Wednesday 24 January 2007


2006 tossed up more big issues than usual

By any measure, it was big one. All years have their share of major highs and lows, but I’d venture to say that 06 was a year that rounded off some of the events of the past five or six years and provided an unusually large number of clues to the coming decades.

Iraq might be a good place to start. While catastrophe has long been predicted there, even the worst projections became reality. 06 was the year where the full disaster of the US and coalition intervention there manifested. The untold human catastrophe for the Iraqi people, and those Americans impacted, is tragically only the first wound. In 2006, it became very clear that the war in Iraq has reduced the options of the US when dealing with other international menaces. The most obvious of these is Iran. But the Iraq war has reduced American influence dramatically in dealings with all actors on matters of international importance.

Iraq also changed the US political landscape in 2006. After his re-election in 2004, George Bush seemed unstoppable. The electorate seemed wilfully blinded to the realities that were already becoming increasingly apparent in terms of war, foreign policy, economic policy and competence. Suddenly in 2006, the Iraq War and numerous domestic issues resulted in a massive rebuke of the Bush agenda in Congressional elections.

The Democrat Congress has a big job ahead. The world is watching. A workable strategy in Iraq is the most pressing challenge. Just as important for the long term will be the reassertion of America’s interest in justice, human rights and a foreign policy that values multilateral support. These values after all were major contributors to the pre-eminent position the US achieved in the twentieth century. Working out whether the "war on terror" has been an overstated foreign policy endeavour in the context of all other global threats will also be important.

While 2006 brought into focus declining US power and influence, and the failures of the Bush administration, it also demonstrated the correctional capacity of democracy – even one as plainly distorted by money and media as the US democracy. Time will tell whether the Democrats are up to the task before them.

2006 also showed us the nations that will assert increasing power in the decades ahead – and gave some clues as to the kind of influence they will assert.

China’s mission toward superpowerdom continued relentlessly. The economy continued to boom, the Chinese and the world continued to benefit from the boom and China’s courting of international favour also continued apace. China is everybody’s friend it seems. Little willingness was shown to assert moral leadership – especially in its dealings with some of the world’s most odious regimes – Sudan and Myanmar come to mind.

Should we be surprised? China’s favourite foreign policy mantra refers to “staying out of other country’s internal affairs”. It’s a convenient position. It allows China to exploit commercial partnerships with international pariah states while furiously denying the rights of others to meddle in its own internal affairs.

Domestically, 2006 was a year where some real texture started to show in China. Lawyers, human rights activists and journalists were imprisoned and silenced – as they have been for decades. There were more of them though. And they made more noise and they connected to more people.

Ever more sophisticated technologies were deployed to control the rapid spread of the internet, blogs and email. Yet a fledgling progressive China continued to show its face. The media was instrumental in the country’s biggest corruption case, the ousting of the mayor of Shanghai, and differing views on matters from corruption to governance to the environment, to health policy, surfaced and were tolerated to varying degrees. Rural protests over land and the gaping void between rural and urban incomes soared.

China’s complex domestic challenges are there for all to see. Is it really likely that China can be a progressive global influence when its internal affairs are in such chaos?

China’s neighbour and the other Asian colossus, India also continued its inexorable climb in international economic and political influence. India is a wonderful contrast to China with its feisty and frequently dysfunctional democracy, a free press, a dynamic literary and artistic scene and an open vigorous political debate operating in parallel with embarrassing illiteracy, dire poverty, the effects of the debilitating caste system and the frequently appalling treatment of women.

India is making great progress in addressing some of its most chronic problems. China is a decade ahead of India in development terms. Yet India has some definite advantages as well.

The contest between China and India really began to take shape in 2006. Let’s hope that the economic victor is also the nation that makes the greatest progress in conferring freedoms and rights on its peoples.

Russia once again became a regular page one story in 2006. And it wasn’t good . What we saw was an increasingly authoritarian government, murdered journalists, mysterious offshore poisonings and energy blackmail against former Soviet states. Like China and India, Russia will play a very big part in the coming decades. And present indications suggest that the newly ascendant Russia may not be a warm and cuddly player on the international stage.

The Israeli – Palestinian conflict also took some sharp turns in 2006. The election of Hamas at the start of the year represented a sharp shift for Palestinians frustrated at corruption and a seeming inability of the Fatah movement to make meaningful progress towards a Palestinian state. It was a shift away from secular and moderate politics to an Islamic party that refuses to recognise Israel. The Palestinian people were roundly punished by Israel and the world for exercising this democratic right with vital funding to the Palestinian Territories suspended plunging the already miserable territories into greater despair. It’s difficult to imagine how anyone could calculate that this situation makes Israel and the West safer.

Even more disturbing for Israel however was the humiliation it suffered in its war with Hezbollah. The picture for Israel is awful. Hezbollah has proved a capability both for engaging Israeli forces in ground battle and for striking Israeli cities with conventional weapons. This capability will only continue to improve in the decade ahead. Whilst Israel has overwhelming military superiority in its region, the deployment of such overwhelming force carries grave implications for civilians and the threat an all out Middle Eastern conflagration. Israel will face ever-greater threats. A brave peace initiative may not guarantee security but it is the best chance Israel has. It will certainly give Israel a long absent legitimacy in its battle against extremists.

2006 was also a very big one in Australia. Kevin Rudd’s elevation to the Labor leadership enlivened the political discussion. Rudd’s Howardesque demeanour, his policy energy and vigour have all lifted Labor’s prospects dramatically. The government had to contend with the AWB scandal, the deteriorating situation in Iraq and rising interest rates.

Howard is changing too. One of the world’s great global warming denialists is slowly embracing the idea. He’s softening up in other areas too. After five years of disinterest, the Prime Minister is suddenly concerned about the plight of David Hicks. He has also been reasserting his interest in the social safety net. He’s starting to sound like a liberal!

The Prime Minister’s highly tuned political instincts may well be sensing a shift in the national mood away from the bribe cult of recent years. Polls on issues as diverse as climate change and the Hicks case show a nation looking beyond Howard spin and also demonstrating some readiness to embrace personal sacrifice for a national outcome.

So is the Howard selfish cycle coming to a close? Perhaps. Certainly there is a mood shift. Still, in perhaps the most audacious of carefully electorally calibrated bribes, in 2006, Howard and Costello presented Australians with non-means tested tax-free superannuation in retirement. This policy means a continuation of Howardism will see a nation where Australia’s university students will pay some of the highest fees in the world, an ever diminishing pool of young workers on modest incomes will pay a high percentage of tax to support a tax system that gives the ever fortunate and numerically enormous baby boomer generation a tax free income from their superannuation – irrespective of the size of that income. Many will receive an annual tax-free income of hundreds of thousands of dollars and more. It would seem that such a policy is unsustainable. But its revision will require that baby boomers and the elderly look beyond the Howard bribes to the interests of their children and grandchildren. It will be interesting to watch.

Australia became even more acutely aware of our geography in 2006. Problems in East Timor, PNG, the Solomons and Fiji suggested that our immediate neighbours will require an ever increasing diplomatic and aid effort. It’s very hard to know how well the Howard government is managing these issues. The handling of the East Timor issue raises doubts. And it’s hard to imagine the embarrassing Alexander charming our neighbours as well.

Yes, 2006 was a big one. Plenty of indications of very complicated times ahead. Yet amidst the ugliness there were also positive signals. People everywhere from the United States and other western nations through to China and Russia, struggled to achieve outcomes against the odds. In Australia too, there were signs of a shift to a more inclusive and far sighted view. 2007 promises to be interesting!