattered the faith of those people in basically their democratic arrangements. And as that’s occurred, unless governments domestically put in place a range of policies to look after those people, indeed as we did, principally, in this country, those votes increasingly became lost to basically what I’d call the center-left, and they’ve been increasingly captured by what I would call the radical right.

Wayne Swan:                You’ve seen this most particularly in recent elections in Scandinavia, you’ve seen it in Sweden, you’ve seen it in Finland, you’ve seen it around the world, that the use of race, the use of gender, to play into the insecurities of working people, and to play in to their loss of faith in the authority structures and decision making structures, in a society where they see the great gains of their labor principally going to a few at the top, has been the driver of the radical right and the great failure of the post-war period.

Wayne Swan:                See, for 30 years following the war, policies were put in place to drive a more equal and fairer society. And they were done as a hedge against communism on the left and fascism on the right. Following the rise of Thatcher and Reagan, and the advent of trickle-down economics, otherwise known by many as neoliberalism, we’ve seen a growth in rampant income, wealth, and inequality. And that has seen a fracturing in societies where there was once a consensus about a fairer share being the best way to drive prosperity and growth into this notion of trickle-down economics that if you give more to the top, then somehow, everyone down the bottom will benefit.

Wayne Swan:                Well, that’s just produced an enormous amount of distrust and it has created, if you like, the political space for the rise of the authoritarian radical right, which we now see so dominant in many countries across Europe, and you see represented in the leadership of Donald Trump.

Misha Zelinsky:             Yeah. And you covered a lot there about, I suppose, the conditions that are allowing this radical right to rise around this insecurity, economic inequality. The thing that’s got everyone, at least that’s on the center-left of politics about how do we respond to this, is that the conditions would seem to be good for a social democratic agenda around inequality and [crosstalk 00:07:35]

Wayne Swan:                They certainly are, but there hasn’t been the sort of social democratic leadership that we’ve required. I mean, we’ve done best here, in Australia and New Zealand, where we’ve had our social democratic aspirations reflected in Labor parties. And the anchor of our Labor Party is, of course, the trade union movement, which provides that direct linkage. And I think that has been why you could actually say that the big difference, say, between the radical right in Australia having a section of a Liberal government, and manifested, say, in the form of Pauline Hanson with a couple of senators, the big difference between that, and the election, say, of a Donald Trump in the United States, has been 30 years’ worth of real wage growth in Australia and 30 years of wage stagnation in the United States.

Wayne Swan:                But we started to see that wage stagnation. We started to see the profit share rise and wage share be suppressed. We’ve seen policies increasingly in this country after the six years, where pre-tax income has been suppressed in the form of wage suppression, post-tax income has been suppressed in the form of more regressive taxation. The twin combination of unfair taxes and low wage growth is tailor-made for either an ascendant social democratic party to storm to victory, or for a radical populist to storm the victory if the social democratic offering is not up to scratch. And when you translate that into our last election result, we should’ve won, but we didn’t have the sort of defeats, either, that you’ve seen in various other social democratic offerings in the past.

Wayne Swan:                That’s not an excuse for our outcome.

Misha Zelinsky:             And so, in terms of connecting with working people and sort of reflecting their concerns, one of the challenges seems to be that there’s a perception, at least, that all sides of politics have been sort of colonized by so-called elites. And that seems to particularly hollow out that social democratic side of politics, both here and abroad. I mean, do you think there’s something about this question of big elites being from nowhere and people being from somewhere, and this question of place [crosstalk 00:09:58] communities?

Wayne Swan:                Well, I think that is really important. And I think it’s a reminder to all of us, on the center-left of politics, that to be out there with the people all the time, or of the people all the time, as comfortable in the tea room as you are in the boardroom, is absolutely critical. And I think many of our comrade parties around the world, in particularly the U.S. Democrats, have fallen prey and have not really learned that lesson.

Wayne Swan:                So I think it’s something we all have to keep in mind, but it is also something that the radical right specializes in through their authoritarian leadership and the associated gutter campaigns that they put into the system beneath the radar. And I would cite, in this example, the vilification and the smashing of the standing and reputation of Bill Shorten behind the scenes through one of the most aggressive and unprincipled demolition jobs on a politician’s character and standing that I’ve seen my whole time in politics.

Misha Zelinsky:             Well, and so, in terms of… One of the things I think is challenging for social democrats is that, as faith in democracy, faith in government, goes down, it almost suits the right-wing agenda because they don’t like government [crosstalk 00:11:18]

Wayne Swan:                Well, of course it does. You see, the whole right-wing agenda, and this is what you see at the core of this government here, is to destroy the credibility and standing of government and to demonize government intervention. So, stage one of that was to demonize our stimulus, which saved our country from recession. To continue to demonize it, to do that, and to get into bed with plutocrats and parts of the business community so that when next time a huge global event comes, no government will have the guts to stand up and do what the Rudd and Gillard governments did in a time of need, which was protect our people and to use the power of government to do so.

Wayne Swan:                But it is ongoing, you’ve only got to pick up a newspaper or observe just about any policy of this current Liberal government, and find, at its core, an attempt to destroy the credibility and efficiency of public service provision. And there is perhaps no program that demonstrates that more than the so called robo-debt campaign that’s going on in Centrelink. The treating of people, that they fired the hired staff in Centrelink so that when the public wants to actually ring and find out what their entitlements, they’re on hold for 30 minutes an hour. This is all part of a systematic attempt to destroy the quality of public service provision so they can turn around ain the end and say to social democratic parties like mine, “Look, you can’t trust government, they can’t deliver services. I’ll tell you what, we’ve got a better offering. Have a tax cut instead.”

Misha Zelinsky:             And so, you touched on plutocrats. And one of the things that I’m so curious about, and there’s been a big backlash against what they called the Davos tops. And so, I mean, how do we make the case that democracy in government is still the answer, given that you see, increasingly, these big philanthropists plutocrats, where the argument is we can return the benefits of this inequality actually-

Wayne Swan:                Well, it’s outrageous and shocking. If people want to give money and make their society a better place, fantastic. But don’t expect a tax deduction. Don’t erode the basis of the government to provide the basic service provision upon which a civilized society depends. It’s just shocking that people who don’t actually pay the right amount of tax in the first place then turn around and want to give more money and get a tax deduction for that.

Wayne Swan:                Look, I know many people in the Australian business community who pay their taxes and they give away a lot of money, but equally there are plenty of people with a lot of money who aren’t paying their fair share of taxes and still expect a tax deduction and be regarded and favored in the community because they’ve given away money when they have shattered the very linkage between collecting tax and service provision by becoming tax termites and ripping away at the very essence of a civilized society.

Misha Zelinsky:             And it also is fundamentally undemocratic in that, ultimately, you want to see taxes collected by the government people deciding where those taxes should be [crosstalk 00:14:07] correlation.

Wayne Swan:                Exactly. And no wonder people then lose faith in democracy, because they see people who obviously have a lot of money, they see the publication from the Tax Stats that they’re not paying it, and then they see them standing up pretending to be very generous because they’re at some very worthy cause using these people as a shield against the underlying evasion they’re engaged in, and they expect to be clapped. No wonder the average person gets cynical.

Wayne Swan:                I mean, no wonder the average wager could get… well, actually, gets really cynical when all they ever hear is of high profile people, be they sporting people in Rugby Union or whatever, who are earning millions of dollars a year, but no one’s out there debating at the same time the fact that they can’t even get an enterprise bargaining up for a 2% increase. And they see this conflict. A news agenda dominated by elements of identity politics and big money for the top-end of town, and on the other they don’t hear many reports about the fact that their enterprise bargaining’s being squashed and they’re not going to get a decent wage increase for the next couple of years.

Misha Zelinsky:             And so, yeah, in terms of this question of identity politics and economic justice, I mean, do you see those things in conflict? Because a lot of people say, “Well, we have to choose one or the other,” but my view is the thing that can unify people the most around whatever their identity is, is around economics and class.

Wayne Swan:                Exactly, and just ask Martin Luther King. I mean, it’s just not well known that when he went on his freedom march it was called Jobs and Freedom, and it was called Jobs and Freedom for a reason. That gender equality, racial equality is always going to be ultimately completely unattainable without a degree of economic inequality. So, we don’t ignore them. They’re all part of the same equation. But when you’re a truck driver in Western Sydney, or when you’re a steel worker in Wollongong, and all you ever hear about is a sporting hero on a million dollars a year having a court case dominating the news every night, and then you’re told in your latest bargaining round that you’re not getting even a reasonable increase, well, you really get the shits.

Misha Zelinsky:             Mm-hmm (affirmative). And so, I mean, it’s interesting, isn’t it? Whereas you talk to people in the business community or you talk to the Davos set and they say, “What are we going to do about populism?” You say, “Pay taxes and lift wages.” And they’re like, “Well, I guess we’ll never solve it then,” right?

Wayne Swan:                Well, the two most fundamental elements of doing something about the entrenched long-term inequality in our community are progressive tax and a stronger voice for workers, principally through unions.

Misha Zelinsky:             Mm-hmm (affirmative). And so you touched a little bit about the economy, GFC response or the Great Recession response. I’m kind of curious, firstly, you’re a former treasurer, what’s your take on the state of the economy at the moment? So, current… we’re in the weakest period of growth we’ve had pretty much for a decade.

Wayne Swan:                Well, it’s weak and anemic growth induced by the federal government’s refusal to put in place decent spending on infrastructure. It’s pretty simple, really. And it’s galling to watch the current treasurer somehow go out and try and blame the Reserve Bank for the fact that their fiscal policy isn’t working and that he intends to put pride ahead of outcome. We didn’t put pride ahead of outcome when our economy was challenged.

Wayne Swan:                I mean, imagine if these clowns were in charge and there was a pronounced international downturn, the likes of which we had back in 2008 and 2009. Well, I know what they’d do. They wouldn’t act, because they’re part of a weird brigade out there that wants the cleansing impact of a recession. Because they see that as eating away at the power of workers and a way of reducing wages, and they also see it as a political opportunity to run some of the authoritarian lines that may work for the sort of parties of the far-right elsewhere when people feel dreadfully insecure.

Misha Zelinsky:             And so you talked about, basically, that the Reserve Bank, which is a controlled monetary policy-

Wayne Swan:                Yeah.

Misha Zelinsky:             … and the treasurer who’s ostensibly in charge of fiscal policy. Now, there’s a suggestion they’re going to be pulling against one another.

Wayne Swan:                That’s right. Well, the treasurer’s fiscal policy is wrong and to cover that up he’s seeking to somehow say that the Reserve Bank governor should fix it through monetary policy.

Misha Zelinsky:             Despite [crosstalk 00:18:18] big 1%.

Wayne Swan:                Monetary policy is tapped out. Tapped out. Everybody’s saying, and it’s not just the governor of the RBA in Australia, I mean, there has been an excessive reliance on monetary policy because governments around the world have been dominated by an austerity ethos and therefore a reluctance to effectively deploy fiscal policy. Fiscal policy here and around the world should be playing a much, much larger role as we seek to deal with the economic challenges that we face 10 years on from the Great Recession.

Misha Zelinsky:             And obviously when you were a treasurer in the then-run government, there was a massive intervention via stimulus package. Do you think it’s possible today with the world the way that it is for the-

Wayne Swan:                No.

Misha Zelinsky:             … global response that we saw from every country to be coordinated through the G20 or any other mechanism?

Wayne Swan:                Well, 10 years ago, in fact, in March, early April, 2009, the world came together via the G20 and put in place a massive stimulus package to save the world from a Great Depression Mark II and to ensure it was only the Great Recession. Despite that package, it’s taken most developed economies over a decade to come out. Australia sailed through that period. Our economy now is almost 35% bigger than it was in 2007. The American economy is in the low 20s. The British economy is around 20 or a bit below. We sailed through. And because we didn’t see the loss of hundreds of thousands of jobs and the destruction of so many small businesses, we averted the skills and capital destruction that dragged other economies around the world down.

Wayne Swan:                Yet still, the conservative parties in this country carry on as if this was a massive mistake. Now, because of, if you like, the rise of the radical right it’s hard to see us getting the sort of international cooperation that we got from the London Summit in 2009 that dragged the world out of their recession and didn’t become a depression. If we have to go into those circumstances again, I don’t think we are or will see the sort of actions that G20 took 10 years ago. And that will be a tragedy, if that happens.

Misha Zelinsky:             And so a lot of this dysfunction we’re seeing principally probably arises from the election of Donald Trump in the United States which has been a disruptive force for the old world order, if you can call it that, and also the rise of China. Australia finds itself in the middle of this, particularly one of the big headwinds in our economy relates to this so-called trade war between China and the U.S. I mean, how do we navigate that in a political sense and in an economic sense?

Wayne Swan:                Well, sensibly, because our principal trade relationship is with China and our principal investment relationship is with the rest of the developed world, and our principal security relationship is with the United States. So we have to be incredibly careful and deft in what we do. We can’t be compliant if the China is out of step when it comes to really important issues like the South China Sea or, for that matter, even Hong Kong. But equally, when we are seeing some of the absurd decisions announced by the U.S. President, we can’t be seen to necessarily be compliant there. There is a real challenge for diplomacy and nuance for us to navigate what is a very, very difficult period.

Wayne Swan:                You see, this issue of inequality, however, is not just one that’s a problem in the U.S. and in the developed world. It’s a massive problem in China itself and, I think you’ll find, a massive problem behind the protests that you are also seeing in Hong Kong as well, because-

Misha Zelinsky:             Yeah, there’s a real challenge around the rental market there and the average wages from Hong Kong.

Wayne Swan:                Yes, that’s right. That’s right. Intergenerational issue. You know, it’s not just a question of political rights. But they have no political rights and are facing, if you like, economic prospects that they can have no say in or real impact on their government’s arrangements. So it’s a complex world. There’s no doubt the rise of China has been tremendously beneficial for the Chinese themselves but also for the rest of the world, but what it requires is principled and nuanced leadership, not bombast.

Misha Zelinsky:             And you touched there on an intergenerational inequality. I’m kind of curious about that, because one of the big things of the last election, just returning back to the election, was this question of the, imputation credits became a big focus and the impact on retirees. What about the impact on young people who are unable to get a secure job or are unable to enter property market? How are we going to balance the intergenerational pact?

Wayne Swan:                It’s a very good point. Well, we have got a huge intergenerational inequity problem. And my view is that our actions on negative gearing were broadly supported across the community for the very reasons that you have just outlined. I’ve got lost track of a number of people I know who have got negatively geared properties, but absolutely understand that there has to be fundamental change in this area if their kids and/or their grandkids are ever going to get a toehold in the market. So I don’t think that was one of those policies that was responsible for the blowback in the election. There might be ways in which you could be nuanced and change, but the fundamental generational inequity involved in those arrangements is one I believe that is understood in the community and the consequence was a tolerance for change in that area.

Misha Zelinsky:             Well, the thing is as well, I mean, on the question of negative gearing, that’s a policy Labor took in 2016-

Wayne Swan:                Exactly.

Misha Zelinsky:             … when it very nearly won in the election by one seat majority, or left a Turnbull government a minority government at the time. So, in terms of what are the policies we need to do though to make sure that we can… because one of the things that worries me is young people increasingly feeling disenfranchised from the countries that they’re residing in in terms of youth unemployment in the regions. And I think some of this sort of far-right politics we’re seeing there was a trumpification of the regions, a lot of it is from young people not feeling they got a chance to get their hand on the first rung.

Wayne Swan:                Well, we got to spend a lot of more time interacting and communicating in this area. I think a lot of young people want to know that principle matters, I think a lot of people want to know that values matter. Now, our challenge is to live up to that creed. And this is the point that I’m going to continue to make as president of the party, that principles and values matter. But so too does compromise from time to time, because to ultimately implement your principles and your values you’ve got to hold power. And we have to be seen to be able to do that in ethical ways.

Wayne Swan:                And I believe there’s probably no party around the world in a better position to actually do that properly than the Australian Labor Party. The period of government under Hawke and Keating, the period of government under Rudd and Gillard, over and above any of the blemishes those governments had, did achieve an enormous amount. Very much in the tradition of earlier labor governments whether it’s a post-war reconstruction under Chifley. Labor’s got a tremendous history to draw from as we go forward and to demonstrate to people that politics and government can be a force for good and can make a difference in the lives of people.

Wayne Swan:                But it’s just, making a difference through a government decision-making is not something that happens one day and is seen the next. To convince people that these objectives could only be achieved in the long-term, not the short-term is the challenge, because the populace from the radical right will never give a principled and effective policy a chance to get off the ground. No greater example of this than what the Conservatives did to the carbon price. If that carbon price had survived in Australia, we would be having an entirely different political and economical debate. And what sections of the business community aligned with the radical right of the Liberal Party did in destruction of the carbon price will go down in history as one of the most wanton acts of economic and social destruction in the history of our nation.

Misha Zelinsky:             Mm-hmm (affirmative). I actually also would give a special shout-out to the Greens who were voting against the ETS twice in 2009.

Wayne Swan:                Exactly. Exactly. [crosstalk 00:26:36] that as well. Yeah.

Misha Zelinsky:             I always like to remind my friends of that if they are particularly left-wing and inner-city Greens that there’s only one party that’s put legislation as a party of government to the floor and enacted price and action on climate change.

Wayne Swan:                Well, if we would’ve got it through back in 2009, a lot of the other events that occurred may not have occurred either, but anyway.

Misha Zelinsky:             And so, how does Labor… I mean, the last 10 years, I think, the climate wars for the last decade in Australia have been pretty devastating, both the cause of climate action, but also on progressive politics. I mean, how do we square this circle between these young people who are very energized about climate change and people in the inner city that I think are energized?

Wayne Swan:                Well, we’ve got to get them to understand that when you’re tackling climate change and doing very substantial emissions reductions it’s just not a question of coal. It’s a question of emissions reductions across the board. Of course we have to move as quickly as we can from fossil fuels and replace that with renewable energy. And it has to be driven. It has to be driven by a price on carbon. And the problem at the moment it’s not driven by a price on carbon. Many of these well-intentioned people think that their obligations are discharged by fighting against a particular coalmine here or there. The truth is that our coal, our thermal coal is 4% of world’s thermal coal. Most thermal coal around the world is mined-

Misha Zelinsky:             Locally and used locally. Yeah.

Wayne Swan:                … and used locally. What the world needs, what Australia needs is a carbon price for us to make the transition across all of those elements. To think that if you knock off Adani or knock off a couple of coalmines in the Adani basin, that this is some substantive contribution to the fight against climate change in the short term or the long term is simply not true. Yes, we have to make that change. We are, despite the government’s opposition, making substantial headway in renewable energy thanks largely to the NASA progressive business and the Clean Energy Finance Corporation that I set up and that the Conservatives did not manage to destroy.

Wayne Swan:                So this climate change debate is broader and more complex than it appears in the media, and as a progressive party we’ve got to continue to argue for a strong set of emissions reductions which are far greater in their impact and their scope than any one particular coalmine at any one point of time. I was with Nicholas Stern the day that he announced the Stern report back in two-

Misha Zelinsky:             Was it 2009? ‘8?

Wayne Swan:                No, not ‘9.

Misha Zelinsky:             ‘7?

Wayne Swan:                Yeah. ‘6, probably.

Misha Zelinsky:             ‘6? God, that was a long time ago. I remember [crosstalk 00:29:15]

Wayne Swan:                When I was in Whitehall visiting Gordon Brown.

Misha Zelinsky:             Yeah.

Wayne Swan:                And if you go to the Stern report, it always envisioned that coal production would go down gradually as renewable energy went up. And that has not fundamentally changed. We are not getting the emissions reductions across many of the other critical sectors that we need, and so much of this concentration on a particular mine here or there drags critical attention away from what is a diabolically difficult area of public policy achieving these reductions across a whole range of sectors that people never talk about.

Misha Zelinsky:             And the other thing I think we need to… those that are passionate about climate change and the environment, except we need to make significant action in that space. I think one of the things that challenges the politics of it is the asymmetry of who’s impacted.

Wayne Swan:                Yeah.

Misha Zelinsky:             And so the people that are very passionate about it in the city, their job’s not impacted. But the people that are going to be impacted, have to wear the costs of it have to-

Wayne Swan:                Exactly. Yeah. And where the people are impacted, they feel that the people that have strong views don’t care about them.

Misha Zelinsky:             Yeah.

Wayne Swan:                So you get a political backlash that ultimately undermines the progress on climate change.

Misha Zelinsky:             Correct.

Wayne Swan:                Because a very significant section of the progressive alliance is told by another section of it that they don’t count anymore, or that they don’t like their lifestyles, or they don’t know how to think, or they’re ignorant.

Misha Zelinsky:             Yeah.

Wayne Swan:                And that was the problem of the Bob Brown caravan.

Misha Zelinsky:             Indeed.

Wayne Swan:                And yeah, we just can’t go down that road if we are going to win this fight against climate change.

Misha Zelinsky:             Yeah, and we need to build those coalitions and find ways… I think there’s a role for industry policy in terms of finding ways… industry’s going to decline over the time.

Wayne Swan:                Absolutely. You know what I find when I go out? In the business community it’s a generational thing. If you meet anyone now involved in business under 50, they’re talking the economics of climate change. Because what’s going to drive climate change is not necessarily reductions targets. It’s going to be the fact that the market won’t lend to these people. That there’s good business to be done. So you could have a decent conversation with many in the business community who are younger, because they actually get the economics of climate change as well as the environmental issue and outcome. And they are actively out there, involved in the fight in a commercial way, and we need all of them in the tent.

Misha Zelinsky:             And so I just want to turn a little bit back to your time as a treasurer and deputy prime minister in the Gillard government, commissioned an Asian Century White Paper. I’m kind of curious to contrast the view of the government then with how the world’s turned out. I mean, it was a very cheery or upside sort of document about the economic potential and perhaps overlooked maybe some of the bigger challenges of an assertive China that we’ve seen in the [crosstalk 00:31:54]

Wayne Swan:                Well, it wasn’t meant to deal with security matters. I mean, it was a very good paper. And these people would’ve been burning books back in the 1500s. I mean, they eliminated the Asian Century White Paper from every government website.

Misha Zelinsky:             Is that right?

Wayne Swan:                Yeah, absolutely. Absolutely.

Misha Zelinsky:             So it’s just gone? I didn’t know that.

Wayne Swan:                I mean, I recommend it to anyone who’s interested in the future of our country should go and read the Asian Century White Paper, because-

Misha Zelinsky:             How will they find it?

Wayne Swan:                Well, it’s-

Misha Zelinsky:             It’s on Wayne’s website.

Wayne Swan:                Well, fortunately, it’s still around, but-

Misha Zelinsky:             Right. Well, that’s an interesting aside. But anyway, we were getting into the… yeah.

Wayne Swan:                Anyway. And it was so well received in the region. And in many ways, as I moved around and the members of the committee moved around, it was, if you like, putting the final nail in the coffin of White Australia, that they finally thought, over a whole range of issues, this seemed to bring together the notion that Australia saw itself as Asian-facing and part of Asia. And we have a different discussion now about Asia and Australia than we had when I first went to university or indeed was in politics for the first decade or so. You know, that we all understand that it’s part of a growing region and with it come the challenges, one of the biggest one we were talking of, climate change.

Wayne Swan:                And the other one is growing inequality, because unfortunately the trickle-down model that has been used in the developed world is now being aggressively used in the developing world including by communist China and resulting in rampant wealth and income inequality in both types of countries. So the problems we face are similar. Of course, in our region at least a third of the countries are in dire poverty in what you’d call the broader Asian region and a lot more work needs to be done in dealing with their challenges. It’s not just a question of China when you’re dealing with Asia. Non-China Asia is bigger than China.

Misha Zelinsky:             Sorry, India and Asia and somewhere else?

Wayne Swan:                Well, but all those other little countries that there is so many of them where the very basis of development has not even begun. So there’s still a lot of poverty alleviation to be done in Asia. We do focus on the Asian middle class because it’s what brings so much prosperity to our country, but we shouldn’t lose focus either in Asia or in Australia on those struggling countries across the Asia-Pacific.

Misha Zelinsky:             So when you said the White Paper was an economic document, obviously, there were defense white papers at the time, and there’s that duality that exists in public policy in Australia which is that kind of that Tony Abbott describes as fear and greed. Do you think the relationship with China since the Rudd -Gillard government has changed and how would a Labor government best interact with a more assertive China now?

Wayne Swan:                Well, I think the Abbott government bungled it from day one when they held that completely dysfunctional G20 in Brisbane and Prime Minister started lecturing global leaders about the Australian health system and all sorts of bizarre things and he banned climate change from discussion at the summit.

Misha Zelinsky:             That’s right.

Wayne Swan:                So President Obama went and gave a speech up the road at the university about the importance of climate change. It hasn’t been a great start in terms of our relationships with China. I think the government’s playing catch-up there now, but still is deeply confused about where we are and who we are.

Misha Zelinsky:             And so one of the things you responsibility when you’re treasurer is the FIRB decisions and the FIRB board reports treasurer in the cabinet. But I’m curious about foreign investment decisions. Should we worry about state-owned enterprises buying up shares [crosstalk 00:35:21]

Wayne Swan:                Absolutely. And I-

Misha Zelinsky:             … by an autocracy.

Wayne Swan:                Well, of course we should. And one of the first statements I made after I became treasurer in the middle of 2008 was putting obligations on approvals for state-owned enterprises. We don’t want any government body dominating a supply chain or dominating a market. I didn’t-

Misha Zelinsky:             And you talked about Chinalco trying to buy Rio Tinto?

Wayne Swan:                Well, far bigger than that, but takeover… it was actually always an attempt to take over a BHP. So if we had five medium-sized companies in a particular area and they wanted to buy one, well that’s fine, but if they wanted to come in and buy the lot, no. So we put down some principles about competition being observed, the whole series of principles, because ultimately you don’t want another government directing the private enterprise activities of its subsidiaries in your country.

Misha Zelinsky:             Mm-hmm (affirmative). And what about things like critical infrastructure? We’ve had [crosstalk 00:36:15]

Wayne Swan:                Absolutely. Absolutely.

Misha Zelinsky:             … network, but, of course, [crosstalk 00:36:19]

Wayne Swan:                Well, in fact, I did that.

Misha Zelinsky:             That was from the NBN, yeah.

Wayne Swan:                Yeah. For a good reason. So yes, there are national security implications of these things, always has been, always will be. You shouldn’t be letting foreign countries buy companies in your missile launch zone, for example. And I stopped one Chinese company from doing that. I say there’s another example of that that’s almost live at the moment, of course.

Misha Zelinsky:             Correct.

Wayne Swan:                There’s always been a national security element of any form of economic policy. And I think in recent years the capacity, including under us the broader part in this outlook, if you like, has increased.

Misha Zelinsky:             And so what about situation where government makes a decision and then China often responds with a fair bit of hostility about those decisions. You’ve got sort of this use what they call hostage diplomacy with the detaining of Canadian citizens, Australian citizens in response to 5G decision here and also with the arrest of the Huawei executive in Canada. I mean, how did you stand up to Chinese decisions at the time and how does a government do that going forward?#

Wayne Swan:                Well, I had a couple of particularly difficult and tense meetings. In fact, went I went to China to explain the fact that for the first time Australia was going to enforce responsibilities on state-owned enterprise investments in Australia, I was accused openly of being a racist. Now, that regime exists to this day. It was put in place for a good purpose. But when you look at these people, you got to go and look them in the eye and tell them what you’re doing. I think one of the problems that we’ve got is a lot of this diplomacy doesn’t necessarily come from what’d have been across-the-table discussions.

Misha Zelinsky:             You’re talking about megaphone diplomacy?

Wayne Swan:                Yeah, megaphone diplomacy rarely works. But if you got to engage in it, you’re want to make sure you go and look in their eyes first.

Misha Zelinsky:             Mm-hmm (affirmative). So you think there’s a bigger interpersonal thing that we should be working on in that sense?

Wayne Swan:                Well, I think you got to work on it, but you got to be realistic it won’t always work.

Misha Zelinsky:             Although [crosstalk 00:38:23]

Wayne Swan:                You don’t know until you try.

Misha Zelinsky:             Indeed. But, I mean, for example with Turnbull, when he was making some decisions around foreign interference around donations et cetera, Australia was essentially put in what they call the freeze where meetings were all canceled. So how do you handle that sort of stuff?

Wayne Swan:                Well, I don’t know whether that was what caused that… I mean, but we’ve got, and any country would have responsibilities. For example, China wouldn’t let us invest in a company in their missile launch zone, so we most certainly wouldn’t let them do it in ours. And that was the conversation I had with the minister at the time, and it turned out to be amicable. So you got to have these discussions. They are difficult. There will be positioning publicly. There will be conflicts. But the most important thing, and you don’t always know what’s going on, is that there needs to be under the surface, effective dialog by other ministers, diplomats or both.

Misha Zelinsky:             That’s right. That principal reciprocity, I think, is a good one and I think it’s a very useful one for us to use. So do you see a new… you know, we haven’t had blocks in the world since the fall of Berlin Wall. Do you see increasingly blocks emerging between the so-called liberal democracies and autocrats?

Wayne Swan:                Well, what I see emerging is a hard-right movement which has its roots in both United States, in a number of European countries and most particularly Hungary, backed in by some pretty sophisticated operations coming out of the Soviet Union. And there is plenty of documentation now about how that worked in the last presidential campaign in the United States, how it worked in the Brexit campaign and how it has played out in a number of other countries. So yes, I think we have to be alive and alert to the fact that there is an authoritarian push across a number of democracies to influence domestic outcomes.

Misha Zelinsky:             And so how do we deal with this challenge of these open systems? You know, this use of Facebook, social media, and yeah, you touched on it at the beginning with [crosstalk 00:40:25] question about it.

Wayne Swan:                Well, by making sure that your capacity to repel it is high, to detect it and then repel it.

Misha Zelinsky:             And should we be holding these… Facebook’s in America [crosstalk 00:40:37]

Wayne Swan:                There’s no question that Facebook and those organizations are going to be subject to much more regulation and scrutiny than they have in the past and that will be a good thing.

Misha Zelinsky:             And so just turning back to Australian politics, you recently retired from parliament, though you’re not retired, I know that, otherwise you’d jump across the table on me, I’m sure, if I were to say that, but are you missing politics at all, the [crosstalk 00:40:57]

Wayne Swan:                Well, I got out of parliament, but I haven’t got out of politics.

Misha Zelinsky:             Yeah, still the president of the party, so…

Wayne Swan:                Yeah. No, but I got out because I wanted to have a bit more time to particularly spend with family. I’ve got two grandchildren, two children living overseas, so a bit of travel. I’ll never give up my public policy interests and I’ll never give up fighting for the Australian national interest, but I thought it was time to move on in terms of the parliamentary party, but I’m not giving up the discussion or the battle of ideas, because that’s something I’ve dedicated my life to. I just want a bit more time to get into surf which I’m doing a lot more of and to be with and talk to my family.

Misha Zelinsky:             And so one of the things you talked about in your valedictory, but also in other, in the last few of years of being in parliament, was the impact of time away-

Wayne Swan:                Yeah.

Misha Zelinsky:             … and what politics does to families and the people. I mean, give us a bit of insight about the difficulties.

Wayne Swan:                Well, it’s a cruel world and if you’ve got a busy job, you’re away a lot, so you miss so many important events and you run the risk of being emotionally separated from and decoupled from the most important people in your life. And I said it in my main speech, that I wished I’d actually made more time for that, and I do regard that as a failure in my career. I have just been fortunate to have a very tolerant family, but it’s something that I want to spend more time on.

Misha Zelinsky:             In your time in politics, it’s probably fair to say that the prestige of the political class and of their institutions has probably diminished and faith in the institutions is much lower now when you look at any survey, not just in Australia, around the world. What’s driving that and can we get it back, and how? Because I think it’s so important.

Wayne Swan:                Well, I think the radical right is driving it. I think there are political forces driving this who’ve got an interest in demonizing the role that government has in our society and that is a vested interest so they can grab more of the product of the labor of our people than they’re entitled to. I think it’s very much driven. It’s also driven in an underlined way by many of the technological changes, the speed of communication and the nature of communication, or sort of hyper drive that or make it a hyper circle, if you like.

Misha Zelinsky:             And politics is sort of slow, the legislative process is slow, the world is quick.

Wayne Swan:                Yeah. Yeah. So it’s a combination of all of those things, but we got to get back to a bit more moral base and value base in our politics we got at the moment. And to do that you’ve got to out these people and hidden actors behind the scenes who are setting out to destroy trust between people.

Misha Zelinsky:             And you talked again, in your valedictory, about a turning point in Australian politics being the Tampa crosses, and you sort of touched there on values and morality. How did that impact on politics and what are the [crosstalk 00:43:38]

Wayne Swan:                Well, it was the beginning of the radical right in Australia purposely, deliberately using race as a wedge. And we hadn’t seen that in that way in this country before. It’s been a feature of politics in the United States for a long period of time, but the first we really saw of it as the country basically came out of its White Australia and embraced multiculturalism was Pauline Hanson.

Wayne Swan:                And what we’ve now seen as the embrace of Pauline Hanson by the conservative side of politics and the use of race and gender issues both openly and covertly, and I mean covertly even in the recent election campaign, where most people would say to you, “Oh, the refugees or all these things weren’t an issue.” They were. They were out there and they were pushed hard by that radical right under the scenes in many marginal electorates around the country. So we’ve got to try to eradicate that again. But my fear is that Liberal Party has been taken over by the extreme right and we’re in for an extended battle here. A battle for the nature and the type of Australia that we all want.

Misha Zelinsky:             And it’s interesting, because you talked, in ’87 Howard was basically pilloried for his attitude to Asian immigration.

Wayne Swan:                Yeah.

Misha Zelinsky:             Then when Hanson first came to parliament she was basically excluded by the entire political class, but also by the media.

Wayne Swan:                Now you’ve got Channel 7 paying her and TV channels paying her to do interviews, when she’s an elected member of parliament. It is an outrage and a disgrace that media organizations in Australia are involved in that sort of activity.

Misha Zelinsky:             And then the other… you know, the somewhat perverse one is that Tony Abbott, of course, was famously involved in destroying One Nation Pauline Hanson and then the next iteration, when Hanson returned back into parliament in the 2016 double dissolution election-

Wayne Swan:                Yeah. Well, the big-

Misha Zelinsky:             … he was photos with her and saying that One Nation’s now different.

Wayne Swan:                Well, the big change in my time in politics has been the elimination of smaller liberals for a Liberal Party and its takeover by a U.S. style republican right. And significant sections of the business community as well. The Americanization, if you like, of the conservative side of politics has occurred in our lifetimes and we’re now living with the consequences of it. And, as I said before, exhibit A is energy policy.

Misha Zelinsky:             And so I was curious, and I’ve put this question to you before to give you a bit of a chance, but, your best day on the job and your worst day on the job in politics, I’m kind of curious about, what are the things that make politics so powerful and what can make it so hard?

Wayne Swan:                Oh, well, the best day was the day we found out that we weren’t going to recession. That all the stimulus that we put out there had effectively worked. It was the very, very, very best day that I’ve ever had in public life. Because we didn’t know. We were operating in a very difficult policy environment. The worst day? Oh, there’s lots of bad days in politics.

Misha Zelinsky:             I’ll bet.

Misha Zelinsky:             And, well, I won’t explore that any further, but now, the final question I always ask everyone, so it’s a foreign policy podcast largely, we’ve covered all the terrain, but, three foreigners alive or dead would be at a barbecue at Swannie’s. Who would they be and why?

Wayne Swan:                I think I’d go for Neil Young, just for a bit of sort of music interludes. I could’ve easily picked Springsteen.

Misha Zelinsky:             Well, I was going to say, I mean, I think you could’ve picked a few.

Wayne Swan:                Or even Dylan. So I would just take those three.

Misha Zelinsky:             Okay. Practical list, practical list.

Wayne Swan:                I would just [crosstalk 00:47:20] in terms of-

Misha Zelinsky:             I think everyone… you’ll pay in about odds on to pick Springsteen, but we’ll go with Neil Young.

Wayne Swan:                I’m just in the Neil Young phase at the moment for some reason.

Misha Zelinsky:             Very good.

Wayne Swan:                Secondly, it’s a sort of toss-up, but I’d actually say Lyndon Johnson.

Misha Zelinsky:             Yeah, LBJ.

Wayne Swan:                Well, you know, he really stuffed up the Vietnam War, but I tell you what, what he did with the Great Society, just about every big social and economic change of a progressive nature, most of which have now been eliminated now was put in by that guy. Anyone who reads the Robert Caro books will understand why I’ve chosen LBJ.

Misha Zelinsky:             He’s a fascinating character as well because he’s considered to be the ultimate machine politician who did so much progressive change, right?

Wayne Swan:                Well, that’s it. Well, maybe there’s a connection. Maybe he knew how to get it done.

Misha Zelinsky:             Mm-hmm (affirmative).

Wayne Swan:                And thirdly, well, I better choose an Aussie.

Misha Zelinsky:             No, no. It’s got to be foreign.

Wayne Swan:                Oh, foreign? Oh, right.

Misha Zelinsky:             Yeah, yeah.

Wayne Swan:                Well, you probably got to go for Mandela, right?

Misha Zelinsky:             Oh, well, Nelson Mandela. Yeah, indeed. I mean, Nelson Mandela, LBJ and Neil Young all in a room at Swannie’s would be a good one, right? Well, look, before we go, I’m going to give a plug to the podcast. If you haven’t rated and reviewed it yet, please get on. It’s been a great chat with Wayne. If you don’t do it for me, do it for Swannie because he’s going to want to see this getting out to as many people as possible. So Wayne, thank you so much for joining us and I really appreciate the chat.

Wayne Swan:                Pleasure.

 

Dr Charles Edel: The Gathering Storm? How the ‘Lessons of Tragedy’ can help preserve global peace.

Dr Charles Edel is a Senior Fellow at the United States Studies Centre.

He was the Associate Professor of Strategy and Policy at the U.S. Naval War College, advised the Secretary of State John Kerry on political and security issues in the Asia-Pacific and was a Henry Luce scholar at Peking University.  Charles is the co-author of 

The Lessons of Tragedy: Statecraft and World Order (2019)’ and his editorials regularly appear in The New York Times and other publications. 

Misha Zelinsky caught up with Charlie for a chinwag about Mike Pompeo’s visit to Australia,  ongoing US China tensions, whether we are seeing the repeat of the gathering storm of the 1930s, the brave protesters of Hong Kong, how democracy can revitalise itself, the dangerous polices of the Chinese Communist Party,  and why it’s so important that we learn from historic tragedy. It was a wide ranging chat and I hope you enjoy it!

Misha:                          Charles Edel, welcome to Diplomates. How are you?

Charles Edel:                 I’m great. Thanks very much for having me on Misha.

Misha:                          Pleasure’s all mine. I appreciate having you on. So for the audience now obviously have given you, lifting the lid on the white podcast. Look, you’ve got the great intro about with your bio, et cetera, that I thought would be interesting, how does a person who worked for a secretary of state Kerry foreign policy expert, how do you end up in Sydney, Australia?

Charles Edel:                 With a lot of luck, and a ton of skill by being married to the right person.

Misha:                          Right.

Charles Edel:                 So when I was working for a secretary Kerry in policy planning office of the State Department I was looking at and advising him on political insecurity matters for what we used to call the Asia Pacific. Now it’s been brought into the Indo-Pacific, but Australia was clearly a very important part of that. Remit I got to travel out here when I was in government.

Charles Edel:                 But after I left government in January of 2017, my wife who is a diplomat, said “Well it’s time we go abroad again how he feel about Australia.”

Charles Edel:                 And I said, “I feel pretty damn good.” So I’m just here as a traveling spouse and it was the best decision I ever made. Yes, clearly being married to her, but coming out here to Sydney.

Misha:                          Second best decision.

Charles Edel:                 Second best … Well, look, we say we won the jackpot twice, because it’s not only Australia, but it’s Sydney. We apologize to Canberra and Melbourne and everywhere else.

Misha:                          Now you are opening up a whole heap of how dangerous. I just lost all my three listeners in Melbourne. So anyway, so normally sort of talk about things in a more general sense, but been some news this week we’ve had a visit from Secretary of State Pompeo and I thought I’d just get your take on a few things. I mean, one of the things that caused a bit of a fuss was this question of missile deployment, foreign missile deployment by the United States. You know, there was no … In the end, prime minister Morrison ruled it out, but it took a few days. What’s your take firstly on the question of foreign missile deployment and what would that do to the balance of regional power? If Australia chose to partake in that?

Charles Edel:                 So first of all, I’m not sure I am in agreement with your assessment that Prime Minister Morrison has fundamentally ruled it out. I think the conversation in the commentary has really gotten ahead of what the quotes actually were. And so my read of it at least, is that a hot on the heels of the United States withdrawing from the INF the intermediate range nuclear forces agreement, which is only binding on the United States and the Soviet Union, then the United States and Russia, right.

Charles Edel:                 That they wouldn’t develop or deploy land-based missiles either conventional or nuclear. Right after the U.S. withdrew from this on Friday, the new secretary, the U.S. Secretary of defense, Mike Asper when he touched down here in Australia said that we are looking for more sites in Asia to potentially deploy U.S. land-based missiles. That’s the backdrop to all of this.

Charles Edel:                 And again, what I heard was then the followup questions. Well did he ask Canberra to deploy them? And no, he did not ask. And I drew a line under it is what Morrison said. To me that’s actually an ambiguous statement. But it’s true that he didn’t ask because A, those conventional assets haven’t yet been developed. The type of things that they’re talking about. But this is the beginning of a conversation about whether or not they can be developed, if they should be developed and where they are deployed for what effect.

Charles Edel:                 So sorry to give you the long backdrop, but to me the reason that you can see the U.S. withdrawing from this is if you are a Europeanist, if you’re a Russian hand, this looks disastrous, right? Because for a long time it was arms control, strategic stability between the Soviet Union. Then Russia and the U.S. Well, the argument that was made, which I think has a fair amount of weight behind it, is why would you be party to this if only one side is abiding by it only the United States because the Russians have consistently been cheating on this and on what they’re developing, what they’re deploying forward. But even if you could bring the Russians kicking and dragging into compliance a big if there, it was never binding on what happened out in Asia. And so the Chinese over the last 20 plus years have literally been developing thousands of missiles, conventional and nuclear that range across the entire region and that are specifically designed to prevent the United States and certainly deeply complicated its access to project power into the region.

Charles Edel:                 Now, one of the ways that you would offset that to have a countervailing strategy is to have land-based cruise missiles that would potentially target and range things within China. Now that sounds very scary, but it’s also how you do deterrence classically. So that is the basis of the conversation. That is where we are on. And the attempt is, it’s a good discussion to say, well, would assets in Australia matter? Do you need them closer to China? Does that simply spiral up tensions or does that in fact create deterrence by one side balancing off against other, that’s where we’re at in the conversation.

Misha:                          And so an interesting point because part of the visit from Secretary Pompeo, saying we’re here to stay, we’re friends, et cetera. In this discussion with this a hundred years of mate ship, one of the issues that’s discussed at length now in the discourse within Australia is how dependable is the U.S. guarantee via ANZUS

Misha:                          Does the guarantee mean anything in that sense? Or is something like missile foreign deployment something a way to underwrite that guarantee? Or do they or they linked at all? I mean, I think it’s an interesting question because we had Jim Mattis who was a Secretary Defense quit on the basis of the Trump administration’s treatment of allies. And it’s sort of that capriciousness. So kind of curious about the dependability of the United States as a partner in that context.

Charles Edel:                 So you’ve actually asked about 15 different questions wrapped up into one. Let me see if I can pull apart some of those with some randomized thoughts for Misha.

Misha:                          Sure.

Charles Edel:                 So first of all, I think that what Pompeo was saying, I’m not going to try to translate it.

Misha:                          Sure.

Charles Edel:                 Is something that I believe at least is fundamentally true, that the United States is a Pacific power. It has been for the last 230 plus years.

Charles Edel:                 If you look at America’s strategic and economic and commercial interests, they are all in this region. That is the bet that’s successive U.S. administrations have made. So I don’t think that’s going away. The United States wants to be deeply anchored in the Pacific. Second point, the United States is a Pacific power comma predicated on those in the Pacific wanting it to be one because of the tyranny of distance. Now, there are certain us territories, a certain US states in the Pacific, but to remain a balancer, an offshore balancer in the Pacific that has to be acceptable to those in the region, which again is not something that the U.S. can impose unilaterally. It has to work with allies, friends and partners.

Charles Edel:                 A third point when I say a balancer that is the United States preferred role, I would argue not to Lord it over everyone and not to have hegemonic abilities you know, but simply to make sure, and this has been consistent U.S. American grand strategy and I would say both Europe and in Asia, but over the past 200 plus years that it is a driving mode of force of America and American strategic thought that they’re … They want there to be a balance of power in Asia when there is a lop side, when there is no balance of power.

Charles Edel:                 When you have one power dominating others, that has tended to not only affect American prosperity by closing off certain parts of Asia, but also has been a direct security threat to America. And so it’s important to recognize that without the United States in Asia, there is no balance of power. So part of this absolutely as you’ve asked, is a hard power question that as the balance of power, the relative balance of power has shifted over the last 20 years because of astronomical Chinese economic growth, which they’ve then poured it into the acquisition of military assets, which have been meant to coerce neighboring states, but also make it harder for the United States to remain in and protect power into the Western Pacific. Again, this is something that the U.S. has to play catch up with along with its allies and partners. So I don’t know, I think that’s like three parts of your 15 part question.

Misha:                          Well, we’ll get through the rest. We’ll get through the remaining 12 parts. That was the taste a bit. You’ve talked to sort of the long history of this issue. Of course an author, you’ve written a book, Lessons of Tragedy. I think it’s caused a bit of buzz in Canberra. I understand, I saw a tweet about Martin Parkinson referencing that … Who’s Secretary Prime Minister in cabinet saying everyone should read these book. So it’s available in all good bookstores. You can give it a plug now if you want. But the Lessons of Tragedy, it seems, it’s kind of like a counterintuitive sort of title in that it’s sort of meant to be uplifting, but at the same time with a counterintuitive title. What do you mean by this, firstly? And then we’ll dig into, the message within it.

Charles Edel:                 So you’ve nailed the paradox within my book. First of all, that it’s a bestseller that has sold like two books, such as a lot of someone who’s trained as an academic. But the point here is I think then my coauthor Hal Brands and I wrote an optimistic if sobering book, but the title is The Lessons of Tragedy, which doesn’t look or sound particularly optimistic. And the basic argument, which we can unpack a little bit, Misha if you want, is that we have lost our ability to think tragically about how bad things could happen. And I don’t mean personal tragedies, I don’t even mean societal tragedies.

Charles Edel:                 When we say tragedy, the ones that we’re talking about in this book are full-scale bucklings of the international order, complete with great power, not competition, but war and massive human suffering unfolding globally. And because we have lost the ability to think that that is actually a possibility and one that we argue is becoming more possible by the day because we are so far from the last time this happened, 75 plus years, we’re 30 years out from the last time America and its allies had a serious geopolitical, no less ideological challenger.

Charles Edel:                 The logic of what we have done for so long seems to make less sense. And it’s making less sense just as the warning signs are beginning to flair in multiple directions. So again, I don’t think that this is simply a pessimistic book because the point is, and the reason we use the lessons of tragedy, the reason we can’t hold up the book here in the studio, but it’s got two ancient Greek warriors on the cover, is because when we think about the Athenians and amazingly creative people and amazingly powerful people. People who created the world’s first democratic system in many ways that we still honor today. A prosperous people whose empire kind of span the known world. There’s this paradox because they were seemingly obsessed with the concept of tragedy every year they made their citizens go watch those plays that you and I either read or forgot to read or never chose to read in high school-[crosstalk 00:11:12] that too.

Charles Edel:                 But the point was the Athenians even in their achievements wanted to keep council with their worst fears. And they did that by putting them up on stage, but they used it communally as a prompt to think about how bad things could spin out of control, what the repercussions of that would be and to prompt the discussions and debates within their society about how to take some profoundly unnatural actions in peacetime.

Misha:                          And so in your book you sort of talk about the consequences of forgetting, and you go through a historic take on a number of different configurations. But the question I have is what is the … Do you think we are forgetting lessons? I mean we, the most probably direct lesson of tragedy would be the World War II. A lot of that generation is now sadly passing on. Is that lesson now being forgotten and that hard work that was done to build a more peaceful world order after World War II and that sort of never again, is that now fading into obscurity? Is that your concern or is it something else?

Charles Edel:                 Yes, I mean straight up. Yes. Because again, I just said this, that the logic of what America and other democratic states did. Made sense at the time when you were directly on the heels of coming out of World War II, right? So the idea was essentially preventative, right? That you would pay some costs and now so you didn’t have to pay enormous costs later that you would tend the garden, that you would look what were happening so that you didn’t have to wait till after things had collapsed. But again, there are some pretty natural questions that have come up in American political debate, in Australian debate too, although they take on different hues in the American context, there are questions like, why should America station military hardware and men and women around the world? Why should Americans care about far away places like the South China Sea and Ukraine? Why should Americans care to open their economy to others who don’t open theirs? And they’ve come at the short, medium and sometimes even longterm costs to American workers in certain industries.

Charles Edel:                 They’re really good answers for those because it tends to be, what happens when America has not played that role, and we’ve run that experiment twice during the 20th century. But as the distance has grown and as the visceral experience seems to have drained the logic of why we have done those things. Seems to have faded from memory, and it’s fading at the worst possible time.

Misha:                          So how do you make the argument for that? I mean people talk about, it’s popular in maybe wonky circles, the liberal world order, but then it’s almost a cliche, what does it actually mean and what’s involved in defending that and how do you make that case? Because to your point, once upon a time, President Kennedy pay any price, bear any burden and doesn’t seem to have that same level of guarantee. And as a result, that lack of confidence in that U.S. guarantee democracy sort of is retreating off the back of it. So I mean, how do you talk about it in a way that makes sense to people?

Charles Edel:                 Well look, this book, it represents an experiment to see if the language of Greek tragedy might be helpful here. And I, you know, we can talk about whether it’s more helpful or less helpful because simply saying things like the international liberal order or the rules based order or the American led order convinces no one of anything. And let me point out too that I’m as guilty as anyone else on this because when I was working in government, we would say we have to do this to defend the rules based system.

Charles Edel:                 And if you explain that to anyone who doesn’t work in the narrow circles of national security, that means what exactly? And the point is that the rules based order sounds really abstract and really theoretical, but it has real world effects because when it goes away, we’re actually talking about things like preventing states from coercing other states, like making sure that their rules for freedom of navigation, like making sure that their rules that other states can interfere in other states, businesses. Like making sure that there’s a global trading order that we all play by the rules and play fairly by them. So again, if you say rules-based order, got it. It’s short hand and it encompasses a lot, but I think we have to get better in our vocabulary, all of us, about what this actually means and why it affects normal citizens.

Charles Edel:                 Because when it goes away, when you have the reversion to yes, great power war, I mean people understand what that is, but when you have the reversion to not a rules based order, but a spheres of influence world, where the biggest dogs rule the most important areas. What does that mean? Well, it means that states can only trade with certain states based on the political conditions that the big dogs set. It means that states bump up against each other militarily and things become more fraught and are less stable than they might seem. That’s the alternative to this system. So again, this book is an attempt, one attempt to say, well, what does this mean? Why is it worth preserving? And are there better ways that we can talk about? But it’s not the only attempt, and it shouldn’t be.

Misha:                          And so you’ve talked to them about great power competition, largely that’s the United States relationship with China. In your book, you sort of touch on the similarities between the 1930s where we had a great depression, rise of extremist ideologies in Europe, which then led to world war II. I mean, is that, are there parallels that you see now when you look at the global financial crosses followed by we’re seeing populism, sweeping around the world, authoritarianism returning to Europe, authoritarians being elected around the world. Are there parallels or should we be careful about drawing parallels that are too close?

Charles Edel:                 Yes to both your questions. There are parallels and we should be careful about overdrawing analogies and only looking at one set of analogies. So in terms of the 1930s, the parallels are there and they’re real. Populists on the march, democracies in disarray, revisionist powers. So powers who want to change the status of power and how much they have kind of poking, prodding, nibbling around the edges.

Charles Edel:                 Some proxy wars breaking out on the side where states tests new found technologies. Take a look at Syria for instance. Take a look in Ukraine. The analogies are real. But it’s not the only analogy that we can think about. So actually, my coauthor, Hal Brands and I from this book, we wrote another article a while ago where we asked, look, is this the darkening storm, right? That we see coming towards us. Or is this the darkness before the light? And so we looked at the 1930s, but we also looked at the 1970s where you had a similar set of withdrawal by America after the Vietnam War. A real questioning of America’s international role. You had violence on the streets more so than we see today. And the question is, is that a better analogy because of course-

Misha:                          The collapse of the Bretton Woods system.

Charles Edel:                 Well, that’s exactly right. Right, because capitalism itself looked to under strain. But of course if you look at the 70s and then you look at the 1980s, in some way American power comes roaring back because the structural drivers of longterm strength of the American economy, the demographic profile of the United States, some of the policy decisions that were taken by both the Carter administrations, it’s kind of strange to say. And the Reagan administration teed up a more assertive set of policies that kind of made sure that American power was reinvigorated. And so the truth of the matter is that both of those analogies work, but in different strokes. And so if I would argue that if the right policy choices are made to reinvest in American power to grow the kind of, the economic prosperity of America to begin to play smarter bets on the strategic sense to make sure that the American people, which you can begin to see are tipping away from, we are living in a placid environment.

Charles Edel:                 To me this augers a very different future than the 1930s, but that’s only if those policy decisions are made because if they’re not, then we could very well see it tipping to a much darker future.

Misha:                          And so, this question of the U.S. China Relationship looms large in Australia, We’ll get to I suppose how Australia navigates that. But I’m curious, what’s changed in the United site’s perception of China because it seems that it’s been what was sort of a strategic, sort of a closeness has now become a strategic rivalry and that it’s almost like the U.S. suddenly woke up to this challenge overnight. How has that relationship changed? And why?

Charles Edel:                 So it’s a great question, right? That the China debate in Australia, no less in America seems to have changed so quickly that it’s really been confounding. And why has it changed so profoundly and moved so quickly? That’s a great question.

Charles Edel:                 And I would say that obviously it’s different in Australia as it is in America, but for the U.S., the engagement thesis that if you engage, if you choose to engage with China and Chinese leaders and CCP leaders, they will norm themselves to the rules of the international system and they will grow more prosperous and more secure for it.

Misha:                          And then more democratic.

Charles Edel:                 And more democratic ultimately. So that was the basis for the past 30 years of American engagement with China. And I think what’s happened and what’s happened seemingly quickly, although it’s been building for a long time, is that there’s a new emerging consensus that, that was potentially the right bet to have placed at the time, but hasn’t held up. And the thesis, that engagement, would as you say, democratize China.

Charles Edel:                 That has clearly not happened because it’s moved in the opposite direction. They would make them a more stabilizing force. Well that hasn’t happened either. And that would make them make economic choices that would reform an open up their economy as Dung Joe Ping seem to indicate was the future direction for them. While under Xi Jinping they’ve gone in the exact opposite direction. So there’s been this question of … Look in America, you always have your hawks right, who have always said you need to hedge against China’s rise. Certainly the more troubling aspects of it. But you also had the business community and the NGO community cheering on engagement. Well over the last two to three, if not three to five years. China has lost both of those constituencies within the U.S. because of the actions that they have taken on stealing IP, on forcing tech transfers on not living up to the deals and the agreements that they agreed to play by in 2000 when they joined the World Trade Organization.

Charles Edel:                 And frankly, if you look at the repressive turn within China by the CCP under Xi Jinping, all of those advocating for more people to people ties, for more civil society groups, for more a rule of law groups, have been kicked out of China at this point. So they’re not cheering on, no one’s cheering on this hard and turn, but it’s a realization that what had worked in the past is actually not going to work in the future. So a new set of assumptions need to undergird what you as policy is moving forward.

Misha:                          I think one of the interesting questions about this, and you sort of talk to the Chinese Communist Party, it’s important I think to separate the Chinese people from their government. And I think everyone doesn’t want to be defined by the government of the country at any particular one time.

Charles Edel:                 As an American. That’s true. I can say that. It’s true.

Misha:                          So the domestic policies. So we can talk … We’ll get to the foreign policy of the Chinese Communist Party. But the domestic policies, I mean, what we’re seeing in Hong Kong, how troubling do you think that is for rules based order. This was a thriving liberal rule of law country well, part of China that was handed over from British colonial rule to China. What we’re seeing now is demonstrations in the streets as China’s increasingly trying to crush that liberalism there. How worried should we be about the Hong Kong situation?

Charles Edel:                 Well, two things. I think, first of all, we should be profoundly inspired by what is happening. Every day when I turn on the news, when I read, it is, you know, sometimes in democratic societies it’s hard to get people to focus, to be inspired by things.

Charles Edel:                 You have a seven point two million person population in Hong Kong. Now for basically three months, continuously out on the street protesting with protests as large as 2 million people out there.

Misha:                          It’s incredibly brave.

Charles Edel:                 It’s incredibly brave and under threat of force. Beatings by a CCP linked organizations. The threat of potential invasion. And I think it’s very clear to me the most powerful statement that I’ve read in some ways is that the Chinese artists, the dissident artists, Ai Weiwei, who was of course … For producing dissident art was in prison, was tortured, was beaten in Beijing. He wrote a fabulous op-ed in the New York Times saying that the young people who are out on the streets who have information to what China is and to what the rest of the world offers, they’ve made their choice and they made a long time ago. And we should be inspired by that because they have the information and they are saying what they want.

Charles Edel:                 And in fact, this is a test case for whether or not people choosing their own system of government can be crushed by authoritarians. So on the one hand, this is where we can get into the ins and outs of U.S. policy at some point. One of the most counterproductive statements that came out of Washington and that actually is setting the bar really, really high these days, was saying that this was a clash of civilizations. The U.S. was now embarked upon between the U.S. and China with racial overtones because the first time the U.S. has faced this against a non-Caucasian people, which is first of all, fundamentally and historically inaccurate, comma, see World War II in the Pacific. But too, as you point out, this is not about the Chinese people and Western people and they’re different. All people want the same thing. And if you don’t believe that, simply look at what’s happening in Hong Kong.

Charles Edel:                 So I wanted to take a step back from your question about how worried we should be because this is truly inspiring stuff potentially when we can’t even see people who live in an open democratic systems coming out to vote. And you have millions of people on the ground demonstrating for this. Now the flip side of your question, how worried should we should be? We should be pretty worried here. I think in unmistakable terms Beijing is making noises that they are willing to, if not crushed this in the way that they crushed a similar uprising in Tienanmen Square 30 years ago with five to 10,000 deaths at the hands of the People’s Liberation Army against their own citizens. If not quite that comma or not that yet. Well, we’ll go after protesters. We’ll use terrorism. We’ll hire the triad thugs employed by the Chinese to beat people.

Charles Edel:                 There’s a video that I was watching out this morning where you can see the Hong Kong police on the second they switch off duties switching into both black and white shirts. There’s footage of this right. So that they could both insight the protesters and then beat them down afterwards. So this is amazingly troubling, but even more so for that. And I’ll take one step back here, Misha. It’s Hong Kong has always been a special place. And the Chinese knew this. This is what they negotiated with the British in the 1994 SAS courts when the British handed it back over to them. That it would be one country but two systems, semi-autonomous region. And the point was that this was supposed to be a model that for 50 years Beijing would not interfere in or force any decisions on Hong Kong. Well, that is clearly not true.

Charles Edel:                 And the people of Taiwan are watching this extremely carefully. In fact, Tsai Ing-wen the president of Taiwan who is doing not so well in the polls leading up to this coming January’s elections, in reaction to what’s happened in Hong Kong has seen her fortunes rise. Because we now know that when the Chinese say, and again, I’ll be careful with my words, when the Chinese government says, “One country, two systems.” They don’t mean it. And so there’s a real credibility problem at this point, that no matter what Beijing and the Chinese leaderships offer, be it one country, two systems, be it peaceful conditions in a harmonious rise, be it not militarizing the south China Sea, be it joining the WTO and agreeing to play by the rules. That there’s a real credibility problem that’s emerging.

Misha:                          And so you just touched on the South China Sea. Of course, China constructed some fake islands and then promise not to militarize those to President Obama. And then of course militarize them. How concerning firstly is that annexation and what does it mean for the area? Having that annexation occur and then, and secondly, what message is China trying to send by doing that?

Charles Edel:                 They’re trying to send the message that we are the most powerful country in the region and we can intimidate and coerce other countries and that those that don’t agree to our political demands, no less our diplomatic demands, i.e, hierarchical system with China. At the middle, we talked about a sphere of influence. This is what we’re talking about are going to be leaned on very hard. And that’s been the experience of the Philippines. That’s been the experience of the Vietnamese even this week. You know, the South China Sea is the rocks, reefs, and atolls. The really, really plentiful fishing grounds that you have in there that feed, you know, like 10, 15% of some of these countries populations, the natural resources that are potentially under the ground, gas and oil that have, you know amazing wealth that they might offer to the countries around.

Charles Edel:                 This is a disputed territory, right? That six different countries lay claim to, but what the Chinese have done and said this is ours based on historical claims. When that was invalidated by an international court at The Hague. The American policy decision, I can talk about that because I was in government, was to give that a little time and space so that things might cool off and then we can kind of peacefully work with things. But that’s not what happened. That was the bet that was placed. But the Chinese lorded their claims over and have continued not only with their naval vessels, not only with their enormous coast guard vessels, but increasingly with a maritime militia, right. With thousands of fishing boats that are equipped and resourced by the central government to go out and intimidate coerce and use acts of violence against Philippine fishermen, Vietnamese fishermen and others.

Charles Edel:                 This is a really large challenge. Now what does this mean, is what you asked? That’s the message I think that it sent. That it’s ours and good luck contending with us because there’ll be violence meted out against you or the threat of violence or even economic pressure applied to your economies if you dare push back against us.

Charles Edel:                 In terms of what that means. Well, the South China Sea as enormous waterway, is in some ways the most vital one of maybe two of the most vital waterways in the world. When we think about the amount of commerce that passes through this, when we think of kind of commercial trading routes and freedom of the seas, freedom to transit through these unimpeded in international waterways has been a long standing precept and bedrock principle of that nebulous thing, that rules-based order. And so when countries have the ability to unilaterally close this down, what does that mean?

Charles Edel:                 Well, that has enormous ramifications for commodities, for insurance pricing, for global prosperity. And what we are seeing here is a test about when the Chinese move to assert their de facto control over this waterway, whether or not they’re allowed to have it or not.

Misha:                          And so what’s interesting is that China tends to prefer to deal with foreign countries on a bilateral basis, not a multilateral basis. And that you sort of talked about the coercive behavior, the bullying. What about the question of interference and the sort of more insidious ways that China tries to influence, it’s neighbors either through hacking or through the BRI, the belt and road initiative where there’s soft money coming in, in the form of loans that can’t be paid back, which China then seizes control of particular assets. I mean, how worrying is that like up against some sort of the bullying and the brute force that we’re seeing that you just described.

Charles Edel:                 It’s worrying, but not all of these things are equally worrying and we have to think about that and kind of smart ways because BRI has troubling aspects to it, but there are also attractive aspects to that. So I don’t want to paint with a blanket here but in the new report that I wrote with John Lee an Australian colleague about kind of what does the future of the U.S., Australian look like as things heat up here in this region. We said, let’s be clear that it is Beijing’s intentions to undermine the alliances, the American alliances in the region. But the way that they go about doing this takes many different forms.

Charles Edel:                 So one form is coercion, violence, force, or the threat of those. But there’s another series of tools that they have, inducements, right, that the reward is going to be well worth it even if you have to at times give up your independent political decision making.

Charles Edel:                 And alternatively, occasionally building alternative institutional arrangements some of which are very much warranted, but others of which are meant to lock in Beijing’s advantages. So there’s a number of different toolkits that I think they go about this.

Charles Edel:                 Now you asked how worried particularly on the influence and interference. And the answer is I think quite worried because for a democratic state and talking about Australia, but this applies to the United States, it applies to New Zealand, certainly and others. We are open systems. That is how we are designed. It is a source in many ways of our great strength, right? We have con testability anyone can enter into them, anyone can influence or talk to their leaders because our leaders work for us. Not the other way around. That is our strength, but it also creates some vulnerabilities because we’re not the only ones that get to talk to our leaders or influence them or pay them or put them on corporate boards or suggest that maybe there’s a different way, an alternative way of thinking about things.

Charles Edel:                 So I have to say, having been in Australia for the past two years, it’s been fascinating to watch this debate here because the debate has gotten so hot here and so quickly. And I have to say one of the ways when I go back to Washington and I’m always asked, “Well, how has the influence and interference debate playing out in Australia?” That I think that the debate has evolved in very helpful ways here, is that we have to delineate that which we find acceptable in an open society and that which we find unacceptable. And I think that the broad parameters of that strategy are being conducted and carried about pretty well in the public debate here. We can debate certain policies, but the broad contours of that debate are, look, if we’re competing in terms of brand, in terms of cultural affinity, game on. We don’t box countries out.

Charles Edel:                 If you want to make an argument for why a communist linden a state is better, go for it. If you want to make an argument for why democracies don’t deliver goods as well as again, game on. That’s okay and that’s allowable, but anything, and this is what I see in the debate here, that is coercive, corrupting or clandestine is not okay. And we’re going to legislate against that and we’re going to make sure that we prosecuted against that as well.

Misha:                          Bringing this to Australia now directly, I mean the trade war, now is heating up increasingly between the United States and China and Australia, I think rightly concerned about being caught in the crossfire there and being pulled between us security relationship with the United States and other alliances. And then of course, how important trade relationship with China and the disruption potentially caused by these trade wars. I mean, you can understand the concern that-

Charles Edel:                 Absolutely.

Misha:                          That brings to Australia. How do we have a productive discussion about this? Because often, criticism of China or Chinese government behavior is often said, “Well, don’t upset the apple cart.” And then on the other hand the United States will ask Australia to be more assertive in the South China Sea, and China’s sort of square that circle is a very, very difficult thing for policymakers. So then how do you see that as a representative or a citizen of the United States observing this debate?

Charles Edel:                 So three things that I would say in response to that. The first is, and I think you’ve rightly caged this, that the way that you often hear the debate framed here, but frankly around Southeast Asia as well, is there are two partners and their partners of choice for different things, for security and for trade.

Charles Edel:                 But of course, trade is not prosperity. It’s one component, part of it and a very important part. But so too is investment. So too, is job creation and again, I actually think it’s, it’s a very character black and white debate here that yes Australia has enormous trade flows with China its most important trading partner, 33% of your outbound exports go up north to Beijing when they’re let off the docks and into the Chinese markets. That’s a big if. But again, the United States is the number one investor into Australia in terms of foreign direct investment. And by the way, that’s also true of Australian commerce into America. And there’s more investment put into America by Australian firms than there is into China, into the Middle East or then into Latin America. When we think of job creation, when we think of aggregate prosperity and taxable dollars put into your economy and for your government, there’s no comparison.

Charles Edel:                 I mean the amount of FDI that the U.S. puts in and by the U.S., I simply mean the private sector is out weights China’s by a degree of 10 to 1. Now, I’m not making the argument that therefore choose A or B, you want to choose both to some degree, but it’s a false dichotomy in some ways to say, it trade equals prosperity because that’s not actually what the real numbers look like.

Charles Edel:                 Second Point if you don’t mind me. I’m getting rolling here.

Misha:                          Keep going.

Charles Edel:                 Is that in this report that John and I put out, we say that the economic edge of this debate is going to evolve because of changing circumstances, but it’s going to evolve probably differently in the United States as opposed to Australia. So in the United States, the word on the cusp of everyone’s lips is decoupling whether or not the United States and the Chinese economies are going to pull apart, dis-aggregate because they’re deeply intertwined.

Charles Edel:                 And of course then the next question is, well, are we talking about smart decoupling or dumb decoupling? And we’re at the beginning of that debate, but I actually think it’s almost inevitable that, that’s going to happen to some degree because there are certain sectors that the United States and China frankly needs to and wants to protect.

Misha:                          Tech for example, telecommunications.

Charles Edel:                 Exactly, that’s right. I mean, [crosstalk 00:39:25] if you ask anyone in China, I lived in China for a number of years, would you allow the United States or would you allow an Australian Telco to build your internet architecture? You couldn’t even get those words out before you got laughed out of the room because the answer is obviously no. Which then begs the question, why is this debate happening here? Although frankly, this debate is happening here only to a minor degree because Australia was the first mover on the Huawei question.

Charles Edel:                 But again, if that’s the question and the debate in America, the question and the debate in Australia, I imagine needs to be a different set of questions. It’s how do you smartly diversify your trading partners? You’re not going to stop trading with China. You might want to think about which things you’re selling to them and which things you’re allowing them to invest in. Critical infrastructure. We talked about dual use technologies or another, but in terms of agricultural food stuffs, in terms of wine, those are things that you will want to continue selling. And the question though becomes if Australia is the most developed economy, is the country of advanced economies that is most dependent on the China market of all advanced democracies in the world. That has the potential to create real political leverage where at least a case of the slows on other issues like security that we were talking about.

Charles Edel:                 So the question becomes not selling them things, but how do you decrease that political leverage? And the answer is very obvious. It’s diversification of trading partners. In fact, you’re a government commissioned, Pierre [Vargace 00:40:58] to write a report on India. Yeah, that’s like a 400 page report with 120 recommendations about how Australia and India grow links. But it’s not only India, right? I mean his report was only India. The answer is Southeast Asia as well, which we know is going to represent kind of the hot emerging market in the years to come. So the diversification question should be one that should be sought not only by business people, but also by the government. And frankly, the political risk conversation in the corporate sector here, is immature because all the time businesses do you know, cost benefit analysis, do risk allocations but very infrequently are political factors put in terms of those.

Charles Edel:                 But if we look at what’s happened even over the last six months with coal, with wheat, with wine staying on the docks. Not for any real official reason, but just because I don’t know what exactly, because the Chinese government is displeased, that Australia’s decided to stand up for its own sovereign interests.

Misha:                          The Canadians had a similar experience with canola oil.

Charles Edel:                 And continue to have one. That is a decision that needs to be factored into corporate decisions because it’s a risk factor. That doesn’t mean don’t do it, but you have to weight things perhaps differently than they’ve been weighted before.

Charles Edel:                 The final point I would make is how can we assert ourselves? Well you don’t do it dumbly. It’s actually called diplomacy right. Because when we assert our interests, there’s this kind of false narrative, this false binary that China reacts in one of two ways, thermo nuclear war or nothing.

Charles Edel:                 And that’s just false.

Misha:                          Right.

Charles Edel:                 And in fact, if we look at smaller states and how they have reacted to instances of Chinese economic coercion, South Korea for instance we can look at India, not a smaller state particularly, but Vietnam certainly. In all those instances you did not have war. We can go through the examples of them, but the point is when they pushed back, it reframed the terms of the debate more conducive to their interests. And in some places like in South Korea, like with Vietnam, Beijing had to not admit mistakes, but reset the frame of the debate.

Misha:                          And what about the role of multilaterals? I mean that with countries working together, as I said, China prefers that bilateral deal. We’ll deal with the on one-on-one basis. And they tried to pick countries off one-on-one. Can Australia work more closely with regional partners on a multilateral basis to deal with or make the Chinese government play by the rules, of the rules base order, if we can fall back on that cliche.

Charles Edel:                 Yes. They can, I mean, there’s great strength in numbers, but only if those numbers are brought to bear. And there’s another false narrative that I would say is out there that, China doesn’t care about this stuff. I mean, look at its national power. What does it matter if it gets criticized, and on certain aspects that’s true. But on other aspects, Chinese government goes through great lengths to avoid being criticized, to avoid being seen as the bully. If you look at the politics, for instance, of ASEAN on the Association of Southeast Asian Nations, 10 members. The preferred approach is always to play it off as you have said one on one, because it’s easier to pick members off ASEAN as a consensus based group. So if you want to make sure that they have no joint statements, that the South China Sea needs to remain open and is not China’s. All you have to do is pick off Cambodia, which is very easy to do these days or Lau.

Charles Edel:                 But you can also look at the enormous lengths that the Chinese have gone to scuttle individual statements or anything that has a whiff of collective resolve. So when we move the gaze away from ASEAN, but about Australia’s relationships with its neighbors, with Japan, with ASEAN, with India, the more that can be done collectively not to escalate tensions, but simply to say, these are the rules that we’re willing to engage on. The more effect I would argue that it probably has.

Misha:                          And so, one of the things I wanted to get your perspective on is this question of a democracy. Democracy is under … Probably the first time it’s been challenged in a generation as certainly since the supposed end of history with the collapse of Soviet Union, is democracy is still the best system because Vladimir Putin’s basically said, “It looks all over, dust your hands, see you later.”

Misha:                          I mean, firstly, is that a legitimate position and why can he say something like that? And then secondly, has the U.S. … Does the U.S. still believe in the projection of democracy around the world?

Charles Edel:                 So first part of the question is why did Vladimir Putin make this statement? And was he right? So like someone who’s trying to murder the system, you shouldn’t really believe them and why they take it. However, why did he say, well, because-

Misha:                          Well it’s not something he could have said, I think 10 years ago with any level credibility.

Charles Edel:                 Right, because it has more credibility now. That the democratic system … Look, democracies have always been predicated on two things, right? The Winston Churchill quote, that it’s the best system of government except for all the rest or the reverse of that rather. Right?

Misha:                          Sure.

Charles Edel:                 But also, and fundamentally, democratic systems are based on, it delivers the best type of goods for its citizens, and responsive to their needs. And we can say that democracy, liberal democracy, liberal capitalistic democracy has had some real growing pains and real stumbling problems, particularly over the last 10 years. In the aftermath of the global financial crisis, it doesn’t look like a perfect model. When we look at globalization and what it has delivered, enormous goods, right? Globalization took millions of people, billions of people if we look at China’s case out of poverty, but also affected people unevenly. And particularly in advanced Western democracies, left a lot of people behind. So are there problems with it? Yes. The best part of our system is that it has the ability to self correct and honestly self-correct, but we’re not there yet.

Charles Edel:                 And that’s why I think, why you see so much populism and kind of push back against this. So is there some truth in what Putin has said that the system is underdressed? Yes. I mean if you just looked at the numbers, right. The number of democracies in the world hit a high point in 2000 and I believe six and has been on an ebb tide ever since.

Charles Edel:                 Meanwhile, the number of authoritarian states has increased, so we are really seeing a contest of systems emerge about what is better, able to offer prosperity to people around the world and there’s one system that makes an argument that is simply political control and order and non democratic choice that will lead its way to prosperity and the other stuff doesn’t matter quite as much. I would say kind of circling back to Hong Kong, I’m not sure if that argument has a lot of staying power because even when people become prosperous, they don’t stop caring about that other stuff. This is why Hong Kong is such a great challenge. No less Taiwan for Beijing because it puts lie I think to the fundamental argument that they have.

Charles Edel:                 But to say that democracy is great and then all of our citizens are being taken care of, I think is fundamentally to misread what’s happened around the world and in Western elections over the last 5 to 10 years.

Misha:                          I think what’s interesting there, and you did right off and say, it wasn’t as though people got to 1989 and then they read a bunch of Jeffersonian literature and read a bunch of Marx’s and said, “You know what, Jefferson’s a much more beautiful argument.” They looked at was delivering for people and a communist Soviet Union. Russia at the time was not able to deliver for people on a living standard basis, so people yearn for that. What’s interesting in this last decade, is essentially plan … There’s been this enormous prosperity in this sort of autocratic capitalists approach to the world that has been led by China.

Misha:                          And so young people, I mean when you look a lot of the polling, increasingly young people are sort of questioning whether or not democracy is the best system up against other systems and how worried should we be about that? Or is that just young people being contrarian with?

Charles Edel:                 Well, so it’s a little bit of both. We should be concerned and as young people being contrarian, but it’s also young people being offered a false choice in those polls. And then an abstract question, do you like democracy or not? How necessary is it? Look, when you look at those polls that have come out in Australia, the Lowy institutes, but a really good polling numbers on this in America, you’ve seen a lot of this poll into all around the Western world. The numbers are to the question, how important, how necessary do you find it as a young person? If we slice and dice the demographics. How important is it that you live in a democracy? And the answer is mah. It’s kind of important, but it’s not the most important thing.

Charles Edel:                 And the numbers are falling too. Now that is deeply disturbing to a lot of people, particularly to older people. But I actually think that with this one, I’m not as pessimistic as the polls might put out there. Although on the policy discussions I have bigger questions so I’ll return to that in a second.

Misha:                          Sure.

Charles Edel:                 But if you actually spend any time talking with young people, high school students, university students, this is a great virtue of my job because I lecture to university students. I get to talk with high school students all the time. And if you don’t ask them, how important is democracy to you? But if you rather say, how important is it that you live in a place that respects individuals? How important is it that you live in a country where human rights, protection and promotion is important? How important is it that you don’t have your own government scanning your face, deciding every action that you make or don’t make fits into a credit system and the government that gets to decide if you’re a trustworthy or an untrustworthy citizen. How important is that when you go to university that you get to learn new ideas and when you find things that are appealing or unappealing and you protest them peacefully, that you’re not bulldozed by violence?

Charles Edel:                 Well, the conversation shifts really markedly and very quickly.

Misha:                          From the abstract to the practical.

Charles Edel:                 From the abstract to the practical. And when you ask young people, how important is it that you live in a society like that? It’s not like 50% and falling, it’s more like 90% and rising.

Misha:                          I mean, people, it’s often politicians mixed into the question about democracy and what they see on TV and how politicians, act versus the actual system itself compared to what an autocratic system truly is, or is there an element of that do you think?

Charles Edel:                 Well, there is a little bit of that. But it’s also because, you know, I think we’ve gotten lazy that you kind of referenced 1989 you know, with Jeffersonian versus Marx’s thinking, but really it was Francis Fukuyama who wrote the end of history, i.e. history was over, there was no more argument in history. Liberal Democratic capitalism had one game over argument over. And because the Soviet Union had gone the way of the Dodo at that time or the Tasmanian Tiger right there, extinct too.

Misha:                          Oh, local reference, well done, bonus points.

Charles Edel:                 Thank you. I love Tasmania. I can make that reference now. But because they had gone that way, democracy didn’t have to compete against anything else. It didn’t have to make the arguments. So I actually think that our political leaders have gotten pretty lazy about talking about why democracy matters in practical terms, why it’s better than the alternative because there is an alternative and it is back with a lot of strength behind it.

Misha:                          Well, it’s interesting to touch on that. So what’s troubling I think as well is not just the challenge to the liberal world order, to democracies, but the increasing coordination we’re seeing by autocratic nations. Can you expand a little bit about that level coordination that we’re seeing between countries like Russia and China, but in the Middle East as well with Iran and what the challenge that represents. And secondly, should democracies be working closer together to offset that?

Charles Edel:                 There is growing coordination, if not out, and out, alliances between the world’s largest autocracies with the intent of undermining the system and growing both of their power and weakening democratic powers. And is there more that democracies can do to coordinate their actions? Yes, absolutely. It’s necessary. But the question becomes what will prompt us to do so? Because again, just looking at the numbers if you begin to look at you know, you’ll often hear that America’s in decline and some of our leaders statements will make you think that that is invariably coming true.

Charles Edel:                 However, if you look at it, and this goes back to our conversation about the 30s versus the 70s, if you look at aggregate U.S. GDP in 2016, it was about 22% of world output. That is not that far off the high point post war in the early 1970s. When you add in partner and allies, we’re talking about more than 60% of global GDP and military outlays that is far greater than any competitor has.

Charles Edel:                 The question is not necessarily one of resources. It’s willingness to use them. And again, a reason that how, and I decided to write this book is because for a democratic society, which always has more than just security on its mind, it has to, it has to be responsive to its own citizens. To get it to act in ways that can forestall things getting worse, particularly in the security and prosperity realms, but also in the values realm. What will prompt them to do so? And if you look at history, the answers are not great. Because it’s generally after something horrible happens. Generally after something blows up that we decide, whoa, we weren’t paying enough attention. It’s time to ramp up big time. And I simply say, as a historian, no less someone who’s interested in policy and occasionally works on it. That cannot be a good enough answer because we can’t wait for things to get horrible in order to develop the right set of policies.

Charles Edel:                 So the question becomes, what can we as democratic societies do on our own, but collectively together that stop the trends that we see happening in the world right now.

Misha:                          And in your book you talked about these historic political analysis and that, it had said gets discussed a bit, the Thucydides Trap. The one great power being displaced by a new great power, often or inevitably it’s a trap. The trap being the-

Charles Edel:                 It’s a trap Jim. No, sorry, go on.

Misha:                          Inevitably, those two great powers go to war and there are numerous examples in history of that happening. When we look at it in the U.S., China context is very easy to say, “Well that’s the inevitable conflict there.” But are you an optimist or pessimist about whether or not that can be avoided? Can we avoid the trap and how do we avoid the trap?

Charles Edel:                 Yeah, yeah we can avoid the trap based on decisions that we make, but it’s not clear that we’ll make those decisions. But let me step back and put my cards on the table because we have to kind of dig into what assumptions and am I carrying into this. So if you bring the assumption to bear that rising powers jostling for their place in the sun are inevitably going to create some friction. And anything that kind of the status quo power does will inevitably create spirals of escalation. That they do something you push back and voila, you were in World War III with nuclear weapons, right? That is one frame of reference. That is the Thucydides Trap. That is the World War I frame of reference. Then the policy outcome is pretty clear. Don’t push back because who the hell wants to be a World War III?

Charles Edel:                 However, if you take a different analogy that pushing back doesn’t necessarily, as long as it has done smartly, creates spirals of escalation but rather deters problematic behavior and stabilizes very problematic situations, albeit in ways that feel uncomfortable, i.e. the Cold War. That’s a different set of policy outcomes that you’re lied to. So again, this is the situation we find ourselves in is different than both of those historical analogies, but depends which way you read things. And if you read pushback as inherently destabilizing or one that feels uneasy, none of us like the world that we’re moving towards, but it also can stabilize uneasy situations. That aligns your policy choices.

Misha:                          Well, this has been very illuminating. Now Charles, I couldn’t talk about this all day, but you’ve got a job to do kids to teach. I’ve got … I can’t entertain my five listeners forever but-

Charles Edel:                 Well, I think I knocked it down to three. Right, because we knocked Melbourne out of the conversation.

Misha:                          Well, that’s right. So that’s, right. So you’ve got two sales, I’ve got two listeners. We’re very popular bunch. There’s four between us, but I’m now, heavy duty conversation. Now we’re going to lighten it up with my super fun, happy, amazing question. Super non clunky segue into a barbecue, Charlie Edel’s three Aussie’s alive or dead who’s coming and why?

Charles Edel:                 Very easy choices. One, Ned Kelly and or Peter Carey, because I love his, a historical fiction version. The True History of the Kelly Gang. Just a great read.

Misha:                          Okay.

Charles Edel:                 Two-

Misha:                          Isn’t it Kelly in the suit or not?

Charles Edel:                 The armored suit?

Misha:                          Yeah.

Charles Edel:                 Well I hope if he is, he’s not standing too close to the barbecue that won’t work out so well for him. Two, because we’ve been having this high-minded abstract talk, which I hope is not only abstract, we have to invite Hedly Bull, academic, Aussie born, lived in England who talked about issues of order versus issues of disorder. That all the time the international environment is these two forces contending and that the rules, those who seek to create an order prompt rules and discussions.

Charles Edel:                 And in fact he’s informed a lot of my own thinking. So a great Aussie, who I’d love to have more conversations with over a sizzle.

Charles Edel:                 And then third, without a doubt, Rebel Wilson, because she has to be in any conversation I think. And by any conversation, I mean I would be quiet and just listen to what it is that she had to say.

Misha:                          So we’ve got, well an outlaw, a comedian and an academic and a barbecue.

Charles Edel:                 Yeah. A fill in the blank on the joke, I guess.

Misha:                          Well that would be one to be in attendance at. But thank you so much for joining us and Charlie, and I hope everyone enjoyed the episode.

Charles Edel:                 Well, thanks very much for having me on Misha. I appreciate it.

Misha:                          Cheers, mate.

 

Chris Bowen: Reasons to be optimistic and the future of progressive politics and liberalism

Chris Bowen is the Member for McMahon in the Australian Parliament. In his time in public office, he has served as Treasurer, Minister for Human Services, Minister for Immigration, Minister for Financial Services, Assistant Treasurer and Minister for Competition Policy.

As the author of the books of ‘Hearts and Minds’ and ‘The Money Men’, Chris is a noted public policy thinker and expert. 

Chris joined Misha Zelinsky for a chinwag about the future of democracy and liberalism including the threat to democracy posed by inequality, the role of faith in politics, how Australia can properly engage with India and Indonesia, what the future holds on Australia’s China policy, why we should be much more worried about global debt and how progressive parties can rebuild trust with the public. 

Misha Zelinsky:             Chris Bowen, welcome to Diplomates, thanks for joining us.

Chris Bowen:                Long time listener, first time caller. Good to be here Misha.

Misha Zelinsky:             I think you’d be one of our very, very few listeners that have become calls so it’s very pleased to hear that.

Chris Bowen:                I did get on early, so it’s a great listen. Well done.

Misha Zelinsky:             Thank you so much for that plug, we’ll make sure that we’re putting that out in the socials. There’s so many places we could start obviously, but one of the places I thought we could start was interesting recently leading into the G20 we had Vladimir Putin come out and say that liberalism was dead, is a dead project, that the West effectively had lost the post Cold War era. I mean, what do you make of those comments firstly, and secondly what does it say about the state of the world given that perhaps ten years ago that would have been laughed off, now it’s a serious point?

Chris Bowen:                Yeah, I think that’s right. That’s a good way if putting it. I’m more optimistic than that, I think we have to be more optimistic than that. We can’t accept that as being the statement of fact, we have to fight back against that. But the fact that a world leader could even say that with some credibility tells you where the debate’s at. The one thing we know is that the Francis Fukuyama theorem of, “History has ended, liberalism has won”, is not how things have panned out. For a long time we thought he was wrong because Islamic fundamentalism and religious fundamentalism was a challenge to liberalism and that remains an issue.

Chris Bowen:                But also, authoritarianism has become a much more accepted framework in many countries of the world to some degree or other, whether we’re looking at what’s happening in Turkey or Hungary, but the United States is on a different part of the continuum. The trend is all to populism/some form of authoritarianism and at the other end of the spectrum, whereas say twenty years ago we might have been having the discussion, will the rise of China and the economic growth of China lead to China becoming a liberal democracy? Well in fact, if anything we’ve seen Chinese authoritarianism increase, not become more of a liberal country.

Chris Bowen:                The fact that we’re having this conversation tells you that the world’s not in a great state, but I’m an optimist about liberalism. Some people question whether democracy is under challenge.

Misha Zelinsky:             We’ll get to that.

Chris Bowen:                Yep.

Misha Zelinsky:             Yep.

Chris Bowen:                And that’s a legitimate question to be asking, and then I guess to subsidize smaller liberalism under challenge, or liberalism as a world view in the international context. It is under challenge, but I think we have to think of ways to ensure that it’s not only survives, but prospers.

Misha Zelinsky:             So what are the reasons to be optimistic about it? It’s so obvious to give all the counter examples about the insurgence of autocracies and all the crisis of confidence in the liberal democratic order. So, what are the reasons to be optimistic? Very easy to point out the problems.

Chris Bowen:                Yeah, that’s right. Well, just looking around the world a lot of the defeats of, if you like, liberalism or, in some senses, progressivism, have been narrow. Trump didn’t actually win by much, as you know he lost the popular vote, and actually a swing of not many votes in key states would’ve changed that result.

Chris Bowen:                UK politics is highly contested. We may or may not get into the inner workings of the British labor party.

Misha Zelinsky:             We’ve got a bit of time! Cover all sorts.

Chris Bowen:                The two party system is pretty closely contested in the United Kingdom. You’d be a brave person to predict the result of the next UK election. Macron in France now, we all have our criticisms of Macron perhaps, but he’s a force of centralist liberalism, maybe slightly to the left. Trudeau in Canada, he’s had a few challenges, but he’s got one good election win and will probably win another election in the next twelve months. So, you can look at those places, and of course New Zealand, Jacinda Ardern didn’t win an election, she won a parliamentary majority, but I don’t think there’s much question that she’d win an election now.

Chris Bowen:                So there are some bright spots. And, the fact that the forces of progressivism are being challenged means that we do need to think about what our answers are. I think we are doing that, thinking around the world, parties of the center left, to some degree of success or otherwise. Or at least asking the right questions. And I’m an optimist because we have to be, otherwise you wouldn’t get out of bed in the morning, that we will come up with the right answers.

Misha Zelinsky:             One of the things that troubles me, is this intersection of economics and politics, right?

Chris Bowen:                Yep.

Misha Zelinsky:             One of the consistent things everyone talks about from a public policy point of view is this level of inequality that you’re seeing, both within and between countries. Can you have an increase in equality, where people feel more disenfranchised, particularly when you look at the pattern of that inequality where it seems to be regional areas, where regions that are distressed tend to become less hopeful.

Misha Zelinsky:             Are democracies and healthy democracies consistent with inequality, or do we have to address one to address the other, where you’re addressing them isolation?

Chris Bowen:                Well we should address inequality, one, because it’s the right thing to do, and two, because it is leading to this populism. You can look at inequality through any number of frameworks or spectra, but I think the most useful one for this conversation is the one that you’ve given a nod to, pointed to, which is geographic inequality. If you look at this challenge to the forces of the center left or liberalism, progressivism, what ever you want to call it around the world, it is very much a geographic divide.

Chris Bowen:                Brexit one outside London. If it was up to the people of London, they’d be very firmly in the EU. Trump one in rural America. Not in the cities. If it was up to the people of California or New York, Hilary Clinton would be preparing for re-election. Macron won in Paris. He lost in the region of France to Le Pen. And, if you look here to our recent kick the guts election defeat, we had swings to us in the city, in wealthy areas, in both safe labor and safe liberal seats, the inner ring. We had swings against us in outer metropolitan areas, particularly in Sydney, which we weren’t necessarily expecting. And big swings against us in regional particularly in Queensland.

Chris Bowen:                Now these are people, in my view, who say in the Australian context, twenty-seven years of uninterrupted economic growth, give me break. I don’t see it. My kid can’t get a job, I’m maybe forty-five and I’ve been unemployed for two years. You go down the main street of Mchale or Gladstone, or Gladstone’s a bit different, it’s going better than some regional centers. Mchale, or Bowen, or Rocky, and things aren’t feeling too great. They’re saying what about us? And the straight, center-right message of, “We care about inequality”, has not appealed to them. It’s our challenge to make sure that we do put it in ways which does appeal to them, when we ensure that the product is the right one for them, and two we are expressing it in a way which speaks to their views about inequality. Because they are, if you like, victims of inequality, they are falling behind in our society.

Chris Bowen:                Obviously our message of, “We care about you and care about inequality.”, has not resonated.

Misha Zelinsky:             It is a bizarre thing when you look at the traditional, I guess, areas that social democrats care about globally, and the regional inequality that we’re seeing somehow, whether it’s message, whether it’s policies. I think there’s an element of attitude and tone about it.

Misha Zelinsky:             But, how is it that we’re just misaligned, we’re not connecting somehow?

Chris Bowen:                This is not a new challenge in some ways, it’s more intense and more acute than it has been. But it is also not a new challenge. Do you remember fifteen or twenty years ago Thomas Frank wrote the book, “What’s the matter with Kansas?”, which was about this very matter. In some countries it was published as, “What’s the matter with America?”, but the real title is, “What’s the matter with Kansas?”. And he spoke about these issues, the people of Kansas, Alabama and Arkansas, and those states are doing it tough or falling behind, subject to inequality, have been left behind by the elites. And the democrats have all these wonderful policies to deal with that, and they are turning up on the first Tuesday of November and letting some old Republican. What is going on here?

Chris Bowen:                And he put it down to cultural issues, lack of empathy with the cultural concerns of people in those states. And I think there is still something to that.

Misha Zelinsky:             And you raise that recently, talking about whether or not people of religious faiths feel at home.

Chris Bowen:                Yes. Which is, I think, an existential problem.

Chris Bowen:                If you look at the United States, the single biggest indicator of voting intension is faith. Not income, not ethnicity, not geography, it’s faith. What ever faith. Even if you’re of Islamic faith, that’s the best indicator that you’ll vote Republican, if you are of very solid faith.

Chris Bowen:                Again, I think we have a real challenge here in Australia about this. Now, we’re a progressive party of course, we believe in equality. I voted for major equality, I’m very proud of that. But, we need to ensure we are also having lines of communication to people who are economically progressive, and who believe in social justice. And some instances believe in social justice because of the ethos that they were brought up in, in their church.

Chris Bowen:                But also have some concerns about their social conservative. Now, I’m not suggesting for one second we need to not continue with the progressive project, but I am suggesting that we need to think about how we talk to people of faith, how we bring people of faith with us, ensure that they know they have a role in our party, that they can be treated with respect by the party, and have their views considered, both within the party processes and by the party in government. And we have not done that. To be frank, we have neglected that as a movement and as a party, and we have paid a price.

Chris Bowen:                I think a big part of the swing against us in western Sydney and probably in some regional areas, was the concern of people of faith, that the labor party has lost touch with their concerns and their issues going forward. People who say to me, “We just want to know that you’ll listen to us. We may have voted against marriage equality, but we accept the result, but we want to know we’ve got a place at the table going forward.” I think, collectively, the party and parties of the left, need to ensure that there is a role for people of faith. Again, many faiths teach social-

Misha Zelinsky:             That’s right.

Chris Bowen:                Social justice.

Misha Zelinsky:             It’s not antithetical-

Chris Bowen:                No, that’s right.

Misha Zelinsky:             The tenants of religion are in no way an antithetical decision. Obviously, love thy neighbor, looking after one another, there’s plenty within the-

Chris Bowen:                Quite the contrary! Quite the contrary!

Chris Bowen:                I mean, in most religions as you say, preach love, and respect, and tolerance and understanding, and justice. We might use different words, but it’s what we’re about as well. But we’ve lost the connection with people of faith, and we must get it back. I don’t mean to be melodramatic. I regard it as an existential crisis.

Misha Zelinsky:             Well that’s that. Certainly putting it at a high level.

Misha Zelinsky:             This narrowness, how do progressives, and this a global problem. You look at it globally, rightfully identified progressive parties, social democratic parties have either been marginalized or disappeared in some countries, you’ve got France.

Chris Bowen:                Yeah. Well there’s the French socialist party effectively no longer exists.

Misha Zelinsky:             Right.

Misha Zelinsky:             And so, as you say, the existential threat, Macron’s essentially co-opted that group and other parts of the center-right. Globally this retreat for the regions, this retreat from the suburbs even, this retreat from, as you say, more conservative social values, how do, rather than narrowing, how do progressive parties broaden? How do we become broader?

Chris Bowen:                Well, there’s no one thing Misha. It’s got to be part of a tableau, an embroidery of our party. It’s as simple as making sure that we’re in touch. We’re in touch with the regions, we’re in touch with people of faith, we’re in touch with people who maybe at least open to the argument that’s put by the populists, that the answer to your problem is less trade and less immigration. Now you know, and I know that’s the antithesis of what the answer is. We have to say to people who have been spoken to, in the Australian context, by one nation or even Parma, or the liberals in their own cunning way, to say look, the answer to your problem is less immigration, less trade. We have to show that the answer is not less immigration, less trade. But, we cannot dismiss the question or the issues that we come back to, moving our faith back down to the regions.

Chris Bowen:                If you’re in Mchale, or Bowen, or Townsville, and the economies not doing too great, we cannot say you’re wrong. We have to say, you’re right! But the answer to your problem is not Pauline Hanson. We have the answers. Now the essential key to those we have to have the answers, otherwise we can’t give it.

Misha Zelinsky:             But we do tend to jump to say, you don’t get it, you don’t understand the data, you don’t understand the policies.

Chris Bowen:                Yeah, what are you talking about? We’ve got twenty-seven years of uninterrupted economic growth, and unemployment’s low, and interests rate.

Misha Zelinsky:             And the macro numbers don’t tell the micro story, right?

Chris Bowen:                They certainly do not.

Chris Bowen:                When I was shadow treasurer I used to say this, I used to do a lot of board rooms with the countries most senior business people. I used to say to them respectively, because they used to say to me, “Oh well, the labor party is wrong about this and that, and everything’s going-”, well I said, “You don’t get it. With respect, you don’t get it.”

Chris Bowen:                Things look good from here. We’re sitting in a board room in Sydney, we can see the Opera house, the Harbor bridge, the unemployment rate in Sydney has a three in front of it, or sometimes a two in front. There’s no vacant shops, everything’s bustling. Come out with me. Come to Mchale and walk down the main street. Come to Emerald! Inland Queensland. Things don’t feel too great out there. We collectively, not just political parties, but the establishment, if you want to use that word, economic establishment, the political establishment, the business community, the elites, need to get it.

Chris Bowen:                Far too much, collectively, we haven’t got it. Or, haven’t communicated that we do get it anywhere near effectively enough. The door has opened for that Charlottetown [clark parma 00:15:42] and the populist Pauline Hanson, and we have to close the door by being more responsive to the concerns of people who say this twenty-seven years of uninterrupted economic growth, I think, is bullshit.

Misha Zelinsky:             Quote that!

Chris Bowen:                You don’t beep out on this podcast?

Misha Zelinsky:             No, no, that’s all right. I’m not too sure too many kids are interested in geopolitics and social democracy globally. But for those that do, close your ears.

Misha Zelinsky:             So look, that was really interesting. One of the things I was keen to talk to you about, and we started with Putin and liberalism, and we’ve talked about social democracy, but the question of liberalism, the United States being the typical guarantor. They’ve underpinned the global system-

Chris Bowen:                Shining hope of the world!

Misha Zelinsky:             Right.

Chris Bowen:                Last hope.

Misha Zelinsky:             This trade war with China, they’ve now appeared to be retreating from their own system. Firstly, what do you make of that? And secondly, what’s the implications of that war between the US and China for Australia?

Chris Bowen:                The trade war will be sorted. There will be a truce. The only question is when and how? Why do I say that? The alternative is unthinkable, because the only alternative to the trade war being sorted is in effect decoupling. Saying the United States and China will decouple from each other and not have tradings.

Misha Zelinsky:             And some people argue for that, increasing national security grounds.

Chris Bowen:                Well that’s about unthinkable as men and women decoupling. Because we need each other, right?

Misha Zelinsky:             Yep.

Chris Bowen:                China and the United States need each other. And the idea that you could have a two polers in the world, two poles of the world economy with very little to do with each other is just… The world doesn’t work like that. The production chains don’t work like that. Half the things that are made in America, the components are made in China. And that’s not about to change.

Chris Bowen:                Now, there’s an easy way and a hard way, and that’s the only question open to president Trump and president Xi is, do we take the easy way or the hard way? I hope very much they take the easy way. But even if they take the hard way, either they or their successors will sort it. It’s true to say that in the United States this is not just Trump, it is a broader concern in the political elite, including the Democrats, that China has not been playing fair in the world trading system. And it’s also true to say that in some elements they have poy. President Trump is not always wrong. And he does have some legitimate concerns about the world trading system and China’s place in it. But the trade war is very much not the answer.

Chris Bowen:                Now I’m hopeful that they’ll choose the easy way. Either they will choose the easy way, or if there’s a new president next year, but I hope it doesn’t take that long because the implications of a worsening trade war, I mean, you don’t really need us to spend much time on, because they’re pretty self evident. They’re pretty bad. They’re pretty bad for the world economy, they’re pretty bad for us as a trading nation, pretty bad for our region. Even more than the direct implications of the trade war, because you can do all the modeling, and you’ll have this impact, this flow into Australia, and all that’s legitimate. But, I think the bigger problem is just the blow to confidence around the world, just the uncertainty created by the trade war, and the general blow to confidence is terrible for a country like Australia.

Chris Bowen:                I tend to be on the more optimistic side of what will happen in the world economy and the political system, but I’m also a nice, open realist as to the implications if I’m wrong, and that they choose the hard way, and it’s not pleasant.

Misha Zelinsky:             Well, it’s interesting, because pretty much the only by-part [inaudible 00:19:34] that you can find in Washington is the attitude to China. The peace arises, you described before, China’s getting rich, China’s going to get democratic, peace will now be, perhaps… Has not eventuated-

Chris Bowen:                Well it has been peaceful, but there’s been no move towards greater democratic freedom

Misha Zelinsky:             And so we’re seeing increasing authoritarianism. The question, to your point, it’s unthinkable to decouple economically, but there’s a real push to decouple on the national security elements. How do those two things sit together when you consider the techno nationalism around Warway, and the security of data and that element of the debate? And then all the economic points that you’ve made. They seem to be completely pulling against one another.

Chris Bowen:                Yeah, it’s really hard. I know I don’t underestimate the difficulty for any government in the western world. I think the liberal national government here has made mistakes in that space over the last six years, but I’m not overly critical of them because I don’t underestimate the size of the task, or the degree of complexity of the task in navigating that. Now what you need is a national strategy. The problem Misha, I think you’re really making this point, is that in many countries, including Australia, the economic establishment and the national security establishment shout at each other.

Misha Zelinsky:             Yep.

Chris Bowen:                And the national security establishment shouts, “China’s terrible, have nothing to do with them.” And the economic establishment shouts, “They’re our largest trading partner, we’re buggered without them!”. Both sides have some evidence to their cases, the trouble is that far to often, it’s just the shouting. In the cabinet, and I’ve served in both, there’s the Expenditure Review Committee, which is in effect the Economic Policy Committee, and you’ve got the National Security Committee, the cabinet, I’ve served on both for some years. What you really need is probably a National Strategy Committee. To get the intelligence agencies and the economic agencies in the same room and say, what are we going to do about it then? How are we going to navigate this?

Chris Bowen:                Some countries are doing it differently, but we’re all faced with similar conundrums. Prime minister Trudeau is dealing with this very acutely in Canada. Prime minister May, they’ve dealt with their own Warway issue in a different way to many other countries. And they’ve obviously weighed up the evidence. And you know I’ve seen the briefings, not the classified briefings, but I’ve seen the public briefings about Warway, and there are some issues, and our position is the same as the government on Warway.

Chris Bowen:                These are tough issues and we’ve got to stop shouting at each other about them.

Misha Zelinsky:             That’s an interesting point.

Misha Zelinsky:             One of the things, to your point about China is the oscillating between greed and fear, but I think actually we don’t oscillate that much, as you say, to people that are national security minded tend to be hawkish and people who are economically minded tend to be doveish.

Chris Bowen:                We have tribes.

Misha Zelinsky:             Yeah, right.

Misha Zelinsky:             Hilary Clinton said you can’t argue with your banker. I think we have situation where it’s difficult to argue with our best customer. China touches up a little around coal exports, I mean, certainly the coal or oil type situation with the Canadians, as you alluded to there. But is there a case on national security grounds, or even just on a diversification basis, for Australia to build deeper links into other parts of the regional, global economy?

Chris Bowen:                Absolutely. This is the key question. I think you correctly put Misha. We can talk about China and how we handle it, and obviously I have views about that, but what we’re not doing as a country is deepening our links to the region. More broadly, the Indo-Pacific. Every country is important, but the two key countries for us are India and Indonesia. We’re doing a little more in India than Indonesia-

Misha Zelinsky:             Which we don’t talk about much at all.

Chris Bowen:                No, no. But, by and large we’re not very much.

Chris Bowen:                Both of those countries have been bedeviled, in terms of our bilateral relations with different but similar problems in that in both cases the relationships have been transactional. Indonesia in particular, our relationship with Indonesia is transactional, it’s not deep.

Misha Zelinsky:             Going to Bali.

Chris Bowen:                Going to Bali or, from a government-government level, we’ve got a problem with boats, can you help us? Or live exports, it’s all about a transaction. And with India it’s a related but slightly different problem, is that it’s stop start. So there’s been good intentions by prime minsters, etc., and there’s been bilateral visits, and it disputes-

Misha Zelinsky:             You would’ve thought it’s easier, perhaps on a language basis and a cultural basis. There’s cultural alignment around sport, there’s language alignment-

Chris Bowen:                Curry, cricket, and Commonwealth. That’s what they say about India. Well let’s just step back for minute Misha. In each case, let’s look at why both countries are vital for us, and then look at why we need do better, or what we could do better.

Misha Zelinsky:             Sure.

Chris Bowen:                So, let’s just take India, the fastest growing major economy in the world. Probably will be the second biggest economy in the world by 2050, probably, on track. It will overtake China as the largest, most populous country in the world. OK. You’d think that means they’re pretty strategically and economically important for us. And, they absolutely are. But, again, it’s been stop start.

Chris Bowen:                I’m hopeful though that perhaps we’ve turned the corner with India because the biggest thing we’ve got going for us with India, is that they are now, pretty consistently, our largest source of permanent migrants. So we have a critical mass of permanent ambassadors, from us to them, and them to us. Those Australian-Indians or Indian heritage who now make Australia home, are very entrepreneurial, active in business, and hopefully will help us cement that relationship and stop it being about curry, cricket, and Commonwealth, but actually deepen it.

Chris Bowen:                There are a few things we can do for India. Firstly, we should be actively, not just say we agree, but we should, in my view, very actively promote India joining APEC. APEC’s an Australian invention-

Misha Zelinsky:             Forgot institution largely.

Chris Bowen:                It’s fallen off the tree a bit-

Misha Zelinsky:             Keith talked about it a lot, obviously.

Chris Bowen:                Yeah. See when APEC started, it was the main game in town-

Misha Zelinsky:             G20.

Chris Bowen:                Now you’ve got G20, you’ve got East Asia Forum. Summit season’s a busy time. And APEC tends to now be the forgotten cousin.

Chris Bowen:                Well one, Australia should promote invigoration of APEC, in my view, for all sorts of reasons. And two, we should welcome India to APEC. It’s an anomaly that they’re not in APEC. They’ve been trying to join since 1994. And the concern about India is, it’s a legitimate concern by some of our colleague countries in APEC, that India is generally not a globalized, generally not pro-free trade, and would be a blocker in APEC. Well my answer to that is we have to bring them in.

Misha Zelinsky:             Yep.

Chris Bowen:                You can’t pretend to exist. They are going to be the world’s second biggest economy. Let’s bring them in. We’ve got to give more support to those people in then Indian system arguing for openness. Now the proportion of trade in the Indian economy has doubled. Their exports have doubled over the last period. So, they are being more openly focused. Prime minister Modi’s instincts generally on the economy are more free trade and global in their approach. It’s still a very different economic system to ours. But there is cause for hope. So we’ve got to try to build our institutional, bilateral links with India much more, and we should try to bring them into regional architecture.

Chris Bowen:                On Indonesia. Now, Indonesia is the most stable country, basically in the world, when it comes to economic growth. They just continue to grow. China does, but Indonesia’s growth rate has been, if anything, even more stable. They’re just consistent, quiet achievers when it comes to economic growth-

Misha Zelinsky:             Quarter of a billion people!

Chris Bowen:                Yes! And so much so that they will be the world’s seventh biggest economy probably, by 2030, and fourth biggest economy by 2050. They’ll overtake us, Germany, the UK, everybody.

Chris Bowen:                Guess what? Their next door to us, and they’re not in our top trading partners. I think, hello? Are we getting something wrong here?

Misha Zelinsky:             Well it’s certainly…

Chris Bowen:                Yeah! And, again, as I said, our relation’s transactional. We don’t talk to each other.

Chris Bowen:                Here in Australia, more Australian school students study parts of Indonesia in 1972 than they do today. University campus after university campus is closing their Indonesian faculty, because they don’t have enough students.

Misha Zelinsky:             Is that an emphasis question? Why is that happening? You’ve learnt the language.

Chris Bowen:                Yeah, because I decided that, for a couple of reasons, I couldn’t talk the talk, without walking the walk, and talk about Indonesia about how important it was, for example, that we left out Indonesia literacy, if I’m a middle-aged Anglo-Celtic, middle class guy, lecturing the country and young people that we need to do this, if I wasn’t prepared to do it myself.

Chris Bowen:                So, I took myself off at age forty-two, when I started, and got myself a degree in Indonesian language.

Misha Zelinsky:             Old dog, new tricks mate!

Chris Bowen:                Yeah, that’s right. That’s right.

Chris Bowen:                People say Indonesian’s an easy language, I say, no it’s not. There’s no such thing as an easy language to learn.

Misha Zelinsky:             Absolutely.

Chris Bowen:                There are just some that are easier than others. And Indonesian’s at the easier end of the scale. It’s still very bloody hard.

Misha Zelinsky:             Other languages are always challenging.

Chris Bowen:                Yeah, yeah.

Chris Bowen:                But it can be done. And it can be done at middle age, mid-career. But language is important because one, it shows respect. Well I’m going to Chicago, and my language skills aren’t as good as I’d like them to be, I’m constantly working to improve them. But I can start a meeting with an Indonesian finance company, for example, in Indonesian. They often fall off their chair in surprise that a western politician can speak Indonesian. I don’t finish the meeting in Indonesian in case I agree to something I didn’t mean to.

Chris Bowen:                The fact that you show the respect, and often when I’m there the meetings flow in and out of Indonesian and English, because they can’t half speak English, and if I can speak Indonesian we show each other respect of floating in and out of each other’s language, to make sure we understand each other. It just changes completely the tone of the meeting. If you’re just speaking English, and often it’s pro-former, it’s formulaic, it’s a lot of, “Here you are.”, and “Thanks for your visit.”, “And stay as a good friend.” It’s bullshit.

Chris Bowen:                If you actually show the respect that you’ve learnt their language, it changes the tone of the meeting. And also, because we’re getting more young people learning Indonesian, or any other Asian language, Indonesian’s what I chose because you can’t learn them all. Any Asian language. You almost inevitably are engendering and interesting the country, and their background and their history. Part of my Indonesian degree was two compulsory subjects, the history of Indonesian language, and Indonesian contemporary culture.

Chris Bowen:                But even at school. When I was school I had the choice between Italian, and French, and German.

Misha Zelinsky:             Same.

Chris Bowen:                But they also taught us about the culture as they were teaching us language. The same with Indonesian, or Mandarin, or Hindi. We talked about India, but how many schools are teaching Hindi? None.

Chris Bowen:                And recently ABC fact checked me, and I’m glad they did, because I had said in a speech, going back to China for second, but it’s about Asian languages, I said in a speech Australian’s have non-Chinese heritage who can speak Mandarin to a level of business competence. The number is one-hundred and thirty.

Misha Zelinsky:             I’ve heard stat, it’s an extraordinary stat.

Chris Bowen:                It’s extraordinary!

Misha Zelinsky:             It’s actually quite damning in a way.

Chris Bowen:                It is. And sometimes when I say to the speech people shake their head and say that can’t be true. One friend of mine slammed a pencil on the table and said, “That can’t be right!”. As I said, fact checked found that essentially it was right. So it was an educated guess, but even if it’s double that, even if it’s two-hundred and sixty! [crosstalk 00:32:21]

Misha Zelinsky:             Two fifty.

Chris Bowen:                Out of twenty-four million, that’s a pretty poor figure.

Chris Bowen:                Now, Mandarin skills aren’t bad, because of immigration.

Misha Zelinsky:             Sure.

Chris Bowen:                But that’s not going to get us there. Education is to get us there as well. So, we’ve got a massive step change to undertake, in terms of our engagement with the region. Because, to get back to your essential point, yes, we can’t put all our eggs in the China basket, share politically, economically, interest of the world, we’ve got to be lifting engagement with India, Indonesia, as young and in the entire region in particular.

Misha Zelinsky:             Yeah. Going back to the Indian question, because people look at India, look at China, now China has an economic miracle, and India tends to get forgotten. India’s mess here is democratic. I’m so curious on your take of, what’s the future for democracy, open markets, and mesial liberalism versus the Chinese model of state capitalism, state owned enterprises? At this point a lot of people are pointing saying, “Well, that model appears to be delivering, bringing people out of poverty.” Now it’s a convergence, it’s easier to catch up than it is to go forward, but is there legitimate case to stay that the state owned enterprise model, the central control model, is the way forward? Or do you still think the Indian model can prevail in the long term?

Chris Bowen:                No, the Indian model’s getting there. It’s a unique Indian model. It’s not what you recommend as a starting point with a tradition of protectionism and heavy state, very heavy handed regulations and anti-foreign investment. But they’re getting there.

Chris Bowen:                They now have a national GST, for example. It’s got seven different levels, depending on the product you’re buying, which is not necessarily how you design it from scratch in a perfect world, but it’s what they had to do to get it through, because up until then-

Misha Zelinsky:             John Howard did a deal here on the early exclusions. I mean, these things happen in politics, right?

Chris Bowen:                Well up until recently, every states had its own GST, and I’ve seen it, I’ve traveled through India and the trucks get stopped on the state borders to check the goods. That’s all gone. And they’re getting there with retail and land reform, etc. And their growth rates are strong. As I said, they’re the fasted growing major economy in the world, and probably on track to overtake the United States and become the world’s second largest economy at some point when you and I are still on the workforce Misha.

Chris Bowen:                That’s a big turnaround. So they’re getting there, and of course they’re a very robust, strong democracy. They just had an election. It’s a remarkable feat and logistical feat, the Indian election, as is an Indonesian election. But there’s two examples, India and Indonesia, two recent elections, all by and large comparatively smooth and straight forward, and democratic, and both engaged in pro-market reforms and continuing to grow.

Misha Zelinsky:             Does that give you hope for democracy in the region? Obviously, similar outcomes in Indonesia, very complex acapella go style elections-

Chris Bowen:                Absolutely!

Misha Zelinsky:             Very difficult to run them. And India’s also complex. A lot of people say, “Well, democracies on the way. China’s being more assertive. The Russian’s are being more assertive. The traditional democracies have lost their swagger. Brexit, Trump, etc.” Does that give you hope for the region?

Chris Bowen:                It does, and of course democratic change in Malaysia. An economy of similar size to us, similar population to us. I know Malaysia pretty well, I didn’t necessarily think I’d see a change of government in my lifetime, from the all-know government. I don’t think many Malaysians did either. They certainly had elections for a long time, but one party happened to win them every time, until this time. So, we shouldn’t discount that either. I’m not commenting on the details of Malaysian politics, but there’s been a change in government, which was unexpected.

Misha Zelinsky:             A peaceful change as well.

Chris Bowen:                They had a peaceful change, yeah!

Misha Zelinsky:             Which is always the test.

Chris Bowen:                Yeah.

Chris Bowen:                And you could not have guaranteed that a few years ago, if there was a change of government, that it would be peaceful. As I said, they tend to be forgotten, but they’re a significant economy roughly. A roughly comparable economy in terms of middle power, and there’s another example.

Misha Zelinsky:             One of the things I wanted to get your take on, former treasurer of Australia, you had the portfolio a long time in opposition, one thing that gets overlooked a lot in the debate is this question of debt, global debt. Since the GFC effectively money around the world has been effectively, if not free, subsidized, and we’ve just cut our own straights yet again here in Australia to 1% levels, unthinkable even five years ago. How concerned should we be about one more generally, what it’s doing to the global economy, and how concerning is debt when you look at the debt loans that individuals and countries are carrying? Big question.

Chris Bowen:                Yeah, it worries me. It wouldn’t worry me if I was currently serving as treasurer of Australia. If you look at the global debt levels, it’s about 234% of GDP at the moment. Pre GFC it was 208%. So we have higher exposure than we had pre-GFC in the globe.

Chris Bowen:                Now, then you’ve got to look underneath it and say, what’s driven that? Now the good news is, is that a lot of that is driven by states, sovereign states. About eleven trillion has been handed by the United States. About five trillion has been added by China. Debt created by a sovereign government has its issues, but in terms of economic [stability around the world, it’s probably one of the less ‘badish’ types of debt.

Misha Zelinsky:             Owing it to yourself in your own currency.

Chris Bowen:                Yeah, exactly.

Chris Bowen:                Some comes from corporate in United States. And some comes from corporate in China, which is perhaps a cause for instability, if, because there are concerns about the opaqueness of some of that debt. If there is a downturn or a problem, it could be that, that is the cause of it. I don’t want to be too alarming, but you have to be realistic about where the shock could come from, and that is one.

Chris Bowen:                And some is household debt, which is a concern, and that’s our problem.

Misha Zelinsky:             Yep.

Chris Bowen:                Australia and Canada, household debt.

Misha Zelinsky:             World champions in that dubious area, right?

Chris Bowen:                Yeah, that’s right. Second highest in the developed world. Not a record we should be looking for. And that does expose us. If there was an international downturn, whether it be caused by Chinese debt crisis, whether it be caused by a US recession, which the markets would indicate. Possible/likely.

Misha Zelinsky:             Not to get in a super wonk-ish discussion, but inverted yield curves.

Chris Bowen:                Yeah, exactly. Exactly right.

Misha Zelinsky:             Predicting a US recession in twelve months, or so.

Chris Bowen:                Exactly right.

Chris Bowen:                And there is some rushing after that. Or it’s caused by an elongated, worsening trade war, or it’s caused by Europe/Brexit. Europe’s hasn’t been in a great state. Germany’s narrowly avoided a recession. Italy’s bouncing along the bottom. Greece continues to be Greece. Europe’s not in a great state, so from somewhere you could see the makings of an international downturn from one of the above. And if that happens, one of our exposes is our very high household debt.

Chris Bowen:                I think most households can cope with an increase in interest rate, obviously they’re going down at the moment, but even if they did start to move up, most households have factored in some buffer. What you can’t cope with is unemployment. And that’s where, if there is a downturn, and we’ve got very high household debt, we are in-

Misha Zelinsky:             The assumption is you’ve still got your job.

Chris Bowen:                Correct.

Chris Bowen:                Debt does worry me.

Misha Zelinsky:             What’s the role of government? Because one of the things that troubles me, it’s a global question, going right back to basic economics, cheaper money means businesses borrow, means they invest, households borrow to an extent they can consume, but largely, we want to see this investment piece. Now, the rate of capital formation. So, i.e. people borrowing money to invest in new things to build. New factories, new businesses, etc., is on the way. You’re seeing largely this subsidized money being driven into asset markets, property shares and other forms of equity.

Misha Zelinsky:             Is there a role there to make sure that we actually, well, if we’re going to subsidize money, it goes into job creation, or into things that are going to create economic activity?

Chris Bowen:                Well, ideally.

Chris Bowen:                I don’t want to go through the war, but that was one of the policy rationales for our negative gearing reforms, for example. Obviously the pay will go through a process of revising our policies. But one of the things that drove us on negative gearing reform was that we have the most generous property tax concessions in the world. I mean it’s almost irrational not to be a property investor in Australia.

Misha Zelinsky:             Well the tax system tells you to do it, right? You can watch my essay on this, but I find it crazy for every ten dollars that’s borrowed in Australia, six bucks go in the property market.

Chris Bowen:                Because we provide such incentives to do for the tax system.

Misha Zelinsky:             People go with incentives like water goes down hill.

Chris Bowen:                Yeah, exactly.

Chris Bowen:                And so, that’s one of the reasons why we have the second highest household debt in the world. It’s because our tax system encourages it. Now, again, as I stress, the party has got to go through the process of a review, but that was the number of rationales for that reform, one of them was housing affordability, one of them was budget repair, and the other one was financial stability and high household debt.

Misha Zelinsky:             What’s the way forward here, in terms of actually getting consumption going? Because 60% of the economy is driven by consumption. So the focus tends to lead largely on supplies, so let’s get monetary policy-

Chris Bowen:                Well the reserve bank governors made it clear they can only do so much, right?

Chris Bowen:                Again, it’s a bit hard to avoid the recent election, but we had policies on the investment guarantee to encourage businesses to invest. But we also, unapologetically said, well you can’t expect people to consume when the wage is going backwards. And so we did have some, you might call them radical, but strong policies on the living wage, on penalty rates, because unless we get wages growth going, and it did require a degree of intervention because the systems not sorting it. And this is an international problem, I don’t hold this government entirely responsible for all of it, but I hold them responsible for the lack response, and for saying-

Misha Zelinsky:             And incoherence in the policy, cutting penalty rates-

Chris Bowen:                Exactly.

Misha Zelinsky:             Demand for consumption.

Chris Bowen:                Well we can argue about the way it’ll increase wages, but I think we could probably agree the way to increase wages is not to cut them on weekends.

Chris Bowen:                We saw wages growth as being pretty important for social justice and fairness, and equality, but a pretty important economic stimulus as well. Unless there is a solution found through those mechanisms or others, we are going to continue to bounce on the bottom of consumption. And the economy will continue to be anaemic. In my view.

Misha Zelinsky:             Well I could probably pick your brain all day, but you’re a very busy man with a lot of things to do. But, before you go, and one of my classic clunky segues into the lamest of all questions, Chris Bowen’s barbecue, three international guests, three international shows, so who are the international guests alive or dead that you’d have at a barbecue at Bowen’s? It’s got alliteration, so already-

Chris Bowen:                There you go, I could get an apron printed or something.

Chris Bowen:                Three international guests! Well, and they can be dead? Well first-

Misha Zelinsky:             Might be less fun.

Chris Bowen:                Well, OK, to show my pure [wonkiness 00:44:15], in the fantasy football world, and they could be dead, Winston Churchill. I was born eight years after he died, so never walked the planet with him, but I’ve read basically everything you can read about him, an enormous, remarkable figure. And then you’d put Clem Attlee in. You’d see those to be in the same room as those two. Being a bit more realistic around the world, pretty interested in the US presidential race at the moment. I wouldn’t mind spending a couple of hours with Pete Buttigieg.

Misha Zelinsky:             Yeah, I met Pete, he’s really a compelling guy isn’t he?

Chris Bowen:                Yeah! Yeah, I’d have him over for a barbecue. I’d have Ruth Bader Ginsburg over as well, if she could make it. Very admirably figure, powerful intellectual, extraordinary figure.

Chris Bowen:                And then just to mix it up completely, I’d probably have, this guy is actually a friend of mine, I’ve come to know him, I’d have, just to mix it up a bit, a guy who I think is probably the best, in my view, the best living novelist in the world, I’m bias, is John Boyne. He’s an Irish novelist. He wrote the Boy in the Striped Pajamas, and he wrote The Absolutist, which I highly recommend. A compelling read. I’ve come to know him, he’s a good fella. An Irishman, an Irish novelist. He loves Australia! He comes to Australia at every opportunity, that’s how we got to know each other.

Misha Zelinsky:             [crosstalk 00:45:48] I think Churchill might have an interesting discussion.

Chris Bowen:                Yeah, yeah! That’s right. I don’t think Churchill’s appeared directly in any of his novels. He certainly has written about the issues of the day. So I’d have John over as well.

Misha Zelinsky:             So we’ve got a novelist, a former British prime minster-

Chris Bowen:                And the nearest south bender [crosstalk 00:46:08]-

Chris Bowen:                I added one.

Misha Zelinsky:             And that’s right, a former president of Australia. So that would be a great barbecue, I’d definitely like to be a fly on the wall with that one. Chris Bowen, thanks for joining us, I really appreciate your time mate.

Chris Bowen:                Been a lot of fun Misha. Good on you.

Misha Zelinsky:             Cheers.

 

Peter Jennings

Peter Jennings is the executive director of the Australian Strategic Policy Institute. As a leading global expert on defence and security policy, Peter has held senior roles in the Department of Defence and was a key advisor to Prime Minister John Howard.

Peter joined Misha Zelinsky to talk about the US-China rivalry, how Australia should manage its changing relationship with the Chinese government, the importance of cyber-security in future 5G networks, how democracies should respond to threats posed by hostile state actors, and the rise of right-wing terrorism at home and abroad.

 

EPISODE TRANSCRIPT

Misha Zelinsky                    Peter Jennings welcome to Diplomates.

Peter Jennings:                  Thank you very much.

Misha Zelinsky:                  Now, it’s always difficult to know where to start, and it seems foreign affairs is a big space, but naturally when you talk about Australia’s foreign affairs policy, you think about big powers and the influence upon on them on Australia. United States and China is obviously on the tip of everyone’s tongue. You recently wrote an article saying that 2019 was a turning point in the world’s relationship with China. Can you just tell us about that a bit?

Peter Jennings:                  Well, we’ve seen this coming for some few years. And I think historians will look back and say 2012 was a very significant year because that was when Xi Jinping came to power. And really the importance of that was I think she decided for his own leadership and for the country that the time of sort of hiding China’s power was was passed, and he was going to take China out more assertively onto the world stage. And we’ve been watching that ever since, including in areas like, for example, China’s military annexation of the South China Sea, which really happened between 2014 and 2016.

Peter Jennings:                  So I think 2019 becomes important because we’re now seeing a lot of countries in the developed democracies start to push back against China, seeking to gain too much influence in their societies. And one of those really big decisions has been around whether or not countries will allow Chinese telecommunications companies like Huawei into the 5G network. Now, it all sounds a bit complicated measure, I guess. But 5G is going to become the most critical backbone of national infrastructure in every country. Everything is going to run over it from driverless vehicles, to new medical technology, to electricity, to gas. It’s going to be absolutely vital.

Misha Zelinsky:                  The so-called Internet of Things, right?

Peter Jennings:                  Yeah, that’s right. And quite a few countries, Australia included, have decided that it’s just not safe. It’s not secure to allow Chinese companies, Chinese telcos to actually run that critical infrastructure. And so I think Australia was quite literally the first country to formally decided that it was not going to allow Chinese companies into 5G. And then Japan and New Zealand, interestingly enough, and the United States followed suit. You’ve now got the Americans, and the Canadians, and the Brits, and a few others considering what they will do. I think that we’ll look back on 2019 as the year where a much more observable divide started to become clear in the world, which was China on the one hand, and the developed democracies on the other. And this is very significant.

Misha Zelinsky:                  Just going back to the question of Huawei, because this has caused a lot of angst for the Chinese government, why is it that our security agencies in particular and others within the Five Eyes network in particular taking such an issue with it, a Chinese telco. I mean, something, so, well, it’s just a company. They make good stuff. They do it cheaper than some of their competitors. Why is it a concern for them to be developing the 5G network?

Peter Jennings:                  Well, because capitalism in China is different. There is no such thing as a Chinese company, particularly a large Chinese company doing business overseas. There’s no such thing as that type of company being able to operate independent from the wishes of the Chinese Communist Party. So Huawei has had such success internationally precisely because it’s had the backing of the party, the funding from Chinese banks to go out around the world and to produce at remarkably low cost, sometimes lower than the cost of production, telecommunications infrastructure for many countries.

Peter Jennings:                  Why this is significant is because I think Huawei’s close connections to the Chinese Communist Party means that it’s really not in a position to say no if Chinese state intelligence comes knocking and says to Huawei, “Hey, we’d like you to facilitate our access to a particular communication system. Or we’d like you to make it possible to help us put some malware into a piece of critical infrastructure.”

Misha Zelinsky:                  Once overseas.

Peter Jennings:                  One that’s overseas indeed. And Huawei, of course, denies as you would expect it to. They say, “No, we operate independent of the Chinese state.” But back in 2017, the Communist Party passed a law called the National Security Law, which says that every individual and every company in China must support the work of the intelligence services if they’re asked to do so. And that was, I think, a clear factor behind the Australian government’s decision. In fact, the government said, “Look, we’re not going to let any company bid into 5G if we have concerns that it might at times follow the bidding of a foreign government. And so I think that’s why there’s been this concern, because if you’re designing the technology in China, and you’re manufacturing key parts of the technology in China, and you have the Chinese Ministry of State Security looking over your shoulder, that is the best possible intelligence gathering partnership that you could imagine if you believe that China might have an interest in tapping into your information technology.

Misha Zelinsky:                  That’s interesting because there’s sort of a global race now on in 5G. And it’s one thing for Australia to say we’re not going to have Huawei here. But is there a issue globally with through the Belt and Road Initiative and the way that China is rolling out its network in other parts of the world, across Africa, parts of Asia, central Asia particular about the contest between standards and which standards are adopted, because if the Chinese standard is adopted, does that have implications for security globally as well?

Peter Jennings:                  I think we’re going to see a world that’s divided into essentially two types of 5G networks. And they will be Chinese supply will be one type, and there will be Western supplied will be another. Yet I think it’s a great shame that the developed democracies have not found it possible in the last decade to sort of create an industrial situation where an obvious 5G supplier can become a champion for the democracies in providing those 5G networks. But what I am pretty sure about is that the market will meet that need if enough governments conclude that they’re not going to allow Chinese suppliers into their networks. And of course we are talking about technology that in the first place came from companies like Ericsson and Nokia. And so I think that the technology is there.

Peter Jennings:                  And unfortunately, for a number of developing countries across Africa, for example, Huawei has been able put a price case for adopting their technology, which has been impossible to ignore. But the question we should be asking ourselves is why is it so cheap? Why has China of all countries found it to be strategically valuable to try and lock down as much IT infrastructure around the world as they possibly can and actually do so at uncompetitive prices?

Peter Jennings:                  Well, it’s because they see a strategic value for themselves to own global telecommunications. And I think that it’s never too late to kind of push back against that type of strategic positioning. And that’s what the democracies have to do now.

Misha Zelinsky:                  So you sort of touched there on Chinese want to dominate strategic industries. There’s so-called the 2025 plan that China announced just recently. It caused a lot of alarm, the United States in particular, with China saying, “We’re going to dominate these 10 key industries.” Firstly, is it a concern that China wants to do that? And secondly, if it is a concern, how should worldview respond to that. Is this the beginning, are we seeing the beginnings of a cold war, or is this something that’s perhaps not as considered because they’re looking to tech up?

Peter Jennings:                  I think we are at risk of finding ourselves in a new type of cold war with China, and quite frankly we’re probably in an industrial cold war, you might say, because China’s objectives both in the 2025 plan and in earlier five-year plans that they’ve produced will often become the sort of box-checking list for Chinese intelligence agencies to actually see, “Well, what technology can we go out and steal, or legally acquire, or force from Western companies that want to do business in China if we’re having trouble developing that technology ourselves?”

Peter Jennings:                  And the 2025 plan is a very good indicator of where Chinese intelligence activities are pointed in terms of industrial espionage to steal the technology that they can’t develop themselves. That’s been a pattern of Chinese behavior for years. I think on top of that, we’d have to also acknowledge a reality, which is that China is building its own in-house capabilities very quickly and becoming extremely good in some areas like artificial intelligence, for example.

Peter Jennings:                  But a lot of that, at least to begin with, has been done on the off-back of intellectual property theft. And we have to wise up to that. We have to understand that our businesses and our universities are being attacked regularly by Chinese intelligence, precisely to try and sweep up all of the interesting tech that we might be producing.

Misha Zelinsky:                  It was described by a prominent member of the US security agencies or defense establishment that this Chinese property theft was the greatest transfer of wealth in human history. So there’s the obvious grounds that you want the commercial benefit of white people. What does it mean in a contest between perhaps democracies and the traditional sort of alliance structure versus a Chinese government-led approach to it, which is being tech advantaged? Does that lead to being defense or offense capability advantaged as well?

Peter Jennings:                  Look, it’s a tricky one. I think that democracies are always going to be less efficient than autocracies in terms of their ability to harness industry or to protect intellectual property because we are sort of messier systems that actually place a lot of value on giving people freedom from being directed to do things be a government, and happily so. That’s entirely the right kind of system, from my point of view. But it is a weakness compared to the ability of the Chinese state to simply direct industry, for example, to say, “Right. This is a particular type of technology we want. Got to develop it or steal it,” and to compel individuals to actually support the work of China’s intelligence apparatus.

Peter Jennings:                  So in some senses I think we’re behind the play and probably always will be against what a powerful authoritarian government can do. But on the other hand, there is still a sense that democracies produce I think better types of innovation. So it remains the case that it’s the democracies, the Americans, the Europeans, even Australia in some niche areas of technology which are producing the best types of stealth technology, the best types of artificial intelligence technology. How long we can rely on that sort of innovative advantage, I don’t know. But my sense is that, and an authoritarian state like the People’s Republic of China is going to struggle at that very fine edge of the best innovation.

Misha Zelinsky:                  It’s interesting, though, that, I mean, you sort of said Western governments struggle. There is a precedent for this in that the Americans were caught flat-footed in the ’50s and ’60s when the Russians sort of had the so-called Sputnik moment, where they launched a satellite into space. And then Kennedy of course said, “We’re going to go to the moon.” And they did shortly thereafter.

Misha Zelinsky:                  So if the political world is there, so do you think perhaps going back to your 2019 example, the United States now very clearly, and Pence said that in a speech not too long ago, very clearly now sees Chinese or China as a strategic rival, could that be sort of the impetus to drive that level of sort of innovation and perhaps government-led innovation rather than relying on the private sector just to do it entirely?

Peter Jennings:                  Yeah, I think there is now probably more consensus in the United States around the risks presented by China than I’ve ever seen. And there is some ironies in that, Misha, when you think about it because it’s not a country that’s known for consensus under the leadership of Donald Trump. And indeed I think the one point of weakness I see in Washington is how personally Trump might be signed up to this consensus view. There’s quite a fear amongst a lot of people in Europe and well indeed in the United States that feel that Trump might try to cut a deal over trade with Xi Jinping. And that could lead to turning a blind eye on some of the intellectual property protection that I think is really the core of America’s concerns about China.

Peter Jennings:                  But putting Trump to one side across the national security community, across mainstream Republicans and Democrats, Congress, the American System will generally, there is now a very strong view that the number one strategic problem the Americans face is a powerful China, especially a China which is becoming more authoritarian. And this is something that will have consequences for America’s allies and for how America kind of operates in the world in coming years.

Misha Zelinsky:                  So it’s interesting. One of the things I think often gets raised, and it’s quite difficult in the Australian political context at times where I think you see globally in that this pushback you’re seeing, critics of that pushback will say, “Well, this is really xenophobia. This is kind of the Anglosphere not being comfortable with the rising East, or being replaced, or being strategically rivaled by another country that wants to do well.” Is this, do you think that that argument has merit, or is this something specific to the Chinese government and the way it conducts itself? I’m just curious about your thoughts around that question?

Peter Jennings:                  Well, I think it’s a great way to muddy the waters in a strategic discussion for some people, and we see them in Australia, that are determined to say that this is ultimately a debate about race. And therefore if you are expressing concerns about China, that must mean that in some way you’re going to be a xenophobe. The point I’d like to make is that it is not racist to be concerned about the behavior of the Chinese Communist Party. And I think we’re going to have to work very hard to be clear in the language we use. For example, we often say China as a kind of a shorthand, when most of the time, what I’m really talking about is the role of the Communist Party.

Peter Jennings:                  I do believe that this is almost a debating tactic that a lot of PRCs supporters use. I have seen what a democratic China looks like, and it’s called Taiwan. So I have absolutely no doubt in my mind that the people of the mainland of China could operate very effectively in a democratic system. And in fact in many ways, it’s the nature of the party status, it’s called, the Communist Party, which is the biggest risk factor that we have to deal with. So I completely reject any sense that this is racist or xenophobic—it’s not. It’s about what types of political systems do we want to live under and how much pressure in a country like Australia should we be prepared to accept from the Communist Party of China in trying to dictate how the Asia-Pacific is going to run.

Misha Zelinsky:                  And so bringing it back to Australia, I mean, some of the things that I think have shifted the debate here, I mean, has been China’s assertiveness in the South China Sea and its claim of it as being strategic interest. Does that matter? Should we be concerned about this sort of the building of islands in the South China Sea and the increase creep of what China considers to be its spheres of influence? Is that something we should be concerned about or is it up, as the Chinese would contend, “It’s called South China Seas. So leave it to us”?

Peter Jennings:                  Look, I think we should be concerned. The last time the world was at war, at least in the Pacific was in dealing with the maritime ambitions of a Japan, which was determined to try to control its trade roots all the way down into the South China and through Southeast Asia. So we’re talking about a strategically vital bit of territory. The South China Sea is itself about the size of the Mediterranean. So it’s not a small area. And the fact that a country like China has come in the space of about 24 months, annexed it in much the same way that the Russians annexed the Crimea, I think it’s something that the entire world should really be outraged about. And this is I think very much a problem for Australia.

Peter Jennings:                  So perhaps another dimension to add just to that point, though, is that was the wake-up call. I think for a lot of people that might’ve said, “Well, we’ve never seen China behave in a hostile military way. Frankly, that’s a bit of a myth, but it’s a line that you often hear. But I think this has become a wake-up call for people to realize that in Xi Jinping and in the People’s Republic, what we have is a country which is now trying to militarily dominate the region. And for countries like Australia, Japan, and most others, that’s simply unacceptable.

Misha Zelinsky:                  So the question then becomes, how should Australia respond to this? Because you had traditionally maritime disputes that dealt with, through maritime law international courts, a ruling came down very clearly that did not rule in favor of China and its claim in the South China Sea. Basically got ignored. And increasingly what we’re now seeing is kind of payback from the Chinese government or countries that displease it.

Misha Zelinsky:                  Really good example recently is the Canadian arrests of the prominent Huawei CFO. And now you’re seeing these hostage diplomacy with those several individuals arrested in China, and then of course the banning of Canola oil or Canola seeds is imports from the Canadian economy. So, I mean, how concerned should we be about that kind of belligerent approach to independent foreign policy decision-making?

Peter Jennings:                  Well, firstly, I mean, the first point to make is so much for Huawei’s claim that they operate completely independently from the Communist Party because the party has been savage in its application of bullying tactics towards Canada over the arrest of Mrs. Meng. And, again, I think that begins to be a bit of an eye-opener, that we are dealing with a country that is quite prepared to go beyond legal barriers to promote its interests where we can.

Peter Jennings:                  My view is, to sort of answer the broader part of the question, how do we deal with this, I think firstly we’ve got to be very clear-minded in terms of our own thinking about what is strategically important to Australia. I’m perfectly happy, for example, for us to have a very successful trading relationship with China. That doesn’t bother me in the least. We win from that. The Chinese win from that. I’m much more concerned, though, about seeing Chinese ownership of Australian critical infrastructure.

Peter Jennings:                  So, for example, the fact that China owns of the electricity and gas distribution and transmission assets in Australia today is not something that I feel comfortable about from a strategic point of view. So where those types of issues come up, I think we’ve got to be very clear about where our strategic interests lie. And we should then be prepared to push back against Chinese opportunism either of an economic sort or indeed of a military type that we’ve seen in the South China Sea.

Peter Jennings:                  Then the second element to that is what can we do with allies and like-minded friends? And I think frankly the world has really failed to actually think about what is a type of concerted response that’s necessary to stop Chinese takeover of the South China Sea and a more assertive and outward-looking Chinese military posture. We’ve allowed China to kind of like split and stop the Southeast Asian countries from being able to develop sort of a shared position on the South China Sea.

Misha Zelinsky:                  Yeah, they want to do it on an individual basis.

Peter Jennings:                  Yep. And that’s a very obvious Chinese tactic is, “We’ll deal with the countries bilaterally.” And through the sort of, the bullying that you see, where they can hint that maybe your exports are not going to be received, or that they can stop students from coming, or they can stop tourists, it’s led to a whole bunch of countries that really should know better just kind of looking the other way in the interest of maintaining economic relations with China.

Peter Jennings:                  Now, I just think that that’s going to continue to be a problem for us; we’re going to see more and more examples of this come up. We governments will have to make hard decisions between making money on the one hand but looking after national security on the other. And this is going to be hard for whatever party’s in power in this country for years to come.

Misha Zelinsky:                  It’s a tricky question, though, when 30% of our trade is with China. It used to be 50% was with Britain. Then it was 25% with Japan. We’ve never had a situation like this before. I mean, do you think, is there a case to be made for trade diversity, diversification of Australia’s trading relationships, not withstanding we should continue to trade with China obviously. I mean, there’s a lot of mutual benefit there for everyone.

Misha Zelinsky:                  But that threat now that they … Well, it’s not really a threat. You’re seeing it being used against the Canadians and others. Is there a case for Australia to look to other avenues for its export relationships in order to limit the impact of those kind of things, for example, the coal that we’re seeing now being held up in Chinese ports for various reasons?

Peter Jennings:                  I think we desperately need to try and diversify our sources of wealth creation. And there’s an interesting question to ask. And our successors will look back and say, “How was it that policymakers over a generation allowed such a level of dependency to be created on a country which is so alien to the values and political system that we operate in?”

Peter Jennings:                  And indeed I think that we made some really quite terrible policy mistakes along that journey. So, for example, there was a time when there was a very aggressive sort of push inside the Australian public service to say, “Well, we are an Asian country.” And part of that demonstration of being an Asian country meant that we were reducing our ties with Europe. And we weren’t bothering to build ties in Latin America, say, or Africa.

Peter Jennings:                  And so if you look at the shape of Australia’s international relations, it is heavily skewed, particularly on the economic front to a handful of countries in North Asia. And I think that by definition that’s risky. So developing alternative markets, rediscovering Europe, looking, if you take a 30- or 40-year-perspective at what 900 million African consumers can do for the Australian economy, looking at Latin America, which is almost a closed book as far as Australia is concerned, I think there’s lots of things we can do to reduce our dependence on one country, namely China.

Misha Zelinsky:                  Yeah. We’ve sort of talked a bit there about the trading relationship. The question, then, is also about moral leadership and the difference between … The Western liberal democracies, they’ve always seen themselves to be custodians of morality globally. The Chinese government has got a pretty questionable record of human rights violations. There’s a million Uyghurs locked up in detention, which gets very little discussion. Is this scenario where countries like Australia, first, we should call out this behavior, but also use it as a way to assert morality as a values-based projection of Australian leadership globally?

Peter Jennings:                  Yeah. So I think we talk quite a big game about individual human rights. We say in the 2017 foreign policy whitepaper that we have a foreign policy ultimately based on values. And yet I really don’t see much in the way of a practical demonstration of that. I think what we have is a foreign policy that’s ultimately shaped around pragmatism and trying to facilitate making money. Not that I’m opposed to making money, but I do think that I personally would like to see a stronger Australian foreign policy approach, which emphasized individual human rights as articulated in the UN charter as being something which really should be a sort of a guiding point for how we think about our role in the world.

Peter Jennings:                  We’re always going to be dealing with countries that perhaps have a poorer record on human rights than we do. And I would not say that it’s smart to kind of like boycott those in those countries and say we will have nothing to do with them, because if we were to do that, we’d have a pretty lonely existence talking maybe to New Zealand, and that would be about it. That’s not sensible. But nor should we shy away from the reality that, for example, in China we appear to have over a million people in Xinjiang Province, the Uyghurs, now in essentially reeducation camps. This is just unacceptable. And to sort of just kind of like meekly accept a Beijing line that what this is is sort of like school education is just fatuous. So, yes, I think a strong stand on individual human rights is a natural part of what should be a principled Australian approach of standing up for our strategic interest.

Misha Zelinsky:                  And so one of the important things about values of democracy is the integrity of elections. Increasingly globally we’ve seen a lot of foreign interference from hostile state actors. You’ve got very well-documented Russian interference in the 2016 election. There’s hints of Russian interference in the Brexit vote. Recently we had a hack of our Parliament but also our major political parties by a sophisticated state actor, which it could only be a few. How concerned should we be about this type of sort of hostile attempts to interfere with democratic institutions by foreign state actors that are not democracies?

Peter Jennings:                  Well, we can’t afford to imagine that it somehow doesn’t relate to us. I think we do have to be concerned about it. I think the Russians and the Chinese probably have different objectives when it comes to the types of interference that they’ve engaged in. When I look at Russia’s actions in the US and in some European elections, I think broadly I would say that there’s a kind of a wrecking objective, which is to create a sense that the democracies frankly are as bad as we are. So what does it matter? How could anyone kind of put a democracy forward as being in some way inherently superior to the type of system that exists in Moscow under Putin?

Peter Jennings:                  I think the Chinese probably have a different set of objectives than that, which would be to engage in doing their best to try to produce outcomes in elections, which suit Beijing’s interests more than other outcomes. And here something that I think is going to become a bigger issue in Australia than we’ve seen at the moment is whether or not there is a sort of attempts on the part of the mainland to influence the voting behavior of Australians of Chinese ethnicity.

Peter Jennings:                  One thing we know is that for a certain group within that community of Australians with Chinese ethnicity, there’s this strong reliance on getting their information from Chinese language newspapers, which in this country are almost all owned by mainland interests. And there’s a strong capacity to shape how voters might behave through WeChat and other forms of Chinese language social media that is pretty much impenetrable to non-Chinese speakers.

Peter Jennings:                  And I think this is something that we’re going to have to look at very closely just to make sure that Chinese Australians are not having their democratic choices interfered with by people from the mainland that have an interest in trying to shape election outcomes.

Misha Zelinsky:                  So what’s the future, then? You kind of sort of touched on it earlier, talking about this splitting of standards, but what’s the future? I mean, the West, and the Internet have always been priding themselves on the openness of the systems, the openness of the political process, the transparency. The openness of the Internet is fundamentally information should be liberally and freely available, and that will conquer all.

Misha Zelinsky:                  You know, I’ve got a very deliberate situation where autocratic regimes are having closed systems. So we got a contest now not so much between nations as much as we have one between an open and closed system, and the Russians very deliberately recently have attempted to basically disconnect the Internet, if I can put it in very … I’m not a … In the words of our former prime minister, I’m not a tech head, but they are deliberately unplugging themselves from the rest of the world because they don’t want their domestic population to be influenced by information flows from the open Internet, and whereas we have a pretty much a hands-off approach. How do you see that future? Can Western liberal democracies remain open and remain their integrity, or if they close themselves, almost lose something that’s inherent to them as well? So it’s a really difficult one to grasp.

Peter Jennings:                  It sure is. And I don’t have a solution for you. I mean, I find both ends of the spectrum pretty scary. It’s obvious that what we’re seeing in China and quite a number of more authoritarian regimes is that in fact the Internet and everything that comes with the Internet of Things and 5G technology is a tremendous mechanism for authoritarian control of populations. It means that you can control what people know. You can see and understand what people are reading to a degree that no one could’ve anticipated when George Orwell was writing 1984. And that’s deeply scary.

Misha Zelinsky:                  Yeah. I mean, you can change history in a way. If you just Google Tiananmen Square in China, it’ll just tell you that Tiananmen Square is a lovely place to visit, and you’ll never know that there was a horrible-

Peter Jennings:                  That’s right.

Misha Zelinsky:                  … suppression and killing of domestic citizens.

Peter Jennings:                  In fact, most Chinese under 30, mainland Chinese, would have almost no knowledge of what happened in Tiananmen. On the other hand, you come into the democracies and you’ve got a sort of almost like a Wild West of badness at the extreme edges of the Internet.

Misha Zelinsky:                  Nothing’s true. Everything’s true. Your opinion is as good as my fact.

Peter Jennings:                  That’s exactly right. And I had the experience after the Christchurch shooting of writing a newspaper article about the murderer and doing some research was literally within about 10 seconds of starting to see what was on the Net, watching this guy’s shooting video inside the mosques, which is just dreadful. Normal citizens of our countries have not up until the last 10 years had such open access to such violent imagery. It’s the sort of thing that combat veterans might be aware of, but almost no one else. And that scares the living daylights out of me as well. I just think that that sheer openness of our system is one which is almost causing a sort of brutalizing of how people think about how they should interact with the fellow citizens.

Peter Jennings:                  So I don’t know what the solution is to this, other than we should probably spend less time on social media, all of us for our mental health. But at the end of the day, if I have to choose between those alternatives, I think there’s more to be said for an open system that’s less controlled than what we see emerging in China and indeed a few other authoritarian states.

Misha Zelinsky:                  So you’ve touched on the incident in Christchurch and the horrible events there. You wrote in that article about the dangers of right-wing extremism, and effectively you’ve said we’ve paid a lot of attention to the threat of Islamic extremism, but this threat of right-wing extremism, which is bubbled away in the dark corners of the Internet, as you say, and in plain sight in some instances with social media and other extremists in the political discourse. How concerned should we be about right-wing extremism?

Peter Jennings:                  I think we should. It has always been there, frankly. Before 9/11 probably that had been more of a focus of our intelligence agencies than Islamic extremism. But I do know that in the UK and in a number of European countries, there’s actually deep concern in police and intelligence services about the rise of the extreme violent right. And it’s here in Australia too. So that Internet that we’ve just been talking about is a way of actually connecting all of these groups. It’s a way of making people like that feel that they are actually part of a global social network and able to sort of radicalize each other.

Peter Jennings:                  And I think we are going to have to find ways to put more control and observation over that in order to prevent further attacks of the type that we saw in Christchurch. People have said to some extent correctly that New Zealand’s more open gun laws than Australia made it easier for Tarrant to access those weapons legally, which he did. But we would be fooling ourselves if we were to pretend that something like that couldn’t happen in Australia.

Peter Jennings:                  There’s intelligence research available publicly that says it’s about a quarter of a million long-arms weapons, so that’s to say rifles, and shotguns, and some military-style semiautomatic weapons that are illicitly out in the Australian population. So if someone’s desperate enough to acquire those types of weapons, they will be able to do so. And we know that there are Australians that have at least tendencies towards that kind of extremist ideology that presents a threat.

Peter Jennings:                  So, yeah, I do think this is a new problem. And I think we’re going to have to work amongst the Five Eyes intelligence partners, European partners to sort of collectively get a stronger grip over this extremist far-right movement to make sure that it never is anything more than just an absolute fringe part of our politics.

Misha Zelinsky:                  The thing about the incident, right, is that you could stand up in a crowded room and say something ridiculous. And most people would just call you out as being a nut. If you come and say the moon landing was fake or some other conspiracy theory of that nature, most people are going to just … But on the Internet, very quickly you can find people that agree with you and perhaps sell you something even more crazy.

Misha Zelinsky:                  So how do you grapple with the fact that it’s not just Australians coordinating with Australians, but it’s Australians coordinating with these right-wing groups globally and these global extremists that seem to export that into our domestic discourse?

Peter Jennings:                  Yeah. Well, it’s true, and I think in the case of Tarrant, most of his radicalization took place in Europe and actually reading European-sourced sort of radical commentary. And I don’t say that to try and say it has nothing to do with Australia. Very clearly it did. He’s an Australian citizen. But now you can be a part, you can be a nut in rural New South Wales and be part of a global group of like-minded nuts. And what’s the solution? Well, probably working more closely with European countries where I think has been a bigger and sharper problem for a number of years.

Misha Zelinsky:                  And more embedded in their political discourse as well, right?

Peter Jennings:                  Yeah. Well, there’s a history there, of course, and these countries are under pressure. And at the end of the day, those of us who aren’t nuts, we’ve got to kind of like I think reenergize the sensible center, if I could put it that way, to remind people that there are better alternatives. And mostly those alternatives are around robust democracy of the type that we have in Australia, thankfully. But, again, one of the regrettable points of the Internet is that it mutes sort of balanced, sensible, centered-type views, and it amplifies extremist radical views. And I think-

Misha Zelinsky:                  False balance almost.

Peter Jennings:                  Yeah, that’s right. And it’s we’ve just got to look at how we educate our kids and do a whole range of things that kind of damps down those extremes and sort of puts more emphasis on the sensible center.

Misha Zelinsky:                  One of the things I think a lot of people are concerned about just recently with, and you’ve talked about gun laws and the amount of … Everyone likes to think that there are no guns in Australia. It’s not true. But how concerned are you, some of the things about these things about attempts that would seem to infiltrate Australia’s political systems by far-right groups in the United States and the gun law be attempted? Because the world looks to Australia as the kind of the prime example of how you can go from having guns to not. How concerned are you about that attempt? Because I think that surprised a lot of people.

Peter Jennings:                  Well, it was appallingly misjudged. And I think it’s to the eternal criticism of those fools that felt that it was a smart ideal to go to Washington, D.C. to talk to the NRA to ask for money. It’s not a defense to say that they got a bit sloshed and started talking, because they certainly were sober enough when they were planning their trip, and they knew pretty clearly what they were doing.

Misha Zelinsky:                  It was a hell of a bender otherwise.

Peter Jennings:                  Otherwise it was a hell of a bender. But I think something that’s not been clear from those Al Jazeera programs is did the NRA or the Koch brothers at any stage ever think that it was a smart idea to offer money to these people? I don’t know that they did. And maybe that tells you that even those, that that American institution has got more sense than we might give them credit for for not handing over money to those folks.

Peter Jennings:                  I was part of the Howard government in the days when Martin Bryant was engaged in that appalling killing spree in Port Arthur in Tasmania. I recall very directly the pressure that Howard was under to compromise on the gun laws that he brought in. And I think that it was one of his best moments as prime minister to actually stick with it because it was actually quite a strong lobby that didn’t want to see as tough arrange of controls over automatic weapons that Howard put in place.

Peter Jennings:                  But we are, 20 years later, we are surely a better country for that decision having taken place. And I don’t, except at the fringes of Australian politics, I don’t see many people saying, “Wouldn’t it be a good idea to sort of go easy on the gun laws to make ownership of semiautomatic weapons more accessible?” So I thought that you really would have to say that the attempts of those individuals that went to the US to ask for money was about as ill-considered a political move as I’ve seen in my fairly lengthy career now of watching politics in Canberra.

Misha Zelinsky:                  So I always look for a segue on this, but it’s going super clunky on this one, but now I have a very lame hokey title called Diplomates. And I like to finish the interviews saying, well, three international guests got asked, who would you bring of three Aussies to a barbecue? But you get go pick three international guests. So who are three international guests coming to a Peter Jennings’ place for a barbecue?

Peter Jennings:                  Ooh, gosh, that’s an interesting one. Can they be political figures or could they be-

Misha Zelinsky:                  Yeah, anyone you like.

Peter Jennings:                  Anyone I like. Who would I like to talk to? Well, I’ll tell you three people who I absolutely admire. One of them I know reasonably well, that’s Susilo Bambang Yudhoyono, the former president of Indonesia, who I actually as a young defense official escorted through Canberra on a trip, probably 25 years ago when he was a general, very fine individual. I admire him greatly. So I’d have him, Jim Mattis, former US Secretary of Defense, who I think was a fine general, someone who knew Australian fighting forces very well and who did for at least two years probably one of the toughest jobs in Washington, D.C., which was to be the defense advisor to Donald Trump as commander-in-chief.

Misha Zelinsky:                  He’s got some stories to tell, no doubt?

Peter Jennings:                  And he did, and a man that’s sort of much admired in Australian defense system. And I feel as though I should come up with a sort of quirky and different choice for you for-

Misha Zelinsky:                  Only if you feel quirky and different, man-

Peter Jennings:                  Quirky or different. I honestly don’t know. Seeing as I spend so much of my time traveling overseas, I think the person I’d most like to be able to see at a relaxed thing like a barbecue would be my wife, actually, who hears lots of stories about all of these fine people what I’m able to meet. So I’ll go for those two guys of great high standing and my own wife.

Misha Zelinsky:                  Most importantly, you’ve definitely got the right answer in the last one. But, look, thanks so much for your time.

Peter Jennings:                  [crosstalk 00:45:33].

Misha Zelinsky:                  It’s been a great chat, and I really appreciate it.

Peter Jennings:                  Thanks, Misha. It’s my pleasure to talk.

Speaker 2:                              You were just listening to Diplomates, A Geopolitical Chinwag. For more episodes, visit www.diplomates.show or subscribe to the podcast on iTunes or through any of your favorite podcasts channels.

Announcer:                           This podcast is brought to you by Minimal Productions.

 

Bonita Mersiades

Bonita Mersiades is one of the most famous whistleblowers in world sport.

She is the author of ’Whatever It Takes: The Inside Story of the FIFA Way’ – a book that details the massive corruption inside the bids for the 2018 and 2022 FIFA World Cup including Australia’s role in the shady process. 

Bonita joined Misha Zelinsky to talk about the intersection of sport and politics, why when it comes to cheating its easier to punish individuals than nation states, the role that money plays in the corruption of sport and why it’s just so scary being a whistleblower. 

EPISODE TRANSCRIPT

Misha Zelinsky:                  Bonita Mersiades Mersiades, welcome to the show.

Bonita Mersiades:           Thanks, Misha.

Misha Zelinsky:                  Slightly different change of pace for what we typically have on Diplomates. You’ve got a very heavy sports background, but sports and politics are never too far apart. I thought, with your experience, let’s start right at the beginning. Why do people care so much about sport? Why do people care so much about men and women running around on a field kicking a ball or throwing a ball?

Bonita Mersiades:           There’s many reasons. I guess one of them would be that we’ve all done it, or most of us have don’t it, at some stage in our lives. The other thing is I think almost more than anything, perhaps music is the only other thing, is that it’s something which is part of a culture that goes through generations. Particularly in something like football, regardless of which code of football it is, the love of that and a love of the team for example can pass down from generation to generation. I think from an individual perspective, that’s why we love sport.

Bonita Mersiades:           From a bigger picture perspective, of society, it absolutely does reflect society and the values that we find important and the values that we like to instill for example in our children, of fair play and team work and perseverance and determination and integrity. For all of those reasons, it’s important.

Misha Zelinsky:                  Now, people often say, sports, it’s not a matter of life and death, it’s much more important than that. It’s also seen as an extension of the nation state. Do you see, in your experience, how much is sport an extension of not just communities but of the country itself? Do you think that that is an important part of sport, as well, the national identity?

Bonita Mersiades:           Yeah, especially for a country like our own. We’re very much tied up, our national identity is very much tied up with sport, even if not so much with ourselves. It is for other people. Having traveled a lot for work not just in sport, but in previous work in government, one of the things that people will often throw at you as a curtain raiser conversation is about the cricket team or the football team or whatever. It is pretty much part of our identity.

Bonita Mersiades:           I think, though, increasingly, too, is that a lot of nations are getting into sport and investing so much in sport because it is obviously a way of exercising soft diplomatic power. Along with arts and culture and fashion and food and all sorts of other ways in which soft power is exercised, sport is also very important to that.

Misha Zelinsky:                  It’s interesting you touch on that soft power, because it’s that murky bit between politics, business, passionate community interest. It strikes me sometimes what makes sport so special is what makes it inherently corruptible. What is it that we see with this questionable behavior from players, obviously, but administrators, high level bureaucrats? How is it that it gets so easily corrupted, something that is so pure when you start as a kid?

Bonita Mersiades:           I think a lot of the administrators in sport, particularly at high level, they forget what sport was about in the first place. My experience, for example, of FIFA is such that, whereas most of the people involved at a high level would have started off in the game as a kid once upon a time and came through the ranks as a volunteer and all of those sorts of things, they lost sight of that when they could see just how powerful that particular sport is, football … I’m talking soccer when I talk football … and the doors it opens for them. For example, if the FIFA president came to visit a country such as Australia, he would get a green light corridor which is reserved for heads of state. He would get to meet anyone that he wants to meet. The president of FIFA has, it doesn’t matter who it is, the president of the United States or the prime minister of the UK. They juggle about who they’re going to sit next to at state dinners. They are treated like a head of state and they see themselves as a head of state. In fact, they even refer to the FIFA congress, which has 212 member nations, more than the United Nations, as their parliament.

Misha Zelinsky:                  That’s really interesting. We’ll come back to that a little bit later on, about the way that sports globally govern themselves. You of course, you touched on FIFA. You’re the author of a book called Whatever it Takes, which is The Inside Story of the FIFA Way, but also particularly Australia’s failed bid for the World Cup in 2022.

Misha Zelinsky:                  Firstly, I suppose, why did Australia bid for this event? Why is it important to put taxpayer money … We put in $50 million, I think it was. Why do countries put money behind these kind of events?

Bonita Mersiades:           I think the number one reason is the one that we touched on earlier about soft power. If you look at Australia’s history with major world events, whether it be the ’56 Olympics, the 2000 Olympics, the Commonwealth Games, although that’s not as large, and things like that, Australia has leveraged those events to give it more power and more of a, I guess, credibility and notoriety, and I say that in a positive way, every time there’s been one of those major world events. That’s why nations use them. If you look at who won out of that 2018, 2022 process, and we’ve already experienced the 2018 World Cup, there is absolutely no doubt that Vladimir Putin and Russia used that to try and soften their image when everything else that was going on in their country would probably be a negative for most.

Bonita Mersiades:           Why did we bid? One, there was that. Two, I think from a football perspective, at the time and probably still, we have always seen it necessary to turbo charge our sport to realize its potential. This is what I’m really passionate about, is that football is a way in Australia for Australia to be closer to the world and the world to be closer to Australia. Yet, we’ve never really taken great advantage of that. Hosting a World Cup would have been a way to do that, as well as putting our sport onto another level financially. That was one of the reasons from a football perspective, as well as whatever legacy it may have left for the sport within our country. They were the three major reasons. There was a national reason, there was a football legacy perspective, and there was a football financial perspective.

Misha Zelinsky:                  Yeah. In your book, you talk about the fact that … Famously, for those who … I’ll just quickly recap. There was two bids for the 2018, 2022. Australia was reasonably confident they were going to do well with that process. We then finished last. We got one vote. $50 million dollars for one vote. That vote was from the now disgraced Sepp Blatter who basically told us he voted us, I mean, effectively out of sympathy. Otherwise, we would have got zero votes.

Misha Zelinsky:                  The thing that you talk about in your book, and I’d like for you to unpack this, at the time of the vote we knew we were going to lose, and yet nobody told the government. Can you expand on that a little bit, about that process of the vote itself?

Bonita Mersiades:           Yeah. I think that was … People have also asked me what really got me to the point where I was so unhappy with working through this. There was a lot of things, but that was one of them. We were standing in the lobby of the FIFA headquarters in Zurich after Kevin Rudd had been to visit. Kevin Rudd was a master politician and master showman. Put him up with Sepp Blatter and it was really a contest to see who was going to be smiling the most and being in front of the camera the most. Kevin Rudd was great on that visit, but after he left we were told point blank we wouldn’t win it because we would never be commercially competitive.

Bonita Mersiades:           From my perspective then, we should have at least as a minimum told the government that that was the case. The government may well have said, “That’s fine. There are other objectives we’re pursuing with this,” because after all, just by being a bidder we’re out there in the global community getting noticed. That’s not a bad objective as long as the government is able to make that decision, in my view. They were also bidding at the time for a security council seat at the United Nations, so there was that double act going on as well. But we didn’t. We didn’t do any of that.

Bonita Mersiades:           I think, when you come back to what happened at the very end of the whole bidding process and the fact that I revealed in my book, that Qatar, through what was then Al Jazeera, paid a $100 million what they call production contribution if the World Cup was held in Qatar, I think it’s fairly clear that Qatar were also given the same information, i.e. you won’t be competitive commercially. In other words, their meaning against the United States, who was one of the other bidders for 2022. Qatar dealt with that because they had the state owned resources to be able to deal with it. They came up with some might say it was a clever way of doing it, and some might say it was sneaky. Nonetheless, it worked for them, from an organizational perspective. We didn’t do any of that. Instead, what we did was, oh, we’ll get a consulting company to do a report on why Asia is the next big growth area in football. My question to that was, there’s three other Asian nations bidding so why us rather than the other three.

Bonita Mersiades:           There was always this view that no one would want those other three, they’ll want us in Asia, not the other three. I think there was this sense that while we would host a great World Cup … We do all of that stuff really well … and it’d have been fantastic to have, there was never any sense, realistic view of what else was going on. At least publicly there wasn’t a realistic view of what was going on.

Misha Zelinsky:                  You’ve sort of touched on this process. A lot of people wouldn’t know that when they’re deciding a World Cup, there’s only 22 votes, as I understood it.

Bonita Mersiades:           At that time, yes.

Misha Zelinsky:                  Yeah. Can you give a sense of some of the dirty trick … You touched on the Qataris have put up $100 million. You talk in your book and at other speeches around some of the examples from the then French president Sarkozy or Vladimir Putin in Cyprus. Can you give some examples of some of the stuff that other countries were doing in other to secure it? Given that the Russians won 2018 and Qatar won 2022, I think it’s important to think about exactly what went on.

Bonita Mersiades:           Yeah. Not just during the bidding process, but afterwards as well if you track some of these things. I think it’s important, too, because so many people have talked about Qatar and put it down to the traditional brown paper bag stuff. There may well have been some of that that went on, but there are also this other much more sophisticated and strategic interventions.

Bonita Mersiades:           I mentioned the $100 million production contribution. Not long before the vote, the person who is now the emir of Qatar went to France, had dinner with Nicholas Sarkozy, and Michel Platini who was then the FIFA vice president and one of the most powerful people in football, was invited along. Basically, it was put upon him that he and the people, his votes that he could manage, should vote for Qatar and in return for which Qatar would look after a number of things.

Bonita Mersiades:           The following year at the Dubai Air Show, Qatar Airways bought … I haven’t got the numbers absolutely correct, but certainly a proportion … bought approximately 80 Airbus aircraft and two Boeing aircraft. The following year, Michel Platini’s son ended up with a job with Qatar. The following year, Qatar, and they still owned, Paris Saint Germain, the most successful and the biggest football club in Paris. All of these things sort of went on both at the time and subsequent to secure those votes. That’s one example.

Bonita Mersiades:           In terms of Russia, I tracked this through a Greek newspaper, or through a relative who sent it to me actually. Vladimir Putin visited Cyprus in September 2010. This was about two months before the vote or six weeks before the vote. In a speech about anti ballistic missile technology, he said, “We Russia are going to share our technology with you,” which in itself is a huge issue and quite big, “But by the way we’re also bidding for the 2018 World Cup and we’d really love to have your vote.” Sitting in the audience is the man who’s going to vote. Now, was that you must vote for us or else or just the type of typical government to government deal or negotiating or trading that goes on during these things? That’s why I say there’s a lot of sophisticated and strategic interventions from countries and nation states around that whole bidding process and the voting process.

Misha Zelinsky:                  It was quite successful when you look at it, right? You look at the fact that there was a lot of concern at the time, certainly for the last decade, around Russia’s behavior globally, when you look at invasion of Georgia and so on and so forth, the annexation of Crimea. They bid quite high as you describe and then there was a tremendous soft power success for the Putin regime in Russia last year in the 2018 World Cup. Qatar, which is a tiny country, I think everyone was shocked that they won it. They’ve come under enormous pressure for some of the abuses of human rights and labor rights subsequently. They’re two really concerning examples.

Misha Zelinsky:                  Australia’s bid. I’m kind of curious. What about us? We spent $50 million of taxpayers’ money. Was our bid clean or not?

Bonita Mersiades:           It depends what you mean by clean. Is it clean in that anyone is being indicted or arrested yet? It was clean in that respect because no one has been. Was it clean in terms of using, as I’ve termed it, or in fact as the former attorney general of the United States termed it, the FIFA way? Yeah, we absolutely did. For example, we gave four million dollars to the Oceania Football Confederation, that’s based in the Pacific, for a really good project, that is to help kids in the Pacific play sport with better facilities. No one can doubt that that’s a good cause, but it was only given because we were bidding. I sat in the meeting. It’s not a question of I’ve read this somewhere and i think this is what happened. I sat in the meeting with the director general of [inaudible 00:14:59] on more than one occasion, what was then [inaudible 00:15:02], more than one occasion in which he talked about how he would require additionality from the federal budget in order to fund this. There is no doubt about that.

Bonita Mersiades:           We, when I say we, Australia, the Football Federation of Australia, got an award from the Asian Football Confederation for a five million dollar donation, five million dollar donation that wasn’t particularly allocated to anything but we donated it. We gave half a million US dollars to Jack Warner, probably the most notorious of all of the characters, if I can call them that, around FIFA and world football. He wanted that to upgrade a stadium in his home country of Trinidad and Tobago. What they didn’t bother to do in terms of due diligence was to find out that the land on which the stadium was … Sorry, the stadium was built by FIFA money. The club concerned was owned by the Warner family. The land on which the stadium and the facilities were built was owned by the Warner family. Where did that US half a million dollars end up? In Jack Warner’s personal back account.

Bonita Mersiades:           Now, what Football Federation Australia officials or former officials have said in relation to that, “Well, we didn’t know that was happening.” Even if they didn’t know that was happening, they should have been able to figure out what was going on and they should have done better due diligence. Not only that, they shouldn’t have made a payment of US half a million dollars to one of the most powerful people in world football and a voter some six weeks before that vote, because it smells. There is no other word for it. It smells.

Misha Zelinsky:                  In any other context, if these people were elected, it’d be a corruption. Because again this murkiness of sport, it becomes less … There’s no proper oversight, no proper democratic oversight. Just going back slightly from the bid, we lose the bid quite badly, but ten months before that event you lost your job. Your book is largely about being a whistleblower. I was kind of curious. You called out some of the problems. Next thing you find yourself on the out. Can you maybe explain what caused you firstly to blow the whistle on this, so to speak, internally? Then why did you find yourself shown the door do you think?

Bonita Mersiades:           I kept raising questions while I was in the job. It’s worth bearing in mind that I was a very senior executive. I reported to the CEO, I had close contact with the chairman amongst the bid group. I was also doing my other work at FFA as well, which was the ordinary communications and PR and corporate affairs type stuff. I would ask questions about why were we doing this, why were we spending money here. I would call out … We employed three notorious, two of them especially, notorious international consultants. In my eyes, [crosstalk 00:18:05]-

Misha Zelinsky:                  Who specialize in the area of thief of bidding?

Bonita Mersiades:           Yes. That’s all they do basically.

Misha Zelinsky:                  Right.

Bonita Mersiades:           Having worked with consultants for years and years and years, having been in government and elsewhere, I knew that they were not ordinary consultants. They were getting paid $15 million between them. They weren’t like ordinary consultants who would provide reports or provide you feedback or have any … Except for one of them, they had no deliverables in particular. I kept asking questions about this. As I mentioned, we were told that we wouldn’t win and we didn’t tell the government. As far as I’m aware, we didn’t tell the government. Certainly from a management perspective, we didn’t. I just got more and more uncomfortable. After a while, I guess, I think it was just simpler for my CEO at the time because he had the consultants in one ear sort of complaining about me and me in the other ear complaining about them. I think he thought what price piece will get rid of her?

Misha Zelinsky:                  Like a lot of whistleblowers, you came under an enormous amount of personal pressure. Can you explain that the attempts to discredit you? There was a report done that deliberately targeted you and one other person. Can you sort of take us through that process? You’ve made the complaint and then you’ve then largely been left as the problem.

Bonita Mersiades:           Yeah. To this day, I’m still seen as a problem, even though there’s been a change of executive management [inaudible 00:19:35] at FFA. I think someone said I was an agitator and therefore I shouldn’t really be someone they talk to.

Bonita Mersiades:           The first thing they did was try to make out that the reason I was sacked was for reasons that were just not accurate. A little bit like what’s happened to the Matilda’s coach more recently. They would say, for instance, it was because I was responsible for relationships with the state governments and they weren’t going well. Actually, it wasn’t my responsibility. That was all about stadiums and that wasn’t my responsibility. There were those sorts of things. That was just the immediate aftermath.

Bonita Mersiades:           It became much bigger than that. There was sort of a fatwa put out against me by Football Federation Australia in terms of warning people not to have any contact with me, not to talk to me, not to take any notice, saying that I was bitter and twisted, saying the usual stuff when there’s a whistleblower. They do everything to discredit you and say that you’re only saying things because you’ve lost your job. Some people didn’t believe that because they had known me. I didn’t just go and work in football because I wanted a job. I worked in football because I love football and have done all my life. I grew up with it.

Bonita Mersiades:           Then it sort of elevated. When I started talking about governance, when I put it all together, I wrote it all down. I wrote everything down. I started putting together and I realized that what this really was was a governance issue at a much bigger level, at a FIFA level. I started talking about that, both here in Australia and also internationally. I actually coined the phrase the FIFA way back in 2011 and in fact I’m delighted to say that Loretta Lynch, the US attorney general, picked up on it.

Bonita Mersiades:           They then started a review of the 2018, 2022 bidding process by a person who is now a judge in the New York Court of Appeals. He was a paid consultant to FIFA. He interviewed approximately 75 people for his report, which took approximately two years to do. He got paid about ten million US dollars for it. In his report, he singled out two people to criticize. First of all, he said the decision was fine, there was nothing wrong with Qatar and Russia being selected. He did say that there was some dodgy things about the Australian bid and some dodgy things about the UK bid, but he singled out two people and identified them. That was me and another whistleblower, a woman. Of all people in the entire world of football that were seen as being a problem for football, it was the two whistleblowers and two women, and two quite vulnerable people.

Bonita Mersiades:           One of the impacts of having been a whistleblower, especially in a relatively small community in Australia, is it’s very hard to get a job when you’re up against one of the most powerful men in the country, i.e. Frank Lowy. For the other whistleblower, she was an American born Arab woman who … She has found it difficult to I guess really gain the employment that she would like to, just as I have. You continue and get on with life and do other things, but life changes a lot when that happens to you.

Bonita Mersiades:           I guess one of the telling things about all of that was that you do learn who your friends are and you do learn about people who say they stand for something and that they don’t actually stand for anything when it comes to it. Because they’ve never bothered to pick up the phone and ask you how you are or any of those sorts of things. I guess I’m glossing over it to some extent, because it doesn’t sound that bad, that it was just written in a report, but it was much worse than that in that this was global news. This wasn’t just something that happened in little old Australia. It was global news.

Bonita Mersiades:           When this report came out, I was in Perth doing some work. A friend of mine, a journalist in England, contacted me and he said, “You really need to look at the Garcia report straight away.” By the time I’d got back to the hotel to log onto the computer and have a look at it, I was inundated with calls. It changes your life. It’s one thing to have been sacked from my job and had to sort of reinvent myself after that. It was quite another to have this man who should know better, a lawyer, who had been the US attorney general for the Southern District of New York, so a prosecutor, he should have known better than to break the confidence of two women whistleblowers. It was just outrageous treatment and says more about him than it does about us.

Misha Zelinsky:                  You sort of detailed I suppose there the enormous pressure you came under. It’s quite a curious … A lot of people might have just gone underground. You’ve probably taken even more prominence since then. How did you go about fighting back against a very, very, very powerful not just in Australia, but global outfit?

Bonita Mersiades:           There were two options, and one was to sort of, and what they wanted us to do, was to get into a corner and curl up and die. Neither of us did that, I’m pleased to say. Certainly for the other whistleblower, her preference was not to bring any more attention to herself because she had some other issues that she needed to deal with. From my perspective, I thought I’m just not going to take this. I’m not the person who did anything wrong. I’m the person who’s brought attention to all of this. I’m just not going to take it.

Bonita Mersiades:           Fortunately, someone put me in touch with an MP in the House of Commons, Damien Collins, who is now the chairman of the Culture, Media, Digital, and Sport Committee at the House of Commons, and also an Australian businessman who is living overseas who is very interested in sports governance issues. We formed, in conjunction with a couple of members of the European Parliament, a group called New FIFA Now, campaign group. Soon after that, we turned up in the Brussels parliament and European Parliament and had I think about 250-300 people at a gathering in which we called for reform of FIFA. We called for basically an overthrow of FIFA as we knew it then and said that there was something terribly wrong going on, when that report had come out, when the two whistleblowers were shamed and disparaged the way they were, yet their whole decision making regime and rationale was not questioned whatsoever.

Bonita Mersiades:           Now that was before the May 2015 arrests.

Misha Zelinsky:                  Yeah, I’d like to … Let’s go to that now. This dodgy process happens. You lose your job. You come under a lot of pressure, start fighting back. FIFA are kind of largely sweeping things under the rug as perhaps they’ve done in the past. Then, of course, there are an enormous amount of arrests, huge worldwide press, that of Jack Warner, the soccer club that you just described, the $500,000 from Australia for the stadium upgrade that never happened, and then Sepp Blatter who was the head of FIFA and the person that voted for us but did so in a manner that was relatively back handed. Tell us a little bit about that and also how validating it might have been. Was it validating after everything?

Bonita Mersiades:           It was quite incredible. As part of our New FIFA Now campaign activity, there was actually a FIFA presidential election coming up in 2015. Sepp Blatter was standing yet again and he was up against at the time Prince Ali of Jordan. We had, as part of a campaign activity, we had organized something with Amnesty International and with [inaudible 00:27:55] to happen in Zurich. We also have put together this sort of fake newspaper, which we were handing out in the streets of Zurich.

Misha Zelinsky:                  Not fakes news, though.

Bonita Mersiades:           No, no, not fake news. Fake newspaper.

Misha Zelinsky:                  Okay.

Bonita Mersiades:           With stories about FIFA corruption basically. Sharon Burrow and Jamie Fuller and others were …

Misha Zelinsky:                  Sharon Barrow is of course the global head of the union movement. An Australian, former head of the ACTU.

Bonita Mersiades:           Yeah. Former head of the ACTU. They were in the streets of Zurich handing out this fake newspaper with the real news when all of the sudden the news came through that there’d been these arrests at the Baur au Lauc Hotel. That was yet another media onslaught. It was quite incredible. In a sense, Jamie and Sharon were sort of Johnny and Jenny on the spot in Zurich. Even again here, there was a lot of media interest in what went on.

Bonita Mersiades:           Did I feel vindicated? Not straightaway. It took a while for that to happen. It was certainly the case though that it was pleasing to see and to have confirmed that the FBI and the IRS were looking into these issues. I had known about it for some time that they were. It was pleasing to see that they’d got to the point where they’d made these arrests. After that, to learn that other things subsequently happened, such as the Swiss government started looking at it, the French government and the UK. I guess over time that has become vindicating. Even more so, I guess when the full Garcia report was released some three years after that summary report, which-

Misha Zelinsky:                  This is the report that named you as the …

Bonita Mersiades:           Which named me and the other woman. Almost three years after it was first released as a summary report, when that came out, everything that was in it in relation to Australia in which he had pointed the finger and said there’s something that needs to be looked into in relation to Australia, everything had come from me, which made it even more absurd what he had said. Because on the one hand, he’s saying this happened, that happened, this happened in relation to Australia. The person who had told him all that, he then said, “You can’t really take any notice of her because she’s a whistleblower.” I think that probably for me was really the point of vindication.

Misha Zelinsky:                  That’s a big decision to make, whistle blowing. Do you think it was worth it knowing that journey you’ve been on? Maybe you can’t answer that, I’m not sure. At huge personal cost, obviously, but seeing that whole house of cards come tumbling down, does it feel worth it in the end?

Bonita Mersiades:           Yes, it does fundamentally. Does it change your life? Yes, it does. Is it worth it? Yes.

Misha Zelinsky:                  It’s a very brave thing to do, to stand up to power.

Bonita Mersiades:           Thanks.

Misha Zelinsky:                  Turning to money in sport, we’ve talked a little bit about much money there is in sport. You talked about FIFA more generally in the sense that they’re an international body, they’re not government run, but they’re these quasi international bodies with sort of no democratic oversight, at least from people, democratically elected people. Given how much money they’re in control of, and these are multi, multi, multi billion dollar enterprises, but also receive billions and billions of dollars from governments, from taxpayers, what do we do about overseeing these entities? What’s the role of culture and governance and how do you actually bring these institutions to their heel? The FBI raiding them and investigating and arresting people is one thing, but you want to see good governance more fundamentally like you would in an ordinary government. What’s the role of governance and culture?

Bonita Mersiades:           It’s a really interesting question, and especially at the moment when you can see what’s happened since 2016 in particular. What happened then is we got a new FIFA president. He brought in a CEO who was a senior bureaucrat in the United Nations. Now, United Nations has had its own governance and financial management problems, but what she has done is introduce a lot of good process and good reporting. I would say that where there’s an issue of process versus culture, culture wins every time. What they haven’t addressed, and I don’t think anyone who’s in the game could address it, they haven’t addressed the culture of FIFA and they haven’t addressed the culture of world football.

Bonita Mersiades:           You’ve got to go back to what the FBI said, I think it was James Comey at that very first media release, sorry, media conference, after the arrests, where James Comey and Loretta Lynch was there. James Comey was still the director of the FBI and he said, “This is a mafia style organization.” I was at a conference not long after that where one of the FBI investigators was speaking. He actually explained what a mafia organization looks like. You take one person out, e.g. Jack Warner, and you put another person in.

Misha Zelinsky:                  The show rolls on.

Bonita Mersiades:           Yeah, the show rolls on. In fact, that’s exactly what happened in the Caribbean. Jack Warner came out, the next person came in, and he’s since been arrested as well.

Bonita Mersiades:           What do you do in terms of governance and culture? One of the things that we called for at New FIFA Now is that there needed to be … It was like being a company. You needed to treat it like a company, an administration, that you would bring in an outsider who had an absolute [inaudible 00:33:47] to make the necessary policy and operational and cultural change and force that through. That takes a generational thing. That isn’t what’s happened. What is clear, though, is that the whole circus keeps rolling on.

Bonita Mersiades:           FIFA’s financial statements came out I think yesterday or the day before, and they showed that their cash reserves have increased to $2.6 billion, their revenues over four years have increased to around about, I’m talking US dollars here too, seven billion dollars. Despite, when you consider that those four years to 2018 includes 2015, despite all of that and despite a 100 million US dollar legal bill, sponsors are still putting money into the game. The question is, where is that sponsorship coming from nowadays. This is the big issue for sport, I reckon. It’s coming from Russia. It’s coming from China. It’s coming from the Middle East. There’s still some money coming from the US, but it is less so as a proportion of all the money. There’s a real pivot happening in world sport. That could just reflect society in general, where the world is going in geopolitical terms. Going back to the very first question is how the sport reflects society, I think it’s worthwhile looking at where the big money in sport is coming from.

Misha Zelinsky:                  That’s interesting. I didn’t really link the concept of sponsorship, soft power, and the control of those institutions, but there’s actually … My next question just goes to this point. There’s this issue of national systematic cheating going on in sport. You’ve seen the Russians with Sochi, then the question of the nation states interfering in the bidding process. We’ve seen some pretty severe penalties for Sepp Blatter, for Jack Warner, but the penalties seem to be on the individuals and on the nations less so. Why? Is that about power? Is it about money? It seems to be the World Cup, the 2018, the 2022 fiasco, Putin would be the center of it and he’s gotten away with it scot free and put on a triumph of soft power in the 2018 FIFA World Cup in his home country. What is it that you can actually … How are we going to stop countries getting away with this rather than the individuals?

Bonita Mersiades:           That’s a really good question. As to why, it’s much more difficult to I guess get at a world leader in that respect than it is to get at a recipient or someone who may be a recipient of a corrupt payment for example. That’s what’s interesting about what’s happening with FIFA so far, too. Most of the people they’ve arrested, indicted, charged, or have been sentenced have been those who have been in receipt of the payments, not those who have made the payments. I think that’s a really interesting issue because it’s not always that companies have made the payments, it’s been individuals as well. Yet, every single indictment so far has been around an individual. It hasn’t gone beyond that. How you stop that, I don’t know. I think it’s a big issue for the world. It goes beyond sport, but of course it gets back to the fact that sport reflects that very much so.

Misha Zelinsky:                  It’s definitely a challenge, though. These countries and these individuals, sorry, companies and countries, when you look at countries like Russia, countries like China, the distinction between a company, an individual, and the nation state is incredible blurred.

Bonita Mersiades:           Very.

Misha Zelinsky:                  That-

Bonita Mersiades:           [crosstalk 00:37:24]

Misha Zelinsky:                  That’s right. Exactly. The top down pressure and the top down influence is enormous. To say these are just rogue actors is to a fair minded person, I think, relatively heroic kind of way of framing it. What’s the answer? Is there cause for hope in this? Ultimately, sport … Sport is a funny thing because it relies on you and I putting importance on 11 women or men running around on a field kicking a piece of leather around wearing different color shirts and giving import to that so people can make billions of dollars out of it. It matters. Once you puncture that myth, sport kind of dies. These things chip away at it. Is there hope for sport in the longterm, do you think?

Bonita Mersiades:           I think there’s hope for sport in the longterm. I would have perhaps three and a half years ago we were at a tipping point where things may change more quickly than they have. I think what an organization like FIFA in particular has done very well is manage the crisis they’re in quite well. I would argue, as I said earlier, that the culture hasn’t changed though. One of the things we have to bear in mind is that the FBI and the IRS and the Swiss and all of them keep saying this is an ongoing investigation. They haven’t gone beyond North and South America yet. They haven’t looked at Asia. They haven’t looked at Oceania. They haven’t looked at Africa or Europe. That’s, I would think, is still to come.

Bonita Mersiades:           What can sport do? I think the other potential is in the general changes we see in society where younger people in particular are not taking crap like this. My generation, obviously there are exceptions, but my generation has tended to sort of play within the system a bit more. Whereas I think younger people, don’t classify it necessarily as an age thing, but they are calling out this sort of behavior and they don’t want it. I am hopeful that that will have an impact over time.

Misha Zelinsky:                  You’ve talked about the age of idea. Another important [inaudible 00:39:41], it’s something that has been a certain movement in this area as well, gender, the Me Too movement and calling out bad behavior and power. Role of gender in sport, you took on basically the ultimate boy’s club arguably in FIFA. What was the role of gender in this?

Bonita Mersiades:           For the two of us, the two women involved, it was huge, but I’m going to say there’s not one woman in power in football, including in this country, who ever bothered to pick up the phone and say, “Are you okay?” Not one. I find that unforgivable because in fact the other woman whistleblower, she actually sort of came to my attention as being in a spot of bother quite a while before that. My first reaction, having met her once, was I must reach out to her and see that she’s okay because there’s obviously something going on there. I did that. That’s what I think I would do for almost anyone in that situation.

Bonita Mersiades:           There’s no doubt that because we were women, they saw us easy targets. She was even a more junior woman than I was in the whole setup. They saw us easy targets, thought we’d be people who would probably keep quiet. They certainly looked for areas, things where we were both vulnerable and found them, and that’s one of the reasons in fact why she has chosen not to be public about these things. Yet, there was no support from a gender perspective. That’s despite the fact on the FIFA executive committee at the time, sitting in the room, discussing these issues, was an Austrian woman, who’s gone on to get awards for being so wonderful on gender diversity in football, yet she didn’t once reach out to either of the two women who were absolutely treated appallingly by the male machine that was FIFA.

Misha Zelinsky:                  What do you think the reason for that was? Is that something that’s systemic as a problem in the sport itself, that it’s hard for women to support other women, the interests of the individuals involved? Is there anything in particular you could put it down to?

Bonita Mersiades:           I don’t think it’s the sport itself. It’s the sport itself in that I think one of the things I always characterize those who have got to the top of FIFA and in fact in football in Australia as well, they get to the point where they’ve forgotten why they are there. They’re more concerned about what football can do for them than rather what they can do for football. Therefore, if there is a line between right and wrong and good and bad and all of those things, they are quite happy to sort of dip their big toe over to the other side and dismiss anyone … This is true of any sort of whistleblower type situation … dismiss anyone who’s making a noise, a bit of an agitator as I said earlier, or a bit of an activist and say, “I’m not having to do with them because that won’t help me.”

Misha Zelinsky:                  Now, we’ve talked a lot about all the negatives of sport. We kind of touched on the positives at the beginning. One of the things, you can sometimes get depressed about the state of the world. This podcast often deals with a lot of the bad things that are happening in the world. Sport can be harnessed for good. We saw recently the issue in relation to Hakeem Al-Araibi, the entire soccer football community coming together, although the union movement globally coming together, and the players union movement supporting him and the incredible work of Craig Foster. Do you see that there are other avenues for sport to be that lightning rod for good? We’ve talked about the problems, but can it still be a force for good?

Bonita Mersiades:           Absolutely. That’s what it should be for. The Hakeem Al-Araibi situation is a good one. I first met Hakeem back in 2016 because the FIFA presidential election was on. One of the front runners for that was Sheik Salman of Bahrain and Hakeem was then living in Australia. He didn’t have refugee status, but he was brave enough to speak out against Sheik Salman. Hardly anyone in Australia took any notice of it, including Craig Foster and the UPFA, but nonetheless internationally it was a big story because the FIFA presidency was a big story. Hakeem did the right thing then and he’s continued to do so. It was a great example of the positive power of sport and the potential of sport. What we recently saw with Craig is the public face of that Save Hakeem campaign.

Misha Zelinsky:                  It was a great story and it’s very good to see him back safely at home here in Australia. The last question I like to ask all my guests … We could talk all day about sport, frankly. I could talk about sport nonstop. We need to put some kind of limit on it. .

Misha Zelinsky:                   Of course, the last hokey question that I have at the end of a very serious discussion about sport is about … It’s called Diplomates. Who are the three foreign mates you would invite to a barbecue at Bonita Mersiades’s? Who would they be?

Bonita Mersiades:           Three foreign mates or three foreign people who have-

Misha Zelinsky:                  Or three foreign people that you’d like to be their mates. I’d like to pretend that all these people that I talk to are my mates. You can have anyone you want.

Bonita Mersiades:           Okay, all right. The first I would suggest would be Vitaly Mutko. He is the deputy prime minister in Russia. He was the Russian sports minister. He was president of Russian Football Federation. He was the president of [inaudible 00:48:35] St. Petersburg. He is part of the St. Petersburg clique of Russia. He, of course, was the sports minister who was in charge when all of the doping issues were going on. He sanctioned it. He has lost all of his positions in world football and in the Olympics. I think he would be worthwhile having a chat to. Just to see if he’s ready to be a whistleblower.

Bonita Mersiades:           The other one would be, and this is terrible, I’m going to sit on the fence, either of the Obama’s would be fine with me. I’m a great admirer of Barack Obama and a great admirer of Michelle Obama-

Misha Zelinsky:                  I’ll let you have both. It’s your barbecue, so you can have them both. Is there a last one?

Bonita Mersiades:           Last, and I would like to say but not least, but this is a really different reason, I think it’d be fascinating to meet one of the people who controls a lot of the world, especially a lot of the world in our language, and that’s Rupert Murdoch.

Misha Zelinsky:                  Certainly does.

Bonita Mersiades:           Yeah.

Misha Zelinsky:                  Rupert Murdoch, a Russian politician, and the Obama’s. That’d be quite an interesting affair. Look, thanks so much for joining us. Thanks so much for being so open and honest and brave. Congratulations on your fight so far and appreciate it.

Bonita Mersiades:           Thank you.