This minority are that way for good reason

‘The first generation with declining standards of living': Australia's faltering economic standing

Sydney Morning Herald

13 hours ago

Sydney Morning Herald

‘The first generation with declining standards of living': Australia's faltering economic standing

This story is part of the August 2 edition of Good Weekend. See all 14 stories. Not since the height of the Cold War have Australia's national security and economic standing in the world been more under the spotlight. As a topic, international relations is suddenly sexy – and drawing more attention than ever. Dr Stuart Rollo is a regular contributor to the opinion pages of The Sydney Morning Herald and The Age, and is author of Terminus: Westward Expansion, China, and the End of American Empire. Rollo, 38, is a researcher at the Centre for International Security Studies at the University of Sydney. The prime minister of Singapore, Lawrence Wong, has said that the American-led era of free trade is rapidly drawing to a close and there's a growing likelihood of a global trade war. Is Australia more exposed than most other countries? A global trade war would be particularly severe for Australia. An over-concentration on mining and the FIRE sectors [finance, insurance and real estate] and decades of financial deregulation that have gutted our manufacturing base have left us with a shockingly simple economy. Harvard's Atlas of Economic Complexity ranks Australia as the 105th most complex economy out of 145, right between Botswana and the Ivory Coast. That is dead last of all OECD countries. Our regional neighbours who would be put under similar pressure by a trade war, like Japan, South Korea and Singapore, have considerably more complex and resilient economies than ours, and are in stronger positions to adapt to shifting global conditions. By some estimates, the average 70-year-old in the US is 72 per cent wealthier than 40 years ago, but the average person under 40 is 24 per cent less wealthy. This trend is happening across the Western world. Is this a further sign of the West's decline? Absolutely. This is the first generation in modern history with declining standards of living and life expectations relative to their parents. There are many causes and symptoms here, but one structural reason is the financialisation and assetisation of Western economies. Since the 1970s we have been shifting from industrial to financial capitalism, where a much higher portion of income is spent on rents and debt repayments rather than reinvested into productive enterprises or spent on consumption. This concentrates more of society's wealth in the hands of asset owners and speculators, who tend to be older people who were able to buy into asset classes like real estate at a time when they were much more affordable relative to wages. What happened to the time when Australians actually made things? Our manufacturing base has been shamefully left to wither away over many decades. How have we allowed this to happen, and is there anything we can do about it? Successive governments from the Hawke-Keating years implemented a slew of policies that opened the Australian economy to global market forces, removed protections for manufacturing and deregulated financial markets, which shifted investment from long-term industrial production and research and development to the high-return FIRE sector and privatised major state-owned enterprises like the Commonwealth Bank, Commonwealth Serums Laboratories, Qantas, Telstra and many others. This left us with reduced national capacity, produced privatised monopolies and got us to the point we are at today, where 15 of our 20 largest companies are majority owned by American investors. Americans have triple the ownership stake in these businesses than Australians do. These policies certainly shaped a period of astonishing economic growth for Australia, but they also caused broad industrial devastation, reduced economic complexity, and heightened socioeconomic inequality. There are several major policy initiatives and strategies underway now to attempt to address some of these issues, but it will be extremely difficult and costly. Back in November 2011, then US president Barack Obama addressed the Australian parliament and announced an American 'Pivot to Asia' because of 'the vast potential of the Asia-Pacific region'. That's become less likely under Trump, hasn't it? The Pivot to Asia was kicked-off by the Obama administration to move beyond the era of costly and destructive 'forever wars' in the Middle East and focus on establishing the United States at the centre of economic, diplomatic and military arrangements in the world's most populous and economically dynamic region. This was always about locking in American regional primacy in the face of a rising China, but Obama took a multilateral approach built around organisations, rules and incentives. From his first day in office in 2017, Trump began to dismantle regional economic and diplomatic integration but maintained the focus on military pressure, although now under an America First approach with more sticks and less carrots to keep its allies on board. To pull this off, the US needs to anchor its alliances with Japan and Australia particularly and hand over responsibility for maintaining a favourable balance of power in the Middle East and Europe to its allies there, something that is already proving to be extremely difficult. I don't think a pivot in anything like its original intended form will ever materialise, but a major American military build-up in the region is certainly on the cards. In your book Terminus, you provide a historical interpretation of America's involvement in the Pacific. Have the power dynamics been irreversibly changed by China's rise? Yes. In Terminus, I document the special vision that the political and commercial architects of the American empire held of China as the almost limitless foreign market upon which America's economic destiny hinged. While American consumers, businesses and investors certainly benefited greatly from China's rapid economic growth in the years since Deng Xiaoping's economic reforms, China has never been politically integrated or subordinated into the American world order. China is now too powerful for this to happen under any circumstances short of major domestic political upheaval, national fragmentation or war. China and the US seem to me to be destined for rivalry and a period of hegemonic contestation in the region and, perhaps, globally. Trump has chosen tariffs as his tool for re-shoring manufacturing in the US. Given that countries affected by his tariffs are already forming new trade alliances and supply chains away from the US, will this work? The goal of the tariff system is to coerce as much of the world as possible into subsidising the reshoring of American manufacturing. While there will likely be more major 'wins' in terms of promises of investment made on paper over coming years to appease the Trump administration, I don't expect that most nations will continue to undermine their own economic interests indefinitely. Several CEOs of major tech companies in the US have warned that AI will wipe out millions of white-collar and entry-level tech jobs by as early as 2030. Are we right to fear for the next generation of young people? I am a tech pessimist. Not only will AI make many relatively well-paying middle-class jobs redundant, but its rampant use during critical learning and developmental stages of life threatens to leave young people dependent on it as a tool for basic research, writing and analysis, and ill-equipped to face the challenges of a changing and unstable world. This is only amplified by the infiltration of social media and tech companies into every corner of social and cultural life, and with it the addiction-driven commodification of our time and attention, packaged into data insights and marketing opportunities for sale to third parties. A Pew research survey released last year of 24 countries showed nearly 31 per cent of respondents – including one in three Americans – would support authoritarianism, with those most in favour of autocrats already sitting on the ideological right. Is democracy under increasing pressure? These polling numbers demonstrate what social science studies have shown for a long time, that even in advanced democracies a minority often supports some form of authoritarianism, and that this support tends to increase when people feel heightened economic stress, security threats or rapid social and cultural upheaval. It seems to me that Australia, able thus far to draw down on its vast reservoir of wealth, robust institutions and high social trust, is weathering these conditions better than most Western democracies. We still have an opportunity to shore up a fairer, safer, more convivial and democratic society, but it will require courage and leadership. We are lucky enough to have been gifted a cautionary vision of where the status quo is leading. China has just opened a direct railway connection with Iran – the Iran-China freight corridor – which reduces transit time from approximately 30 days to 15 compared to sea routes. Does this mean the West's control of one of the biggest trade routes on Earth will weaken, undermining Western sanctions? For several centuries, the British and then the Americans exercised geopolitical dominance through maritime power and their ability to control key sea lines of communication. Modern methods of overland trade and economic infrastructure like vast networks of pipelines and high-speed rail are effective tools to circumvent this strategy. While they cannot totally replace maritime trade, this infrastructure certainly makes the societies that it connects more resilient to external forces. Indonesia has just joined the BRICS [which includes Brazil, Russia, India, China and South Africa] group of nations. BRICS now eclipses the G7 group in terms of GDP by purchasing power parity. Trump has suggested he wants to break up BRICS. Has he got any chance? BRICS, although today still a very loose association of states, would be a formidable opponent should it ever really solidify around shared political, economic and strategic goals. Trump has abandoned the notion of an American-led liberal rules-based order, which would have once held out the promise of prosperity and security through compliance to these states. He is now likely to seek to pit them against each other using combined methods of realpolitik, bullying and bluster. I think BRICS will continue to grow in size and importance, but American pressure, along with their own considerable internal conflicts of interest, may put a dampener on deeper integration and unified cohesive opposition to American hegemony. The greenback has been the lifeblood of global finance for over 80 years. Is a time approaching when the US dollar is no longer the world's reserve currency? Whether the greenback declines precipitously in coming years or continues on for decades without an alternative emerging largely depends on American actions. If the US continues to use access to the global financial system as a cudgel, it will prompt countries serious about protecting their long-term interests and sovereignty to plan for alternatives. If dollar hegemony does begin to fall apart rapidly, it would be catastrophic for the US. The massive budget deficits that finance the American military colossus would be totally unsustainable due to inflation and a collapse of confidence without the constant underwritten demand for US dollars from the global economy. Loading Notwithstanding his recent resupply of weapons to Ukraine and his apparent falling-out with Putin, Trump has basically switched sides on Russia. Should this be a major warning to Australia about the reliability of the US as a security partner? Trump seems eager to wind the war up on terms favourable to Russia and leave the Europeans and Ukrainian rump state to work out a balance of power in the region while he turns his attention to China. This is, of course, a major tragedy for the Ukrainian people. Australia should be building strong cooperation with the US where our interests clearly align, and making plans for scenarios and situations where they may diverge. Beijing cannot allow Russia to lose the war in Ukraine because it needs the US to be focused on Russia and Europe rather than the Pacific, China's top diplomat reportedly told his EU counterpart in July. Also last month, NATO Secretary General Mark Rutte told The New York Times that if China attacks Taiwan, Beijing may ask Moscow to open a second front against NATO to deflect resources away from the Pacific. What does this say about China's long-term intentions? China's intentions towards Taiwan have been very clear for decades. It sees Taiwan as an inalienable part of Chinese territory, and seeks to reintegrate it into the Chinese state. Peacefully if possible, through force if necessary. This goes against the wishes of the vast majority of Taiwanese people. While the US supports on paper a One China policy under the Beijing government, Taiwan is a critical piece of America's regional security architecture. Should it be lost, the first island chain of bases containing China would be broken. Given this, it does not surprise me at all that Beijing is formulating a range of strategies for expanding a war over Taiwan. Needless to say, the Taiwanese themselves are in a perilous strategic position. Last month, Australia quietly paid the US another $800 million towards the AUKUS submarine deal, bringing the deposit so far to $1.6 billion, even though AUKUS is now under review by the US. Would the $368 billion being spent on nuclear submarines be put to better use on a range of anti-ship and anti-air defensive systems? Yes, and our national arsenal should also include a much more affordable submarine capability tailored towards our own national defence and aligned with national capabilities to operate and maintain it, much like the original deal with France that was abandoned in favour of AUKUS. China dominates the rare earth market, mineral supplies that are critical for the technologies of the 21st century such as digital communications, renewable energy, and electric vehicles. Australia has significant deposits of rare earth minerals: is it vital for us to begin processing these, rather than just ship them overseas? I don't know if it is 'vital' but it is certainly good policy. Developing a domestic critical minerals processing industry would be good for Australia both for the sensible hedging against Chinese dominance of the sector internationally, and for the technological, industrial, and commercial benefits that would come with it and flow on elsewhere. Loading In your book you describe how, in the 1990s and early 2000s, it was widely believed in the West that the Chinese economic boom would turbocharge democratic reform. Why were so many experts and commentators wrong? This was a major liberal fantasy that emerged after the fall of the Soviet Union. Many across the West believed in the simplistic formula that free markets would bring prosperity to China, which would in turn bring a growing middle class that would be inherently oppositional to authoritarian one-party rule. This conveniently allowed American corporations and bankers to make fortunes doing business in China while believing that they were contributing to democratisation and the downfall of the Communist Party. Ironically, quite the opposite has happened. Sociological research has shown that China's entrepreneurial middle class is overwhelmingly opposed to political liberalisation, fearing that it could unleash social forces from below that would threaten their recently won wealth and comfort. In June Prabowo Subianto, the new president of Indonesia, snubbed the G7 to meet with Vladimir Putin in St Petersburg, where he praised Russia and China, saying both never had double standards and always fought for global justice. Subianto's speech came after reports that Moscow was lobbying Jakarta to house long-range bombers in Indonesia's Papua province. Shouldn't these statements make us anxious about our largest nearest neighbour? I'm a foreign policy realist, so I think that serious countries should always be concerned by the growing power of their neighbours. That isn't a call to man the barricades against Indonesia but we should, of course, pay close attention to their military capabilities and agreements with other powerful states, much as they do to ours. Indonesia and Australia have been described as 'strange neighbours' – a conservative Islamic country very close to a liberal Western country with strong links to Europe. Will this forever be a source of difference between the countries? Culturally, socially, geographically, demographically, economically, and almost any other way you might want to slice it, Australia and Indonesia are profoundly different. Given this difference, and some considerable historical low points in the relationship, both states have done a remarkably good job of quietly and effectively managing our relations. We should build on things like our mutual security interests and forge closer cultural and economic ties, while maintaining the ability to disagree civilly but vigorously. Loading Historian Geoffrey Blainey has argued Australia is less prepared for war than it was just before World War I. Europe appears to be preparing – should we as well? We should be prepared to defend Australia and contribute to the maintenance of a sustainable system of balanced deterrence in our region. Professor Blainey is right to point to our domestic industrial vulnerability, and call for the acceleration of modern manufacturing development and preparedness programs, but the analogy between Australia's situation vis-à-vis China and the Europeans' with Russia is inaccurate. World War I was a tragic and unnecessary war. We should be doing everything we can to avoid similar mistakes closer to home today, not simply accepting an incalculable catastrophe as a fait accompli. On a scale of 1 to 10, how would you rate Trump's economic performance so far? Trump is running a very high-risk, high-reward economic strategy, cannibalising as much of the global economic system as possible in an attempt to shore up declining American national strength. I believe that the short-term, mostly paper, successes that he has enjoyed so far are likely to fail spectacularly in the long run: 3/10.

The Age

13 hours ago

The Age

‘The first generation with declining standards of living': Australia's faltering economic standing

This story is part of the August 2 edition of Good Weekend. See all 14 stories. Not since the height of the Cold War have Australia's national security and economic standing in the world been more under the spotlight. As a topic, international relations is suddenly sexy – and drawing more attention than ever. Dr Stuart Rollo is a regular contributor to the opinion pages of The Sydney Morning Herald and The Age, and is author of Terminus: Westward Expansion, China, and the End of American Empire. Rollo, 38, is a researcher at the Centre for International Security Studies at the University of Sydney. The prime minister of Singapore, Lawrence Wong, has said that the American-led era of free trade is rapidly drawing to a close and there's a growing likelihood of a global trade war. Is Australia more exposed than most other countries? A global trade war would be particularly severe for Australia. An over-concentration on mining and the FIRE sectors [finance, insurance and real estate] and decades of financial deregulation that have gutted our manufacturing base have left us with a shockingly simple economy. Harvard's Atlas of Economic Complexity ranks Australia as the 105th most complex economy out of 145, right between Botswana and the Ivory Coast. That is dead last of all OECD countries. Our regional neighbours who would be put under similar pressure by a trade war, like Japan, South Korea and Singapore, have considerably more complex and resilient economies than ours, and are in stronger positions to adapt to shifting global conditions. By some estimates, the average 70-year-old in the US is 72 per cent wealthier than 40 years ago, but the average person under 40 is 24 per cent less wealthy. This trend is happening across the Western world. Is this a further sign of the West's decline? Absolutely. This is the first generation in modern history with declining standards of living and life expectations relative to their parents. There are many causes and symptoms here, but one structural reason is the financialisation and assetisation of Western economies. Since the 1970s we have been shifting from industrial to financial capitalism, where a much higher portion of income is spent on rents and debt repayments rather than reinvested into productive enterprises or spent on consumption. This concentrates more of society's wealth in the hands of asset owners and speculators, who tend to be older people who were able to buy into asset classes like real estate at a time when they were much more affordable relative to wages. What happened to the time when Australians actually made things? Our manufacturing base has been shamefully left to wither away over many decades. How have we allowed this to happen, and is there anything we can do about it? Successive governments from the Hawke-Keating years implemented a slew of policies that opened the Australian economy to global market forces, removed protections for manufacturing and deregulated financial markets, which shifted investment from long-term industrial production and research and development to the high-return FIRE sector and privatised major state-owned enterprises like the Commonwealth Bank, Commonwealth Serums Laboratories, Qantas, Telstra and many others. This left us with reduced national capacity, produced privatised monopolies and got us to the point we are at today, where 15 of our 20 largest companies are majority owned by American investors. Americans have triple the ownership stake in these businesses than Australians do. These policies certainly shaped a period of astonishing economic growth for Australia, but they also caused broad industrial devastation, reduced economic complexity, and heightened socioeconomic inequality. There are several major policy initiatives and strategies underway now to attempt to address some of these issues, but it will be extremely difficult and costly. Back in November 2011, then US president Barack Obama addressed the Australian parliament and announced an American 'Pivot to Asia' because of 'the vast potential of the Asia-Pacific region'. That's become less likely under Trump, hasn't it? The Pivot to Asia was kicked-off by the Obama administration to move beyond the era of costly and destructive 'forever wars' in the Middle East and focus on establishing the United States at the centre of economic, diplomatic and military arrangements in the world's most populous and economically dynamic region. This was always about locking in American regional primacy in the face of a rising China, but Obama took a multilateral approach built around organisations, rules and incentives. From his first day in office in 2017, Trump began to dismantle regional economic and diplomatic integration but maintained the focus on military pressure, although now under an America First approach with more sticks and less carrots to keep its allies on board. To pull this off, the US needs to anchor its alliances with Japan and Australia particularly and hand over responsibility for maintaining a favourable balance of power in the Middle East and Europe to its allies there, something that is already proving to be extremely difficult. I don't think a pivot in anything like its original intended form will ever materialise, but a major American military build-up in the region is certainly on the cards. In your book Terminus, you provide a historical interpretation of America's involvement in the Pacific. Have the power dynamics been irreversibly changed by China's rise? Yes. In Terminus, I document the special vision that the political and commercial architects of the American empire held of China as the almost limitless foreign market upon which America's economic destiny hinged. While American consumers, businesses and investors certainly benefited greatly from China's rapid economic growth in the years since Deng Xiaoping's economic reforms, China has never been politically integrated or subordinated into the American world order. China is now too powerful for this to happen under any circumstances short of major domestic political upheaval, national fragmentation or war. China and the US seem to me to be destined for rivalry and a period of hegemonic contestation in the region and, perhaps, globally. Trump has chosen tariffs as his tool for re-shoring manufacturing in the US. Given that countries affected by his tariffs are already forming new trade alliances and supply chains away from the US, will this work? The goal of the tariff system is to coerce as much of the world as possible into subsidising the reshoring of American manufacturing. While there will likely be more major 'wins' in terms of promises of investment made on paper over coming years to appease the Trump administration, I don't expect that most nations will continue to undermine their own economic interests indefinitely. Several CEOs of major tech companies in the US have warned that AI will wipe out millions of white-collar and entry-level tech jobs by as early as 2030. Are we right to fear for the next generation of young people? I am a tech pessimist. Not only will AI make many relatively well-paying middle-class jobs redundant, but its rampant use during critical learning and developmental stages of life threatens to leave young people dependent on it as a tool for basic research, writing and analysis, and ill-equipped to face the challenges of a changing and unstable world. This is only amplified by the infiltration of social media and tech companies into every corner of social and cultural life, and with it the addiction-driven commodification of our time and attention, packaged into data insights and marketing opportunities for sale to third parties. A Pew research survey released last year of 24 countries showed nearly 31 per cent of respondents – including one in three Americans – would support authoritarianism, with those most in favour of autocrats already sitting on the ideological right. Is democracy under increasing pressure? These polling numbers demonstrate what social science studies have shown for a long time, that even in advanced democracies a minority often supports some form of authoritarianism, and that this support tends to increase when people feel heightened economic stress, security threats or rapid social and cultural upheaval. It seems to me that Australia, able thus far to draw down on its vast reservoir of wealth, robust institutions and high social trust, is weathering these conditions better than most Western democracies. We still have an opportunity to shore up a fairer, safer, more convivial and democratic society, but it will require courage and leadership. We are lucky enough to have been gifted a cautionary vision of where the status quo is leading. China has just opened a direct railway connection with Iran – the Iran-China freight corridor – which reduces transit time from approximately 30 days to 15 compared to sea routes. Does this mean the West's control of one of the biggest trade routes on Earth will weaken, undermining Western sanctions? For several centuries, the British and then the Americans exercised geopolitical dominance through maritime power and their ability to control key sea lines of communication. Modern methods of overland trade and economic infrastructure like vast networks of pipelines and high-speed rail are effective tools to circumvent this strategy. While they cannot totally replace maritime trade, this infrastructure certainly makes the societies that it connects more resilient to external forces. Indonesia has just joined the BRICS [which includes Brazil, Russia, India, China and South Africa] group of nations. BRICS now eclipses the G7 group in terms of GDP by purchasing power parity. Trump has suggested he wants to break up BRICS. Has he got any chance? BRICS, although today still a very loose association of states, would be a formidable opponent should it ever really solidify around shared political, economic and strategic goals. Trump has abandoned the notion of an American-led liberal rules-based order, which would have once held out the promise of prosperity and security through compliance to these states. He is now likely to seek to pit them against each other using combined methods of realpolitik, bullying and bluster. I think BRICS will continue to grow in size and importance, but American pressure, along with their own considerable internal conflicts of interest, may put a dampener on deeper integration and unified cohesive opposition to American hegemony. The greenback has been the lifeblood of global finance for over 80 years. Is a time approaching when the US dollar is no longer the world's reserve currency? Whether the greenback declines precipitously in coming years or continues on for decades without an alternative emerging largely depends on American actions. If the US continues to use access to the global financial system as a cudgel, it will prompt countries serious about protecting their long-term interests and sovereignty to plan for alternatives. If dollar hegemony does begin to fall apart rapidly, it would be catastrophic for the US. The massive budget deficits that finance the American military colossus would be totally unsustainable due to inflation and a collapse of confidence without the constant underwritten demand for US dollars from the global economy. Loading Notwithstanding his recent resupply of weapons to Ukraine and his apparent falling-out with Putin, Trump has basically switched sides on Russia. Should this be a major warning to Australia about the reliability of the US as a security partner? Trump seems eager to wind the war up on terms favourable to Russia and leave the Europeans and Ukrainian rump state to work out a balance of power in the region while he turns his attention to China. This is, of course, a major tragedy for the Ukrainian people. Australia should be building strong cooperation with the US where our interests clearly align, and making plans for scenarios and situations where they may diverge. Beijing cannot allow Russia to lose the war in Ukraine because it needs the US to be focused on Russia and Europe rather than the Pacific, China's top diplomat reportedly told his EU counterpart in July. Also last month, NATO Secretary General Mark Rutte told The New York Times that if China attacks Taiwan, Beijing may ask Moscow to open a second front against NATO to deflect resources away from the Pacific. What does this say about China's long-term intentions? China's intentions towards Taiwan have been very clear for decades. It sees Taiwan as an inalienable part of Chinese territory, and seeks to reintegrate it into the Chinese state. Peacefully if possible, through force if necessary. This goes against the wishes of the vast majority of Taiwanese people. While the US supports on paper a One China policy under the Beijing government, Taiwan is a critical piece of America's regional security architecture. Should it be lost, the first island chain of bases containing China would be broken. Given this, it does not surprise me at all that Beijing is formulating a range of strategies for expanding a war over Taiwan. Needless to say, the Taiwanese themselves are in a perilous strategic position. Last month, Australia quietly paid the US another $800 million towards the AUKUS submarine deal, bringing the deposit so far to $1.6 billion, even though AUKUS is now under review by the US. Would the $368 billion being spent on nuclear submarines be put to better use on a range of anti-ship and anti-air defensive systems? Yes, and our national arsenal should also include a much more affordable submarine capability tailored towards our own national defence and aligned with national capabilities to operate and maintain it, much like the original deal with France that was abandoned in favour of AUKUS. China dominates the rare earth market, mineral supplies that are critical for the technologies of the 21st century such as digital communications, renewable energy, and electric vehicles. Australia has significant deposits of rare earth minerals: is it vital for us to begin processing these, rather than just ship them overseas? I don't know if it is 'vital' but it is certainly good policy. Developing a domestic critical minerals processing industry would be good for Australia both for the sensible hedging against Chinese dominance of the sector internationally, and for the technological, industrial, and commercial benefits that would come with it and flow on elsewhere. Loading In your book you describe how, in the 1990s and early 2000s, it was widely believed in the West that the Chinese economic boom would turbocharge democratic reform. Why were so many experts and commentators wrong? This was a major liberal fantasy that emerged after the fall of the Soviet Union. Many across the West believed in the simplistic formula that free markets would bring prosperity to China, which would in turn bring a growing middle class that would be inherently oppositional to authoritarian one-party rule. This conveniently allowed American corporations and bankers to make fortunes doing business in China while believing that they were contributing to democratisation and the downfall of the Communist Party. Ironically, quite the opposite has happened. Sociological research has shown that China's entrepreneurial middle class is overwhelmingly opposed to political liberalisation, fearing that it could unleash social forces from below that would threaten their recently won wealth and comfort. In June Prabowo Subianto, the new president of Indonesia, snubbed the G7 to meet with Vladimir Putin in St Petersburg, where he praised Russia and China, saying both never had double standards and always fought for global justice. Subianto's speech came after reports that Moscow was lobbying Jakarta to house long-range bombers in Indonesia's Papua province. Shouldn't these statements make us anxious about our largest nearest neighbour? I'm a foreign policy realist, so I think that serious countries should always be concerned by the growing power of their neighbours. That isn't a call to man the barricades against Indonesia but we should, of course, pay close attention to their military capabilities and agreements with other powerful states, much as they do to ours. Indonesia and Australia have been described as 'strange neighbours' – a conservative Islamic country very close to a liberal Western country with strong links to Europe. Will this forever be a source of difference between the countries? Culturally, socially, geographically, demographically, economically, and almost any other way you might want to slice it, Australia and Indonesia are profoundly different. Given this difference, and some considerable historical low points in the relationship, both states have done a remarkably good job of quietly and effectively managing our relations. We should build on things like our mutual security interests and forge closer cultural and economic ties, while maintaining the ability to disagree civilly but vigorously. Loading Historian Geoffrey Blainey has argued Australia is less prepared for war than it was just before World War I. Europe appears to be preparing – should we as well? We should be prepared to defend Australia and contribute to the maintenance of a sustainable system of balanced deterrence in our region. Professor Blainey is right to point to our domestic industrial vulnerability, and call for the acceleration of modern manufacturing development and preparedness programs, but the analogy between Australia's situation vis-à-vis China and the Europeans' with Russia is inaccurate. World War I was a tragic and unnecessary war. We should be doing everything we can to avoid similar mistakes closer to home today, not simply accepting an incalculable catastrophe as a fait accompli. On a scale of 1 to 10, how would you rate Trump's economic performance so far? Trump is running a very high-risk, high-reward economic strategy, cannibalising as much of the global economic system as possible in an attempt to shore up declining American national strength. I believe that the short-term, mostly paper, successes that he has enjoyed so far are likely to fail spectacularly in the long run: 3/10.

Stop playing politics. Call it out as genocide

The Age

a day ago

The Age

Stop playing politics. Call it out as genocide

To submit a letter to The Age, email letters@ Please include your home address and telephone number below your letter. No attachments. See here for our rules and tips on getting your letter published. PALESTINE Like many Australians and others all around the world, I find it hard to eat and watch TV these days. Starving Palestinian children scream hysterically as they try to get food from aid people. A father who hasn't eaten for four days tells of his trauma trying to feed his children, and life ebbs from a 13-year-old boy shot as he tried to access food for his starving family. Calling out a war criminal is not being antisemitic, nor is calling genocide genocide. It's being moral and ethical and showing leadership and not being complicit in genocide. We ask our politicians to please call it for what it is, not play politics with the health and lives of innocent people. They called out Hamas. Now they need to call out those, who, in claiming to be defending themselves from the terrorist Hamas, are starving and slaughtering innocent people, including the most vulnerable. Then they need to follow up with action. Meryl Tobin, Grantville Australia must act decisively on sanctions Australia's recent diplomatic posturing rings hollow in the face of our ongoing complicity in Israel's brutal campaign against Palestinians. Recognition or statements of concern mean little while Israel continues to commit grave breaches of international law – starving Gaza's population, bombing refugee camps, and expanding illegal settlements with impunity. Australia cannot credibly support a rules-based international order while ignoring the International Court of Justice's finding that Israel plausibly stands accused of genocide. Nor can we justify normalising or encouraging the normalisation of relations with a regime under investigation for genocide and apartheid. Palestinian rights – particularly the right to self-determination – must not be held hostage to the 'security concerns' of their oppressor. This framing inverts justice and places victims under permanent probation. Australia must act decisively: implement sanctions on Israel as we have on Russia, impose a two-way arms embargo, end trade and military cooperation and support international accountability mechanisms. To do less is to continue aiding and abetting a rogue state's destruction of a people. John O'Rourke, Carlton North Unilateral recognition of Palestinian an empty gesture Prime Minister Albanese is being very careful with the recognition of a Palestine state. He is right, he knows Hamas can't be excluded in any decision about a Palestinian state, and there needs to be a way to ensure such a state operates appropriately and does not threaten the existence of Israel, and that Israel itself learns to live in peace with its neighbour. This is easier said than done, the history of this conflict doesn't bode well for such an agreement, too much blood on terrorist attacks and genocidal retaliations has been spilled by the two parties. Without confronting these challenges, unilateral recognition of a Palestinian state by countries such as France, Canada and the UK is only an empty gesture not conducive to a stable two-state solution. George Fernandez, Eltham North THE FORUM To do list With such a huge parliamentary majority, now is the time for Anthony Albanese to take a couple of bold actions that are desperately needed. Firstly, a total ban on all gambling advertising. This will be ferociously resisted by the gambling industry. There's no point consulting with them – we know exactly what they will say and why. Objections will also come from organisations that benefit from the revenue. They have grown dependent on it, but they can find other income if they have to. Everybody else will be delighted to see this happen. Secondly, announce a referendum for fixed, four-year terms for federal parliament. The only objectors will be a few politicians (mostly conservative) who want to be able to manipulate the election date for their own benefit. This referendum would get the biggest 'yes' vote in Australian history. If these reforms can't be undertaken now, then when could they? Geoff Dalton, East Malvern Ambassador vacancy I honestly don't know what all the fuss is about regarding the federal opposition's concerns about the present Trump administration not appointing an ambassador. During President Trump's first term in the White House, Australia was left without an ambassador for more than two years, during which time we had two prime ministers, Malcolm Turnbull and Scott Morrison – both Liberal. Considering the facts that President Trump has become even more belligerent and unstable, has basically destroyed any trust that allies of the US ever had and cosied up to authoritarian regimes – to say nothing of what his administration has destroyed within their own borders – it would be prudent to tread warily around this man. He changes his mind on a whim and has no regard for diplomacy or decency. The list of historic charges hanging over Trump are gargantuan yet here we are, giving him the kid-glove treatment. David Legat, South Morang Back in public hands No doubt there will be howls of outrage from the usual suspects in the Coalition and from industry about union proposals to bring public transport back into government control and ownership (″⁣ Melbourne's trains should move back into public hands to get a better deal for commuters, says union ″⁣, 1/8). The simple question these opponents can be asked is to name a government enterprise that has been privatised and gone on to produce better and cheaper outcomes for consumers. They will struggle. The list of failures is long. Energy being the most obvious example, an unmitigated disaster for consumers. Banking and insurance are others where the existence of state-owned enterprises we once enjoyed put a price cap on the private companies. If opponents are unable to give a positive privatisation example then they should get out of the way and let public services return to public hands.

This minority are that way for good reason

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