Mr Prime Minister, you have warmed the hearts of this audience which is, I think, the largest audience that I have seen at CSIS which is remarkable because it is, as you mentioned, a federal holiday here, honouring Martin Luther King, and, it is about 5 degrees outside.
So, welcome to Washington and thank you for taking some time to talk to us at CSIS. I am Ernie Bower, I am the Chair for South East Asian Studies here and also the co-director of our Pacific Partners program, which looks at Australia, New Zealand and the Pacific, so, thank you for spending some time with us.
Now, I wanted to talk first about your relationship with Indonesia and you mentioned that President Joko Widodo, or Jokowi, as he is affectionately known by his people. You mentioned that Jokowi’s response to the terrible attack… attacks last week in Indonesia were very appropriate, I think in your view.
How can we, Australia and the United States, how can we and how should we support Mr Widodo and the Indonesians, who have bravely responded to this attack, and what do you think we can do to encourage Jokowi to take a global role in this fight, as you mentioned, against ISIL?
Well, let me start at the end, he, President Widodo is a charismatic leader. I have been out with him on one of his blusukans where he arrives relatively unannounced at a market, a shopping centre or whatever, and I went on one occasion to a fabric market which was a lot warmer than it is here I can tell you.
We got out of his car, we went there in his car together, and it was very hot in Jakarta and I said to President Widodo, I said I think we should take our jackets off, and he said oh no, we will be fine. Well, by the time the sweat was running through my eyes and I couldn’t see any more I did decide to take my jacket off. There were thousands of people, thousands and the affection they had for him was really inspiring.
He is a very charismatic guy. He is very much a… as a politician, he is very focused on cities, he was a mayor. Lucy, my wife, a former Mayor of Sydney, as you know, we spent some time talking to Jokowi about planning, infrastructure and so on. He was very focused on it. But, I certainly encourage him to speak more widely and to speak globally. Because he does, he is, as I said in my remarks, the democratically elected leader of the largest Muslim nation in the world. That is one big platform.
How do we support him? Well, we support him by supporting him… by encouraging his work on the security side. Australia and Indonesia work very closely on counterterrorism, and have done for many many years. As indeed do our other partners including obviously the United States.
So, terrorism is a global challenge and it requires a global response and part of that is much more intelligence sharing. Obviously information is gold in the intelligence business, but it is something we have to share our intelligence, we have to get a better understanding of what is happening in other countries because boundaries are much less relevant than they used to be.
The truth of the matter is that people will say the Middle East is a long way from Australia, well, I guess it is in kilometres, but nowhere is a long way from anywhere in 2016.
You talked a lot about China in your remarks and you were very clear, I think, but I think one of the things that we face as we try to understand the future in Asia and globally, is whether the Chinese will join, as you encourage them to, in your remarks, in making the rules and playing by the rules, not only in the Asia-Pacific, but globally.
What do you think China wants? What do you think China wants to be? I know you have spent a lot of your time understanding China, having a nuanced understanding, but we would really like to ask you for a deeper look at your perspective.
Well, I think firstly, China's rise, economic rise, is seen by Chinese is a rise, but it is also a return to the natural order of things. China was, until, insofar as anybody can measure these things, until about the mid-19th century, the largest economy in the world, and it no doubt will become so again, unless instability and conflict erodes, simply because of its size.
Demography is destiny, as we know.
China has a very strong sense of its exceptionalism, it has a strong sense of destiny, it has a strong sense of dignity, and as a great economy, as a great nation, it will seek to of have the - it will seek to have the capability and the military capability that goes with that.
My point, and the worse thing to do is give the speech again, but the point I've simply made, is that if you take, and I do, President Xi at his word, and I do, I think that is genuinely his objective, to avoid this inevitability of the rising power coming into conflict with the incumbent. If that is his objective, then he should, and his Government should, calibrate every single action by reference to that test. If the test is how do we avoid the Thucydides trap, then any action which is likely to promote conflict or tension or run the risk of doing so, is one that should be avoided, particularly if there is an alternative way of resolving the issues.
In terms of the South China Sea matters, there is. I mean, there is a whole international legal system that enables you to do that.
I thought I heard you say when you were talking, that - reading between the lines - that you believe that economics may be the foundation of security and enduring security in Asia.
Was I right about that and, if I was, who do we need to do to think beyond TPP, and how does Australia look at that TPP in that context?
Well, we are a free trade country. We have a remarkably high degree of bipartisanship on free trade. For example, unlike other countries, unlike historically our friends in Canada, for example, but it's been a very bitterly fought partisan issue over a long period of time. So Australians recognise that free trade is important. We have negotiated free-trade agreements, or new agreements with Japan, Korea, and China. The TPP, we believe, is another important free-trade agreement.
The bottom line is this, let me turn this around, the picture - we spend a lot of money, all of us, on military capability and we do so in the hope that we will not have to use it - that it will serve as a deterrent, because it will raise the cost for others to challenge us, to try to use force, to impose their will upon us.
The tighter the connections, the more extensive the economic engagement between countries, the higher the cost of conflict becomes.
So it is - it's not - there is no single answer here and I'm not suggesting that free-trade agreements, or multilateral agreements can take the place of the Defence budget, I'm sure there are plenty of Treasurers and Finance Ministers who would like to think that would be so, but sadly it's not the case.
Nonetheless, it is important, because it means that the cost of conflict is enormous. If you think about the political imperative in China, of the Government continuing to deliver rising living standards, and continuing to deliver economic growth - well, the cost of instability, the cost of conflict, the cost of the uncertainty that that entails is very, very high.
You mentioned that Australians are keenly interested in American politics. Thank you for that. I am sure you are entertained.
I really would like to know, what do you think about this election coming up? What would you like to see in terms of...
What would you like to see in terms of a leader in the White House that you can work with in 2017?
Well, I'm sure that we will work with whoever the American people in their wisdom choose.
But I’d just add to that, as I'd said earlier, bipartisanship is important. It's important in America's interest, it's important in the world's interest, when I say bipartisanship, in terms of America's commitment to continuing to underpin that rules-based international order - there has been, at least in our part of the world, certainly, which is the engine of the world's economy, it is where most of the world's economic growth has been derived in recent years, recent decades, that has been underpinned by Pax Americana.
As you see the big changes, the big geopolitical changes, the big economic changes, we’ve talked about China a lot, that's only one of them - it's the biggest, but it's only one of them. It's important to maintain that order and that stability, because all of our security, all of our prosperity, and that of our children and grandchildren, depends on it.
So we have to bend every will. We have to use every talent that we have, every ounce of our intellect, to maintain that. That requires great institutions like the CSIS, to focus on the challenges.
Thank you for the pitch there. John, did you hear that? Well ladies and gentlemen...
He's the only thing that stands between the world and chaos, really. You should give him a raise.
Thanks for that. My review is tomorrow morning.
There you go.
Well, ladies and gentlemen, I'd like to thank the Prime Minister for joining us. I know you have got an active schedule today, I'm glad to see that you are at Blair house and good luck with your meeting with the President tomorrow.
Anything you want to preview for us before you head in there?
I think I dropped a few hints in the speech already.
Ladies and gentlemen, please join me in thanking Prime Minister Malcolm Turnbull.