PM RUDD OFFERS LONG-TERM STRATEGIC ASSESSMENT OF

C O N F I D E N T I A L CANBERRA 000899 STATE FOR PM AND EAP DEFENSE FOR OSD PACOM ALSO FOR POLAD E.O. 12958: DECL: 09/10/2018 TAGS: MCAP PREL AS SUBJECT: PM RUDD OFFERS LONG-TERM STRATEGIC ASSESSMENT OF THE ASIA-PACIFIC REGION Classified By: Deputy Political Counselor John Crowley. Reasons 1.4 (b) ,(d). ¶1. (SBU) In a September 9 speech to a national veterans organization, Prime Minister Rudd provided a long-range forecast of key developments and challenges in the Asia-Pacific region through the middle of the 21st century on which Australian security strategy and defense capabilities and force structure would be based. (The full transcript of the speech is available at: http://www.pm.gov.au/media/Speech/2008/speech 0468.cfm.) Rudd identified five key threats that would define Australia's national security strategy and defence posture over the coming decades: -- Increased militarization in the Asia-Pacific region; -- The continuing threat of terrorism; -- Challenges to Pacific Island countries' sovereignty; -- Energy security; and -- The impact of climate change on food and water security ¶3. (U) The United States would likely remain the world's only superpower through to mid-century, Rudd predicted, but its economic dominance would likely decline over the coming decades, to be supplanted by China as the world's largest economy, possibly by 2020 according to some estimates, followed by India. Regional population growth -- estimated at four billion by 2020, or 56 percent of the world's total-- would contribute to exacerbating food, water and energy resource pressures in a region marked by continuing tensions, including on the Korean peninsula, and between China and Taiwan as well as other territorial disputes involving China. ¶4. (U) Rudd noted that the modernization of Asian military forces was marked by significant improvements in air combat capability and naval forces, including more advanced submarines. To respond to this security environment, Australia needed to develop a flexible land force capable of taking on challenges from contributing to high-end military engagements through to delivering post conflict reconstruction support; an enhanced naval capability able to protect Australian sea lanes and support land forces as they deploy; an air force able to carry out support and combat missions; and properly trained, professional soldiers able to think tactically and strategically. Rudd conceded that the Australian defence force had been "overstretched for a long time," with the tempo of operational demands given precedence over proper planning for personnel and equipment for the future. He reiterated the government's commitment to real growth of the defense budget by three percent per year to 2017-2018. ¶5. (U) In addition to strengthening Australia's military capabilities, Rudd said the GOA would respond to the long-range strategic challenges by enhancing its security cooperation beyond the alliance with the United States, which he characterized as "the bedrock" of Australia's strategic policy, with such regional partners as Japan, Republic of Korea, Indonesia, Malaysia and Singapore, and well as further developing security policy cooperation with India and security policy dialogue with China. COMMENT -------------- ¶6. (C) While some in the media, including the respected daily, The Australian, seized on Rudd's speech as foreshadowing a new Australian military build-up, a careful reading of his remarks suggest they are a reiteration of Qreading of his remarks suggest they are a reiteration of long-standing views that likely also will be reflected in both the GOA's forthcoming National Security Statement and the Defence White Paper, due to be released by the end of the year. Our contacts in the Defence Policy and Liaison Office of the Department of Foreign Affairs and Trade and in Defense Minister Fitzgibbon's office have also confirmed that the Prime Minister's remarks do not represent a departure from established policy and thinking. While in opposition, Rudd and members of the Labor Party had criticized the Howard government's defence acquisition program as rushed and lacking in overall coherence and planning. In Rudd's latest speech, he has laid the groundwork for embracing the former government's remaining major acquisition programs, including three air warfare destroyers (with an option for a fourth to be decided later this year) and up to 100 Joint Strike Fighters. In keeping with Rudd's self-contained style, he did not appear to have consulted widely within the bureaucracy, catching many off guard with a major address, and did not preview the speech with the press, which was left to inflate the story. MCCALLUM