A bonfire of Certainties: Australia’s strategic environment in the Indo Pacific

Speech delivered by Mr Peter Varghese AO, Chancellor of The University of Queensland to the Australian War College, Canberra.

Date: 23 March 2026

In my remarks today I want to use a wide-angle lens. To provide a personal perspective on the Indo Pacific across time and to examine the ways in which it is fundamentally changing in terms of both geopolitics and economics, the twin shapers of any strategic environment. If I were to ascribe a subtitle to this lecture it would be a “bonfire of certainties”.

Much of what I have to say will be speculative because we are at the end of one era and we do not know what comes next. The biggest shift has been in the way the US is now positioning itself. But this is not just a US or even a Trump story because we are also dealing with broader global and regional trends and the way in which culture, politics and aspiration come together.

All of this is happening at a time when our capacity for deep policy analysis is mutating. This goes directly to the way in which all of you will need to come to grips with the policy and planning challenges you will face in the future.

We live in an age of distraction. There is nothing new about the tyranny of the current in our politics and policy making. The twenty-four-hour news cycle has been around for a long time. But what is more recent is the way in which technology has exacerbated the crowding out of the important by the urgent and the prominent. It is reshaping our neural pathways in ways which sap our concentration and encourages simplification.

Policy makers have a finite bandwidth. The more this bandwidth is filled by media management, responding to social media, and controlling the narrative, the less space there is for the serious and time-consuming business of addressing complex policy challenges.

It is not that we have degraded our policy intelligence. Rather we have built a system of policy making which puts a premium on managing the policy narrative instead of finding policy solutions. Narratives are important but they must have a strong policy foundation. They help explain policy, but they cannot substitute for policy.

This is not a uniquely Australian problem. It is evident everywhere. There is a sweet spot in policy making in democracies where good policy can also be good politics. But all the pressures and incentives in our political system are moving us away from that ideal. The result is the growing appeal of populism which too often involves bad policy becoming very good politics.

One casualty of this trend is the absence of historical perspective in policy making. Policy today is not so much made as asserted. It is drafted around talking points, not first principles clearly enunciated. Too often fine-tuning talking points is considered to be the same as fine tuning policy. The result is a dumbing down of policy and an ignorance of the history of an issue even though virtually every policy challenge has an echo in history.

Historical perspective helps us to separate fact from fiction. It is a guide to what has worked and what has failed. It helps us draw lessons from past approaches. As Thucydides wrote: “History is philosophy teaching by example”.

We are now in a world where romantic nostalgia and myth have a powerful hold on our imagination. The comforting myths of past glory, of greatness that has been stolen. Look around at how a sense of lost glory currently shapes the narratives of great powers: China’s century of humiliation, Modi’s thousand years of colonisation, Erdogan as a would-be Ottoman caliph, Putin’s appeal to Russian revanchism, and Trump’s make America great again.

History in the cause of myth and ideology thrives in the shallow ponds where populists paddle. It diverts us from what history should teach us: that all policy has a long historical tail; that rarely do we face an issue which comes without a historical echo, sometimes loud sometimes faint; that to understand behaviour you must understand the history behind those actions and that the surest path to weak policy is through historical amnesia, or worse still historical invention.

Policy by talking point is usually blind to historical context. The ease of cut and paste removes the need to revert to first principles. So we end up with a policy edifice with shallow roots, easy to articulate but fragile in the face of forensic scrutiny. Indeed, shallow eloquence is the signature style of much of our policy narratives.

So let me start with a bit of history about the anchors of Australian strategic policy.

Since the second world war Australian strategic and foreign policy has rested on three pillars: multilateralism, the US alliance and regional engagement.

The mix and emphasis have varied depending on international circumstances and political persuasion.

Labor governments have tended to put more emphasis on multilateralism. The Coalition on the alliance and bilateral relationships. But overall, strategic policy has been remarkably consistent and bipartisan.

I am not of the view that this framework is now utterly redundant. But it is certainly the case that each pillar needs substantial recalibration and re-weighting to deal with not only the challenges of the Trump Administration 2.0 but, even more importantly, also the structural shifts in the global and regional environment which pre-date Trump.

These include:

the rise in China of a peer competitor stronger across all power gradients than any the US has previously faced
a gradual shift to a more multipolar world but with a bipolar central axis which will be with us for some time to come
the effective abandonment of the so-called Washington Consensus as economic policy best practice built on globalisation, the merits of an open economy, deregulation, privatisation and other market reforms
These policies succeeded economically but failed politically in the West
the salience of identity and other cultural issues, especially in the West, in a way which underlines the aphorism that all politics (and I would add economics) is downstream from culture. This is the basis of Trump’s political success and resilience

Rethinking our policy assumptions

These trends challenge our policy assumptions. They amount to a bonfire of certainties and signal the end of an era that now looks like the salad days of Australian foreign and strategic policy. They demand a rethinking of our policy assumptions. So, what might such a rethink look like?

On the US alliance, let’s start with acknowledging that it would be an act of self-harm to abandon it. But let us also recognise that it would be an act of self-delusion not to recognise that it needs substantial reframing.

Historically, Australia has seen the US alliance as bringing together, more than any other single relationship, our interests and our values. We can still make a case on interests although that is getting weaker, but at least under Trump much less so on values. We should not underestimate what a rupture that signals.

not least because Australia, more than most countries, must operate at the intersection of interests and values
after all, the reason we do not want a Chinese hegemony in our region is ultimately because of the character of its one-party authoritarian political system
realists who tend to be dismissive of values as a shaper of policy, should reflect more on this
remove values from the way we think about China’s strategic ambitions and what do we have left? It is not as if Australia has a problem with hegemony per se. We were entirely comfortable with US global hegemony, and we worry that it is receding.

On values, as on so many other aspects of the Trump administration, we simply do not know where the settling point is going to land, if land it ever does.

Various people in his Administration and beyond will attach doctrines and strategies to what Trump does. Maybe coherence will be revealed but for now it looks like a presidency of venality, personal and political. And a performative style which thrives on manufactured drama.

Yet none of us are quite willing to concede that there is nothing more to see than venality and manufactured drama. So, we search for answers to bigger questions, asking what is now the animating feature of US foreign and strategic policy?

Is it still the maintenance of global strategic primacy?
Is it a hemispherical view of primacy, coupled with a return to spheres of influence?
Does Trump see US power primarily through an economic prism with military power more a lever than the foundation stone?
What does the US want from the US-China relationship? Is it open to the grand bargain of a G2 or is that fantasy? And where would a G2 leave Australia or other countries such as Japan and India?
How far will US-China decoupling go? Is derisking and not decoupling back as the core objective?
Does the US look to manage China’s rise or thwart it?

The answer to each of these questions has serious implications for Australia and many other countries and they require us to think more deeply than we ever have about where our interests with the US converge and where they differ. Under Trump, the latter list is growing.

How we construct those two lists will, in my view, be shaped by the following considerations:

US primacy has been an unalloyed boon for Australia, but it is not a vital Australian interest. Australia will survive even if the US loses primacy. And yet our strategic policy is tethered to the upholding of US primacy
our defence policy has drifted between a Defence of Australia doctrine or DoA and Forward Defence 2.0. It needs, in my view, to return to a DoA 2.0 which, like the original, starts with the question: how do we assemble a force structure which can credibly deal with threats to Australia, short of nuclear attack, leveraging the benefits of the alliance but not relying on the combat assistance of the US or anyone else?
Admittedly, DoA today is different to the seventies when our focus was on defending Australia from a possible threat from a larger power but not a superpower
But even though the concept of defence self-reliance goes back to the seventies, we have never invested enough in it to make it happen. That is partly because Australian governments and the Australian community have never really believed that it is possible to defend Australia which is why they have clung limpet like to the belief that the US will always be our protector, and to ensure that is the case we must integrate our force structures ever more closely
Our deep sense of vulnerability thrives despite our moat-like continental geography, the advantages of distance and a G20 economy; all factors that should engender confidence, not anxiety
This is the psychological barrier that holds back Australian strategic policy. Unless we overcome the view that we are incapable of defending ourselves, we have no hope of putting in place the policy and capability mix we need to protect our sovereignty. This is a mindset challenge even more than a strategic policy or force structure challenge.
To get to self-reliance we will have to spend more on Defence but too much of the current debate is fixated on a percentage of GDP
And a DoA 2.0 doctrine must rest within a broader strategy for regional security. Here we want to see a China-constraining balance of power in the Indo Pacific, but not one which is designed to thwart China by which I mean to actively impede its economic growth because that is not in our interests. A powerful China presents many challenges, but a weakened and unstable China may be much worse.
US strategic engagement in the region is vital to these objectives and a loss of confidence in the US as a strategic partner by allies and partners would be catastrophic and a possible trigger for nuclear weapons proliferation
The nuclear non-proliferation regime currently faces its biggest challenge since the negotiation of the NPT. The combination of declining trust in the US as a defence guarantor and the rising emphasis on building greater deterrent capacity could well lead to a new burst of nuclear weapons proliferation
The ROK today talks openly of acquiring nuclear weapons. A nuclear ROK will trigger debate in Japan about acquiring nuclear weapons, notwithstanding the strong domestic opposition
Would a nuclear Japan lead other regional countries to contemplate going nuclear? What is the risk in South East Asia?
Australia gave up its flirtation with nuclear weapons in the seventies. Can we be confident that we will never have to revisit the issue?
Indeed, the whole question of extended nuclear deterrence needs a rethink. Do we really believe that the US will sacrifice San Francisco to save Sydney. And if we do not, where does it leave us in the face of a nuclear threat?

I have focussed on the US-China relationship because it is the central axis around which the security of the Indo Pacific turns. Also, because for all the talk of multipolarity, the reality is that the power gap between the US and China on the one hand, and the emerging great powers such as India, Japan, Indonesia, and Brazil on the other, will remain wide for some time. Indeed the gap is growing not narrowing

The most recent US National Defence Strategy strikes a remarkably balanced view of China.

Its commitment to a collective balancing of China will reassure countries that worry that the US was embarking on a unilateral balancing of China
The language of balance and deterrence, rather than US primacy, is welcome as is making it clear that the US is not out to humiliate or strangle China
However, as with everything to do with US policy in this Administration, the question is to what extent do policy statements reflect the view of the President and, even if they do, will they stop him from completely ignoring them
Increasingly we are seeing a presidency which is detached from the policy making machinery which has itself been weakened: witness the gutting of the National Security Council which is designed to weigh up options and reconcile differing views across policy agencies
We are no longer dealing with a system of carefully curated policy options but one which seems to turn on whatever the president thinks on any given day or even hour
This is the opposite of grand strategy, as is the embedding of unpredictability as a feature of policy making
Slogans do not a policy make and this approach to policy making is causing the greatest concern among the allies of the US
Once the greatest force multiplier of US power, allies are being forced to rethink their reliance on US leadership. The greatest rupture has occurred in the trans-Atlantic alliance, but it would be heroic to assume that allies in the Indo Pacific will not also be affected
Transactions may be the currency of diplomacy. But an alliance weighed only in transactional terms can have an insidious effect. An alliance needs an element of trust and a measure of reliability. Once trust and reliability are lost, they are next to impossible to revive
What we are seeing now in the region is a quiet exploration of alternatives; of what Plan Bs may be necessary to survive in a very different world. This will lijkely take decades to play out
Part of this, in my view, will be a quest for more strategic autonomy by countries, including US allies, which up to now have been content to bandwagon on the strategic weight of the US
This strategic autonomy is likely to be built on an increased investment in defence and deterrence, an expansion of so-called limited liability partnerships rather than exclusive strategic relationships, and an instinct to keep as many options open as possible
This is not dissimilar to India’s approach. Up to now it was not considered feasible for a US ally to move in such a direction. But that calculation is changing
India has of course found itself in a difficult position. A quarter century of so called “strategic altruism” towards India by the US came to a dramatic end with the imposition by the US of 50 per cent tariffs
It does not signal the end of the US-India partnership but nor is it likely to go back to where it was and the rupture has had the effect of India doubling down on strategic autonomy, as well as tactically recalibrating its relationship with China
More likely than not the US-India relationship will revive some of its balance but not without hesitations. Signs of repair are already evident in recent trade announcements. For India, the US will remain its most important relationship from an economic and technology perspective. But the idea of a quasi-alliance relationship, always a fantasy, is now out of the question. And the breach of trust will seep into many other areas of the US-India relationship
Should the partial repair of the US-India relationship turn out to be not the case, it will challenge the conceptual basis of the Indo Pacific as a coherent strategic system. We would be back to the Asia Pacific with India and South Asia on the periphery. The Indo Pacific was always intended to bring India squarely into the strategic matrix of the Asia Pacific. It is important it stays there

China must wake up every morning and thank Marx for the work Trump is doing for them. After all it has been a long-standing objective of Chinese policy to weaken US alliances and US global leadership.

Trump has also succeeded in delivering what eighty years of anti-Americanism failed to achieve: creating a perception of moral equivalence between the US and the authoritarian powers such as China and Russia and however exaggerated that equivalence is, it is very corrosive of alliances.

But China cannot rely on everything falling into its lap. It faces huge domestic challenges from demography to an economic model which requires substantial reform.

China would be wise not to believe its own rhetoric about US decline because the pace of that decline is likely to be slow, even though Trump is doing a good job of eroding many of the things that made America great in the first place.

The US may well be overly confident in its ability to outperform China on the technologies of the future, but there is no question that the US will remain the strongest military and economic power for some time to come.

China thinks history is on its side and that it is only a matter of time before it moves ahead of the US on all significant measures of power. That strikes me as more wishful thinking than sober analysis, at least over the medium term. US power will be a natural break on China’s ambitions for some time to come.

All of this is taking place at a time when the international order has ruptured, to borrow Mark Carney’s phrase. That rupture may well accelerate the shift to a more multipolar order, but we should be cautious in our assessment of how fast and far that will happen. In my view it will be a long time before our bipolar world becomes truly multipolar.

Rebuilding the multilateral system

This has implications for whether a new multilateral system can be built to replace the international system which the US constructed and led for the last eighty years but which it is now intent on dismantling.

Rebuilding the multilateral system will be a slow process.

It is not dead. It still survives in the UN and international and regional organisations
But Global multilateralism is for now in suspended animation and cannot be revived for as long as the US stands outside it
The days of negotiating global agreements through structures with universal membership where nothing is agreed until everything is agreed by everyone are gone. It only worked because of US leadership and power, and it was in trouble well before Trump 1.0
Constructing a global system without the US is a fool’s errand and nor is it in our interests for China to position itself as the successor to US multilateral leadership even if China were prepared to play that role
What made the US-crafted multilateral order so appealing to Australia, which can neither buy nor bully its way in the world, was that it reflected the liberal democratic character of the US. A China led international order would reflect China’s authoritarian political character
The idea that middle powers can come together to compensate for the US abandonment of a rules-based order strikes me as largely wishful thinking. There will indeed be opportunities on some specific issues for coalitions of the willing (what Mark Carney called variable geometry), and we will likely see more of them
But an effective international order must broadly reflect rather than ignore the international power gradient. It can only be built with the active support of the great powers and in a bipolar world that is very unlikely. We will have to settle for something less than a new global order
Our focus should therefore be on building up regional plus arrangements such as CPTPP and RCEP, securing the broadest possible membership without dropping standards
This way we might achieve something bigger than regional but short of global
We should drop geopolitical vetoes on membership of trade arrangements. Geopolitical vetoes in trade agreement ultimately work against both trade and security interests

The regional pillar – the third pillar of Australian foreign and strategic policy – is in relatively good shape but requires us doing more across the board to deepen our regional relationships.

Our key relationships are with Japan, Indonesia, India and Korea but SEA more broadly is very important because it is our strategic hinterland, as is the Pacific but in a different way
The only significant regional country with which we can realistically forge an alliance like relationship is Japan. The others can be stronger strategic partners but not allies
Japan and Australia share similar and congruent strategic positions. We share many values. We are both close US allies but also recognise that we need to move towards a more self-reliant defence posture. Whether the new leadership in Japan shifts this judgement remains to be seen. For now, it looks as if Japan will double down on the US alliance
We also share with Japan a concern about a region dominated by an authoritarian China, although unlike Australia, Japan would likely worry about China even if it were a democracy. Like India, Japan would worry about how a large and powerful neighbour, irrespective of its political character, would constrain its options and room for manoeuvre
India is committed to strategic autonomy which leaves no room for alliance relationships, and is also moving towards an illiberal democracy
Multi-alignment, the new version of non-alignment, is also at the heart of Indonesia’s foreign policy, and Korea is likely to move down a more independent path more likely than not with nuclear weapons, irrespective of reunification
China is obviously also a key relationship for Australia but not one which can be a genuine strategic partnership. Our strategic interests are too incompatible for a comprehensive strategic partnership even if that label has yet to be excised from our official description of the bilateral relationship
Beyond stronger bilateral relationships Australia should also pursue more ad hoc – and as an Indian commentator has described it, limited liability partnerships - with trilateral and plurilateral membership
The securitisation/militarisation of the Quad is unlikely to occur, not least because India will resist it. The so-called Squad – with the Philippines replacing India - is more likely to go down this path but it has less strategic heft than the Quad. And it remains to be seen whether Trump is interested in any of these subregional arrangements
Trump has an essentially unilateralist view of the world. He believes that the US holds the most leverage and that it does not need allies to bolster US power. Indeed, allies should instead pay for the privilege of riding on the coat tails of US power
In this environment we all need to do whatever we can to keep regional institutions alive because a bifurcated region will not be able to solve region wide problems
But life support until the wheel eventually turns may be the best we can hope for when it comes to regional organisations
Crucially we all also need to work over time to build a new consensus on the merits of an open economy to replace the Washington consensus
In this we have the advantage that Asia is now more enthusiastic about globalisation and the merits of trade liberalisation than the West appears to be. Even India has shifted on trade liberalisation

A balance of power which can credibly constrain – not contain – China should remain Australia’s overarching strategic objective.

Its glue should be an aversion to the prospect of China as the hegemon
An aversion which flows from the combination of China’s power and its authoritarian character which means if it does become the hegemon, it will exert a large measure of control over the national positions of regional countries when it comes to China’s core interests which includes crafting a region safe for autocracy
Balancing China is not the same as an alliance of democracies which is a flawed concept that has very little traction in the region
The re-creation of the Middle Kingdom, where hierarchy was harmony, China sat at the apex and all countries were expected to pre-emptively concede the primacy of China’s interests is not an attractive outcome for Australia
We should also be cautious about how far a so-called axis of authoritarianism (China, Russia, Iran and North Korea) can go. This is largely an opportunistic grouping with a shared resentment of a US led global order rather than a deep strategic alliance
For the moment China and Russia see value in a close relationship, but beneath the surface each views the other with strategic suspicion and in time this will reassert itself
Constructing a new strategic equilibrium in the Indo Pacific should be a multilateral exercise because balancing China requires the collective weight of the US, Japan, India, Australia and others who are uncomfortable with a Chinese hegemony and are prepared to act together to prevent it
One of the biggest risks we face is that the US will attempt a unilateral balancing of China and fail. This would leave China immeasurably stronger and help create the conditions for a Chinese sphere of influence in the Indo Pacific

Conclusion

So where does all this leave us in terms of repositioning Australia in what is certainly a tougher and more unpredictable world?

Our three pillars – alliance, region and multilateralism – remain central but the strategies which sit under them must adapt.

We will likely end up with a more transactional view of the alliance: harnessing its many benefits but recognising it is not an all-weather guarantor of our security
We need to reverse the drift back to Forward Defence, to untether Australian strategic policy from the preservation of US primacy, of which AUKUS is one example, and instead return to a sharper focus on the Defence of Australia
We should understand that while US global primacy has been good for Australia it is not a vital Australian interest and to think it is, is to handcuff ourselves to policies which may make sense for the US but not for Australia
We should be an active contributor to constructing a new collective balance of power in the Indo Pacific which can constrain China without containing or thwarting China
There can be no balancing of China without the strategic heft of the US, which is why continuing US strategic engagement in the Indo Pacific is essential
But if the US is not interested in a collective balance, we face a monumental challenge
We should deepen our regional relationships, especially with Japan, India and Indonesia, strengthen our ties to Southeast Asia and hold firm to being the partner of first choice in the Pacific, even if in the long term that gets much harder as China’s capacity to outbid us grows
We need urgently to reverse the decline in our Asia literacy evidenced by the collapse in the study of important Asian languages such as Indonesian. We need to shift the demand curve for Asia literacy and only Australian business can really move that dial
We should save as much of the furniture of regional institutions as possible, recognising that US-China competition will severely narrow the scope for regional cooperation
And we should push back against the false allure of protectionism and economic self-reliance, as well as an overly narrow view of supply chain security
We need to find a new vocabulary to make the case for open economies, and we should not abandon the sheer economic sense behind comparative advantage as the foundation for our trade policy

Australia will not be a lonely country but more than ever before in our history we are going to have to rely on ourselves and sharpen the skills we will need to make our own way in a very different and much tougher world.