Think-tank says vast mineral wealth offers major influence over emerging powers
CANBERRA - Australia has been urged to use its vast mineral resources - including the sale of uranium to India - to boost its diplomatic muscle with the emerging great powers of Asia.
"Australia's role as a stable low-cost supplier of key commodities gives it a greater diplomatic bargaining tool than previous governments have been willing to acknowledge," a new paper by the Australian Strategic Policy Institute says.
"The time has come for the Australian Government to jettison much of the ideological and policy baggage that was associated with the growth phase of the minerals export sector."
The paper by Flinders University international relations expert Richard Leaver and Carl Ungerer, the institute's national security project director, follows a growing debate about the strategic role of commodities in national security.
This includes concern over the growth of Chinese investment in Australia's strategic resources, continuing debate over uranium exports, and longer-term worries about the military and economic expansion of China and India.
It also comes as another paper by Centre for Independent Studies foreign policy research fellow John Lee warned that China would not be content to rise as a "responsible stakeholder" in an American-led regional and global order.
"The idea that the United States can manage China is failing and America, including allies like Australia, must confront the realities of dealing with Beijing," Lee said.
He said China's future ambitions remained in building a comprehensive national power at the expense of the US and its allies and partners: "Canberra must work with Washington to maintain peaceful co-operation yet at the same time accept there will continue to be areas of competition with China."
The paper by Leaver and Ungerer says that natural resource politics are reasserting their importance around the world, driven by the rise of China and India, the increasing interconnection between trade, national security and the environment, and the imperative to lock in growth in prosperity during a time of global market insecurity.
"Traditionally, resources diplomacy has been understood in Australia only from the demand side," the paper says.
"But there's an important supply-side element to resources diplomacy as well.
"It's about using the supply of key commodities as part of a broader set of national instruments to change export opportunities and to strengthen key strategic relationships."
The paper says this theme has waxed and waned in Australian diplomacy for several decades, but despite becoming perhaps the global economy's largest non-oil commodity exporter, Canberra has not tried to use its muscle on key commodity markets or to leverage exports in the broader national interest in any consistent way.
But it says Canberra could unlock its potential influence to help create orderly conditions within commodity markets, and to use uranium sales - including exports to India - to promote broader strategic perceptions of a more secure non-proliferation regime.
Leaver and Ungerer say the present view that commodity marketing is a commercial issue that should be left solely to commercial traders without government involvement needs to be reassessed.
While Canberra considers uranium to be the sole exception to this rule, all its major commodity customers have always regarded their purchases as serving national strategic goals.
"The uranium industry is no longer unique," the paper says.
"A case can be made that all major industrial raw materials are now strategic, especially for the nations that produce most of them ...
"Canberra needs to leave behind the already-outmoded view that commodity markets move in response to normal commercial forces."
The paper also says that Australia should raise its present free trade talks with Beijing to a "bilateral strategic economic dialogue" aimed at developing acceptable principles for competition and foreign investment policy.
Canberra should further expand this into a global campaign directed against speculation in commodity markets, and deepen its economic partnership with India through the direct sale of uranium.
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