Prime Minister Rudd has noted that ‘accounts are already beginning to emerge of the long-term geopolitical implications of the implosion on Wall Street — its impact on the future strategic leverage of the West in general and the United States in particular’.

It is not in Australia’s security interests to see a discredited, weakened, protectionist and possibly isolationist US retreat, wounded, from the world.  But that is now a possible scenario that cannot be ignored.

It is within this context that the forthcoming Australian Defence White Paper and its associated policy reviews, and its $100 billion rearmament program over the next decade, now have to be understood.  Although initiated before the crisis emerged, the Rudd government’s plans to acquire new jet fighters, warships and submarines and a bigger army are assuming greater political urgency in an increasingly uncertain global and regional environment.

For Australians there are now credible empirical reasons for considering the geopolitical implications of this crisis as at least as potentially alarming as the economic consequences.  This crisis has weakened Australia’s ally the US while, as a recent US national intelligence assessment argues, it is speeding the movement of global wealth from west to east.

The full version of this article may be found here. [pdf]

Paul Dibb AM is Emeritus Professor and Chairman of the Advisory Board, Research School of Pacific and Asian Studies, ANU. This article originally appeared in the Australian Financial Review on the 21-22 March, 2009.