How well has the Morrison government handled relations with Southeast Asia?

This is part of a foreign policy election series looking at how Australia’s relations with the world have changed since the Morrison government came into power in 2019. You can read the other pieces here.

Prior to September 2021, the Coalition had a largely positive scorecard on Southeast Asia relations.

But the announcement of Australia’s security deal with the United Kingdom and the United States (AUKUS) to acquire nuclear-powered submarines caused a serious rupture in our relations with Southeast Asia.

Further, the recently-signed security pact between the Solomon Islands and China highlights the ongoing complexities of China’s role in the Pacific and Southeast Asia.

The increasing gravitation of Southeast Asian countries into China’s orbit isn’t a fundamental failure of Australian foreign policy. It’s based largely on profound shifts in the balance of economic, political and military power in the Indo-Pacific that’s seen China’s influence grow exponentially.

But the challenge is one in which the Coalition government appears increasingly ill-equipped to manage.

Read more: How should the next Australian government handle the Pacific?

Morrison’s track record in Southeast Asia

The Coalition’s track record was mostly positive up until the AUKUS announcement.

Prime Minister Scott Morrison built successfully on Malcolm Turnbull’s rapport with Indonesian President Joko Widodo.

This was in contrast to former Prime Minister Tony Abbott, whose clumsy responses to espionage allegations and the “Bali Nine” drug case did little to endear him to Indonesia’s political leaders.

The Coalition’s policy initiatives on Vietnam have also been commendable. In 2018 the relationship between Australia and Vietnam was elevated to a “comprehensive strategic partnership”. This will broaden cooperation between the two countries, including on defence and security. This is based on Vietnam’s closer alignment with Australia in the face of China’s maritime coercion.

In 2020, Australia signed onto the world’s largest free trade agreement with ten ASEAN member states, China and other Asia-Pacific countries called the Regional Comprehensive Economic Partnership.

This has further cemented Australia’s economic integration with major trading partners in the region.

The pandemic exposed the inadequate health infrastructure and vulnerable informal employment sectors of many Southeast Asian countries.

In response, the Morrison government quickly pivoted its aid program to COVID relief. It channelled $480 million to our hardest-hit regional neighbours.

Treasurer Josh Frydenberg provided a $1.5 billion loan to Indonesia in late 2020 as the country’s finances struggled with the effects of COVID.

Read more: While rich countries experience a post-COVID boom, the poor are getting poorer. Here's how Australia can help

AUKUS rupture

However, the Morrison government’s September 2021 AUKUS announcement created a serious rupture in Australia’s relations with Southeast Asia.

The nuclear-powered submarine deal – formulated in secret between Australia, the UK, and the US – threatened to undermine Australia’s foreign policy independence and credibility in Southeast Asia.

It also challenged long-established ASEAN norms opposing the presence of nuclear weapons.

Among ASEAN states it was received most negatively by its largest member state, Indonesia, whose foreign ministry demanded immediate clarification from the Morrison government.

Indonesia perceived the AUKUS agreement – and the informal “Quad” alliance comprising Japan, the US, Australia and India – as anti-China coalitions which would escalate tensions.

The spat highlights Australia and Indonesia’s increasingly divergent regional outlooks. It also highlights longstanding issues in the relationship. Indonesia believes there’s a lack of respect from Australia and that Canberra has failed to consult adequately with Jakarta on vital foreign policy issues.

Whichever party forms government after the election will have to contend with this.

Labor’s wedge

The Solomon Islands security deal with China has dramatically shifted the election dynamic. It has provided Labor with a wedge issue to argue the Coalition is incompetent on national security and regional foreign policy.

Prior to the security agreement, there was little substantive difference between Labor and the Coalition on Southeast Asia.

Where Labor has differentiated itself from the Coalition is in its increased policy commitment to Southeast Asia, its pledge to reverse cuts in Australia’s aid and diplomatic resources, and its regional climate change focus.

Now sensing a political advantage, Labor has flagged a further $525 million in foreign aid for the Pacific if elected. This recalibration of Labor’s regional foreign policy platform will likely extend to Southeast Asia with further announcements planned.

Anti-China rhetoric is currently at fever pitch in the Coalition government. For Australia to be successful in Southeast Asia, governments of both political persuasions require a more sophisticated narrative on the role of China in the region to avoid alienation from key partners.

Governments must also respect the sustainable economic development priorities of Southeast Asian countries on their own terms, not just as pawns in a larger geopolitical game.

On this point, it seems Labor is leading.