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Wednesday, Feb. 27, 2002

Australia: a 'lucky' country no longer

The debate over Canberra's handling of several thousand Afghan and other boat people from Indonesia claiming to be political refugees says a lot about Australia. Holding the refugees in barbed-wire desert camps or dumping them on remote Pacific Islands may have upset the rest of the world, but in Australia it was hugely popular.

The ruling conservative coalition has already won one election on this issue. It badly split the opposition Labor Party, which was forced by popular sentiment to support the government's move and to alienate its more progressive supporters in the process.

The progressives, rudely called the "Chardonnay set" by conservative critics, now find themselves back to where they started -- beating their heads against the rock of traditional Australian conservatism.

In foreign policy we have seen the same retreat. Most of the civilized world might have seen U.S. President George Bush's "axis of evil" speech as immature or exaggerated. But Australia's conservative prime minister, John Howard, thought it was splendid.

That so-called Islamic terrorism might spring from legitimate complaints against the West does not register even with the media.

What went wrong? Almost nothing. Deep down Australians have always been highly conservative. The United States may have its Deep South. Australia is very deep south, in more ways than one -- lots of kind hearts and gentle people, all quite oblivious to the need to live in a world that has other people, values and languages.

Australia's vaunted pro-Asian tilt was largely superficial -- Crocodile Dundee types convinced they just had to slap a few backs, swap a few yarns and down a few beers to win the affections of their little brown and yellow neighbors. Hardly any of the top people involved with Asia could speak a word of any Asian language. Japanologists who could not speak Japanese, plus a large embassy and media presence in Tokyo top-heavy with non-Japanese speakers, have long been uniquely Australian phenomena. A new and very attractive generation of young Australians involved with Japan is still denied any real influence.

Australia played a leading role in U.S. intervention in Indochina. Yet despite a subsequent period of allegedly leftwing government, its officials and its intellectuals have yet to show any sign of understanding the atrocity their nation encouraged. Canberra has helped to end the troubles in East Timor. But who created those troubles? None other than Canberra, with its squalid encouragement of an Indonesian takeover in 1975.

Not even the Chardonnay set would have dreamed of emulating morally minded Norway in trying to broker Sri Lankan peace. Yet Australians still see themselves as the Western nation best able to play a leading role in Asia.

True, Australian conservatism has always been much more of the gut rather than ideological. Australia has yet to produce its Hitlerian ideologues of the U.S. rightwing, talk-show ilk -- for whom Jews can be read as today's "liberals," and for whom a staged Reichstag fire justifying Hitler's vicious anticommunist pogrom, Guernica-style bombings and an attempt at world conquest can be read as a partly provoked World Trade Center attack justifying a vicious "antiterrorist" campaign, B-52 bombings and a lunge at global hegemony.

As in nonideological Japan, policy reforms such as rights of women and minorities, immigration policy, environment, anticensorship, the handicapped and so on can be pushed through if the timing and mood are right. But for the most part they are flip-flops, with an irrational bias in one direction replaced by equally unthinking bias in the other.

The progressives have yet to come up with sensible alternatives to Canberra's current antirefugee policies. In the past, they naively accepted the claims of Vietnamese boat people and Chinese students to be refugees from communist oppression when in fact these people were simply seeking better living standards. Today the progressives seem to think that just being nice to everyone will solve the problem.

The same flip-flop approach has also been allowed to wreck a once fine economy. With a population of only 7 million, postwar Australia once produced almost a full range of reasonably competitive manufactured goods, thanks to remnants of an Anglo-Saxon manufacturing ethic and sensible protectionist policies. But with the rise of Japan the protectionism became exaggerated.

Gradual currency depreciation with continued protection or subsidization of key industries could have solved the problem. Instead, Australia flip-flopped to the dogmas of economic rationalism and total free-market laissez faire.

Protectionism and subsidies became a dirty words. Tariffs were dismantled, regardless of need, even when the currency was grossly overvalued. Entire industries were destroyed, imports ballooned and the currency depreciated anyway.

Today the economy appears healthy. But that is due almost entirely to the belated but massive, across-the-board protectionism and export-promoting subsidies created by currency collapse. From a peak of 400 yen in the early '70s, the Australian dollar is now down to around 60 yen.

Even so, serious manufacturing has failed to revive and unemployment has become structural, fueling some of the gut resentment today against both legal or illegal migrants. Meanwhile the economic rationalists in the media and Canberra congratulate themselves on having saved the economy by dismantling protectionism, while ignoring the far worse protectionism caused by currency collapse. This is more than naiveness. It is just plain stupid.

Gregory Clark is honorary president of Tama University. He is also a former Australian diplomat (Hong Kong and Moscow), and served as policy adviser in the Department of the Prime Minister and Cabinet, Canberra, 1974-76.

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