Smart Power 2015

DATA STORIES: VOLUME TWO SMART POWER 2015

PROSPERITY, PERSUASION AND PROJECTION IN THE ZONE ELENA DOUGLAS SMART POWER

PROSPERITY, PERSUASION AND PROJECTION IN THE ZONE

Elena Douglas © Knowledge Society and UNDERSTANDING their global footprint. Since the Perth USAsia Centre, 2015. THE ZONE Hillary Clinton said, during her All rights reserved. Founder and CEO, Knowledge Society; confirmation hearing as Secretary www.knowledgesociety.com.au Since its inception, the In the of State, ‘America cannot solve the [email protected] Research Fellow, Perth USAsia Centre Zone forum has sought to reframe most pressing problems on our Written by Elena Douglas the manner in which Australia, own, and the world cannot solve Produced by Milly Main Infographics and design by Caitlin Perry and Tom Harper and in particular Western Aus- them without America ... We must Researched by Lillian Seow, Liam Staltari and Gaelen tralia, defines itself. Australia has use what has been called “smart Perrone become more aware of its status power”, the full range of tools at ISBN 9780992521332 as an Indo-Pacific nation. Western your disposal,’ Smart Power had Cataloguing-in-Publication data for this title is available from the National Library of Australia Australia’s perception of itself as become more than just a theory an energy and minerals super- of statecraft: it has influenced the A version of this report with a full appendix is available at: zone.uwa.edu.au/smart-power power has strengthened, and United States’ approach to foreign the state has entered the national policy and therefore the practices conversation owing to its fierce of other nations. economic integration with Asia. Smart Power is a theory of the Perth shares a four-hour time nature of power in the twenty-first horizon with sixty per cent of the century. Like all intellectual lead- world’s population. The nations ership, Joseph Nye’s achievement with the greatest promise for eco- makes the tacit explicit. His work nomic growth in the twenty-first explores the sources of power and century inhabit this region. In the the nature of individual nations’ Zone highlighted these facts at its power over time. first conference in 2009 and this report seeks to continue that tradi- tion and deepen the enquiry into A THREE-LAYERED the region. CHESSBOARD

Smart Power reminds us that no THE SMART POWER type of power – economic, mili- FRAMEWORK tary or cultural – stands alone. As a statecraft strategy, Nye speaks This report evaluates the nation of the Smart Power theory as a states of the Zone using the Smart three-layered chess board. The Power framework defined by first layer is economic power – leading Harvard foreign-policy gross domestic product, trade, analyst, Joseph Nye. Since Nye foreign investment, productiv- first raised the notion of ‘soft’ ity – and will always be pivotal power – and then ‘smart’ power – to national power and prestige. this framework has become more Here we examine this in the important for nations assessing ‘Prosperity’ chapter.

1 SMART POWER SMART POWER

Military might is a conclusive tool for the right context. From is to provide a new perspective on intangible measures that represent upstarts, many of whom under- The report provides a snapshot of underwriter of national power. the printing press to gunpowder the region. soft power, like a country’s pop- stand that they too are likely to all the dimensions of power for The capacity to project force is to the internet and unmanned ularity to students, tourists and be disrupted in the five-to-ten- each country in the Zone where still an important dimension drones, information technology Major transformations are under- permanent migrants, who have all year time horizon – not the much the data is available. The creators of the power equation and is and military methods are in a con- way in the Zone. The shift of voted with their feet. Detractions longer period that past economic intend for this research to aid gov- examined for the Zone in ‘Projec- stant state of flux. As the sources wealth – and therefore influence are also covered. The incidence of models ensured. Cultural power ernments and businesses to better tion’. This is the second layer of of economic power change – in – to Asia continues apace. The slavery, death penalties and levels has become more fleeting. Twitter understand the new contours of Nye’s chessboard. line with technology – multiple economic focus of several nations of homicide and violence hinder campaigns last hours compared prosperity, persuasion and pro- layers of complexity manifest. is also changing as North Asian soft power. to the years-long campaigns that jection in the Zone, and to make The third layer of the chessboard countries seek to rebalance their once defined the role of the world’s better-informed, and ultimately is cultural (soft) power – educa- This kaleidoscope of power is economies to increase the role of Finally, power as we know it is in leading newspapers. wiser, decisions. tion in all its dimensions and the so intricate that a simplifying services. The rise of the borderless a profound state of flux. The rela- cross-cultural empathy nurtured framework is useful. Smart Power digital economy is having a major tive power of nation states versus This rapid diffusion of power by artists, designers, perform- asserts that power must be under- impact: capital has been mobile non-state actors is changing. Tech- increases the significance of any ers and sportspeople. Brands stood in all its dimensions, hard for some time, and now income nology, as it becomes mobile, is metrics of relative power that can are also important to soft power, and soft. ‘Hard’ can mean coer- is mobile as well. Multinationals empowering these decentralised be quantified and assessed, leaving particularly entertainment and cion and payment, while ‘soft’ distribute profits to different coun- entities at the expense of tradi- analysts free to engage with other, technology brands. Nations with means persuasion and attraction. tries than the ones in which they tional sources of projection and less tangible, dimensions. cultural power are more attrac- The theory does not dictate that were earned. The nature of eco- force. Dispersed – but centrally tive – they attract more tourists one dimension of power is more nomic power will continue to be controlled – terrorist groups call and students and broadcast more important than the other, but that buffeted by these new dynamics. potential fighters to action, but do DATA JOURNALISM of their national culture – and one power cannot be understood not fund their soldiers’ violence or therefore have the means to be without considering both. Nye As wealth and gross domestic control its execution or methods. This report, a blend of Smart more persuasive. For this reason, once noted that, although Kim product increase in Asia, military Complex command structures and Power concepts and data journal- we have called this dimension Jong-il was a known enthusiast power emerges too. Those nations supply chains are unnecessary for ism, is directed at policymakers Smart power = ‘Persuasion’. Smart Power, as it of Hollywood movies, this passion with renewed economic clout are these groups. The inspiration of and executives in the region, and hard power is assessed in this report for the did not inhibit North Korea’s investing heavily in their militar- amateur terrorists can result in includes a nod to Western Aus- Zone, consists of three layers: Pros- nuclear-weapons program. ies. The share of global military city-wide or network-infrastruc- tralia, which has its own listing (economic and perity, Persuasion and Projection. power in the Zone is surging and ture-wide destruction. These where the data allows. The military) Power depends on context; it regional architecture – multilat- changes to the power equation research uses existing reliable sta- + soft power is always relative. Judgements eral alliances – will struggle to are set to continue. tistics from sources such as the THE RIGHT TOOL FOR about the power of any actor can keep up. World Bank, International Mon- (culture and norms) THE RIGHT CONTEXT only be made in the context of Similarly, echoing the nation etary Fund, Conference Board Joseph Nye its neighbours, allies and rivals. The most fluid and unpredict- state’s loss of power, multina- and United Nations. Like all good Social and technological changes The data stories in this report able source of power – soft power tionals are being challenged all data journalism, every page of this are reshaping the nature of power. provide a comparative analysis of – increases a nation’s influence over the world by new disruptive, report includes as much knowl- Nye’s model of international state- the nations of the Zone under the but is hard to measure. This digital players. Major corporations edge and insight as possible. craft demands using the right lens of Smart Power. Its purpose report depicts some of the more face a relative loss of power to new

2 3 SMART POWER PROSPERITY CONTENTS GROSS ZONE PRODUCT

This ring comprises the gross domestic product of each country located The economies of China and Japan loom large today, but in the future in the four-hour time window we call ‘the Zone’. China and India will dominate. In the next decade, India’s economy is likely to experience the largest growth. Currently, the Zone’s economic output – valued at US$23.861 trillion – represents one third of the world’s economy. This share will continue to grow.

Y L

A A S S

N N

C E E M K A E N A A M D N E R 1 I R B M P 0 0 A O A 0 P O D L A D L A L I P P O A N A G N I S I A A T L N S I G L 2 E Y A I 0 I H N A 0 A A B I V I PROSPERITY P L S H S T A E S M N GROSS ZONE PRODUCT 5 N O O 1 LI D IL B S IN A $ 2 ION E POPULATION AND PRODUCTIVITY 6 1 L RIL R $ T 2 O K TRADE, SERVICES AND PROSPERITY 8 TH U O IA 2 S L FOREIGN INVESTMENT 10 0 3 RA ST AU BUSINESS CLIMATE 11 N ER ST WE 1 9 4 PERSUASION CH LIA INA TRA AUS EDUCATION: MINDING THE FUTURE 12

INNOVATION AND R & D 13 18 5 REGIONAL ARCHITECTURE: COOPERATION AND ALLIANCES 14 GLOBAL FOOTPRINT: DIPLOMACY AND AID 16

17 $23.861 6 THE POWER OF TALK: LANGUAGES OF THE ZONE 18 DESIRABILITY OF NATIONS: ATTRACTIONS AND DETRACTIONS 20 TRILLION INDIA ELITE SPORT AND FILM 22 16 7

PROJECTION

MILITARY MIGHT 23 8 15 R U SS 9 IA BIBLIOGRAPHY 24 4 1

N A 1 0 P 3 1 A

J 1

1 2

JAPAN INDIA SOUTH KOREA THAILAND SINGAPORE VIETNAM SRI LANKA NEPAL LAOS $4.92T $1.9T $1.3T $387B $298B $171B $67B $19B $11B

CHINA RUSSIA AUSTRALIA INDONESIA MALAYSIA PHILIPPINES BANGLADESH MYANMAR CAMBODIA $9.24T $2.01T $1.56T $868B $313B $272B $150B $57B* $15B WESTERN AUSTRALIA $233B

All figures are in US dollars. Sources: Individual GDPs and Gross Zone Product may not be equivalent due to rounding. World Bank, 2013; 4 * Myanmar’s figure is estimated (2012–13) ABS, 2013. 5 PROSPERITY

1 UNIT = 1 MILLION PEOPLE COUNTRY POPULATION

POPULATION AND PRODUCTIVITY = TOTAL-FACTOR PRODUCTIVITY 1 UNIT = 1 MILLION PEOPLE COUNTRY (annual growth,POPULATION estimate) This graph compares the populations – the people power – of nations is depicted on each country’s population ring: gold for unemployment 15 and 65). The highest dependency ratio in the Zone is Nepal at 66%, = TOTAL-FACTOR PRODUCTIVITY = AGE (annual DEPENDENCY growth, estimate) RATIO in the Zone. Sixty per cent of the world lives in this region. China, India, and purple for participation rate. The Philippines has the highest unem- followed by Laos at 64% and rapidly ageing Japan at 62%. Singapore, 65% (% of working-age population Indonesia and Japan alone represent three billion of the earth’s seven ployment rate, at 7%, followed by Indonesia at 6.3%. India, Sri Lanka, China, South Korea have the lowest dependency ratios. =that AGE is DEPENDENCY dependent) RATIO 65% (% of working-age population billion people. In manufacturing-based economies, performance hinges Japan and Malaysia still have labour participation rates below 60%. 7% that is dependent) on people power, factories and those factories’ productivity. Another lens into productivity used by economists is total-factor (or 7% LABOUR PARTICIPATION RATE (%LABOUR of population PARTICIPATION aged 15+ RATE that Another measure of the productivity of nations is their age dependency multi-factor) productivity, which measures the productivity of both is economically(% of population agedactive) 15+ that is economically active) Economic growth is driven by the three Ps: population, productivity and ratio – the ratio of those typically not in the labor force (the depend- labour and capital. Vietnam, Singapore, Sri Lanka, Australia and IndiaUNEMPLOYMENT UNEMPLOYMENT RATE RATE participation. It is increasingly important for countries to examine these ent – those aged under 15 and over 65 in this case) to those typically all recorded decreases in total-factor productivity in the most recent(% of labour force(% of that labour force that is unemployed isbut unemployed but in light of the changing profiles of their neighbours. Here, participation in the labour force (the productive proportion – those aged between estimates. In high-technology, value-added economies, success is available to work) available to work) KEY dependent on knowledge, enterprise and innovation.

RUSSIA 143.5 MILLION JAPAN 127.3 MILLION 2.90% 64% 5.6% 1.09% 40% RUSSIA 143.5 MILLION JAPAN 127.3 62% MILLION 2.90% 64% 5.6% 1.09% 40% SOUTH KOREA 50.2 MILLION CHINA 1.357 BILLION 62% 0.2% 4.6% 0.64% 37% 37% SOUTH KOREA 50.2 MILLION LAOS 6.8 MILLION CHINA 1.357 BILLION 59% 0.2% 71% - 4.6% 0.64% 4% 37% 64% 37% INDIA 1.252 BILLION -0.42% 61% LAOS 6.8 MILLION 71% 59% 52% - 2.7% 3.2% 54% 4% 64% 83%

78% INDIA 1.252 BILLION 3.6% 1.4% VIETNAM 89.7 MILLION -0.42% 61% -2.7% 2% 52% 41% 2.7% 3.2% 78% 54% 7% 83% 4.3% 65% PHILIPPINES 98.4 MILLION 3.16% 78% 71% 83% 61% NEPAL 27.8 MILLION1.4% 0.7% 0.3% 3.6% 55% VIETNAM 89.7 MILLION - 72% -2.7% 66% CAMBODIA 15.1 MILLION 3.4% 2% 4% 41% 2.28% 79% 57% SRI LANKA 20.5 MILLION 78% 7% 59% 4.3% -3.97% 65% 3% PHILIPPINES 98.4 MILLION 51% 6.3% 68% 3.16% THAILAND 67 MILLION 2.8% 68% 3.59% 71% 83% 61% NEPAL 27.8 MILLION BANGLADESH 156.6 MILLION 0.7% 0.3% 39% 55% 0.2% - 72% 53% 66% CAMBODIA 15.1 MILLION 3.4% INDONESIA 249.9 MILLION 4% 2.28% MYANMAR 53.3 MILLION 0.94% 79% 57% 52% - SRI LANKA 20.5 MILLION 59% 43% -3.97% 3% 65% AUSTRALIA 23.1 MILLION 51% 68% 5.7% MALAYSIA 29.7 MILLION 6.3% THAILAND -1.32%67 MILLION 2.8% 68% 1.13% 3.59% 50% 46% 68% BANGLADESH 156.6 MILLION 4.5% 39% 0.2% WESTERN SINGAPORE 5.4 MILLION 53% AUSTRALIA 2.6 MILLION -3.43% INDONESIA - 249.9 MILLION 36% - MYANMAR 53.3 MILLION 0.94% 52% - 43% 65% 5.7% AUSTRALIA 23.1 MILLION MALAYSIA 29.7 MILLION -1.32% 1.13% 50% 46% 68% 4.5% WESTERN SINGAPORE 5.4 MILLION AUSTRALIA 2.6 MILLION -3.43% - 36% -

Sources: The Conference Board, 2012–13; 6 World Bank, 2013; ABS, 2013. 7 PROSPERITY TRADE, SERVICES AND PROSPERITY SERVICESSERVICES (%(% GDP) GDP) This diagram, using scaled circles to represent gross domestic product, between foreign trade and domestic consumption is in flux. The biggest It is interesting to compare the external orientation of each economy (the illustrates the spectrum of economies in the Zone. It examines the story here, however, is China’s economy, which dominates this picture. export component) with the relative proportion of services to assess a SERVICES COUNTRYCOUNTRY GDP GDP ($US) ($US) (% GDP) TRADETRADE health and sustainability of each economy by identifying GDP per capita Policymakers in China seek to move its economy away from a reliance country’s development. These are two separate measures and do not (%(% GDP) GDP) GDPGDP PER PER CAPITA CAPITA ($US) ($US) TRADE (as a proxy for spending power), the country’s inflation rate, sovereign on manufacturing and construction and towards a stronger services comprise a whole. Singapore’s role as a logistics hub and AA-shippingAA- CREDITCREDIT inter RATING RATING- COUNTRY GDP ($US) (% GDP) credit rating and economic growth in 2013. sector. The rapid urbanisation of the Chinese population in the last mediary accounts for the city state’s 191% external orientationINFLATIONINFLATION figure. GDP PER CAPITA ($US) (CONSUMER(CONSUMER PRICES, PRICES, ANNUAL ANNUALAA- CREDIT%) %) RATING decade has encouraged this. Shifting activity in this vast nine-trillion- INFLATION GDPGDP GROWTH GROWTH (ANNUAL (ANNUAL %) %) The nature of many economies in the region is changing. The balance dollar economy to services will transform the region. (CONSUMER PRICES, ANNUAL %) GDP GROWTH (ANNUAL %)

KEY

CHINACHINA CHINA 73%73% 73%75%75% 75% 71%71% 71%

AA- AA-AA- RUSSIA $9.24T $6807 2% 7.7% RUSSIARUSSIA BB+ $9.24T$9.24T $6807$6807 2%2% 7.7%7.7% BB+BB+ 1.3% 7.8% $14,612 $2.01T LAOS 16% 191% 20% JAPAN SINGAPORE AUSTRALIA 1.3%1.3% 7.8%7.8% $14,612$14,612 $2.01T$2.01T LAOSLAOS - 16%16% 191%191% 20%20% BANGLADESH - - $11B $1661 -% 8.5%JAPANJAPAN SINGAPORESINGAPORE AUSTRALIAAUSTRALIA 60% 59% 57% BB- BANGLADESHBANGLADESH $11B$11B $1661$1661 -%-% 8.5%8.5% 6% 7% $958 $150B JAPAN 60%60% 59%59% 57%57% BB-BB- AAA

6%6% 7%7% $958$958 $150B$150B NEPAL JAPANJAPAN $4.92T $38,634 2.7% 1.6% - 28% 54% 26% AAAAAA RUSSIA SOUTH KOREA SRI LANKA 3.8% 8.4% $694 $19B SOUTH KOREA NEPALNEPAL $4.92T$4.92T $38,634$38,634 2.7%2.7% 1.6%1.6% AA 58% 57% 56% - - 28%28% 54%54% 26%26% INDIA $1.3T $25,977 1.3% 3% RUSSIARUSSIA SOUTHSOUTH KOREA KOREA SRISRI LANKA LANKA 3.8%3.8% 8.4%8.4% $694$694 $19B$19B BBB+ SOUTHSOUTH KOREA KOREA

6.9% 6.4% $1498 $1.9T VIETNAM AAAA BB- 58%58% 57%57% 56%56% INDIAINDIA 28% 25% 20% MYANMAR $1.3T$1.3T $25,977$25,977 1.3%1.3%$171B3%3%$1911 4.1% 5.4% PHILIPPINES INDIA BANGLADESH BBB+BBB+ - PHILIPPINES 6.9%6.9% 6.4%6.4% $1498$1498 $1.9T$1.9T -% 5.5% $1105 $57B* VIETNAMVIETNAM 49% 49% 46% BB-BB- BBB+ SRI LANKA $272B $2765 4.1% 7.2% 28%28% 25%25% 20%20% MYANMARMYANMAR $171B$171B $1911$1911 4.1%4.1% 5.4%5.4% B+ PHILIPPINESPHILIPPINES INDIAINDIA BANGLADESHBANGLADESH

- - 7.3% 3.3% $3280 $67B CAMBODIA 11% 82% 26% PHILIPPINESPHILIPPINES B NEPAL MALAYSIA CHINA -%-% 5.5%5.5% $1105$1105 $57B*$57B* 49%49% 49%49% 46%46%

THAILAND BBB+BBB+ $15B $1007 3.9% 7.4% A 46% 43% 41% SRISRI LANKA LANKA $272B$272B $2765$2765 4.1%4.1% 7.2%7.2% 1.8% 1.9% $5779 $387B AUSTRALIA B+B+ AAA

7.3%7.3% 3.3%3.3% $3280$3280 $67B$67B MALAYSIA CAMBODIACAMBODIA $1.56T $67,463 2.5% 2.5% 11%11% 82%82% 26%26% A+ B B NEPALNEPAL MALAYSIA74%MALAYSIA 84% CHINACHINA 66% THAILAND VIETNAM CAMBODIA 4.7% 3.1% $10,538 $313B WESTERN AUSTRALIA $15B$15B $1007$1007 3.9%3.9% 7.4%7.4% THAILANDTHAILAND SINGAPORE AA+ 46%46% 29%43%43% 40% 41%41% 40% A A AAA $233B $93,897 1.7% 4.5%

1.8%1.8% 1.9%1.9% $5779$5779 $387B$387B 3.9% 1% $55,183 $298B AUSTRALIAAUSTRALIA

AAAAAA INDONESIA

MALAYSIAMALAYSIA BBB- $1.56T$1.56T $67,463$67,463 2.5%2.5% 2.5%2.5% 52% 24% 37% WESTERN INDONESIA LAOS A+A+ 5.8% 6.4% $3478 $868B 74%74% AUSTRALIA84%84% 66%66% THAILANDTHAILAND VIETNAMVIETNAM CAMBODIACAMBODIA 4.7%4.7% 3.1%3.1% $10,538$10,538 $313B$313B WESTERNWESTERN AUSTRALIA AUSTRALIA

SINGAPORESINGAPORE AA+AA+ 29%29% 40%40% 40%40% AAAAAA $233B$233B $93,897$93,897 1.7%1.7% 4.5%4.5%

3.9%3.9% 1%1% $55,183$55,183 $298B$298B

INDONESIAINDONESIA

BBB-BBB- 52%52% 24%24% 37%37% WESTERNWESTERN INDONESIAINDONESIA LAOSLAOS 5.8%5.8% 6.4%6.4% $3478$3478 $868B$868B AUSTRALIAAUSTRALIA

Sources: World Bank, 2013; World Bank, 2014; Standard & Poor’s, 2015; ABS, 2013; WA DSD, 2014; 8 * Myanmar’s figure is estimated (2012-13). CCIWA, 2013–14; WA Department of Treasury, 2014. 9 PROSPERITY PROSPERITY

FOREIGN INVESTMENT FOREIGN DIRECT INVESTMENT BUSINESS CLIMATE NET INFLOWS, 2013 ($US) This colour-coded map illustrates the distribution of status is a reflection of its sovereign risk. Ideally, FOREIGN DIRECT INVESTMENT The ranking table below uses two measures: the World Bank’s Ease of Doing The Economic Freedom Index takes a broader approach and examines the $0-1 billionNET INFLOWS, 2013 ($US) foreign direct investment across the Zone. A high level this metric would be measured over time. A static $1-10 billion Business Index and the Fraser Institute’s Economic Freedom of the World degree to which a country’s policies and institutions support economic of foreign investment in a country reflects a stronger analysis reveals that China remains a powerhouse $10-100 billion $0-1 billion Index. The Ease of Doing Business Index appraises the experience of the freedom and personal choice. It includes relative measures of the size $1-10 billion $100-1000 billion belief of a return on that investment. This, in turn, is for foreign investment, eclipsing high-performing $10-100 billion enterprise owner and the ease with which he or she can conduct business, of government in the economy; the legal system and property rights; a good proxy to measure confidence in the potential neighbours Australia, Singapore and Russia by almost $100-1000 billion including applying for construction permits, connecting to utilities, register- sound money and freedom to trade internationally; and regulation. Both for economic growth in that country, in that country’s $US300 billion. India’s figure, at $US28.1 billion, is ing property, acquiring credit, protecting investors, trading across borders, measures rank Singapore as the best place in the Zone to do business. legal framework and in the strength of its institu- relatively low, but will increase in coming years as addressing insolvency, paying taxes and enforcing contracts. tions – ultimately, a country’s foreign investment its economy grows.

KEY

EASE OF DOING BUSINESS ECONOMIC FREEDOM RANKING (OUT OF 189 COUNTRIES) RANKING (OUT OF 152 COUNTRIES)

RUSSIA

70.7 BILLION #01 #02 RUSSIA SINGAPORE 70.7 BILLION #10 #08 JAPAN AUSTRALIA 3.7 BILLION #05 #33 SOUTH KOREA JAPAN SOUTH KOREA 3.7 BILLION12.2 BILLION #29 #23 JAPAN SOUTH KOREACHINA

347.8 BILLION #18 #74 12.2 BILLION MALAYSIA LAOS #102 427 MILLION #26 CHINA THAILAND 347.8 BILLION

VIETNAM #95 #51 INDIA 8.9 BILLION PHILIPPINES 28.1 BILLION LAOS

427 MILLIONPHILIPPINES #62 #98 SRI LANKA 3.7 BILLION RUSSIA 916 MILLION #114 #78 VIETNAMCAMBODIA NEPAL 8.9 BILLION VIETNAM INDIA 74 MILLION 1.35 BILLION #114

28.1 BILLION #80 BANGLADESH INDONESIA INDONESIA 1.5 BILLION PHILIPPINES23.3 BILLION SRI LANKA 3.7 BILLION #99 916 MILLION #98 MYANMAR SRI LANKA 2.3 BILLION #115 NEPAL CAMBODIA #90 74 MILLION THAILAND 1.35 BILLION CHINA 12.7 BILLION #135 #72 BANGLADESH MALAYSIA AUSTRALIA INDONESIA CAMBODIA 1.5 BILLION 11.6 BILLION 52 BILLION 23.3 BILLION #126 #108

SINGAPORE NEPAL MYANMAR 63.8 BILLION 2.3 BILLION #142 #110 INDIA #119 THAILAND #173 12.7 BILLION BANGLADESH #177 #143 MALAYSIA AUSTRALIA MYANMAR 11.6 BILLION 52 BILLION #148 SINGAPORE LAOS* 63.8 BILLION 152 189 140 130 120 100 100 110 120 130 140 150 160 170 180 110 10 10 90 80 70 60 50 40 30 20 20 30 40 50 60 70 80 90 1 1

Sources: Source: Economic Freedom of the World report (Fraser Institute), 2012; 10 World Bank, 2013. * Laos is not ranked in the Economic Freedom of the World index. Ease of Doing Business Index (Doing Business Project), 2014. 11 PERSUASION PERSUASION

IN THE ZONE RESEARCH & DEVELOPMENT EDUCATION: MINDING THE FUTURE INNOVATION AND R&D RESEARCH & INVESTMENTDEVELOPMENT (% OF GDP)INVESTMENT (% OF GDP) Formal education is the main policy medium through which governments education quality is measured by the number of world top 500 universi- The nations of the Zone are ranked here according to (825,136 patents) is revealed as the largest source GLOBAL INNOVATION EDUCATION 17 INDEX RANKINGGLOBAL INNOVATION can influence the intellect of their populaces. Quality of education – both ties in a country, as calculated by the Jiao Tong Rankings. the Global Innovation Index. Singapore, South Korea, of innovation in the Zone, registering more than half 17 (OUT OF 143)INDEX RANKING (OUT OF 143) secondary and tertiary – is scrutinised here using PISA (Programme Australia and Japan are the most innovative countries of all patents in the region. South Korea (204,589) PATENT PATENT APPLICATIONS for International Student Assessment) scores and academic university Tertiary education levels are also telling. South Korea and Singapore in the region. The index balances barometers of inno- certainly performs best relative to its population. APPLICATIONS 29,717 (2013) rankings. Nations are ranked by their PISA performance – with China, maintain high levels of tertiary education, while Russia, Australia and vation like institutions, human capital, infrastructure, This appears to be a reward for its high level of 29,717 (2013) Singapore, Japan and South Korea performing the best – and tertiary Japan rank similarly in terms of attainment of tertiary qualifications. and market and business sophistication with quantifi- investment in research and development (4.03% RESEARCH RESEARCH& & AUSTRALIA AUSTRALIADEVELOPMENTDEVELOPMENT $20,578 $20,578 able measures of innovation like patents. of GDP) – more than any other country in the Zone. INVESTMENTINVESTMENT Ultimately, all innovation is driven by connectivity ($US MILLIONS)($US MILLIONS)

Raw patent numbers are also depicted below. China and access to knowledge. N/D = NO DATA N/D = NO DATA KEY SECONDARY TERTIARY TERTIARY 2.23% 4.03% 2.2% 3.39% EDUCATION QUALITY EDUCATION EDUCATION 2.23% 4.03% 2.2% 3.39% QUALITY LEVEL 900,000 900,000 900,000 800,000 900,000 800,000 PROGRAMME FOR INTERNATIONAL UNIVERSITIES IN WORLD POPULATION AGED 25+ 800,000 800,000 STUDENT ASSESSMENT (PISA) SCORES, 2012 TOP 500 WITH COMPLETED TERTIARY 700,000 700,000 0 6 0 6 0 6 0 6 SCHOOLING (%) 700,000 600,000 700,000 600,000 0 6 0 6 0 6 0 6 600,000 500,000 07 16 17 21 600,000 500,000 07400,000 16 17 21 400,000 500,000 328,436 500,000 400,000 300,000 204,589 400,000 300,000 328,436 200,000 200,000 MATHEMATICS SCIENCE READING 300,000 204,589 300,000 100,000 29,717 100,000 200,000 9722 200,000 613 580 570 0 0 100,000 100,000 CHINA 32 2% 9722 SINGAPORE SOUTH KOREA29,717 AUSTRALIA JAPAN 0 $7060 $59,890 $20,578 $146,537 0 573 555 545 HONG KONG 5 15% SINGAPORE SOUTH KOREA AUSTRALIA JAPAN $7060 $59,890 $20,578 $146,537 900,000 1.84% 900,000 561 551 542 825,136 1.07% 1.09% SINGAPORE 2 31% 800,000 800,000 700,000 900,000 700,000 0.25% 900,000 1.84% 0 825,136 6 0 6 0 6 0 6 554 547 538 600,000 1.07% 1.09% 600,000 800,000 800,000 JAPAN 19 20% 500,000 29 33 48 49 500,000 700,000 700,000 400,000 0.25% 400,000 536 538 536 0 6 0 6 0 6 0 6 600,000 600,000 SOUTH KOREA 10 35% 29300,000 33 48 49 300,000 500,000 200,000 500,000 200,000 516 528 519 400,000 100,000 44,914 400,000 100,000 WESTERN 7205 7404 2 N/D AUSTRALIA 300,000 0 300,000 0 511 521 512 200,000 CHINA MALAYSIA THAILAND RUSSIA 200,000 AUSTRALIA 19 25% 100,000 $208,172 $4953 $1356 44,914 $35,045 100,000 7205 7404 3 2 0 504 521 508 0 4 VIETNAM 0 5% 900,000 900,000 CHINA MALAYSIA THAILAND RUSSIA1 5 $208,172800,000 $4953 $1356 $35,045 800,000 482 486 475 700,000 0.76% 3 700,000 RUSSIA 2 26% 0 6 0 6 0 6 2 0 4 6 600,000 N/D 600,000 N/D 0.08 % 100 427 444 441 900,000 500,000 71 76 87 900,000 500,000 1 5 THAILAND 0 10% 800,000 400,000 800,000 400,000 700,000 300,000 700,000 300,000 421 420 398 0.76% 0 6 0 200,000 6 0 6 0 6 200,000 MALAYSIA 2 6% 600,000 N/D 0.08 % N/D 600,000 100,000 43,031 100 100,000 500,000 71 3995 76 87 7450 3285 500,000 375 382 396 0 0 INDONESIA 0 5% 400,000 400,000 300,000 VIETNAM INDIA INDONESIA PHILIPPINES300,000 N/D $24,306 $802 N/D 200,000 200,000 3 3 BANGLADESH 0 3% 100,000 2 43,0314 2 4 100,000 3995 7450 3285 900,000 900,000 0 1 5 1 5 0 PHILIPPINES 0 7% 800,000 800,000 VIETNAM700,000 INDIA INDONESIA PHILIPPINES0.30 % 700,000 0 6 0 6 0 6 0 6 N/D600,000 N/D$24,306 N/D $802 N/D 600,000 105 106 129 N/D NEPAL 0 2% 500,0003 3 136 500,000 2 4 2 4 400,000 400,000 900,000 303 900,000 NON-PARTICIPATING 1 300,000 5 1 5 300,000 INDIA 1 6% 800,000 800,000 COUNTRIES 200,000 200,000 0.30 % 700,000 100,000 700,000 100,000 0 6516 0 75 6 0 6 0 30 6 SRI LANKA 0 10% 600,000 0 N/D N/D N/D 600,000 0 500,000 105 106 129 136 500,000 SRI LANKA CAMBODIA BANGLADESH NEPAL 400,000 400,000 LAOS 0 3% N/D N/D 303 N/D N/D 300,000 300,000 CAMBODIA 0 1% 200,000 200,000 100,000 100,000 516 75 30 0 0 MYANMAR 0 5% SRI LANKA CAMBODIA BANGLADESH NEPAL N/D N/D N/D N/D

N/D = NO DATA

Sources: Sources: Programme for International Student Assessment (OECD), 2012; Global Innovation Index, 2014; World Intellectual Property Organization, 2014; 12 Academic Ranking of World Universities (Shanghai Jiao Tong University), 2014; Barro-Lee, 2010. US National Center for Science and Engineering Statistics, 2008–11. 13 PERSUASION ALLIANCE CATEGORYALLIANCE CATEGORY

REGIONAL ARCHITECTURE: COUNTRIESCOUNTRIES ALLIANCE ALLIANCEALLIANCE CATEGORY

COOPERATION AND ALLIANCES TOTAL ALLIANCES TOTAL ALLIANCES 24 22 20 18 COUNTRIES17 17 16 16 15 14 14 13 13 13 9 9 7 4 24 22 20 18 17 17 16 16 15 14 14 13 13 13 9 9 7 4 [PER COUNTRY][PER COUNTRY] The Zone has a web of security and economic alliances, coopera- The most visible country in this illustration is Malaysia, a party to 24 ALLIANCE TOTAL ALLIANCES * 24 22 20 18 17 17 16 16 15* 14 14 13 13 13 9 9 7 4 tion agreements and multilateral partnerships. In this diagram, we alliances. The chart does not identify the depth or quality of alliance or [PER COUNTRY] depict only those alliances that are multilateral. Not included here partnership, which merits further consideration.

* are bilateral agreements, of which there are many, with more being * * * signed all the time. *

* * = IN NEGOTIATIONS* = IN NEGOTIATIONS * We have divided the world of alliances and partnerships into those with * = IN NEGOTIATIONS KEY solely an economic or trade focus, those with a security focus and finally, those broader in nature that cover both trade and security issues.

ASEAN ASEA N+3 ASEAN A ASEA MALAYSIA E SEAN N AS AS +3 EAN +3 INDONESIA E MALAYSIA EA E AP C MALAYSIA S AS EC O SINGAPORE N E E INDONESIAINDONESIA A C O PE AP THAILAND C G2 M C E O O 0 SINGAPORE C N I SINGAPORE PHILIPPINES N C O G O G A THAILAND 2 G 1 THAILAND 0 VIETNAM2 M M 5 N 0 I D INDIA C I PHILIPPINES C PHILIPPINES C S G LAOS A M E G A W VIETNAM 1 C VIETNAM 5 1 N N T CAMBODIA 5 H U D INDIA D R INDIA JAPAN C S I M C S N T LAOS MYANMAR E A LAOS M E Y W W M T C CAMBODIA CHINA T C A CAMBODIA H H U

U L

AUSTRALIA R L R JAPAN O JAPAN I N I I SOUTH KOREA N T I C A

MYANMAR A T MYANMAR A N M Y SRI LANKA M Y

CHINA A CHINA BANGLADESH E A S L C S

RUSSIA L AUSTRALIA O AUSTRALIA L

L O NEPAL O I I I SOUTH KOREA C I A SOUTH KOREA C A

S N A N SRI LANKA A SRI LANKA

C R

C C

BANGLADESH E

BANGLADESH E S

S C S

C S RUSSIA O

RUSSIA O A

T 24 22 20 18 17 17 16 16 15 14 14 13 13 13 9 9 7 4

NEPAL D

NEPALO

L S ECONOMIC ALLIANCES

A M

R G

R C C ASEAN FTAs ASEAN FREE TRADE AGREEMENTS

T S C

AFTA

ASEAN FREE TRADE AREA

C ECONOMIC AND SECURITY

C ALLIANCES

A AANZFTA ASEAN–AUSTRALIA–NEW ZEALAND

R A P

FREE TRADE AREA

T 24 22 20 18 17 17 16 16 15 14 14 13 13 13 9 9 7 4 S

I D

T 24 22 20 18 17 17 16 16 15 14 14 13 13 13 9 9 7 4

C D

O T

ASEAN ASSOCIATION OF SOUTHEAST ASIAN NATIONS

ASEAN–CHINA FREE TRADE AREA T

P ACFTA

L ECONOMIC ALLIANCES A

ASEAN + ASSOCIATION OF SOUTHEAST ASIAN NATIONS ECONOMIC ALLIANCES

AIFTA ASEAN–INDIA FREE TRADE AREA

F + CHINA, JAPAN AND SOUTH KOREA

* M L P

D G ASEAN–KOREA FREE TRADE AREA G AKFTA I

A A C EAS EAST ASIA SUMMIT

C ASEAN FTAs ASEAN FREE TRADE AGREEMENTS

S T

ASEAN FTAs ASEAN FREE TRADE AGREEMENTS

S T

S ASEAN–JAPAN COMPREHENSIVE ECONOMIC

AJCEP

E A

E D C APEC ASIA-PACIFIC ECONOMIC COOPERATION

D B PARTNERSHIP

F AFTA ASEAN FREE TRADE AREA

C E R ECONOMIC AND SECURITY

AFTA ASEAN FREE TRADE AREA

A FORUM

ECONOMIC AND SECURITY C

S C T

U S T C REGIONAL COMPREHENSIVE ECONOMIC U A ALLIANCES RCEP

C T ALLIANCESG20 GROUP OF TWENTY AANZFTA ASEAN–AUSTRALIA–NEW ZEALAND

P AANZFTA ASEAN–AUSTRALIA–NEW ZEALAND

R F

P PARTNERSHIP

R C Z

C IO

FREE TRADE AREA

S N

I R G15 GROUP OF FIFTEEN FREE TRADE AREA

S A

T C A

A ORGANISATION FOR ECONOMIC CO-OPERATION

C OECD

ASEAN ASSOCIATION OF SOUTHEAST ASIAN NATIONS

Y A ASEAN ASSOCIATIONCMWTH OF SOUTHEASTTHE COMMONWEALTH ASIAN NATIONS AND DEVELOPMENT

P B A ACFTA ASEAN–CHINA FREE TRADE AREA

P I ACFTA ASEAN–CHINA FREE TRADE AREA T T

P T F

- C

A C

E A OIC ORGANISATION OF ISLAMIC COOPERATION TPP TRANS-PACIFIC PARTNERSHIP S

A A ASEAN + ASSOCIATION OF SOUTHEAST ASIAN NATIONS

G S ASEAN + ASSOCIATION OF SOUTHEAST ASIAN NATIONSAIFTA ASEAN–INDIA FREE TRADE AREA

L A AIFTA ASEAN–INDIA FREE TRADE AREA

L F A F * I T + CHINA, JAPAN AND SOUTH KOREA L P * M F + CHINA, JAPANMGC AND MEKONG–GANGASOUTH KOREA COOPERATION APTA ASIA–PACIFIC FREE TRADE AGREEMENT L P T I D -G A ASEAN–KOREA FREE TRADE AREA I D T * AKFTA AKFTA ASEAN–KOREA FREE TRADE AREA I A SAARC ASIAN PRODUCTIVITY ORGANIZATION A A A TA EAS EASTEAS ASIA SUMMIT SOUTH ASIAN ASSOCIATION FOR REGIONAL APO A KF EAST ASIA SUMMIT PO A COOPERATION N AJCEP ASEAN–JAPAN COMPREHENSIVE ECONOMIC N P AJCEP IMT-GTASEAN–JAPANINDONESIA–MALAYSIA–THAILAND COMPREHENSIVE ECONOMIC GROWTH A * A JCE C PT T A A APEC ASIA-PACIFIC ECONOMIC COOPERATION C B A T SECURITY ALLIANCESAPEC ASIA-PACIFICSCO ECONOMICSHANGHAI COOPERATION COOPERATION ORGANISATION PARTNERSHIP TRIANGLE B TPP F RCEP PARTNERSHIP E R A OECD F FORUM E I R A FORUM S C I ACD ASIA COOPERATION DIALOGUE S S C BIMP-EAGA BRUNEI DARUSSALAM–INDONESIA–MALAY- S A FPDA FIVE POWER DEFENCE ARRANGEMENTS RCEP REGIONAL COMPREHENSIVE ECONOMIC A G20 GROUP OF TWENTY RCEP REGIONALSIA–THE COMPREHENSIVE PHILIPPINES EAST ECONOMIC ASEAN GROWTH AREA T T G20 GROUP OF TWENTYTCP THE COLOMBO PLAN F PARTNERSHIP I Z F CSCAP COUNCIL FOR SECURITY COOPERATION IN THE PARTNERSHIP O IO E N Z IORC INDIAN OCEAN RIM ASSOCIATION R R CO A N ASIA PACIFIC G15 GROUPG15 OF FIFTEENGROUP OF FIFTEENNAM NON-ALIGNED MOVEMENT A A NOMA A OECD ORGANISATION FOR ECONOMIC CO-OPERATION IC ALLI A NCES OECD ORGANISATION FOR ECONOMIC CO-OPERATION TSD TRILATERAL STRATEGIC DIALOGUE TCS TRILATERAL COOPERATION SECRETARIAT BRICS BRAZIL, RUSSIA, INDIA, CHINA AND SOUTH AFRICA B A CMWTH THE COMMONWEALTH AND DEVELOPMENT I B T A CMWTH THE COMMONWEALTH AND DEVELOPMENTSECURITY ALLIANCES M IM F T P P C F -E - A C OIC ORGANISATION OF ISLAMIC COOPERATION TPP TRANS-PACIFIC PARTNERSHIP AG EA A OIC ORGANISATION OF ISLAMIC COOPERATION TPP TRANS-PACIFIC PARTNERSHIP A G RELATES TO ASEAN A I TA A M IM IF T MGC MEKONG–GANGAMGC MEKONG–GANGA COOPERATION COOPERATION APTA ASIA–PACIFICAPTA ASIA–PACIFICFREE TRADE AGREEMENT FREE TRADE AGREEMENT T- T A IF GT -G * A T * ASIAN PRODUCTIVITY ORGANIZATION TA A SAARC SOUTHSAARC ASIANSOUTH ASSOCIATION ASIAN ASSOCIATION FOR REGIONAL FOR REGIONAL APO APO ASIAN PRODUCTIVITY ORGANIZATION AP A KF FT O PO A AK COOPERATIONCOOPERATION EP IMT-GT INDONESIA–MALAYSIA–THAILAND GROWTH AP * AJC CEP IMT-GT INDONESIA–MALAYSIA–THAILAND GROWTH TA APT * AJ SECURITY ALLIANCES SHANGHAI COOPERATION ORGANISATION TRIANGLE TP A RCEP P SECURITY ALLIANCES SCO SCO SHANGHAI COOPERATION ORGANISATION TRIANGLE P O TEPCPD OECD RCE ACD ASIA COOPERATION DIALOGUE ACD ASIA COOPERATION DIALOGUE BIMP-EAGA BIMP-EAGABRUNEI DARUSSALAM–INDONESIA–MALAYBRUNEI DARUSSALAM–INDONESIA–MALAY- - FPDA FIVEFPDA POWER DEFENCEFIVE POWER ARRANGEMENTS DEFENCE ARRANGEMENTS SIA–THE PHILIPPINESSIA–THE EAST PHILIPPINES ASEAN GROWTH EAST ASEAN AREA GROWTH AREA TCP THETCP COLOMBOTHE PLAN COLOMBO PLAN COUNCIL FOR SECURITY COOPERATION IN THE E CSCAP CSCAP COUNCIL FOR SECURITY COOPERATION IN THE IORC INDIAN OCEAN RIM ASSOCIATION CO EC ASIA PACIFIC NAM NON-ALIGNEDNON-ALIGNED MOVEMENT MOVEMENT IORC INDIAN OCEAN RIM ASSOCIATION NOMICO NAOM CES ASIA PACIFIC NAM LLIIACN ALLIANCES BRICS TSD TRILATERALTSD STRATEGICTRILATERAL DIALOGUE STRATEGIC DIALOGUE TCS TRILATERALTCS COOPERATIONTRILATERAL COOPERATION SECRETARIAT SECRETARIAT BRAZIL,BRICS RUSSIA,BRAZIL, INDIA, RUSSIA, CHINA ANDINDIA, SOUTH CHINA AFRICA AND SOUTH AFRICA SECURITY ALLIANCESSECURITY ALLIANCES

RELATES TO ASEANRELATES TO ASEAN

14 15 PERSUASION GLOBAL FOOTPRINT: WORLDWIDE DIPLOMATIC WORLDWIDE DIPLOMATIC WORLDWIDE DIPLOMATICMISSIONS DIPLOMACY AND AID MISSIONS MISSIONS

How big is the official global footprint of the countries in the Zone? In this ($US5.4 billion). Seven countries contribute nothing, and six give less illustration, a country’s worldwide diplomatic missions and aid contribu- than $US20 million. FOREIGN-AID tions are employed to measure its official footprint. EXPENDITURE, 2013 FOREIGN-AID Russia and China, followed by Japan, invest significantly in diplomatic FOREIGN-AID ($US) EXPENDITURE, 2013 EXPENDITURE, 2013 Of course, several countries in the region are predominantly aid recipi- missions. Australia, the Philippines and South Korea follow close behind. ($US) ($US) ents rather than donors. Japan is the torchbearer in this field, contrib- uting more than double ($US13.2 billion) the next country, Australia KEY DIPLOMACY AID DIPLOMACY DIPLOMACY MALAYSIA AID 105 AID MALAYSIA MALAYSIA 105 105 THAILAND INDIA 93 $0.2M THAILAND THAILAND INDIA INDIA 93 VIETNAM PHILIPPINES$0.2M 93 93 $0.2M $3.6M

VIETNAM VIETNAM SINGAPORE PHILIPPINES NON-DONORSPHILIPPINES 93 $3.6M 93 77 $3.6M MALAYSIA BANGLADESH SINGAPORE SINGAPORE SRI LANKA NON-DONORS NON-DONORS 60 INDONESIA 77 77 MALAYSIA MALAYSIA VIETNAM SRI LANKA MYANMAR BANGLADESH BANGLADESH SRI LANKA 39 SRI LANKA 60 60 INDONESIA NEPALINDONESIA BANGLADESH VIETNAM CAMBODIAVIETNAM MYANMAR 63 MYANMAR MYANMARSRI LANKA 39 39 SRI LANKA NEPAL NEPAL LAOSNEPAL 45 BANGLADESH BANGLADESH CAMBODIA CAMBODIA 63 63 CHINA MYANMAR JAPANMYANMAR 241 $13.2BLAOS NEPAL NEPAL LAOS 45 45 LAOS CHINA 31 $0.05M CHINA CHINA JAPAN JAPAN 241 241 AUSTRALIA / W.A. $13.2B SINGAPORE$13.2B 167 / 11 $16M LAOS LAOS CHINA CHINA 31 RUSSIA THAILAND$0.05M 31 252 $0.05M $46M

AUSTRALIA / W.A. AUSTRALIA / W.A. INDIA SINGAPORE SINGAPORE 167 / 11 167 / 11 162 $16M $16M

RUSSIA RUSSIA SOUTH KOREA THAILAND RUSSIATHAILAND 252 252 154 $46M $795M$46M INDIA INDONESIA SOUTH KOREA INDIA 131 $1.9B 162 162 CAMBODIA SOUTH KOREA SOUTH KOREA 42 RUSSIA RUSSIA 154 154 $795M $795M PHILIPPINES INDONESIA INDONESIA 164 SOUTH KOREA SOUTH KOREA 131 131 $1.9B $1.9B JAPAN AUSTRALIA 203 $5.4B CAMBODIA CAMBODIA 42 42

PHILIPPINES PHILIPPINES 164 164

JAPAN JAPAN AUSTRALIA AUSTRALIA 203 203 $5.4B $5.4B

Sources: Foreign-Affairs Departments, 2014–15; 16 DFAT, 2014; DSD, 2015; AidFlows, 2013. 17 PERSUASION THE POWER OF TALK: SPEAKERSSPEAKERS LANGUAGES OF THE ZONE PROPORTIONPROPORTION OF POPULATION]OF POPULATION]

Language is an essential medium for cultural projection. Current and the Zone, the estimated proportion of the population that speaks each SPEAKERS PROPORTION OF POPULATION] comprehensive language data is scarce. These statistics derive from of these languages is depicted (where appreciable). Ethnologue’s worldwide database of first-language (L1) speakers. Note that for the purposes of classification, Chinese is identified as a After Chinese dialects, English is the second-most spoken language macrolanguage. worldwide, followed by Hindi. Still, for English speakers this chart provides a healthy rebalance of perspective: the only country in the region The left side of the diagram depicts the global number of speakers of the where English dominates is Australia. KEY major languages present in the region. On the right, for each country of

RUSSIANRUSSIAN RUSSIANBENGALIBENGALI BENGALICHINESECHINESE DIALECTS DIALECTS CHINESE DIALECTS AUSTRALIAAUSTRALIA AUSTRALIABANGLADESHBANGLADESHBANGLADESHCAMBODIACAMBODIACAMBODIA CHINACHINACHINA INDIAINDIAINDIA 166M 189M [INCLUDING MANDARIN & CANTONESE] 166M166M 189M189M [INCLUDING[INCLUDING MANDARIN MANDARIN & CANTONESE] & CANTONESE]1.197B 1.197B1.197B CHITTAGONIAN CHITTAGONIANCHITTAGONIAN 13M OTHER OTHER OTHER HINDI OTHEROTHER OTHEROTHER OTHEROTHER HINDIHINDI 13M13M BENGALI RANGPURI CHINESE ENGLISH BENGALI CAMBODIAN DIALECTS 15M BENGALIBENGALI RANGPURIRANGPURI CHINESECHINESE NEPAL ENGLISHENGLISH BENGALIBENGALI CAMBODIANCAMBODIAN DIALECTSDIALECTS 15M15M 15M NEPALNEPAL MARATHI CHINESE DIALECTS CHITTAGONIAN VIETNAMESE KOREAN ENGLISH TELUGU 72M VIETNAMESE CHINESE DIALECTS MARATHI TAMIL 15M15M JAPANESE LAO URDU GUJARATI 128M BHOJPURI KANNADA MARATHIMARATHI TELUGU CHINESECHINESE DIALECTS DIALECTS CHITTAGONIANCHITTAGONIAN VIETNAMESEVIETNAMESE KOREANKOREAN MALAYALAM ENGLISH ENGLISH ORIYA TELUGU TELUGU 72M72M 74M VIETNAMESEVIETNAMESE CHINESECHINESE DIALECTS DIALECTS MARATHIMAITHILIMARATHI TAMIL TAMIL JAPANESEJAPANESE INDONESIA JAPAN LAOLAO LAOS MALAYSIA URDUURDU GUJARATI GUJARATI 128M128M BHOJPURIBHOJPURI KANNADA KANNADA TELUGUTELUGU MALAYALAMMALAYALAM ORIYA ORIYA MAITHILIMAITHILI 74M74M HINDI TAMIL OTHER 260M 69M INDONESIAINDONESIA JAPANJAPAN LAOSLAOS MALAYSIAMALAYSIA OTHER JAVANESE OTHER LAO CHINESE MALAY DIALECTS JAPANESE

TAMIL HINDIHINDI TAMILTAMIL URDU BURMESE KOREAN OTHEROTHER 260M260M 69M69M 64M 32M 77M LAO 3M OTHEROTHER JAVANESEJAVANESE INDONESIAN KOREAN OTHEROTHER LAOLAO CHINESECHINESEENGLISHMALAYMALAY MALAY VIETNAMESE DIALECTSDIALECTS CHINESE DIALECTSJAPANESEJAPANESE ORIYA 68M 32M SINHALA CEBUANO TAMILTAMIL 16M KOREANKOREAN URDUURDU BURMESEBURMESE 16M MYANMAR NEPAL PHILIPPINES RUSSIA SINGAPORE 77M77M 64M64M 32M32MGUJARATI 47M LAOLAO 3M3M TAGALOG INDONESIANINDONESIAN KOREANKOREAN ENGLISHENGLISH THAI 24M MALAYMALAY BHOJPURI VIETNAMESEVIETNAMESE CHINESECHINESE DIALECTS DIALECTS OTHER 40M 20M OTHER OTHER OTHER TAGALOG ORIYAORIYA 68M68M CHINESE BURMESE NEPALI 32M32M SINHALASINHALA SOUTHERN THAI CAMBODIAN DIALECTS KANNADA CEBUANOCEBUANO CEBUANO 16M16M 4.5M 14M RUSSIAN 38M 16M16M ENGLISH MALAY MYANMARMYANMAR NEPALNEPAL PHILIPPINESPHILIPPINES RUSSIARUSSIA SINGAPORESINGAPORE GUJARATIGUJARATI NORTHERN THAI 16M MALAYALAM 6M 47M47M 34M CHINESE DIALECTS MAITHILI MALAY TAGALOGTAGALOG TAMIL NORTHEASTERN THAI 24M24M MALAYALAM BHOJPURIBHOJPURI THAITHAI 15M OTHERHINDIOTHER MAITHILI20M 20M JAVANESE OTHEROTHER OTHEROTHER OTHEROTHER TAGALOGTAGALOG 40M40M 34M 84M CHINESECHINESE BURMESEBURMESE NEPALINEPALI SOUTHERNSOUTHERN THAI THAI CAMBODIANCAMBODIANINDONESIAN SOUTH KOREA SRI LANKA THAILAND VIETNAM DIALECTSDIALECTS KANNADAKANNADA 23M CEBUANOCEBUANO 4.5M4.5M 14M14M SUNDANESE RUSSIANRUSSIAN 38M38M 34M ENGLISHENGLISH

MALAYMALAY OTHER NORTHERNNORTHERN THAI THAI 16M16M TAMIL THAI MALAYALAMMALAYALAM 6M6M ENGLISH CHINESECHINESE DIALECTS DIALECTS MAITHILIMAITHILI MALAYMALAY 34M34M 335M KOREAN SINHALA NORTH- VIETNAMESE TAMILTAMIL NORTHEASTERNNORTHEASTERN THAI THAI EASTERN THAI MALAYALAMMALAYALAM MAITHILIMAITHILI 15M15M JAVANESEJAVANESE HINDIHINDI 34M34M 84M84M OTHER NORTHERN THAI CAMBODIAN SOUTHERN THAI CHINESE DIALECTS INDONESIANINDONESIAN SOUTHSOUTH KOREA KOREA SRISRI LANKA LANKA THAILANDTHAILANDCHINESE DIALECTS VIETNAMVIETNAM 23M23M SUNDANESESUNDANESE 34M34M

OTHEROTHER TAMILTAMIL THAITHAI ENGLISHENGLISH 335M335M KOREANKOREAN SINHALASINHALA NORTH-NORTH- VIETNAMESEVIETNAMESE EASTERNEASTERN THAI THAI

OTHEROTHER NORTHERNNORTHERN THAI THAI CAMBODIANCAMBODIAN SOUTHERNSOUTHERN THAI THAI CHINESECHINESE DIALECTS DIALECTS CHINESECHINESE DIALECTS DIALECTS

Sources: Ethnologue, 2015; 18 World Bank. 19 PERSUASION

V I O L E METRIC N C DESIRABILITY OF NATIONS: E V I O L E LOWEST-RANKED COUNTRY N V METRIC I C O E L ATTRACTIONS AND DETRACTIONS E METRIC N C HIGHEST-RANKED COUNTRY E LOWEST-RANKED COUNTRY LOWEST-RANKED COUNTRY This rather complex yet insightful diagram is a map of the positive four measures universally recognised as undesirable – homicide as a and negative dimensions of nations in the Zone – their attractions and measure of violence, slavery, corruption and capital punishment. HIGHEST-RANKED COUNTRY HIGHEST-RANKED COUNTRY detractions. Each country in the Zone is ranked according to these eight measures. The positive side of the ring comprises four reliable measures of attrac- The result is a map of the desirability of nations, on which the ranking dots tiveness – international students, international tourists and permanent for each country connect to form a shape. On the right, each country’s migrants. Consistent with the Richard Florida analysis, we have used mini-map replicates this shape to convey its desirability. KEY creativity as a proxy for liveability. The negative side of the ring comprises

N S N O T S I O T N I T E N T A D E U N A D I T S N US T N L T S I O T A I S V E N N T I T LE O D O S H I A T V A D O L Y E A NU M E D I N N D O T I N O I I C U R H S I C E T T D T O L Y T A L E E S VIETNAM THAILAND SRI LANKA M E S N D N A S I V I N E N I C U R O I C D E O H D T I T T O L E E SY VIETNAM THAILAND SRI LANKA NA M E S I D N I N C U R I C E D T T E E S VIETNAM THAILAND SRI LANKA N S I

N PHILIPPINES MYANMAR MALAYSIA SL TIO E A A AL CH NS VE GR ION IL LA R I AT D M VE Y M RN HU A M TE S M RR EN IN NT AN IAG T, RA TR E A IG AF ND M FIC KIN G N PHILIPPINES MYANMAR MALAYSIA SL TIO E A A AL CH NS VE GR ION IL LA R I AT D M VE Y M RN HU A M TE NS PHILIPPINES MYANMAR MALAYSIA M RSR EN IN INOT AN LIAG T, RTA L C E TR AVE RIAG NA H NS AF EAN GM IO ILD LA FI RYD MI AT H M VECK RN U AR MEING TE TS INDIA CHINA CAMBODIA MA RIA NT IN AN N T GE , R RA A MIG FF ND ICK ING

INDIA CHINA CAMBODIA TO NT UR E IN IS HM S TE M IS CE RN INDIA CHINA N EN VIS ATI CAMBODIA PU NT ITO ON SOUTH KOREA SINGAPORE RUSSIA L SE RS AL A TH PIT EA CA D

TO NT UR E IN IS M TE M SH ES RN I NC V A C N E IS T G U T N T IT IO R SOUTH KOREA SINGAPORE RUSSIA P N F O O N I L LAOS JAPAN INDONESIA E T U R A N E L S O O L O N R R S I D A H E I B A T T O IN S I A M T N T M E A P E T E T H S O X A D E P I R L S C N I C I C A R N N U T E VI T C V E S I A SOUTH KOREA SINGAPORE RUSSIA U T P S IT O R I P N R N N E U O A E T L S C R L S K A H R R I A Y T T R L I T I A O N P E O B I A D C G V C C U I

P T Y

BANGLADESH AUSTRALIA NEPAL

C G N R F I L LAOS JAPAN INDONESIA N E O O O I R D B A O T N E A T T O X C P I L C G R I N T R U F E I L C V LAOS JAPAN INDONESIA N A O P S O E R O I RI R D N U B A E T CO RT R N I E A K A T T Y P R O L X L I T O I C N O B R I I T E C G V V CU U CP S A I R I T R P N U E T C Y R R I K A Y L I T O R N O B I C G V C U I P T Y

BANGLADESH AUSTRALIA NEPAL

BANGLADESH AUSTRALIA NEPAL Sources: United Nations Office on Drugs and Crime, 2012; Global Slavery Index, 2014; Amnesty International, 2013; Death Penalty Worldwide, 2014; Transparency International, 2014; Global Creativity Index (Martin Prosperity Institute), 2011; UN World Tourism Organization, 2013; 20 UN Population Division, 2013; UNESCO Institute for Statistics, 2012. 21 PERSUASION PROJECTION ELITE SPORT AND FILM MILITARY MIGHT

Feats of artistic imagination, musical genius and of movies produced by each country. Power was once measured solely by the size of a coun- nuclear weapons; and two measures of expendi- sporting excellence have a global influence. Countries try’s standing army and access to weaponry. While ture: raw dollars and percentage of gross domestic receive mutual benefit from the glory that their artists, China, unsurprisingly, with its massive population, = 1 GOLD MEDAL myriad criteria for national progress and strength have product. The average military expenditure in the Zone musicians and sports stars enjoy. This is especially dominated the last Olympics with 38 medals to run- evolved over time, military might holds an important was 2.1% of GDP.

true for the Olympics, film blockbusters and other arts ner-up Russia’s 24. India, however, with a population = 100 MOVIES place in the architecture of power. productions that tell a country’s story. comparable to China’s, took home no gold that year. = 1 GOLD MEDAL China has by far the biggest active military with nearly In movies, however, Bollywood reigns with 1255 films This table builds a picture of hard power in the region three million service men and women, and the most While cultural power is hard to assess, there are to China’s 584. Together these measures reveal the = 100 MOVIES using traditional measures, including active military significant expenditure at $US188.46 million. some tangible measures, such as those depicted fascinating difference in Chinese and Indian cultural personnel (and to gauge relative militarisation, mili- KEY here – Olympic gold medals in 2012 and the number priorities. tary personnel per 1000 citizens); access to energy;

OLYMPIC GOLD MEDALS OLYMPIC MOVIES GOLD MEDALS MOVIES CHINA RUSSIA INDIA JAPAN SOUTH KOREA AUSTRALIA SINGAPORE INDONESIA THAILAND MALAYSIA VIETNAM PHILIPPINES MYANMAR BANGLADESH SRI LANKA NEPAL CAMBODIA LAOS ARMED-FORCES PERSONNEL TOTAL

2,993,000

2,749,700

INDIA 1255 1,260,000 0

676,500

659,500

522,000

INDIA 1255 513,250 0 453,550 38 CHINA 584 259,800

220,950 223,100

165,500

147,600

133,600

191,300 129,100

157,750

56,750 7 JAPAN 441 38 CHINA 584 ARMED-FORCES SOUTH KOREA 216 PERSONNEL

3.8% 13 4.8% 7 JAPAN 441 % LABOUR FORCE 24 RUSSIA 140

2.6% 13 SOUTH KOREA 216 2.5% 0 INDONESIA 84

1.6% 1.6% 1.6%

1% 1% 24 RUSSIA0 PHILIPPINES 14078 1% 1%

0.6%

0.5%

0.4% 0.4%

0.3% 0.4% 0 INDONESIA0 VIETNAM 84 75

0 BANGLADESH 64 NUCLEAR RUSSIA 1643 0 PHILIPPINES 78 WEAPONS 0 THAILAND 49 TOTAL WARHEADS 0 VIETNAM 75 0 MALAYSIA 49 CHINA 0 7 BANGLADESHAUSTRALIA 64 43 250 INDIA 0 27 0 THAILAND MYANMAR 49 = 100 WARHEADS 90-110

0 SINGAPORE 15 0 MALAYSIA 49 EXPENDITURE 0 CAMBODIA 13 $US BILLIONS 7 AUSTRALIA 43 216.37 0 LAOS 2

0 2 MYANMAR WESTERN 27 2 AUSTRALIA

84.46 0 NEPAL N/D

49.96 0 SINGAPORE 15 45.77

36.67

25.41

9.84 5.73 4.91 4.91 4.25 0.28 3.29 1.84 0 SRI LANKA N/D 2.37 2.01 0.31 0 CAMBODIA 13 N/D EXPENDITURE % GDP N/D = NO DATA 0 LAOS 2

2 WESTERN 2 AUSTRALIA

0 NEPAL N/D 4.5% 3.3% 4.3% 2.06% 2.4% 2.6% 1.8% 1.5% 1.5% 2.2% 2.5% 1.6% = 1% OF GDP 1% 0.8% 1.1% 1.2% 1.4% 0 SRI LANKA N/D N/D

CHN* RUS* INDI JPN KOR AUS SGP INDO THA MYS VNM† PHL* MMR BGD LKA NPL CAM LAO

N/D = NO DATA Sources: Sources: Australian Olympic Team, 2012; * Military expenditure data for Russia, China and the Philippines is estimated. Stockholm International Peace Research Institute, 2014; 22 UNESCO Institute for Statistics, 2011; IMDb, 2014. † Vietnam’s military expenditure data is highly uncertain. World Bank, 2013; Arms Control Association, 2014. 23 SMART POWER

SMART POWER GZP

1 $868B BIBLIOGRAPHY 0 0 0 INDONESIA 2 0 0

S N O 1 LI IL B NS $ 2 LIO 1 RIL $ T 2

2 0 3

1 9 4 Some measures in this report employ statistics from different years depending on the availability of data. The most recent data for each 18 5 country has been used in such cases. Please refer to specific sources for 17 6 more information. Some statistics are subject to retrospective adjust- ments after release. The data in this publication is subject to change. 16 7

8 15

9 4 1

N A 1 0 P 3 1 A

J 1

1 2

JAPAN INDIA SOUTH KOREA THAILAND SINGAPORE VIETNAM SRI LANKA NEPAL LAOS $4.92T $1.9T $1.3T $387B $298B $171B $67B $19.3B $11B

CHINA RUSSIA AUSTRALIA MALAYSIA PHILIPPINES BANGLADESH MYANMAR CAMBODIA $9.247T $2.01T $1.56T $313B $272B $150B $56.7B* $15B WESTERN AUSTRALIA PAGE 5 Gross Zone Product PAGE 13 Innovation and R & D $233B GDP: World Bank, 2013; Western Australia’s GSP: ABS, Global Innovation Index, 2014; World Intellectual SMART POWER 1

0 0 2013. Property Organization, 2014; US National Center for GZP 0 $868B 2 0 0 INDONESIA

S N Science and Engineering Statistics, 2008–11. O 1 LI IL B NS $ 2 LIO 1 RIL PAGES 6–7 Population and productivity $ T 2 2 0 3 Population: World Bank, 2013; age dependency ratio: PAGES 16–17 Global footprint 1 9 4 World Bank, 2013; total-factor productivity: The Foreign-Affairs Departments, 2014–15; DFAT, 2014; Conference Board, 2012–13; labour participation and Western Australian Department of State Development, 18 5

unemployment rates: World Bank, 2013; Western 2015; AidFlows, 2013. 17 6 Australia’s labour participation rate: Australian Bureau 7 of Statistics, 2013. PAGES 18–19 The power of talk Ethnologue, 2015; World Bank. PAGES 8–9 Trade, services and prosperity GDP and GDP per capita: World Bank, 2013; inflation PAGES 20–21 Desirability of nations Smart Power and the Australian rate: World Bank, 2014; GDP growth: World Bank, Violence: United Nations Office on Drugs and Crime, 2013; credit rating: Standard & Poor’s, 2015; trade 2012; slavery: Global Slavery Index, 2014; capital View the interactive online data stories: and services (% GDP): World Bank, 2013; Western punishment: Amnesty International, 2013 and Death Australian GSP: Australian Bureau of Statistics, 2013; Penalty Worldwide; corruption: Transparency www.theaustralian.com.au/business Western Australian trade and services (% GDP): International, 2014; creativity: Global Creativity Index Western Australian Department of State Development, (Martin Prosperity Institute), 2011; tourism: UN World 2014; Western Australian GDP growth: Chamber of Tourism Organization, 2013; migration: UN Population Commerce and Industry of Western Australia, 2013–14; Division, 2013; study destination: UNESCO Institute for Western Australian inflation: Western Australian Statistics, 2012. Treasury Corporation, 2014. PAGE 22 Elite sport and film PAGE 10 Foreign investment Australian Olympic Team, 2012; UNESCO Institute for World Bank, 2013 Statistics, 2011; IMDb, 2014.

PAGE 11 Business climate PAGE 23 Military might Economic Freedom of the World report (Fraser Institute), Military expenditure ($US) and % GDP: Stockholm 2012; Ease of Doing Business Index (Doing Business International Peace Research Institute, 2014; Active Project), 2014. military personnel and proportion of total labour force: World Bank, 2013; nuclear weapons: Arms Control PAGE 12 Education Association, 2014. Programme for International Student Assessment (OECD), 2011–12; Academic Ranking of World Universities (Shanghai Jiao Tong University), 2014; Barro-Lee, 2010.

24 25 Ideas for the common wealth www.knowledgesociety.com.au