After more than a year and a half in office, the Australian conservative coalition government led by Malcolm Fraser has established foreign policy in a pattern different from that of his Labor Party predecessor, Gough Whitlam, but different also from that of the Liberal and Country Parties governments of which Mr. Fraser was himself for some years a member and which were in power for a record 23 years from 1949 to 1972. He has inherited from both, and has adapted both to his own changing philosophy as well as to Australia's changing circumstances.

When the Liberal Party was voted out of office in December 1972, Australia was an established and close partner in the American alliance system. The security treaty between Australia, New Zealand and the United States - ANZUS - was the main pillar of Australian defense and foreign policy, and around it a network of relationships had been built up which comforted all Australians (when they thought about it) except those of the extreme Left, for obvious reasons, and some on the extreme Right who believed you could not trust the Americans and that Australia should build its own nuclear weapons and space them around the coastline. There was also a strand of thought among academics which advocated dispensing with the American alliance on the grounds that it made Australia a hostage to American foreign policy, tarring it with the same brush - unnecessarily so, because in a crisis the United States would help or not help Australia on the basis of assessed national interest to which a formal treaty was irrelevant. These were minority views.

Since 1950, Liberal and Country Parties governments had had armed forces in the Malaysian area, in conjunction with much larger British formations and smaller New Zealand ones, first to combat communist terrorists, then to help defend Malaysia and Singapore from Indonesia during "confrontation," and finally as part of the Five-Power defense arrangement for the joint defense of the two Asian Commonwealth states. John Gorton (Prime Minister, 1968-71) had even said in 1968 that Australia would stay there after the British withdrew, which they were then scheduled to do by 1971. Australia had been a member of SEATO from its inception, had had some 8,000 servicemen in Vietnam for much of that war, and had withdrawn them concurrently with the American windingdown in 1971-72.

During his time as Prime Minister, Mr. Gorton had begun to recognize that the world around Australia was changing, and that some of the major assumptions that had underlain Australian foreign policy since World War II, or at least since 1949, were no longer demonstrably valid. These assumptions were that any attack on Australia would come from Asia, and that such a threat, or potential threat, existed - from Japan, China or Indonesia; that the United States and Britain had their own interests in Asia, and in combating militant communist activities there, as well as an interest in the security of Australia. Thus Australia should encourage and help them to remain militarily committed to the area, in order to keep potential enemies as far away as possible from Australia. This policy came to be known as "forward defense," and the Australian contribution was a form of insurance, a payment of club fees. It was given a setback after 1967 by the British retrenchments east of Suez, and a body blow by the Nixon Doctrine and the American withdrawal from Vietnam.

Australia had never fought in Asia except alongside either Britain or the United States, and (apart from other considerations) did not have the necessary logistical capacity. By 1972, no one in the Australian government believed that massive numbers of white ground troops would be put back into Indochina, or used to defend Thailand, either within the context of SEATO or outside it. The logical conclusion from this was that with neither Britain nor the United States committed to the defense of mainland Southeast Asia, Australia could not be committed there either.

But these were the last months of a government atrophying through age, which had few ideas of its own, and did not encourage the public servants, on whom it relied, to supply them. Any reconsideration of Australia's strategic position or political alignments was not done or reported in public. Even by late 1972, well after the visits of both Henry Kissinger and Richard Nixon to China, Gorton's successor, William McMahon, was not prepared to recognize the People's Republic, and prevented a junior Minister (Andrew Peacock) from accepting an invitation to Peking. There were no diplomatic relations with North Vietnam, North Korea or East Germany.

Australian foreign policy was of course concerned with much more than the relationships with the United States and Britain. Cordial relations were developed with the non-communist countries of Asia, despite some difficulties over immigration restrictions into Australia. The Colombo Plan for economic and technical assistance in Asia was an Australian initiative, launched partly for humanitarian reasons and partly in the hope that it would promote political stability. At the United Nations, Australia was a member of the "Western European and others" group, taking on many issues a position more liberal than, for example, France. The South Pacific Commission, paternalistic as it was, had also been launched by Australia (by the wartime Labor government), and offered some help to the small Pacific island territories.

The final period of Liberal rule was not wholly devoid of rethinking in foreign affairs. Indonesia replaced India as the largest recipient of foreign aid.1 The Department of Foreign Affairs came around to recommending the recognition of Peking, even if the recommendation was not accepted. Papua New Guinea, part Australian colony, part Australian-administered U.N. trusteeship, was moved close to internal self-government. Restraints were imposed on capital inflows into Australia. After the Australian withdrawal from Vietnam, completed by March 1972 except for a small training team, relations with the United States were less obviously dependent. Australia helped promote the South Pacific Forum as a means of joint consideration of common problems among the independent island states. Thus, Australian foreign policy was not noticeably dynamic but neither was it completely static in 1972. It played little or no part in the election at the end of the year which brought Labor back out of the wilderness.

II

From the moment he became Prime Minister, Mr. Whitlam was determined to put his mark on Australian foreign policy. For eleven months he was his own foreign minister, de jure and de facto, and was foreign minister de facto for the remainder of his time. He appeared to relish his role in foreign affairs much more than in domestic affairs: he enjoyed travel, meeting eminent people, conducting diplomacy, and putting the world to rights. He was determined to place Australia on the map to an extent not achieved since Herbert V. Evatt's time (1941-49); to make its voice heard and respected in Asia, Africa and Latin America no less than in the Old World; in the communist states no less than in the United States. A little unfairly, he believed that Australia in its conservatism and in its deference to allies had passed by on the other side of the great human problems and movements of our time, and he was determined to change all that. He saw himself as combining the imposing stature and oratory of Sir Robert Menzies with the radical and humane zeal of Dr. Evatt, and as calling in the Southern Hemisphere to redress the balance of the Northern. He saw the need for new policies, in their own right, and quickly set about implementing them.

There is no doubt that Mr. Whitlam significantly changed the direction, tone and image of Australian foreign policy - sometimes with the agreement of senior members of the Department of Foreign Affairs, sometimes against their expressed judgment. He immediately entered into diplomatic relations with Peking, and later with North Vietnam, East Germany and North Korea. He withdrew the few remaining military advisers from South Vietnam, and stopped Australian military aid there and to Cambodia. He downgraded, without formally abandoning, the Australian commitment to SEATO. He strongly criticized the renewed U.S. bombing of North Vietnam. He withdrew most of the Australian ground elements from the Malaysian area.2 He stopped Australian wheat going to Rhodesia under the thin disguise of humanitarian aid. He prevented Rhodesian and South African sports teams from coming to or transiting through Australia. He provided some nonmilitary aid to African revolutionary movements.

At the United Nations, Australia voted for some anticolonial resolutions where it had previously abstained, and spoke warmly in favor of Afro-Asian bandwagon proposals. To further dilute the image of Australia as a colonial-type power, the independence of Papua New Guinea was hastened, over the objections of local leaders, who were told also that Australia would not help with their internal security after independence. Australia even voted, tongue in cheek, at the United Nations to give independence to its own Indian Ocean territory of the Cocos Islands, with their 600 or so inhabitants.3

Australia had for years objected to French atmospheric nuclear testing in the Pacific. It now, with New Zealand, took France to the International Court, and protested, less audibly, to the Chinese over their tests. Mr. Whitlam supported the concept of a "zone of peace, freedom and neutrality" in Southeast Asia, and a zone of peace in the Indian Ocean and sympathized with proposals for a nuclear-free zone for the Pacific. He personally promoted the idea of a wide regional association in Southeast and East Asia - an idea that had little appeal to any other regional leader. Over the Middle East, partly because of Australia's increasing isolation on the issue, and partly because of a larger Muslim population (from immigration), he moved Australia's position from one of sympathy to Israel, to roughly midway between the Israeli and Arab positions - "even-handedness," he called it. He sought to mollify the Russians by announcing that Australia formally acknowledged Soviet sovereignty over the three Baltic states. (This disturbed the Japanese, concerned about the implications of his action for their claim to the return of the northern islands.) He publicly deplored both the Soviet and the American naval presences in the Indian Ocean, although privately he came to accept that the first was inevitable and the second (to balance things up) desirable. He deferred the construction of an American Omega maritime navigation system in Australia, under pressure from his left wing, but retained the various American military and space installations, with some modest renegotiation of terms.

The Gorton government having signed the Nuclear Nonproliferation Treaty, the Whitlam government ratified it. Over immigration, he formally pronounced the restrictive "White Australia" policy dead and buried, and asserted (more credibly than ever before) that there would be no discrimination against immigrants on the basis of race or color.4

There were other aspects to Labor's external relations that were handled by some of Mr. Whitlam's colleagues, and where they rather than he made the running. Policies over the sale of Australian minerals were largely determined by the Minister for Minerals and Energy, Mr. R. F. X. Connor. These policies were more nationalistic, more variable, more personal than under the previous government. The concept of using resources policy for political ends - "resources diplomacy" - was enthusiastically examined and reluctantly rejected. Overseas investment in Australia, already limited by the Liberals, came under greater restraints, and multinational corporations became the party's favorite whipping boy. These matters were an issue in Australia's relations with Japan, and constituted one reason why Mr. Whitlam was unable to achieve one of his objectives - the rationalization of Australian-Japanese relations within a new, comprehensive treaty.

The Labor Party had never been keen on committing troops overseas. It supported ANZUS, but had opposed the original despatch of forces to Malaya, and later to Vietnam. Mr. Whitlam spoke of the Australian element in Singapore as a "garrison," an unusual word to describe its purpose but with the right emotive content to rationalize its withdrawal. He wanted to eliminate any justification for labeling Australia a colonial or neocolonial power. He wanted (or his Cabinet wanted) to save money on defense so as to be able to spend it on social services and other good works. So a destroyer construction program was canceled, orders for other major equipment were deferred, and the construction of a naval facility at Cockburn Sound on the west coast was slowed down. There was a real reduction in total defense expenditure.

Not all members of the parliamentary Labor Party were happy with these decisions. The Foreign Minister, Senator Don Willesee, disagreed with some aspects of foreign policy. The Australian Labor Party includes a much wider Left-Right spectrum than does the conservative Liberal Party, and some members on the Labor Right were dismayed at the run-down of defense. But there was broad agreement nevertheless, extending (after a pause) to the Liberal and Country Parties, that Australian defense planning had now to be directed first and predominantly to the security of the Australian continent and adjacent maritime environment. The new name for the defense strategy under Labor was "continental defense," and the new thinking about it and about its implications for weapons and tactics had barely begun when Labor lost power.

Labor's view of the world was thus very different from that of its predecessors, who had barely begun to adjust after 20 years of anti-communist wars in Asia. Labor as a party was not alarmed, nor even dismayed, by the communist victories in Vietnam, Laos and Cambodia, and saw no adverse implications for Australia. It was not particularly troubled by Soviet naval movements in the Indian Ocean. It was not frightened by China, nor did it believe China was expansionist or aggressive. It believed there was value in having the United States available for some unforeseeable and remote crisis, but that in the meantime the United States would understandingly accept a public kick in the shins from time to time to establish Australia's independent credentials. It believed there was a rough multilateral balance of power in Asia, and détente elsewhere; that international expressions of good will were a form of insurance; and that in these as much as in ANZUS lay Australia's continuing security. It did not see the vivid contrast of good and evil between the communist and non-communist powers that many Liberals had seen. It saw the world substantially at peace, and likely to remain so.

Many of Mr. Whitlam's initiatives were long overdue, but few were well thought out, or their internal contradictions resolved. His support of Third World causes surprised and delighted Third World leaders. At international gatherings, he spoke with intellectual and rhetorical distinction. So, of course, did a lot of other people, and not even Gough Whitlam could escape the hard facts of Australia's position. In some senses it is a "middle" power. It is a significant exporter of commodities. It is active in the world's councils. But it has limited political or military strength, only a modest amount of aid to give, and less international "clout" than its leaders - and leader writers - often appreciate.

Mr. Whitlam probably needed another three years to stabilize his foreign policies, to find the necessary balance in his own approach to the world. Australia under his direction had begun a new, more sympathetic relationship with China, and with the poorer nations; at the same time it came near to disrupting its close partnership with the United States. The two were not as incompatible as he appeared to believe. Australia did not have to lose an ally in order to find a role.

III

In the dramatic events of November and December 1975, Mr. Whitlam lost the Prime Ministership not because of his foreign policies but because his government had demonstrated, to a sizable majority of electors, a high degree of administrative, financial and constitutional irresponsibility. The coalition of the Liberal Party and the National Country Party that accordingly came to office accepted many of the changes introduced by Mr. Whitlam. There was no question, for example, of de-recognizing Peking: that would have been foolish. The Liberals when in office had quickly realized that this aspect of their China policy had been mistaken; Mr. Fraser had sought to go to Peking, was invited, and would have gone had the election not intervened.

Mr. Fraser is quite clearly the leader of his government. He is strong, tough, and experienced as a minister. Unlike Mr. Whitlam, he is able to choose his Cabinet.5 He is not out to change the world. He is not an orator. He talks bluntly, but without offering offense. He believes in getting down to work and sorting out the issues. He is not a good tourist, and prefers fishing to sightseeing. He does have firm views about the world and Australia's place in it, and has in general imposed these on his government. These views are shared by the Defence Minister, Mr. James Killen, and to a lesser extent by the Foreign Minister, Mr. Andrew Peacock.

Mr. Fraser sees the world as a much less stable, much more dangerous place than did Mr. Whitlam. He does not believe that a real détente exists, except perhaps uneasily in Europe and the North Atlantic, and even here (as in many other places) the Russians are assertive and expansionist whereas the Americans are strong but diffident. He sees the Soviet Union as an unsatisfied power seeking whatever worlds it may conquer short of provoking war with the United States. He saw developments in Indochina as a strategic loss for Australia, because they changed the balance of forces in the region in favor of the communist powers, thereby making more difficult the independence of Malaysia and Thailand; and because they denied defense facilities to the West and opened the possibility of their being used by China or the Soviet Union. However, he realizes Vietnam may devote its energies primarily - as seems to be the case at present - to its domestic situation. He believes that if you appease a dictator you feed his improper ambitions. It would be wrong to say that he has a black and white view of the world, but it is more black and white than Mr. Whitlam's view. He sees forces of evil abroad in the world, and believes that men of honor should be prepared to stand up and be counted. He probably considered Mr. Whitlam's many excursions carrying the Australian flag as pretentious, promiscuous, and at times counterproductive.

Although without noticeable respect for public servants, he feels that with 20 or 30 years of experience they are more likely to be informed and more able to offer responsible advice than academics or journalists imported as whiz-kids on a minister's personal staff. He is not a man to play with ideas, with abstractions. He is a man of principles, including the principle of using power when you have it. He does not have Mr. Whitlam's panache, nor his way with words, nor his intellectual dexterity and flexibility. He is a new, young (47), hard-minded, dogmatic, courageous Prime Minister doing the job as well as he can, and still feeling his way in the tangled forest of international relations.

Andrew Peacock, the Minister for Foreign Affairs, is younger again (38). In previous Liberal governments, he was Minister for the Army, then briefly Minister for External Territories when he presided with skill and goodwill over Papua New Guinea's preterminal steps to self-government and independence. He is a competent minister who does his homework. He would classify himself as a small "1" liberal, in foreign affairs as in other matters, somewhat to the left of his Prime Minister but still well to the right of Mr. Whitlam. He believes strongly in the American alliance, but he never liked the 51st state image, and will do his best to prevent its reemergence. In foreign affairs, he is better informed on detail than Mr. Fraser, and has a surer touch. There is an element of competition between them.

In its various foreign policy statements and actions since it came to power, the Fraser government has for the most part indicated changes of emphasis rather than of direction. It believed, with some reason, that Washington's confidence had been shaken, and so it moved quickly to restore trust. It supported proposals to upgrade the facilities at Diego Garcia. It announced that American nuclear-powered warships could call at Australian ports. It adopted a generally more Western stance. To mark the U.S. Bicentenary, it carried through a proposal of the Whitlam government to endow a chair of Australian studies at Harvard University.

The reaffirmation of the close American ties was a little self-conscious, showing perhaps a resolve to shed the earlier sense of dependence epitomized by Prime Minister Harold Holt in Washington during the Vietnam War when he said that Australia was "all the way with LBJ." When Mr. Fraser visited President Ford last July, the communiqué concluding the discussions carried the statement - "The President and the Prime Minister recognized that all nations should treat each other as equals despite differences in power, size and circumstance" - a piece of rhetoric explicable only in terms of American appeasement of Australian self-esteem, and more reminiscent of Labor's Dr. Evatt than of the Liberal Sir Robert Menzies.

In opposition and in government, Mr. Fraser has been consistently skeptical of Soviet intentions, and critical of its military presence in the Indian Ocean.6 In June 1976 he said, "It is clearly contrary to Australia's interests for the balance in this area to move against our major ally, the United States." But he went on, "It is also against our interests for both superpowers to embark on an unrestricted competition in the Indian Ocean. We seek balance and restraint." Events in Angola appeared to confirm the government's suspicions of the Russians, and its disbelief that détente had been achieved. The Omega navigation station is at last going to be built. Mr. Peacock has said that Australia will not hesitate to disagree with American policies, if Australian interests are affected, but will do so in private. If precedents are any guide, this gentlemanly approach will not apply to protests Australia may make over beef, lamb or wool.

When Mr. Whitlam formally acknowledged Soviet sovereignty over Latvia, Lithuania and Estonia, he offended the sizable Baltic communities living in Australia. During the election campaign, Mr. Fraser undertook to reverse this policy, and less than a week after the poll the Australian diplomatic staff in Moscow were instructed not to make official visits to the three territories.

The Soviet government had not shown any great enthusiasm for Mr. Whitlam, but it has been publicly displeased by the pro-American and anti-Soviet attitudes of the Liberal and Country Parties administration. It had some grounds for concern over Mr. Fraser's visit to China in June 1976. His declared suspicions of the Soviet Union, reaffirmed in Tokyo before going to Peking and again when he got there, may have helped to ensure him a warm Chinese welcome, but must have looked in Moscow as if Australia were doubly aligning itself against the Soviet Union: with the United States on the one hand, and with the People's Republic on the other.

Unquestionably, the visit to China was a major event. Mr. Fraser was given a reception that appeared in every way as warm as that accorded to Mr. Whitlam earlier. There was a forthright exchange of views on both sides. Mr. Fraser voiced his concern about Soviet policies, but did not align Australia with China in the Sino-Soviet dispute. He suggested that China, Japan, the United States and Australia had interests in common which could be developed, especially in containing Soviet military expansion. The Chinese agreed. He expressed his regret and concern that China should continue to support revolutionary movements in Southeast Asia. The Chinese leaders explained that they were committed to this, and would go on doing it, but that good relations with the relevant incumbent governments would always have priority. It was unfortunate that a summary of one of Mr. Fraser's discussions with the Chinese Prime Minister, Mr. Hua Kuo-feng, was leaked to the press, allegedly by an accident within the Australian delegation, and that it included frank and not wholly favorable comments by Mr. Fraser on some Asian governments.

We do not know what the Chinese leaders thought of Mr. Fraser, but he and Mr. Peacock later declared that they were impressed by the sincerity of the Chinese, and their willingness to see a continuing American influence in Asia, which Mr. Fraser duly reported to President Ford.

What prompted Mr. Fraser to change so radically his views on China - at one time a potential enemy, the principal threat to Australia and its interests; three years later, a friendly power, even (at least by implication) a potential ally? It may be that the cultural and personal impact of China and the Chinese was such as to make the Australian visitors more sympathetic to their hosts' viewpoint than an objective assessment of Australian national interests would require. One factor was presumably the degree of responsibility shown by China in the international community; its failure to behave as unpleasantly and as aggressively as had been predicted and feared; its remarkable if still limited rapprochement with the United States. Another factor may have been the continuing expansion of Soviet influence and power in Australia's region, for which the United States was not necessarily a complete counterbalance. Mr. Gorton in 1969 had been prepared to offer a modified welcome to the Russians in order to contain the Chinese. Mr. Fraser seven years later saw the reverse as more appropriate to the facts.

IV

Mr. Fraser's greatest success has been on groundwork laid for him by Mr. Whitlam.

For some 80 years, successive Japanese governments have sought a treaty of friendship, commerce and navigation with Australia. Largely from fear of the implications for its restrictive immigration policy, Australia consistently refused the proposal, even after Japan had become, in the late 1960s, its best customer and the most significant factor in Australian prosperity. Mr. Whitlam, when Prime Minister, accepted the idea of a treaty between the two states, but felt it should be more comprehensive than a standard FCN treaty. Various drafts were exchanged, and broad agreement reached on most matters. But for reasons known only to themselves, the Japanese demanded of the Australian government more favorable treatment for Japanese nationals and enterprises resident in or entering Australia than that currently afforded to any other country. No Australian government could have made such concessions.

The Fraser government took a position similar to its predecessor, but Mr. Miki was keen to conclude the treaty, and a form of words was found which satisfied both sides. On June 16, 1976, the "Basic Treaty of Friendship and Cooperation between Australia and Japan," plus a Protocol, two exchanges of notes, some agreed minutes and a record of discussion were signed in Tokyo.

Assuming, as we should, that the words mean what they say, Japanese nationals and companies in Australia have been guaranteed by this agreement, for the first time, treatment as favorable as is accorded to those of any other non-British country, including the United States. Indeed, in view of the reduced relations between Britain and Australia, there is now little practical difference between the status of Japanese and British subjects, or enterprises, in Australia.

To the outside world, this may seem entirely logical and reasonable, but for most Australians, with their predominantly British and strong anti-Asian heritage, it is the culmination of a revolution.

On many issues, Mr. Fraser's government has behaved much as Mr. Whitlam's would have been expected to behave. It has changed very little over South Africa, or general issues of racial discrimination and colonialism. It surprised the Commonwealth Secretariat with a sympathetic and practical approach, but unlike previous Liberal and Country Parties governments, it has paid little deference to the British connection. Mr. Fraser, an Oxford graduate, did not go to London as Prime Minister until this June, and visits by some of his ministers have been brief, on the way to somewhere else or for recreation. Mr. Fraser has yet to contend with a Middle East crisis, and declare his hand, but he is probably more committed, in practical terms, than Labor was to the preservation of Israel. His government has provided helicopters for the U.N. peacekeeping force. He has a less sympathetic attitude to the Palestine Liberation Organization, and to North Korea. The Liberal government is unlikely to vote for the independence of the Cocos Islands, but has surprisingly had no difficulty over extreme resolutions on Namibia and Rhodesia. It has given aid to Mozambique. Its U.N. voting pattern has barely changed from that of the Whitlam government. It won't advocate, as Mr. Whitlam did in a rash moment, the overthrow of the South African government by force, but neither will it cease to condemn apartheid, support all but the most violent resolutions on South Africa, and refrain from any kind of defense connection with the Republic.

As with China, this marks a significant change in attitude by Mr. Fraser, whose statements when in opposition indicated a measure of sympathy for the white and South African and Rhodesian governments. What caused him to change his position, or at least to acquiesce in policies he would not earlier have supported? Both Mr. Fraser and Mr. Whitlam have been conscious of Australia's increasing isolation in the South Seas. Mr. Whitlam's attitude to the Third World was, unlike his predecessor's, "Don't try to beat them; try to join them." Among other things, Australia thus became a member of the Council for Namibia, of the Ad Hoc Committee on the Indian Ocean, and rejoined the Committee of Twenty-four on decolonization. Membership on such committees constitutes an influence upon the policies of members in the direction of the consensus, as well as offering an opportunity to influence other members. To walk out of such a committee is a public gesture which would end all opportunities to influence it. Whether he liked it or not, Mr. Fraser was thus hoist with the petard of his predecessor's progressivism. Also, aware of its comparatively isolated position, no Australian government now wants to be seen to vote with a small minority against a resolution having massive support, and will do so only on a matter of the highest principle.

One international crisis, the Indonesian invasion of Timor, straddled the change of government in Canberra. Indonesia had shown almost no interest in the territory prior to the 1974 Portuguese revolution, but with the offer of independence to Angola, Indonesia discovered a passionate historical and natural affinity and affection for East Timor. In a visit to Djakarta in September 1974, Mr. Whitlam expressed the view that East Timor was a natural extension of the Indonesian Republic. Considerable resistance developed to this concept within Australia, as it did in the territory, where a civil competition for power became, with Indonesian encouragement, a civil war into which Indonesian armed forces increasingly intervened. On December 7, 1975, Indonesia staged a major invasion of East Timor, allegedly by invitation, to restore order. December 7 was during the period of the Fraser caretaker government, when he was committed to take no policy decisions.

The reasons for the Indonesian invasion were: (1) fear that an independent East Timor would become a base for guerrilla movements (as existed elsewhere) working to break up the Indonesian republic; (2) a belief that an independent East Timor would never be viable, and a fear that under Marxist leadership it could become a host to Soviet or Chinese bases or forces; (3) a largely cultivated conclusion that the people in the territory wanted to be part of Indonesia; and (4) simple acquisitiveness, which the successes of the left-wing "Fretilin" forces within East Timor seemed capable of frustrating. Indonesia used the first three of these arguments on the Australian government, and the timing of the invasion may have been influenced by the domestic political turmoil in Australia.

Within Australia, there was a legacy of pro-Timorese sentiment from World War II, when an Australian guerrilla force operated there in the mountains against the Japanese for a year. This sentiment was reinforced by some very skillful propaganda by Fretilin representatives. On the other hand, there was also a great deal of pro-Indonesian feeling, and a belief that in the long run it was more important for Australia to have good relations with 130 million Indonesians than with a quarter of a million Timorese. Again, some very vocal people, seeing Indonesia's show of strength, which was massive, brutal, and accompanied by transparent propaganda, deplored its violence and illegality, and feared that there might at some stage be a repetition against all or part of Papua New Guinea.

There seems little doubt that the Labor government encouraged Indonesia in its acquisition, although perhaps not in the means adopted. It is unlikely that Mr. Fraser would have offered a blessing in advance, explicitly or implicitly, to this action; but given a fait accompli, no Australian government could have intervened physically on behalf of the Timorese. Nor, irrespective of the extent to which it regretted Indonesia's action, could it base its whole relationship with Indonesia upon this one situation. After the event, the Liberals did broadly what Labor would have done: deplored the invasion, sought through the United Nations the withdrawal of forces, proffered aid, declared for some form (however specious) of testing of Timorese opinion, and sought a resumption of relations with Indonesia as though nothing had happened.

But something had happened. The invasion aroused latent Australian alarm, prolonged by continuing reports of the brutality employed. Indonesia could not understand why, alone among its neighbors, Australia objected to the takeover. Timor was an object lesson in the weakness and ambiguity of Australia's position when confronted by a powerful neighbor, which that neighbor could not fail to observe. It will be some time before the earlier close cooperation and confidence are resumed.

In only one area of foreign policy has Mr. Fraser actually reversed decisions of his predecessor, apart from the minor question of the Baltic states. This was over the zone-of-peace concept, proposed in different forms by Sri Lanka for the Indian Ocean, by Malaysia for Southeast Asia, and by New Zealand and others for the Pacific. Mr. Whitlam strongly supported the concept (though with much less sympathy for the Pacific proposal than for the other two). Mr. Fraser sees little practical value in it. He has said so for the Indian Ocean, which earned him no marks from the proposers. The Southeast Asian idea was less absolute; it recognized the interests of the great powers, and simply sought to get them to limit their involvement. The Fraser government saw no great hopes for this proposal, but no great objection to it.

Over the Pacific nuclear-free zone idea, which in the circumstances was surely an absurdity from the beginning, Mr. Fraser and Mr. Peacock expressed their skepticism to an informal Pacific Forum meeting in March 1976 which considered the subject and which thereupon amicably and unanimously reversed its previous position of support.

V

As with Dr. Evatt 30 years before him, Mr. Whitlam brought to Australia's external affairs a heightened sense both of nationalism and of internationalism, with inevitable tension between the two. Nowhere was this more evident than in foreign economic policies.

Australia had become a serious if not overly generous donor of foreign aid with the inauguration of the Colombo Plan in 1950, and had steadily increased the quantity and diversity of aid, most of it going through bilateral arrangements to Asian developing states, and virtually all of it in the form of grants. Aid was administered through the Department of External Affairs (later renamed Foreign Affairs), with the Treasury restraining the quantity of aid given, and the Department of Trade seeking to have aid linked to Australian exports.

Mr. Whitlam changed Australian aid policies in several important respects. He did not manage to increase total aid significantly, but with his eye on the Canadian model, he established an Australian Development Assistance Agency (ADAA) separate from the Department of Foreign Affairs although under the control of the same minister, and set it to develop a coherent aid philosophy and administration. He raised (from 9 percent to 14 percent) the proportion of aid given through multilateral channels, which were considered more internationally respectable than bilateral means. He increased the amount of aid not tied to Australian exports, thus giving recipients greater flexibility. Changes in aid philosophy take some time to be implemented, but ADAA began to rationalize aid projects within each country, and to give a greater emphasis to rural development and employment.

The Fraser government, despite a massive budget deficit, has not reduced foreign aid; total development assistance for 1976/77 is estimated at $A399 million (about $440 million current U.S. dollars, or 0.49 percent of GNP, according to an early government forecast in November 1976). However, ADAA has been abolished and aid brought back under the control of Foreign Affairs. This was partly a matter of economy, and partly of philosophy, the Liberal Party supporting the thesis that aid is an expression of foreign policy and not an adjunct to it. There has been no further increase in multilateral aid, mainly because there is little room for maneuver: Papua New Guinea consistently takes two-thirds of bilateral aid, and much of the rest is under the Colombo Plan, a government-to-government operation. Other Whitlam initiatives have tended to remain.

Australia has been built very substantially on imported capital, and during most of the long years of Liberal Party rule, it was open season for overseas investors. However, William McMahon, briefly Prime Minister before Whitlam, introduced laws to regulate foreign takeovers, which Whitlam at first administered and then extended, seeking to secure maximum Australian equity in new ventures involving overseas capital. He ran into the problem, of course, that foreign capital creates employment and wealth, which are electorally desirable, and that investors are easily deterred. Statements by members of the government gave the impression that the policy was more restrictive than it was in practice. It was not until September 1975 that Mr. Whitlam enunciated a coherent statement of investment policy which implicitly acknowledged the national costs of keeping investment out.

The Fraser government's policy was announced by the Treasurer on April 1, 1976. This freed some forms of investment from case-by-case scrutiny, but continued Labor's takeover policy with respect to non-bank financial institutions and insurance companies, new large mining and natural resource projects, and certain acquisitions of real estate. In these "key areas," proposals were generally to be allowable where there was a minimum of 50 percent Australian equity with at least 50 percent Australian voting strength on the board, subject to these objectives being attained, if necessary, over a period of time. For uranium, the required proportion of Australian equity was reduced from 100 percent to 75 percent. In practice, therefore, the Fraser policies have not been so very different from those of Whitlam, to the dismay of some overseas investors.

The foreign investing and trading community has had some reason to feel unsure of Australian economic policies. On coming into office, the Whitlam government introduced a variable deposit requirement (VDR) of 25 percent of overseas borrowings with a maturity of over two years to be lodged with the Australian Reserve Bank. This was later raised to 33 percent, then reduced to 25 percent, then to 5 percent - all this within 20 months - then suspended. In January of this year, the Fraser government reactivated the 25 percent VDR. Similarly over currency: under Whitlam, the Australian dollar was quickly appreciated 7 percent against the U.S. dollar, effectively up another 10 percent two months later, then down 12 percent in September 1974. In late November 1976, to stop the drastic outflow of capital funds, the Fraser government devalued by 17.5 percent; then it revalued eight times in less than a month, by small jumps, leaving a net devaluation of 12.45 percent compared with the pre-devaluation level. To all but the most initiated insiders, this is a confusing way to manage a currency and maintain international confidence in it.

International forces bear heavily on a country such as Australia which is so dependent on the export of primary products. The world recession caught Whitlam during his term of office. One reason why that term was foreshortened was his use of apparently unconstitutional means to raise (in the event, unsuccessfully) massive overseas loans from dubious sources to meet an unprecedented budget deficit,7 subsequently bequeathed to Mr. Fraser. The latter has imposed orthodox economic restraints in order to weather the storm, but the storm continues unabated.

VI

These are still early days for the Fraser government, whose foreign attitudes and policies are still maturing. Mr. Fraser naturally started with issues that concerned him most - those involving national security. Cabinet and parliament have approved the money to upgrade defense. This is slowly happening, although it still takes a back seat to the pressing needs of the economy. Mr. Killen has not ruled out the use of Australian forces overseas, but no one can see where they would be used or how they could be maintained. The navy and the air force are indeed inadequate for normal peacetime requirements, let alone for operations abroad.

The world on which Australians, in their slightly apprehensive affluence, look out, is surrounded on three sides by great oceans, and dominated by an Asian land mass the population of which increases each year by about three times the whole Australian population. Australians are feeling the winds colder around their ears. They are troubled by what may come out of Asia, and by the creeping Soviet expansion of influence and capacity throughout the region. This is still limited, and in selected areas, but there is no ready counterforce as in Europe.

It seems extremely unlikely that the United States will be engaged in war in Southeast Asia during the remainder of this century. If this is so, it will have little need of Australia, and the ANZUS Treaty will become increasingly a formality, an excuse for occasional rhetoric, and unfortunately also a specious rationalization for continued Australian reluctance to come to terms with its environment. An exception to this thesis could develop if Australia becomes important to American policies to protect the flow of Middle Eastern oil.

No country is crouched ready to spring at Australia, but equally no major power can fail to notice its immense natural wealth, its open spaces, and the indolent spirit of much of the populace. Australians have become involved in Asia, but mostly as tourists, traders and students, for they are still culturally part of Europe and economically part of the developed world. They are groping self-consciously for their own identity while blandly deferring the problem of security - not because of economic restraints but because of a habit of hedonism, procrastination and dependence. As repeatedly demonstrated in war, Australians have a formidable fighting capacity when aroused, but it takes a lot to arouse them.

Australia is accepted within its own region as being in it but not quite of it, which is precisely how Australia sees itself. It is amiable, brash, rich, underpopulated, generally helpful. It has no axe to grind, but none to wield either. It is effectively excluded from ASEAN, although welcomed as a donor to the Association's development projects. It is a country with which modest links can be built, but from which little real help can be expected.

In the world community, Australia is almost ubiquitously, professionally represented - in the capitals of nations, and in the ever-increasing permanent and ad hoc conference diplomacy. Its representatives are hard-working, but not noticeably more idealistic or altruistic than most others. Mr. Whitlam's fine words were hard to live up to; they were becoming as hard for him, when he left office, as they became for his successor.

But what is Australia? Australians themselves are not quite sure. They want to have the best of all worlds, but they may not indefinitely be given the opportunity.

The long, euphoric days of Menzies are over. The brief, exciting, somewhat flashy experiment of Whitlam is over. The new government, which looks like being in office for several years, has the task of standing Australia firmly on its own feet, in a still largely alien although not presently hostile environment; to set foreign policy at its proper level, without pretensions and without obsequiousness. Mr. Fraser is without pretensions and without obsequiousness, but it is by no means obvious that he and his party and coalition, elected at a time of political turbulence and economic recession, have the ideas, the will or the power to rally the Australian people to preserve their place in the southern sun.

Footnotes

1 Technically Papua New Guinea was by far the largest recipient of external aid, but it did not actually become independent until September 1975.

2 The battalion and supporting services were withdrawn from Singapore, but an infantry element remained in Malaysia to protect the Australian air force base at Butterworth.

3 Mr. Whitlam later told parliament that no one took this proposal seriously.

4 Racial origin was dropped as one of the formal criteria for determining the admission of migrants. This is still the case, although the relevant minister has discretionary power.

5 In the federal Australian Labor Party, the parliamentary caucus elects its front bench and the Leader of the Party allocates portfolios. The Liberal Party Leader does both for his party.

6 The Soviet naval presence in the Indian Ocean has been the subject of two Australian parliamentary inquiries, which produced responsible, balanced reports, and of sporadic, rather simplistic debate. Most concern has been expressed in Western Australia, which borders the Ocean and has a tradition of feeling isolated and vulnerable. Few people are alarmed at the size of the naval presence, which is still modest, but more are concerned that the strategic balance in the area has changed, that the Soviet Union has bases in Somalia and anchorages elsewhere, that it may be able to interdict communications (about half Australia's trade crosses the ocean) or even, in some future crisis, cut off the flow of Middle Eastern oil to the West.

7 Other grounds for the loan were advanced, such as "buying back the farm" from foreign investors (with high interest foreign loans!). Some observers saw it as an insurance against the blockage of financial legislation by a hostile Senate.

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  • T. B. Millar is Professorial Fellow in International Relations at the Australian National University and was Director of the Australian Institute of International Affairs, 1969-76.
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