Assessing Australia’s Carrots and Sticks in its Immediate Neighborhood

On 01 July 2020, Australian Prime Minister Scott Morrison and Defense Minister Linda Reynolds announced the 2020 Defence Strategic Update from its 2016 Defence White Paper. The Update has three unique features: 1) a more robust alliance with the United States in the event of interstate conflict; 2) self-reliant armed forces dependent on long-range precision-strike and cyber capabilities; and 3) a shift of focus towards the immediate region – the Indo-Pacific.

Canberra intends to shape the environment, deter threats from its interests, and respond with a credible military force when required. Its strategic concern over the maritime and mainland Southeast Asia would be part of Operation Gateway, where Australia intends to intensify maritime surveillance patrols in the South China Sea (SCS).

The Update has assumed a worst-case scenario of the Great Power competition in the region. On 23 July 2020, Australia has sent a  note verbale disputing China’s historic rights in the South China Sea (SCS) and called for China to abide by the 2016 Arbitral Ruling.

Questions also raise on what Australia can do in the SCS beyond the diplomatic note. Canberra had demonstrated its intention to work with Washington to conduct Freedom of Navigation and Overflight Operations (FONOPS) when it sailed in the SCS in April 2020 against China’s Gray Zone Operations. On 28 July 2020, Australia and the United States’ released a joint statement during the 2020 Australia-United States Ministerial Consultations (AUSMIN) to intensify coordination in undermining Chinese revisionism.

After AUSMIN 2020, it would be expected that both countries are to intensify interoperability with its allies and partners. They also intend to work with ASEAN states to uphold rules-based order. Canberra has now intensified its role with the Quadrilateral Security Dialogue (Quad) to uphold a free and open Indo-Pacific. In July, the Quad has conducted a naval exercise in the Philippine Sea. With this, a Quad naval exercise in the SCS would be far from possible.

However, some question this Update, fearing that its success depends if only Australia would find any allies or partners in its immediate neighborhood against China. State response to get aboard Australia’s initiative relies on the success of its deterrent value.

In June, the ASEAN issued its 36th Chairman Statement calling for all parties to abide by the 1982 UNCLOS. However, virtuous on paper, each ASEAN states have different stakes in its approach in the South China Sea. Malaysia has insisted on ASEAN Centrality. Brunei has been bland in its statement. Vietnam has not been vocal about Australia and its US ally to contain China despite Hanoi’s desire to confront Beijing. The Philippines restrains from escalating tensions to appease China even as it agrees for a rules-based order in the region.

In this context, Australia would have a difficult time gathering support from its immediate neighbors in ASEAN. While the 1982 UNCLOS does not prohibit freedom of navigation and overflight, it does not necessarily mean that ASEAN supports it. Instead, ASEAN stakeholders in the South China Sea avoid escalation at most.

As Canberra intends to protect and promote its interests in the South China Sea, questions mount if the Update is deterrence by denial or by punishment against the rising Chinese threat.

If the Update poses for deterrence by denial through increased with the US, then it is unlikely to work. The FONOPs is designed not for deterrence but for a demonstration that the US remains undeterred by Chinese actions. A show of force, then, would be regarded as escalating. Australia would reinforce the logic of the security dilemma without necessarily denying China in the South China Sea. This point is something that ASEAN states are sensitive to.

If the Update projects deterrence by punishment, then Australia would have to prove that its sticks on the table would be as forceful and compelling to alter Chinese behavior. Yet this design would be risky because while it defers to US leadership for greater firepower, Australia also assumes that it provides solo deterrence by investing in larger firepower such as long-range precision-strikes which has issues on strike proximity against adversaries. But that would take years and the Chinese would not wait for them.

Australia is now embarking for a greater role in the Indo-Pacific. But its ability to shape the environment ultimately rests on their domestic policy resolve to partake in the Great Power Competition. Canberra would need as many carrots to the table to induce ASEAN and sticks to deter China indeed. Investing in capability development of its own as well as its defense partners in its immediate neighborhood are paramount to achieve the Update’s objective. It should also complement increased training and exercises, continued defense education and exchange, information-sharing and interoperability for Australia to carve its interests down the road.

Disclaimer: The views of the author do not necessarily reflect the views of his affiliated office, the Armed Forces of the Philippines, nor the Philippine Government. All views are entirely his own and for the purpose of academic debate only.