By Denis Hay

Description

Australia’s sovereignty, how can it be regained and shifted toward compassionate politics using monetary sovereignty?

Introduction

Australia faces a defining moment in its history. Torn between a decades-old alliance with the United States and the rising influence of Asia and BRICS+ nations, the country’s sovereignty and future prosperity are at stake. While the U.S. champions a “rules-based international order,” its actions frequently contradict democratic values and international law.

Australia’s alignment with these policies risks its moral standing and ability to act independently. This article examines the dangers of this alignment, explores opportunities with BRICS+ and regional neighbours, and outlines a strategic path to reclaim Australia’s sovereignty and ensure prosperity.

1. Historical Context: A Shifting Power Balance

Australia’s Strategic Vision in 1971

In 1971, Australian policymakers emphasized the need for independent foreign policies reflecting national and regional interests. They recognized that the U.S. alliance, while beneficial in some respects, would diminish in importance as global power balances shifted.

Today’s Reality

Despite these early warnings, Australia has doubled down on its alliance with the U.S., relying on agreements like ANZUS and AUKUS. Instead of fostering independence, these arrangements have entrenched Australia as a junior partner in U.S. geopolitical strategies.

Critical Insight: Australia’s growing dependence on the U.S. contradicts its original vision of Australia’s sovereignty and self-determination.

2. The Force Posture Agreement and Sovereignty Concerns

What is the Force Posture Agreement?

The 2014 Force Posture Agreement grants the U.S. “unimpeded access” to Australian military bases and exclusive control over its operations. This arrangement subordinates critical defence infrastructure to U.S. interests.

Implications for Australia’s Sovereignty

1. Loss of Military Autonomy: Australia has limited influence over how, when, and against whom U.S. forces stationed in its territory are deployed.

2. Increased Risk of Retaliation: Hosting U.S. assets makes Australia a prime target for adversaries, including China and Russia.

A Real-World Example

Australia’s support for U.S. sanctions against Russia has placed it on a list of countries deemed “dangerous” by Moscow, increasing the risk of retaliatory actions.

3. Economic Dependencies and Contradictions

Australia’s Trade Reliance on China

China is Australia’s largest trading partner, accounting for a significant share of exports like iron ore, coal, and agricultural products. This economic relationship underpins Australia’s financial stability.

Contradictory Military Alignment

Despite this reliance, Australia’s military alignment with the U.S. positions China as a strategic adversary. This inconsistency undermines trust and could destabilize the economic partnership if tensions escalate.

Key Risks

1. Economic Retaliation: China has previously imposed trade restrictions in response to perceived provocations.

2. Strategic Isolation: Alienating China risks pushing Australia into greater dependency on the U.S., further compromising its Sovereignty.

Australia’s economic relationship with China is critical to its prosperity. China is not only Australia’s largest trading partner but also a key player in the global economy. Alienating China through adversarial policies risks isolating Australia from its regional neighbours, further entrenching its reliance on the United States. This deepened dependency compromises Australia’s sovereignty and limits its ability to pursue independent policies.

Economic Impacts of Alienating China

1. Trade Retaliation Risks:

China has shown a willingness to impose trade restrictions on countries perceived as antagonistic. Australia has already experienced this with tariffs and bans on exports such as barley, wine, coal, and lobster.

The cumulative effect of these measures has disrupted Australian industries, resulting in billions of dollars in losses for exporters.

2. Loss of Market Access:

China’s market, with over 1.4 billion consumers, offers unparalleled opportunities for Australian goods and services. Alienation risks losing this vital access, forcing Australia to look for smaller, less lucrative markets.

Competing nations, such as Brazil and Canada, are eager to fill the gap left by Australia in China’s import market.

Geopolitical Consequences

1. Regional Isolation:

Australia’s adversarial stance toward China creates friction with other Asia-Pacific nations that support positive economic ties with China.

Nations like Indonesia, Malaysia, and Vietnam are increasingly aligned with China through initiatives such as the Regional Comprehensive Economic

Partnership (RCEP). Australia risks being excluded from these growing networks of regional cooperation.

2. Strategic Dependence on the U.S.:

Alienating China pushes Australia closer to the U.S., making it more reliant on American economic and military support.

This dependency reduces Australia’s bargaining power and increases the likelihood of being drawn into U.S.-led conflicts that may not align with its national interests.

Sovereignty at Stake

1. Policy Constraints:

Greater reliance on the U.S. limits Australia’s ability to adopt foreign and domestic policies that prioritize its national interests.

For example, U.S. influence over Australian defence policies, as seen in the AUKUS agreement, shifts focus away from regional diplomacy toward military confrontation.

2. Economic Vulnerability:

Dependency on the U.S. economy makes Australia vulnerable to American financial instability and political decisions. For instance, changes in U.S. trade policy or economic sanctions on third countries could negatively affect Australia.

Opportunities for Redirection

1. Strengthening Regional Ties:

Collaborate with neighbours such as Indonesia, India, and ASEAN nations to build a regional coalition focused on mutual economic and security interests.

Leverage regional trade agreements to diversify Australia’s economic relationships and reduce overreliance on any single partner.

2. Balanced Foreign Policy:

Maintain economic partnerships with China while pursuing diplomatic solutions to conflicts. A balanced approach minimizes risks of alienation without compromising Australia’s values.

Promote multilateralism through forums such as the UN and ASEAN to resolve disputes and strengthen cooperative ties.

Alienating China risks not only economic losses but also strategic isolation, pushing Australia further into dependency on the United States. This dependency undermines Australia’s sovereignty and reduces its ability to act independently in global affairs. By fostering regional cooperation and adopting a balanced foreign policy, Australia can protect its economic interests, enhance its geopolitical standing, and safeguard its sovereignty.

4. U.S. Influence on Australian Policy

Proxy Conflicts and Australia’s Role

The U.S. often avoids direct conflict with nuclear powers by using allies as proxies, as seen in Ukraine. Australia’s growing military integration makes it a potential proxy in future conflicts with China, putting its security at grave risk.

Undermining Democratic Values

The U.S. promotes a “rules-based international order,” but its actions often flout international law. Key examples include:

1. Illegal Invasions: The Iraq War and Libya bombings violated the UN Charter.

2. Economic Coercion: Unilateral sanctions on countries like Venezuela bypass international consensus, violating principles of Sovereignty.

3. Withdrawal from Treaties: The U.S. has exited agreements like the Paris Climate Accord and arms control treaties, prioritizing domestic agendas over global cooperation.

Australia’s participation in these actions erodes its credibility as a defender of democracy and international law. Aligning with U.S. policies also compromises Australia’s ability to act independently in its foreign policy decisions.

5. The Rise of BRICS+ and Opportunities for Australia

The Emerging Influence of BRICS+

BRICS+ nations now account for a larger share of global GDP than the G7, representing a significant shift in economic power. The bloc’s initiatives, including the New Development Bank and Belt and Road Initiative (BRI), empower developing nations by offering alternatives to Western-dominated financial systems.

Key Opportunities for Australia

1. Economic Diversification: Partnering with BRICS+ can reduce reliance on the U.S. and China.

2. Infrastructure Development: The BRI offers avenues for Australia to modernize its infrastructure and integrate with Asia-Pacific economies.

Real-World Success

The BRICS+ trade framework bypasses the U.S. dollar and provides a template for sustainable, multilateral economic cooperation. Australia could leverage these initiatives to secure a more balanced financial position.

6. International Law and Australia’s Role

Australia’s Track Record

Australia’s involvement in U.S.-led conflicts, such as Iraq and Afghanistan, has been criticized for violating international law. These actions diminish Australia’s moral standing and weaken its ability to advocate for a rules-based order.

The Way Forward

1. Commit to multilateral diplomacy through the UN.

2. Align foreign policies with international legal standards, even when they conflict with U.S. interests.

By adhering to international law, Australia can rebuild its credibility and strengthen its position in global diplomacy.

7. A Path Forward: Reclaiming Australia’s Sovereignty

1. Diversify Economic Partnerships

Australia’s economic reliance on a few key partners, particularly China and the U.S., leaves the nation vulnerable to trade disputes and political pressures. Diversification involves expanding trade relations with a broader range of countries, particularly in the Asia-Pacific and BRICS+ regions.

Actionable Steps:

Strengthen ties with regional economies like India, Indonesia, Vietnam, and Malaysia, focusing on trade agreements that promote shared prosperity and fair trade, not free trade.

Increase investment in emerging markets across Africa and Latin America to open new avenues for Australian exports.

Foster economic diplomacy through multilateral forums like ASEAN and BRICS+ to ensure balanced trade relationships.

Benefits:

Greater resilience against economic retaliation by major trading partners.

Reduced dependency on volatile geopolitical alliances.

Enhanced opportunities for Australian industries to thrive in diverse markets.

2. Strengthen Regional Relations

Australia’s security and prosperity are intrinsically linked to its immediate neighbours in the Asia-Pacific. By fostering collaboration with countries in the region, Australia can build a network of allies focused on mutual growth and stability.

Actionable Steps:

Invest in cultural exchange programs and educational initiatives to deepen people-to-people connections with neighbours.

Develop regional trade agreements that emphasize fair practices and shared benefits.

Collaborate on regional security initiatives, such as maritime safety and counter-terrorism efforts, which prioritize collective interests over external influence.

Benefits:

Enhanced trust and cooperation with neighbouring countries.

Greater regional stability, reducing the need for foreign military alliances.

Opportunities to co-develop infrastructure and technology that help the region.

3. Pursue Independent Foreign Policy

Australia’s foreign policy has been shaped by its alliance with the U.S., often at the expense of its national interests. An independent foreign policy would prioritize Australia’s sovereignty while aligning with principles of neutrality, diplomacy, and peacebuilding.

Actionable Steps:

Reevaluate defence agreements, such as the Force Posture Agreement, to ensure they align with Australia’s national security priorities.

Avoid entanglement in conflicts driven by external powers, focusing instead on diplomacy and conflict resolution.

Commit to a balanced approach in international relations, fostering fair partnerships with both Western and Eastern powers.

Benefits:

A stronger position as a neutral mediator in global conflicts.

Reduced risk of becoming a target in geopolitical disputes.

Increased respect from global and regional partners for Australia’s independent stance.

4. Enhance Domestic Capabilities

Building domestic strength is essential to reducing reliance on foreign powers. This includes investing in infrastructure, technology, and industries that foster economic self-reliance and resilience.

Actionable Steps:

Invest in renewable energy projects to reduce dependence on imported fossil fuels and align with global sustainability goals.

Develop advanced manufacturing capabilities, particularly in defence, technology, and green industries.

Expand funding for education and research institutions to nurture innovation and create high-skilled jobs.

Benefits:

A self-sufficient economy less vulnerable to external disruptions.

Increased national pride and capability in producing world-class technologies and goods.

Opportunities for long-term economic growth and employment.

5. Create a Publicly Owned Bank

While Australia already issues its own currency, a publicly owned bank can serve a different purpose: supporting economic stability, managing infrastructure investments, and promoting fair access to credit within the private sector.

The government does not need this bank to fund its own spending, but it can use it to ensure financial services work in the public interest.

Actionable Steps:

Use a publicly owned bank to provide affordable credit to small and medium enterprises (SMEs), which are often overlooked by private banks.

Direct the bank to focus on regional development, offering loans for projects that enhance local economies.

Address systemic inequality in financial services by offering low-interest housing loans, particularly to first-home buyers and low-income Australians.

Benefits:

Reduces dependence on private banks that prioritize shareholder profits over community needs.

Ensures fair distribution of credit to sectors and regions that drive inclusive economic growth.

Acts as a stabilizing force in the financial system, mitigating the risks of private banking failures.

Under MMT, the government does not need a bank to “finance” its spending on public services or infrastructure—it can directly create and spend money as needed. However, a publicly owned bank serves broader public policy goals by redistributing credit, supporting underserved sectors, and creating stability in the financial system.

It becomes a tool for improving the economic framework in which government spending works, complementing the government’s fiscal policies rather than serving as a funding mechanism.

Conclusion

By taking these steps, Australia can regain control over its destiny, moving away from a reliance on external powers and toward a future that prioritizes national interests and regional harmony.

Diversifying partnerships, fostering local capabilities, and implementing sovereign financial systems are practical and achievable strategies to rebuild Australia’s sovereignty.

Question for Readers

How can Australia balance its economic ties with China and its alliance with the U.S. while maintaining Sovereignty and regional security?

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This article was originally published on Social Justice Australia.