Much has been written, especially over the past year, about the escalating volatility and uncertainty of the global landscape. China’s rise is a dominant feature, with significant implications for Australia and the Asia-Pacific region. Other issues, not least President Trump’s withdrawal from major multilateral agreements, along with his recently launched “trade war” against China contributes to the climate of instability. Closer to home, contests for influence, persistent inequalities and evolving threats from a changing climate all challenge Australia’s engagement in its wider region.

Making sense of these issues is a challenging task. Australia’s Foreign Policy White Paper, launched in November 2017, aims to do so, while setting out the nation’s strategic priorities. White Papers like this most recent edition are significant policy documents, setting the roadmap for the Government’s vision of Australia’s place in the world. Yet, they rarely gain traction outside Canberra, and can be difficult for Australia’s states and regions to engage with in a meaningful way.

We hope that this State of the Neighbourhood report will go some way towards addressing this gap. The five contributors — all friends or members of the Griffith Asia Institute (GAI), hone in on the issues that they see hold significance for Australia and its neighbourhood. Rowan Callick, Industry Fellow GAI, sets the tone, drawing our attention to the major geopolitical shifts that have gripped the region. He points to three deep trends as shaping the nature of the region’s future. Firstly, the rise of economic nationalism, especially in the United States (US) and China. Secondly, intensifying contest between democratic and autocratic systems of governance. Finally, Chinese President Xi Jinping’s expanding ambitions and systems of control, both at home and abroad.

Callick notes that these trends provide the backdrop for more contemporary events, including the Sino-US “trade war”, the arrival of a nuclear North Korea, and the forthcoming meeting of Asia-Pacific Economic Cooperation (APEC) economies in Papua New Guinea. This contribution presents a sobering and forensic view of the global and regional trends, all of which have serious implications for Australia’s security and economic prosperity. Yet Callick remains somewhat optimistic, encouraging policy and decision-makers to do all they can to clearly comprehend the ‘nature, extent and complexity of the international challenges we face’.

The second contribution by Tony Makin canvasses the Asia-Pacific economic landscape and the potential risks presented by rising anti-globalisation sentiment and protectionist measures. Makin situates APEC’s economic outlook in a state of increasingly restrictive trade measures, high public debt and rising interest rates. Developing trends in the global economy and how APEC economies respond to such risks is important for Australia’s economic prosperity. In order to significantly improve national incomes and living standards throughout the region, Makin argues that further liberalisation in cross-border investment is needed. Additionally, more prudent fiscal policy is required to mitigate the risk of high public debt. In a period marking the returning threat to trade protectionism and “trade “wars, how Australia and its region engages with these developments in the global economy will come to determine economic performance.

Sue Harris Rimmer and Charuka Ekanayake write about the trends of rapid urbanisation and the rise of Asia’s cities. They suggest that cities are important sites of political, economic, social and environmental challenges, and are evolving into serious diplomatic actors. Harris Rimmer and Ekanayake argue that as the urban population continues to increase, cities may come to offer innovative forms of governance on issues such as human rights, inequality and the rule of law. For Australia, deeper engagement with Asia’s cities presents opportunities for greater strategic influence within the region.

With Australia’s immediate neighbourhood already facing climate threats, Brendan Mackey examines how climate change is more than simply an environmental issue. He presents an overview of the mitigation and adaption challenges facing Australia’s neighbours, and reveals the shared interests and common concerns that unite Australia and the region in its response to climate change. Mackey argues that building climate resilience and adaptive capacity requires innovation and collaboration between the public and private sectors in order to deliver holistic approaches to climate change. Changing environmental conditions need to be factored into the longer-term investment and planning in the region in order to mitigate climate change impeding sustainable economic development.

Finally, Sara Davies’ contribution investigates Australia’s aid budget in a political climate of reduced government spending. It interrogates the three priority areas for Australia’s health aid strategy, which focus on investing in programs that engage the private sector, reduce poverty, and reduce gender inequality. Davies argues that there needs to be an increased prioritisation of investment in health programs and health sector delivery in the Pacific and South East Asia to further reinforce the “health security” initiative. Given Australia’s extensive international travel and trade arrangements within the Asia Pacific, a strong interest and investment in regional health affairs is vital.

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