The ASEAN-Australia leaders’ summit in Melbourne offers the opportunity for Australia to embrace ASEAN’s ‘inclusive regionalism’ and the organisation’s centrality in mediating the Indo-Pacific struggle between the great powers.

With the Albanese government’s $2bn investment facility, Australia’s engagement with Southeast Asia is starting to look serious. The new Southeast Asia Investment Financing Facility to catalyse Australian investments in clean energy and infrastructure gave  Prime Minister Anthony Albanese a big-ticket initiative to grab the attention of fellow leaders at this week’s ASEAN-Australia Special Summit ^[1] in Melbourne.

The investment facility—a recommendation from the government’s Southeast Asia economic adviser Nicholas Moore—is a welcome sign of the government’s commitment to overcoming a glaring weakness in Australia’s international economic engagement. We keenly await the government’s full response to the Moore Report ^[2].

From a longer-term perspective, however, there is much more to the Summit than commerce. An equally important issue hanging over the discussions is Australia’s positioning in the changing Indo-Pacific and whether Canberra has the imagination to adjust our strategic posture to meet those changes.

Our first special summit in 2018 received only five lines in the 698-page political memoir of then prime minister Malcolm Turnbull, and the Australian community continues to be preoccupied with China, and the US-China dynamic. This summit provides the opportunity to consider why Southeast Asia is so fundamentally important to us—and why the going might not be easy.

Geographic and economic imperatives make the Australia-ASEAN relationship vital in itself, but it is also the starting point for developing new possibilities for Australia’s strategic future.

There are no downsides to strengthening Australian interaction with Southeast Asia.  This is the region of Asia closest to Australia, where the major powers, including Washington and Beijing, assume us to be active. Engaging effectively with ASEAN can only enhance Australia’s wider influence. Also now, when the Indo-Pacific seems to be increasingly multipolar rather than American-led, it makes sense to define Australia internationally in terms of our tighter collaboration with ASEAN, as well as being a US ally. But there are challenges.

Certainly, Australia has assets with respect to ASEAN.  Apart from being ASEAN’s first dialogue partner 50 years ago, we possess strong scholarly and diplomatic expertise on Southeast Asia and our universities have been leading providers of Western education to the region.

Recently, however, the Australia-ASEAN relationship has transformed and many in the Australian community have not registered this. Our GDP was once larger than the combined total of ASEAN countries, and Australians tended to frame relations with the region as development assistance. Today the ASEAN figure is well over twice ours ^[3], larger than that of India and more than four-fifths the size of Japan. The Japanese leadership acknowledges that their old client relationship with the region is over. As for China, many ASEAN countries rank this economy as their top trade destination. Since 2020, ASEAN has achieved the status of being China’s top trading partner.

Despite such dramatic statistics, some commentators continue to refer to Southeast Asia as Australia’s ‘backyard’ and official government statements still speak of ‘development assistance to the Pacific and Southeast Asia’ as if the two regions are comparable.

Australia was more important to Southeast Asia in 1974 than it is today. Although ASEAN is our second largest trading partner, we just make it to eighth on their top ten list. China’s current dominance is well known. But South Korea, a minor player a few decades ago, today has twice our trade with Southeast Asia. With respect to investment, we are a very small player, with only 3.45% of our total investment stocks abroad going to the region. While Southeast Asia is attracting funds from many other countries, including in Europe, our outward investment tends to stay in the Anglosphere. It is good that the recent Moore Report ^[2] addresses this investment gap—a gap that also damages Australia’s political influence.

That influence cannot be taken for granted. Five decades ago, we were the close ally of the region’s dominant power and viewed as a leader in economic development and democratic government. Today democracy has lost some of its shine—and the Singapore survey ^[4] of Southeast Asian opinion leaders indicates China is seen as the country with most ‘political and strategic influence’. Australian contributions to the region continue to be seen as constructive, but many wealthy states are vying for the region’s attention. As a destination for tertiary education, Australia remains strong, although there are now fewer Southeast Asian leaders with Australian degrees.

While the focus on ‘climate and clean energy’ and the ‘blue economy’ at the March summit should be welcomed, deeper engagement with Southeast Asia means more investment, scholarships, and development initiatives. There are also vital differences in strategic culture that need to be taken seriously.

Malaysia’s then prime minister Mahathir Mohamad used to say Australians were ‘basically European’ and portrayed themselves as ‘deputy sheriff for America’. Despite our growing multiculturalism, these perceptions continue and are sharpened when a recent prime minister describes Australia as ‘joined at the hip’ with the United States, or when his successor calls the AUKUS arrangement a ‘forever partnership’, or when our Anglosphere investment bias is noted.

Our present government’s attempts to modify Australia’s image as a regional outlier include calling us a ‘steadfast supporter of ASEAN centrality’ and promising to be ‘guided by the principles of ASEAN’s Outlook on the Indo-Pacific’ (a major ASEAN policy statement from 2019). But can we gain advantages from those principles? The biggest challenge to a full engagement with ASEAN may be our own long-held political perspectives.

The Outlook stresses the ‘inclusivity’ of ASEAN regionalism, which means including, not rallying, against China. It insists on ‘non-intervention’ in a state’s domestic affairs, which makes it difficult to intervene in Myanmar’s domestic turmoil. The ‘non-intervention’ principle also underpins ASEAN’s non-ideological approach to international relations, running counter to promotion of the Quadrilateral Security Dialogue (Quad) as an ‘alignment of like-minded democracies’. The Outlook insists, as well, on ‘dialogue and cooperation instead of rivalry’, which is far distant from the commitment to alliance-building which led Australia to AUKUS and the Quad.

ASEAN has moved more cautiously in political than in economic development, but be in no doubt, it is ambitious. The region’s states have had centuries of experience operating in hierarchies, while asserting agency in dealing with major powers. True, there are today serious maritime disputes with China, but Southeast Asians say Western analysts overlook the many benefits they leverage from their relationships with China.

Adhering to ‘the principles of ASEAN’s Outlook’ means ignoring recent calls to turn to ‘minilateral organisations’, such as the Quad, to ‘get things done’. Groupings of ‘like-minded’ countries may move faster in achieving practical outcomes, but they also tend to be adversarial, sharpening political division in the region. Will Australians see the advantage of endorsing ASEAN’s ‘inclusive regionalism’, insisting that ASEAN leadership in the Indo-Pacific mediates the struggle between the major powers?

Such genuine commitment to ASEAN would have been unimaginable in the past, but the ending of American hegemony demands strategic imagination. Our summits with ASEAN offer the opportunity to consider a new international identity for Australia.