A quarter century since Australia’s last recession, the country is enjoying one of the longest continuous runs of economic growth of any country in recent history. For decades, prosperity has been underpinned by a close relationship with the United States, and the stability and growing prosperity of the Indo–Pacific region.
The international environment is now more dynamic, complex and unpredictable. The world faces more simultaneous conflicts, with a greater impact on a larger number of people, than at any point since World War II. More than 60 million people are displaced by war and persecution and there has never been greater demand for humanitarian assistance across the globe. The pressure on states and multilateral institutions to address today’s challenges is immense, exacerbated by persistent weak global economic growth. Relative economic power has shifted to the Indo–Pacific and, as economic weight has grown, some of Australia’s neighbours have become more strategically competitive.
The department operates in an environment that is always subject to external developments. We need to react to events beyond our borders and often outside our control. Shaping developments and exerting influence in the international environment is even more challenging. Results are often hard-fought and nearly always achieved in partnership with others, sometimes following years of concerted effort. Progress is rarely linear. In the year ahead, the department will develop a comprehensive strategy to guide Australia’s international engagement.
Despite these challenges, in 2015–16, the department performed well to build partnerships with other countries, and regional and multilateral institutions, to encourage change and growth that promotes security and prosperity.
The department led Australia’s efforts to support the United States’ strategic rebalance towards Asia, which plays a vital role in ensuring regional security. Together with the Department of Defence, we supported implementation of the US Force Posture Initiatives in Australia. With the United States a major trading partner, we continued to ensure the 2005 Australia – United States Free Trade Agreement (FTA) delivers economic benefits today.
We marked the 40th anniversary of the Australia–Japan Basic Treaty of Friendship and Cooperation with an agreement to enhance cooperation in the Pacific. We helped ministers map out future bilateral security cooperation. We worked closely with Japan to ensure smooth implementation of the Japan–Australia Economic Partnership Agreement and welcomed rising export sales to Japan since its entry into force.
The department deepened Australia’s dialogue with China. We supported engagement on key international issues through our Foreign and Strategic Dialogue. With Treasury, we supported efforts to expand the bilateral economic agenda through the Strategic Economic Dialogue. Leveraging visits by the Prime Minister and ministers, we worked with Austrade to encourage early take up of opportunities under the China–Australia FTA, which entered into force in December.
The department pursued substantially stepped-up strategic and closer economic links with India. We progressed negotiations for a comprehensive economic partnership agreement and supported implementation of the bilateral civil nuclear agreement. We rolled out inaugural cyber, counter-terrorism and transnational crime, policy planning and maritime dialogues, supported the first Australia–India Leadership Dialogue and facilitated ministerial contact across multiple portfolios. With the Department of Defence, we facilitated the first substantive bilateral naval exercises—a milestone in our burgeoning security cooperation.
The department strengthened Australia’s strategic and economic partnership with the Republic of Korea. With the Department of Defence, we developed a Defence and Security Blueprint, signed by ministers in September 2015. We worked with our Korean counterparts to ensure the full and effective implementation of the Korea–Australia FTA.
The department led efforts to rebuild momentum in Australia’s relationship with Indonesia. We revitalised our bilateral security architecture and resumed negotiations on a comprehensive economic partnership agreement. Recognising the value of Indonesian leadership in the region, we worked cooperatively with Indonesia in institutions like ASEAN and the Indian Ocean Rim Association (IORA). We opened our largest chancery in Jakarta and a new mission in Makassar, reflecting the importance of Indonesia and its regions.
The department supported deeper Australian engagement with Papua New Guinea through ministerial exchanges and new border and maritime security, defence, health, science and visa measures. The launch of the Pacific Leadership and Governance Precinct in Port Moresby was a key milestone for what is Australia’s largest bilateral aid program.
We worked with other governments in the Pacific to build security, stability and prosperity, including through support for expanded trade and investment and assisting Fiji’s response to Tropical Cyclone Winston. However, the political, economic and strategic environment remains complex and challenging, requiring a continued strong focus on working flexibly and innovatively with Pacific countries to achieve our objectives.
The department made a significant contribution to whole-of-government efforts to counter the growing global threat from terrorism and bolster the capability of key regional partners to respond to that threat. We played a leading role in Australia’s contribution to international efforts to restore security and ameliorate humanitarian crises in Iraq and Syria through our support for Australian military operations as part of the counter-Daesh coalition and our significant humanitarian and stabilisation assistance packages for both countries. Daesh remains a potent threat and the humanitarian situation in Syria continues to worsen.
Through the East Asia Summit, we worked to find common ground in addressing terrorism, maritime security and dispute management in the South China Sea. At the same time, we worked to bolster the significance and focus of IORA, an increasingly important regional body.
The department is committed to addressing global issues through the United Nations. We worked hard on the post-2020 global climate agreement, critical for global action in the 21st Century. We also collaborated with new and innovative groupings like MIKTA (Mexico, Indonesia, Republic of Korea, Turkey and Australia) and the Global Innovation Fund.