Economic Diplomacy: Hanging in ASEAN

passing road

Australian Prime Minister Anthony Albanese He says Southeast Asia is „where Australia's future lies” and Treasurer Jim Chalmers He says Even more enthusiastically „ASEAN is the move”. But as Australian officials begin the difficult work of implementing initiatives from last month's ASEAN-Australia summit, the lingering question is whether the feeling is mutual.

This week Annual Survey ISEAS-Yusof Ishak Institute offers some timely views on that question from opinion leaders and policy makers across the region and the answer is mixed.

The survey focused primarily on attitudes to Southeast Asia, which has spearheaded many of the biggest issues facing the region this year. Topic detection If regional nations had to make a binary choice in a clash between two superpowers, China has edged out the US for the first time.

But buried in the detailed results is a relatively stable opinion poll of how the region views Australia, useful in the run-up to the first ASEAN-Australia summit in 2018. ISEAS State of Southeast Asia Report and Periodical AustCham ASEAN Survey Every business has data and methodology limitations. But while the government has now, once again, elevated engagement with Southeast Asia as a key national priority, they at least offer a relatively objective way to monitor progress.

Take your partners

In a new question this year, the survey produced a ranking of the strategic fit of the 11 existing partners, with Australia's most proud status as ASEAN's first dialogue partner in 1974. Australia is seventh with a score of 5.51 per 11.

While China, the US and Japan predictably top the list, Australia can feel a bit wedged between the UK and Russia. But what is most interesting, given Australia's deep and wide-ranging diplomatic engagement over the years, is that the ten ASEAN countries are more divided in Australia's ranking than any other partner. Among Singaporeans and Bruneians, Australia ranks fourth to Thailand ninth.

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Notably, Australia's first place as the region's free trade advisory leader is only 1.7 percent compared to 6.7 percent five years ago.

The most important findings in this survey come from long-term trends. There is a good argument to be made that Australia cannot be expected to rank highly in a region where such major economic and security powers are vying for influence. Yet Australia's first-choice status is generally declining as more attention and resources are devoted to the region.

Notably, Australia's first place as the region's free trade advisory leader is only 1.7 percent compared to 6.7 percent five years ago. The ASEAN-Australia-New Zealand Free Trade Area, a 14-year high-profile multilateral trade agreement, continues to allocate aid resources to ASEAN countries participating in trade initiatives such as the Indo-Pacific Economic Framework. Somewhat negatively, respondents think ASEAN countries are the most effective supporters of free trade.

Beaches, not quarries

Over time, despite all the efforts to present Australia as a sophisticated economic partner, the country's top performance remains the first choice for a holiday, at 7.9 per cent and well above its long-term average. Unfortunately, the five-year-old question on the scholarship's preferred place to study has been dropped this year and replaced by preferred place to live or work. Australia's strong overall performance ranking, albeit on a downward trend, was a place to study. The place to work question produced its best result this year, with 12 per cent making Australia their first choice outside the region after the US and Japan. (The previous place to read the results was integrated into the table with the 2024 job result, for comparison.)

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However, if ASEAN countries are taken into account, they account for 22.4 percent of the choice for a place to work. As evidenced by the free trade advocate question, the rise of ASEAN countries has been an interesting trend in this survey over the past six years. ASEAN-based respondents increasingly lean toward choosing their own neighbors for vacations, education, and collectively as an economic force.

Despite the outward perception that the region is politically divided, diplomatically wary and slowly integrating economically, the surveyed opinion-makers have a strong sense of being part of a rising region. This is an important trend for Australians to understand as the government implements its new engagement policies, from defense to business to education.

Australia cannot really expect to make a mark as a first-choice economic or strategic power in the escalating bilateral struggle between China and the US, but it is on the decline, albeit a small one. Even in a new question over the past two years about regional leadership in rules-based regulation, Australia's first choice has dropped from 3.4 percent to 1.6 percent.

However, when the government's priority is to defend against great power competition with regional countries, Australia does very well. It lags behind the EU and Japan as a hedging partner, but is roughly on par with India over time.

Challenging times

The overall survey results underscore the complexity of the region in which Australia is trying to re-engage. While this year's China/United States test results are significant, fundamental comparisons between the two superpowers on other questions are more mixed and contradictory. Japan is the most trusting country, and respondents are more concerned about economic and climate challenges than great power competition.

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The results regarding Australia tend to reinforce the idea that, despite a long history of bilateral and multilateral engagement, Australia may find it difficult to make its presence and influence felt as Southeast Asian countries become larger and attract more world attention.

In this context, it is notable how South Korea is rising in the ranks of allies compared to India, which has strong cultural ties in parts of Southeast Asia. This highlights the importance of deeper and broader economic links to enhance Australia's value as a partner.

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