Resource nationalism or resource liberalism? Explaining Australia's approach to Chinese investment in its minerals sector

Since 2005, a burgeoning wave of Chinese investments has set off a new ‘minerals boom’ in the Australian iron ore and coal mining sectors. While normally a welcome development, the state-owned and strategic nature of the investors has raised concerns in Australia about how these should be regulated. As a result, in February 2008 the Australian government declared an intention to more closely screen foreign direct investment (FDI) from state-owned sources, which both supporters and detractors alike have claimed is evidence of ‘resource nationalism’ in Australia's approach towards its trade and investment relationships with China. This article challenges this understanding through an examination of the characteristics of Chinese mining FDI, the dilemmas these present to the Australian government, and the relatively restrained nature of its response. Through this, Australia's FDI policy is explained as a defensive move against the potential for strategic behaviour by Chinese investors resulting from their state ownership, rather than any national program to subject minerals trade and investment to political control. On this basis, the article argues that Australian government policy instead evidences a ‘resource liberalism’ approach, which intends to ensure that the governance of Australia's minerals trade and investment with China remain market-based processes.     

The politics of Antarctic minerals: The Greening of white Australia

On 22 May 1989 the Australian Government announced that it would not sign the Antarctic Minerals Convention that had been concluded in June 1988. Australia had been a strong supporter of the minerals treaty approach to regulating Antarctic mineral development. This case study in Australian foreign policy examines four well known approaches to foreign policy making in order to explain Australia's volte face on the minerals treaty. It is concluded that domestic politics best explains Australia's decision and that students of Australian foreign policy need to pay more attention to the domestic determinants of the policy making process.     

Argyle Diamonds: The Political Economy of a Lost Resource

The discovery of the Argyle diamond field in the north of Western Australia during the late-1970s heralded a new phase in Australia's mining history. Initial forecasts rated Argyle's potential output as internationally significant. Even before full-scale mining commenced it was clear that production from Argyle would pose a serious challenge to the South African-based diamond marketing cartel - De Beers. De Beers, through its strategic holdings in a range of foreign and Australian mining companies, worked to bring Argyle production under its control. Despite its strong criticism of the manner in which the Fraser government dealt with the development of Argyle, when in government, Labor too seemed unwilling to exercise regulatory controls. Eager to encourage foreign investment the Federal and State Governments permitted South African mining interests to arrange the terms and conditions for the mining and marketing of Argyle diamonds free from significant public scrutiny.     

Western Australia's Royalties for Regions program: a policy response to growth,regional neglect,and perceived disempowerment

Under the right conditions, compounding socio‐political and economic change can dramatically alter government policy. From 2000, Western Australia, a resource‐rich jurisdiction, experienced significant change owing to a once‐in‐a‐generation resources boom, which forced a break with earlier development approaches. In 2008, regional interventionism returned to the State via the State Government's Royalties for Regions program. Departing from the neo‐liberal tradition, the program allocated 25 per cent of the State's royalty income to non‐metropolitan regions, over and above existing regional allocations, and its success remains disputed. While it is easy to question the program retrospectively, the socio‐economic and political circumstances from 2000 to 2008 reveal a “perfect storm” of conditions enabling the transition from neo‐liberalism to interventionism in regional development. This paper sets out to understand the multi‐faceted conditions that enabled the dramatic paradigm shift embodied by the program. To this end, it examines the State's rural–urban settlement dichotomy, its staples economy, and the policy context leading up to the program. Following that, the paper proposes a causal framework mapping out the factors driving and rationalising the program. These factors are then examined in detail and include perceived rural voter disenchantment, ineffectual regional development policy, the State's mining boom, inadequate regional development funding, the contrasting fortunes of two regions (illustrative of the impact of growth, and the lack thereof), and the political manoeuvring during the 2008 election. Finally, the paper concludes by considering how the conversion of these conditions resulted in the State's most significant regional policy redirection in decades.     

‘Not on Your Life’: Cabinet and Liberalisation of the White Australia Policy, 1964–67

The liberalisation of the White Australia policy in the mid-1960s was a seminal event in Australian history. It marked the beginning of the end for the racial conception of society which had defined the federation since the late-nineteenth century. Cabinet’s discussions of the proposed changes during these years demonstrate that most Australian political leaders were not only fundamentally opposed to reform but also unconvinced by arguments emphasising the policy’s administrative inconsistencies, lack of humanitarianism and racially discriminatory features. Nor were they entirely swayed by arguments of diplomatic expediency, which had been advanced by senior Immigration and External Affairs officials since the 1950s. The decline of British race patriotism in the early 1960s weakened the ideological foundations of White Australia and allowed policy-makers to reconsider its foreign policy implications, especially in terms of Australia’s relations with Asia. Although cautious, the reforms of the mid-1960s represented an important break with the policy’s fundamental principles and provided the groundwork for further liberalisation and the formal abolition of White Australia in the 1970s.     

Killing the goose that laid the golden egg? Australia's resource policy regime in comparative perspective

A common criticism of the minerals resource rent tax (MRRT) was that it would ‘kill the goose that laid the golden egg’ for the Australian economy. Mining companies, their industry associations, and the Liberal–National Coalition all argued the MRRT would reduce Australia's attractiveness for mining investment, and lead to ‘capital flight’ as resource firms shifted towards lower-taxing competitors. To evaluate this claim, it is necessary to compare Australia's resource policy regime – including, but not limited to, its taxation elements – against those of its principal competitors. This article undertakes such an evaluation by comparing Australian resource policies with those of nine of its major mineral and energy competitor countries. This survey reveals that Australia's comparatively high mining tax rates are partially offset by its ‘non-interventionist’ approach to resource policy, and that it has retained good rankings on international political risk surveys. There is some evidence of short-term market response to the mining tax, but there is little evidence of sustained capital flight occurring due to the MRRT. These data collectively suggest that the MRRT did not significantly undermine Australia's attractiveness for international mining investment, despite widespread perceptions to the contrary.     

Timor-Leste’s foreign policy approach to the Timor Sea disputes: pipeline or pipe dream?

Over recent years, Australia and Timor-Leste’s bilateral relationship has been consumed by contested maritime boundary claims in the resource-rich Timor Sea. Intractable disagreements over the right to build a petroleum export pipeline have led Timor-Leste to reinvigorate its pursuit of permanent maritime boundaries as ‘a national priority’. This article examines Timor-Leste’s interests in the Timor Sea and assesses its strategies for achieving its foreign policy goals. It argues that Timor-Leste’s attainment of its stated goals relies on Australia shifting its Timor Sea policy, which has been largely consistent since the 1970s. Timor-Leste’s key strategy is a public diplomacy campaign that positions permanent maritime boundaries as the final stage of its independence struggle, and presents Timor-Leste as owning the disputed Greater Sunrise gas field under international law. While the public diplomacy campaign aims to win enough Australian ‘hearts and minds’ to put pressure on the Australian government, it ultimately fails to negotiate the strategic and historical realities of the interests that define Australia’s realpolitik approach to the Timor Sea.     

Australian Capital City Property Development,Foreign Investment and Investor Attitudes

Recently there has been a substantial change in the role of foreign investment in urban property development in Australia. Now, about 50% of foreign investment each year is directed to urban property sectors, with Asian investors accounting for approaching 50% of this investment. This trend has coincided with the re-emergence of the property development sector from the trough of a recession in the early 1970s to something approaching a boom in the last two to three years. While there are considerable variations in the performance and prospects of the various capital city property markets, Australia is seen in general terms as being a favourable place for foreign investment in urban property development, particularly as a destination for long term equity investment. This paper examines recent trends in capital city property markets in Australia, and in particular the increasing importance of foreign investors. It also discusses the results of a national survey of property developers, investors and intermediaries, and investors, both local and foreign, and reports on their attitudes towards the various capital city property markets, and their investment behaviours. Attitudes towards the Foreign Investment Review Board (FIRB) guidelines and controls are examined, and it is suggested that there is room for further substantial deregulation to encourage direct foreign investment in Australian urban property development.     

Power in Australian foreign policy

The 2017 Foreign Policy White Paper emphasises the importance of ‘maximising’ Australia’s power and influence. However, the White Paper and much of the commentary on Australian foreign policy do not clearly conceptualise ‘power’ or indicate how it ought to be increased. The Lowy Institute’s recent Asia Power Index implies one possible strategy via its resource-based approach to measuring power. We outline a different approach and argue that power should be conceptualised and evaluated as a specific relationship causing behavioural change, rather than as a general attribute of its wielder. To complement the Lowy Institute’s carefully catalogued database, and facilitate a more focused conversation about maximising power and influence in Australian foreign policy, we offer a typology identifying five pathways through which states can translate their material and non-material resources into outcomes that serve the national interest.     

Wild Colonial Ploys? Currents of Thought in Australian Foreign Policy

This article proposes a new method of mapping domestic preferences and their effect on Australian foreign policy from the perspective of three distinct ‘currents of thought’s flowing through Australian society and policy makers about Australia and the world. Traditionalism prioritises security relationships with ‘great and powerful friends’s; Seclusionism stresses autarky and minimal international involvement; Internationalism advocates a creative, multilateralist role in building international stability and prosperity. A currents of thought approach, by looking for an underlying motivation for Australian foreign policy actions, assists in understanding the policy's intent, identifying its supporters and detractors, and in anticipating what types of policy responses will be motivated by different international stimuli. It is also useful for further understanding the underlying processes behind the broad changes of direction in Australian foreign policy.     

Australia's Antarctic agenda

Australia has had a long connection with, and significant national interests in, the Southern Ocean and Antarctica. The Australian Antarctic Territory comprises 42 per cent of Antarctica's landmass. Australia is not only a claimant state and original signatory to the Antarctic Treaty but has played a significant role in the development of what is termed the Antarctic Treaty System (ATS). This article aims to provide an overview of Australia's key policy interests and government policy goals towards Antarctica, including its commitment to the ATS. In examining key policy objectives we note that despite continuity and development of these objectives, significant changes and challenges have arisen in the period 1984–2006. It is these challenges that will help frame Australia's Antarctic agenda over the next 20 years and beyond.     

Australian energy diplomacy

While Australia is considered an energy superpower, Australian foreign policy has often overlooked energy diplomacy. Given the transformations taking place in global energy markets, the time is ripe to begin a policy discussion in Australia on energy diplomacy. I argue that Australian diplomatic efforts should broaden beyond a historical focus on promoting fossil fuels and securing export markets, to driving global energy governance reforms through the G20. This will not only help to ensure that the international energy architecture is capable of achieving governance objectives around energy security, energy access and climate change, but significantly, it will also help Australia to achieve broader foreign policy goals, such as ensuring emerging economies become responsible stakeholders within the international system.     

Australian aid after the ‘Golden Consensus’: from aid policy to development policy?

ABSTRACT

In the decade preceding the election of the Abbott Coalition Government in 2013, a so-called ‘golden consensus’ governed Australian aid policy. During this period Australia’s aid spending increased by over 80% in real terms. However, after winning government the 2013 Federal Election, the Abbott Government made a series of significant and unexpected aid policy decisions, cutting the aid budget three times in fifteen months and integrating AusAID, Australia’s aid agency, into the Department of Foreign Affairs and Trade. This article considers the future role of aid in Australia’s diplomacy primarily by engaging with a prior question: how was it possible for the golden consensus to be uprooted so easily? Conducting a post-mortem reveals that Australia’s development constituency bears some responsibility for the fragility of the consensus. This analysis also reveals the critical role the development constituency will play in determining the extent to which Australia is able to embrace the ‘beyond aid’ agenda. To meet this contemporary challenge, the development community must heed the lessons of the collapse of the golden consensus and, in particular, overcome its reticence to engage in broader foreign policy debates.     

The history of Australian legal opposition to Japanese Antarctic whaling

ABSTRACT

Whaling has been a consistent theme in Australia’s relations with Japan since the 1930s, Australia having endeavoured to regulate, restrict, or bring to a complete halt Japan’s Antarctic whaling virtually since it began. Australia’s motivations have been mixed, involving at various points, some combination of protection of Australia’s coastal whaling industry, concern for Australia’s security, for safeguarding Australia’s Antarctic territorial claim, and more recently, concern for Australia’s whale-watching industry and/or for the whales. Since environmental consciousness became a primary factor in the 1970s, Australian policy has been aligned with that of anti-whaling non-governmental organizations (NGOs), albeit that certain actions of NGOs have caused difficulties for the Australian Government. Law – inclusive of legal argument in the course of diplomacy, domestic laws, and international litigation – has been a mechanism of influence used by the Australian Government and NGOs. This paper traces Australia’s legal opposition from its beginnings until Japan’s announcement in December 2018 that it would end Antarctic whaling.     

The Liberal National Coalition,Australian Labor Party and Africa: two decades of partisanship in Australia’s foreign policy

The issue of bipartisanship in Australian foreign policy is not often substantially addressed. The country’s relations with the world appear to exhibit strong continuity regardless of the political party in government. And yet, when it comes to engagement with African states and issues, the last two decades have seen highly prominent partisan differences in Australian foreign policy. This article utilises the example of Australia’s foreign policy engagement with Africa to argue that there may be two levels of understanding bipartisanship in Australian foreign policy. On the one hand, aimed at relationships and issues perceived to be of primal and significant security and economic well-being for the country, Australian foreign policy does indeed appear to be bipartisan. However, aimed at relationships and issues that have traditionally been perceived as holding minimal security and economic interest and importance for the country, Australian foreign policy does exhibit partisanship.     

Mapping the potential impact of synthetic biology on Australian foreign policy

Synthetic biology is an emerging technology that will impact on the future security and prosperity of Australia. As a discrete policy area synthetic biology has not been explored in relation to Australian foreign policy. To begin this process an understanding of Australia’s genetic endowment, Australia’s agricultural endowment and those security concerns novel to synthetic biology need to be developed. The convergence of the biological sciences and the information sciences is creating novel security concerns that impact on Australian sovereignty, both mainland and the Antarctic Territories, plant and animal health, and defence medical infrastructure. These concerns cross many traditional disciplinary and policy boundaries, an awareness of this is required and a nascent national practitioner community can develop this further. Drawing from work conducted by the US and UK synthetic biology practitioner communities, this article lays out the unique touch points synthetic biology has on Australian foreign policy.     

Unintended consequences: an examination of Australia's ‘historic policy shift’ on East Timor

The Howard government's foreign policy objectives concerning East Timor remain the subject of intense historical debate. Given that some Indonesians harbour suspicions about Australia's role in East Timor's independence, it is important to reflect on Australia's diplomacy throughout this period. This article draws on 15 interviews with former politicians and officials—including Prime Minister John Howard and Foreign Minister Alexander Downer—to argue that in 1998, Australia's foreign policy was focused on supporting Indonesia's democratisation process and maintaining the bilateral relationship. It was only when Indonesia moved towards a ‘special status’ of autonomy for East Timor that Australia reconsidered its own position. Although rarely acknowledged, Australia's policy shift actually precipitated outcomes that it had sought to avoid. As such, Habibie's decision to allow self-determination in East Timor can only be viewed as an unintended consequence of Australian diplomacy—independence was never the objective of Australian foreign policy.     

The Turnbull government’s ‘Post-multiculturalism’ multicultural policy

ABSTRACT

The Turnbull government presented Australia’s fifth national multicultural policy statement in March 2017. This article analyses the policy statement and argues that it represents the most significant change to Australian multicultural policy in four decades. Among other things, it abandons the language of government responsiveness to cultural diversity that previously defined Australian multiculturalism. The 2017 policy amounts to a new form of post-multiculturalism—different from earlier conservative, neoliberal and centre-left versions—in that it seeks to ‘mainstream’ multicultural policy on the grounds that Australian multiculturalism has succeeded in its intended task. While a mainstreaming strategy of this sort is, I argue, theoretically consistent with Australia’s liberal nationalist approach to cultural diversity, the institutional and attitudinal conditions that it presupposes are yet to be fully realised in Australia. More multicultural work needs to be done before this kind of post-multiculturalist approach is practicable.     

Tourism and Foreign Investment in Australia: Trends,Prospects and Policy Implications

Processes of internationalisation and structural economic change have had profound impacts on the pattern of regional economic activity in Australia. The 1980s was a decade of rapid growth in foreign investment, reoriented to the property and services sector, including tourism. It was also a boom time for international tourism, which emerged as the nation's leading export industry. In addition to the national gateway city of Sydney, the rapidly growing coastal cities of Gold Coast and Cairns in Queensland emerged as major international tourism destinations underpinned by significant levels of foreign investment, particularly from Japan. The 1980s boom years for tourism and foreign investment are revised and raises policy implications raised for the longer-term development of tourism and the role of foreign investment.     

Trade agreements and the myth of policy constraint in Australia

In this paper, I challenge the conventional view that trade agreements act as a major constraint on Australia’s industry policy options. Through a comparison with South Korea – a country with similar trade obligations to Australia – I find that the Australian government retains significant room to move in the industry policy sphere. However, Australian policy-makers appear far less willing than their foreign counterparts to use that space. To explain Australia’s comparative industry policy in-activism, I move beyond broad-brush explanations centred on ‘liberal ideology’ to explore the ideational, institutional and structural obstacles to the pursuit of a more proactive industry policy approach on the part of Australian policy-makers.