Australia faces its most challenging and turbulent strategic outlook since the mid-1960s. In this report we survey the strategic horizon and make key policy recommendations.

ASPI’s first Strategic Assessment, Beyond Bali, was published in November 2002 in the aftermath of the terrible bombings in Indonesia that killed 202 people, among them eighty-eight Australians. Our 2004 Strategic Assessment, Beyond Baghdad, appears in May, just weeks after the horrific terrorist bombings of passenger trains in Madrid and widespread fighting in Iraq. Sadly, the threat of terrorism and the question of how to deal with it continue to be central strategic preoccupations. But...

Terrorists will attack Australia if they identify an opportunity. Government and our counter-terror agencies must constantly review how effectively they are meeting this challenge.

Combating terrorism has been a central focus of the developed world since the al-Qaeda attacks in the US on 11 September 2001. It is likely to remain a major strategic concern for the foreseeable future.

Of course, terrorism is not a new style of warfare. US State Department figures show many terror attacks around the world in the 1990s, but these were mostly small scale, unconnected internationally, and located in Africa and Asia. The threat from...

Australia’s capacity to shape outcomes in Iraq is limited. But our involvement in the Coalition is a signal of our support, both for the United States and for the crucial work of rebuilding Iraq.

Iraq’s future prospects are poised on a knife edge. One possible outcome is the creation of a stable, more open and prosperous regime in the Middle East. The other is anarchy, and a substantial if temporary rebuff to America’s place in the world. The skill with which military operations and political affairs are conducted for the remainder of 2004 will have a major influence on which...

We are entering an age of warfare, in which precision strike weapons and low-technology fertiliser bombs compete uneasily for dominance. Can one defeat the other? Australia must think through its options carefully.

One can think of the Iraq War as falling into two distinct stages. The period up to 9 April 2003, when Saddam’s statue was toppled in central Baghdad, was a high-technology war of precision bombing, real-time intelligence and rapid ground manoeuvre. Since then, the war has been a grinding, low-technology effort of ‘boots on the ground’ patrolling and bloody small-arms encounters at close quarters. This statement is, of...

American economic and military power will make it the world’s strongest state for the foreseeable future. Australia’s defence alliance with the US remains vital, and we should look for new ways to strengthen cooperation.

The scale of America’s economic and military power relative to the rest of the world is staggering. In 2002, US gross domestic product (GDP) exceeded US$10 trillion―greater than the combined GDP of the next five largest economies, and one-third of global economic output. The US achieved this with around 5% of the world’s population. In 2002, the output of metropolitan Chicago was about the size of...

The character of China’s power will be the dominating strategic issue in the Asia—Pacific for years to come. Australia’s task is to maximise our influence with the North Asian powers in shaping a secure and stable region.

The Chinese economic powerhouse continues to grow, averaging 7—8% over the past two years despite the SARS epidemic. It could continue at that rate for years to come. China’s leaders still give the greatest priority to maintaining the stability needed to let the economy flourish. Potential sources of regional instability, such as relations across the Straits of Taiwan, are deliberately underplayed...

Southeast Asia faces challenging political transitions, and now has growing internal security problems. Australia must build closer security ties with the neighbourhood, particularly on counter-terrorism.

There is no doubting Southeast Asia’s significant economic potential. The ten ASEAN countries¹ have a combined population of 560 million and a consumer market worth US$300 billion annually—the equal of China’s coastal region. Yet the region has lagged badly in economic growth since the 1997 financial crisis. Average GDP growth between 1996 and 2002 was only 1.8% for the ‘ASEAN 5’ (Indonesia, Malaysia, Philippines, Singapore and Thailand), compared to China’s 7.8%. Since 1997, ASEAN...

There have been big changes in the South Pacific, from the Australian-led Solomon Islands intervention to the push for increased regional cooperation. The coming task is to build support for deeper regional integration, and to help Papua New Guinea solve its serious problems.

Over the past year, Australia’s policy towards the South Pacific has changed dramatically. It’s now a policy of more active engagement to promote the stability and prosperity of our near neighbours. The first demonstration of this shift was the Australian-led Regional Assistance Mission to Solomon Islands (RAMSI). In late July 2003, Australian police, military and public servants...

Australia has had a healthy public debate about our strategic and defence priorities. It’s time to consolidate this thinking into a set of clear policy directions.

Australia has had a lively debate over the past few years about the main focus of our strategic and defence policies. At its core, the argument is about how narrowly or broadly we should define the roles of our military. Among specialists, the debate has at times been quite acrimonious. For outsiders, it may have seemed like an argument over narrow points of difference. Much of this current round of discussion was sparked by...

In an age when security problems are horizontal, but government structures are vertical, we need to strengthen our approach to national security policy. Important steps have already been taken. What are the next steps?

A key change in Australian policy-making since the October 2002 Bali bombings has been the emergence of a more coordinated and centrally driven national security policy.

Policy development in Canberra is influenced by the structure of the public service. We have defence policy statements, foreign policy statements and policies on domestic security mostly because we have a Defence Department, a Department of Foreign Affairs and Trade...

We began this assessment by suggesting that Australia faced its most challenging and turbulent strategic outlook since the mid-1960s. In the 1970s and 1980s Australia and the world faced the potentially horrendous nuclear consequences of the Cold War, but our immediate strategic outlook remained largely benign. Today, we must address multiple security challenges: terrorism, state failure in our immediate region, the proliferation of WMD, the consequences of Middle East instability, and potential regional flashpoints like North Korea and China-Taiwan.

Against this array of difficulties Australia has had some notable successes. The ADF performed very well in Coalition operations in Afghanistan...