Australia’s Strategic Outlook 2017-2027

Paul Dibb *

Speech given at Australian Defence Magazine (ADM) 2007 Conference,

22 February 2007

Let me begin by telling you a story. In the early 1970s the national intelligence assessments
community were asked by government to look at Australia’s strategic circumstances 15 years
ahead. It was called The Environment of the 1980s. What were we good at and where did we
make poor predictions? Well, we were pretty good at predicting population trends,
technology developments and future military capabilities. We were poor at predicting
ideology and politics. So, for example, we failed to predict the collapse of the Soviet Union.
And we thought that US defeat in Vietnam would lead to the dominoes falling in Southeast
Asia. That did not occur. You may think that some of this perhaps has resonance today.

What is the Connection between Strategic Policy and Force Structure?

Turning now to my main topic—sketching Australia’s likely geo-strategic circumstances 10 to

20 years ahead. The first thing to understand is that in defence planning the most difficult
challenge is always to arrive at an intellectually rigorous connection between strategic policy
and force structure priorities. There are three options:

• The first, and easiest, is to have a clearly identified enemy on which to focus military
capability development. But the fact is Australia has not had to face a major enemy like
that since the Second World War.

• The second alternative, which has recurred throughout Australia’s history, is to have an
expeditionary force designed to operate in a subordinate role to a great and powerful
ally.

• The third option is to rely primarily on Australia’s unique strategic geography to guide
the development of the force structure. Strategic circumstances change but geography
has an abiding relevance (although I recognise it can be influenced and compressed by
technology).

My view is that we are presently in danger of sliding towards a hybrid force, which lacks the
rigorous connection that is necessary between strategic policy and rational force structure
choices. By this I mean that we now have a confused force structure that has a bit of the
defence of Australia, a recognition that regional requirements will become more demanding,
and an increasing tendency to develop an expeditionary force for distant military operations
with our American ally.

* Emeritus Professor Paul Dibb was Head of the Strategic and Defence Studies Centre from 1991-2003. Other
previous positions have included Deputy Secretary of Defence (1988–91); Director, Joint Intelligence
Organisation (1986–88); Ministerial Consultant to the Minister for Defence (1984–86); Head of the National
Assessments Staff, National Intelligence Committee (1974–78). His research interests include Australian defence
policy, regional security, and alliance relationships, and he has written widely on these issues. Emeritus Professor
Dibb was the author of the Review of Australia’s Defence Capabilities (more commonly known as ‘the Dibb
Review’), a Report to the Minister for Defence, published in March 1986.

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What I wish to demonstrate today is that our own region will become more challenging, and
potentially more unstable, in the next 20 years. A time of regional troubles lies ahead. This
will demand a steady hand on force structure priorities to ensure that our margin of
technological advantage in our own region for advanced conventional forces is not eroded.

The challenge ahead will be especially grave for us because the resources available to
Defence will inevitably decline as Australia’s rapidly ageing population undermines the
government’s discretionary revenue base in favour of health and aged care. We also need to
recognise that our limited population base, which is unlikely to be much more than 25 million
people, means that Australia’s relative strategic importance risks being eroded still further
with the rise of large new powers—such as China, India and Indonesia.

Australia’s Strategic Outlook to 2027

It is fashionable to claim that the contemporary era is the most threatening, unstable and
complex ever. I reject that. Just go back 20 years and reflect on what the world looked like
then. Well, I can tell you that in 1987 the Soviet Union was alive and well and threatening
global nuclear war. Our estimates were that in the first 24 hours of a full-scale nuclear
exchange between the Soviet Union and America there would be 180 million dead, and that
did not account for subsequent radiation deaths. I for one do not accept that the so-called
global ‘war on terror’ is an existential threat like global nuclear war was. Nor do I accept, as
President George W. Bush claims, that terrorism is the only defining ideological threat of the
21st century.

However, I do accept that the combined dangers of nuclear proliferation and terrorism are a
very serious threat indeed, which could lead to the first use of nuclear weapons since
Hiroshima and Nagasaki over 60 years ago. This could also involve a nuclear exchange, as
the United States responded in kind in the event of a nuclear explosion on its own territory.

Another apocalyptic threat that I do not accept is the current trendy argument that climate
change is such a serious national security threat that it will lead to war between nations.
Where, how, and between which countries? This is not to exclude some nasty national
security challenges short of war arising from climate change, but we need to keep them in
perspective.

The job of the strategic analyst is to manage risk and look for credible contingencies—not
incredible ones. Of course, defence planners need to examine the risk of serious shocks or
discontinuities. As defence strategists, we are necessarily gloomy because we deal with the
use of armed force. We leave it to the foreign policy experts to be optimistic that the world’s
problems can be solved by diplomacy alone. So, much of what I have to say is not to ignore
the forces for peace, stability and economic interdependence in the world of 2027. But I need
to identify the key issues that military planners need to worry about in the two decades
ahead.

Our first priority will continue to be Australia’s own security and that of our immediate
region. The defence of Australia will remain a fundamental responsibility of government,
which no politician will be able to dismiss—particularly if our own region becomes more
unstable. What I have termed ‘the arc of instability’ promises to become more of a national
security problem for us. This is our front yard, not our backyard as some would have it. And
our American ally quite rightly expects us—not them—to fix it up.

I have no need to remind you that recently we have been in East Timor and the Solomon
Islands twice, Fiji has had its fourth military coup and is looking more and more like a military
dictatorship, and even Tonga has erupted in violence. But the most serious challenge for us

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would be if Papua New Guinea becomes a failed state. It is a large country with a population
of over 5 million (approaching 8-10 million by 2027). More than 15,000 Australians live there.
And it shares a long common border with Indonesia. The most serious circumstance for us
would be if we had to intervene in the face of violence from the Papua New Guinea Defence
Force.

We will therefore need to factor our immediate region increasingly into our force planning.

Our second priority is the broader region of Southeast Asia, which forms a strategic barrier
to Australia’s northern approaches. It is from or through there that a putative enemy could
attack us. The central question for Australia is the future of Indonesia. So far, the democratic
experiment has gone better than we might have expected. But the transition from an
authoritarian regime to some form of democracy is fraught with danger (as Russia
demonstrates only too clearly). The most serious potential discontinuity that Australia could
face in the future is the failure of democracy in Indonesia and its replacement with an
extreme Islamic nationalist military government in Jakarta. That would focus our minds—and
indeed our defence preparations—like nothing else. And remember that Indonesia’s
population in 20 years time will probably be around 275 million.

In the past, we have depended upon our greater economic size and advanced military
capabilities to underpin our influence in Southeast Asia. Yet that might be about to come to
an end in the decades ahead, as regional economies grow and can afford much more
advanced military equipment. We will find it increasingly difficult to be the leading military
power with the most advanced technology and training/education in our own part of the
world.

Our third priority will be Northeast Asia which looms as a grave area of uncertainty 20
years from now. The centre of gravity of world economic power is moving immutably towards
Asia in the 21st century, with the rise of China and India. But just look at what could go wrong
in Northeast Asia over the next 20 or so years compared with the long period of peace we
have had since the Korean War more than 50 years ago:

• In the shorter term, the most obvious hotspots are the Korean Peninsula and the
Taiwan Strait. If war erupted between North and South Korea, Australia (as a signatory
to the UN Armistice of 1953) will be automatically involved. The Taiwan Strait is a
different matter, but if we refused an American request for combat assistance it might
prove to be an alliance breaker for us.

• Within the 20 year timeframe, we must consider the possibility of a unified Korea
emerging. It would see Japan as its historical enemy and might well develop an
independent nuclear weapon to that end.

• The most serious discontinuity would be outright war between China and Japan. Asia
has never before had the experience of both a strong China and a strong Japan. There
is deep-seated enmity and distrust between these two countries and they have
important unsettled maritime border disputes. In Europe today the idea of a major
power war is an obsolete concept. That is not the case in Asia.

• Closer to home, China is carving out a sphere of influence for itself in Southeast Asia
and, in future, will display a willingness to challenge the United States in this part of the
world. China is deliberately developing a sea denial capability against American forces.
Within the 20 year period, it could conceivably acquire military bases for itself in
Southeast Asia and an ability to project naval and air power there.

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• Finally, I believe that we will have a resurgent Russia on our hands that is angry and
resentful because of the way in which the West treated it when the Soviet Union
collapsed. Russia is now the world’s leading producer of natural gas and oil (it
outstripped Saudi Arabia last year as the leading oil producer) and it is keen to export
its weapons in competition with the United States. This will have implications for our
margin of military advantage in our own region.

These then are the three key regions that will challenge Australia’s future national security
interests. They mean that we need to define a region of pre-eminent security interest to our
north that, together with the defence of Australia, is the primary driver of our force structure
priorities. Of course, as now, it should not be the only driver: we can accommodate the need
for niche capabilities for operations much further afield. But we should do so with extreme
care. And much more so than at present.

In the time available here, I have been unable to canvass some other important issues. One
is the growing importance of understanding the geopolitics of energy security in Asia and
especially the security of energy supplies to Japan and China. We have a key role here as a
stable energy supplier to both of them. The other is the fact that the Middle East will
undoubtedly continue to be a region of great importance (because of oil) and great instability.
But we must be careful of how far we get sucked in. This will be particularly so as our own
region becomes more demanding of our national security priorities.

Concluding observations

Let me now draw all this together with a few concluding points:

1. The United States will continue to be the dominant world power and our most important
ally over the next 20 years, but we will need to become more adept at balancing our
relations between the United States and China and more discriminating in how we
respond to alliance demands—especially given the likely crucial defence challenges
arising in our own region.

2. We will need to monitor very carefully indeed the potential for nuclear weapons
proliferation in our nearer region. On a number of occasions in the past (in the late
1960s and early 1980s) we sought to narrow the technological lead time with regard to
a nuclear weapons potential because of deterioration in our perceived strategic
circumstances.

3. The picture I have painted suggests that we should not slide further towards a hybrid
expeditionary force. I am a strong believer that we need to focus on our own unique
force structure needs for a time of regional troubles ahead. Crucially, we need to focus
on being able to expand our current very modest core of advanced conventional war
fighting capabilities. We must not let Australia’s relative military strengths inevitably
decline over the next two decades.

4. Having said all this, I believe that tighter defence budgets loom ahead as our ageing
population cuts into the government’s discretionary revenue base. Tougher times loom
ahead. A future generation in the Defence Organisation will have to learn all over again
Sir Arthur Tange’s famous maxim that ‘strategy without the discipline of money is not
strategy’.

© 2007 The Australian National University