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Aukus is a global reconfiguration with profound implications


Natale Labia writes on the economy and finance. Partner and chief economist of a global investment firm, he writes in his personal capacity. MBA from Università Bocconi. Supports Juventus.

This was choreographed to sound and feel like exactly what it was: The single biggest reconfiguration of global geopolitical alliances since the end of the Cold War.

It has been quite a northern summer of international relations. Only a month ago we watched what was seemingly the final act of the US’s “exit” from foreign affairs, with the heartbreaking evacuation of Kabul Airport being the desperately sad if fitting metaphor for the shift from 20 years of “nation building” and ham-fisted “democratic deepening” to a return to splendid isolationism.

How wrong we were. Last week in a press conference of typically high drama, scheduled to coincide with waking hours across almost three-quarters of the globe’s time zones, the leaders of three Anglo-Saxon democracies announced exactly what it would be that would take the place of decades of the US “War on Terror” in the Middle East.

Aukus, an awkward acronym which, perhaps ominously, rhymes with raucous, was choreographed to sound and feel like exactly what it was: the single biggest reconfiguration of global geopolitical alliances since the end of the Cold War. It was only hours before journalists started using gauche “submarines lurking under the surface of international relations” metaphors to describe the cabal.

To paraphrase a wartime leader who might have enjoyed the gravitas of the situation, this discussion was not the end of a foreign affairs and defence romance between Australia, the UK and the US, nor even the beginning of the end; but perhaps it was the end of the beginning of where this adventure might take them. The ink had only just dried on whatever Aukus communiques had been signed and indeed US President Joe Biden had clearly not bothered to commit the name of Australian Prime Minister Scott Morrison to memory, referring to him simply as “that fella Down Under”.

But the point was unmistakable. One did not need the nous of a Cold War-era Kremlinologist to decipher what the point of all this was. “Preserving peace and stability in the Indo-Pacific”, the phrase that has been wheeled out more times than might be grammatically sensible, could have simply been shortened to one word which no one dared mention: China.

History has shown such military alliances as being of questionable use in preserving afore-said peace. At least this particular agreement has not been saddled with an early 20th-century tripartite moniker like “alliance” or “entente”. But the political and economic implications are profound.

First, countries that do not have major economic or military heft will be increasingly asked to pick sides. Post-pandemic, the world is looking bipolar, and those poles are (if deeply economically intertwined and interdependent) progressively more mutually exclusive. 

For a middle-sized country with a weakening economy and ever more questionable continental influence, South Africa will have to consider how to manage this. Surrounded by countries in Africa that are deeply connected with China and yet with much deeper historical and cultural links to the West — indeed, with that proud notion of having a liberal democracy and Constitution — means that South Africa will increasingly be a critically strategic point of reference on the African continent. 

The second clear and immediate effect of the announcement was to ostracise Europe. Unshackled by the constraints of the European Union, UK Prime Minister Boris Johnson has clearly more swashbuckling pursuits in mind for Britain in Asia than relations with its geographical neighbours. Along with the offer to assist Australia obtain a fleet of nuclear-powered submarines was the cancellation of a €60-billion contract to buy French diesel-powered submarines. The ire from the Elyseé Palace in Paris was shrill and immediate.

While this move was labelled as “stabbing us in the back” by the French foreign minister, Jean-Yves le Drian, and French ambassadors to Washington, DC, and Canberra were summarily recalled to Paris — an extraordinary step between allies — once again this is just another step in the slow and gradual detachment of France and the EU from the transatlantic relationship. 

Whether it was intentional or not, the irony of choosing last Wednesday to announce the pact was extraordinary, as it was the same day as European Commission President Ursula von der Leyen’s annual State of the European Union Address where she spent an extensive portion of her speech outlining the importance of building European military capability which can act unilaterally and with “strategic autonomy”. Perhaps it will become a footnote of history that Aukus has the unintended consequence of creating a European army.

But, as with all globally “systemic” threats, it remains uncertain as to how much of a threat China actually is to the US and vice versa, or how much they are creating threats of each other because, for many differing and extremely complicated reasons, the reality is rather simple: both countries simply need them.

That the “military-industrial complex” is a name that is too conspiratorial in phrasing does not negate its economic or strategic influence and importance. If companies make nuclear submarines, and if selling nuclear submarines is good business, then it will always suit a number of people to ensure that someone somewhere has a good reason to buy them.

Sadly, however, such posturing and manoeuvring has rarely had positive economic or political effects. It is hard to imagine that Aukus will be any different. DM


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  • Nick Cursi says:

    I think the writer is totally missing the threat that China is posing to countries like Taiwan. What would be the world’s response if Taiwan was annexed? Far better for everyone to understand the response before any action.

    • Natale Labia says:

      Agreed, and perhaps the critical problem with Aukus is exactly that – the lack of clarity over what the response would be in that case. Theresa May asked exactly that question to the PM in Commons and got zero response.

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