… the expenditure patterns of other states shows that they
still judge that person to person contact continues to be vital in both
ensuring effective understanding between states, and also in discerning and
interpreting the meaning of communications from others. By failing to have sufficient
overseas diplomatic representation, Australia risks failing both to communicate
its own positions effectively and also to fully understand the policies of
For example, doing business in the Gulf States is linked to
government connections and networks, similarly with China, and it is often the
case that you need to get in the door of government first before anything can
happen in terms of business and then the doors really open up.
… you build relationships and you build influence through
relationships. I am not sure you build them over a telephone line or a
videoconference in the long run. You need people on the ground. It can enhance
it and quicken the pace. After you have had your initial dialogue and have met
someone and known someone, you can possibly have a videoconferencing, which we
do commercially. But in the end you still have to have regular face-to-face
The importance of communicating in person is relevant in
countries where there may be cultural sensitivities and language barriers. In
some countries it can be seen as insensitive to engage someone through
non-visual communications, where body language is integral to building rapport.
I was in Washington and we got, on average, a ministerial
visit every two weeks … Parliamentary visits are really important, because you
guys can connect in a way in which bureaucrats cannot connect. I have seen
members of Parliament, from both sides of the aisle, interact with congressmen
and women in a way in which I do not think it is possible for an official to
… there is no substitute for having some smart,
well-qualified people on the ground because you cannot build the relationships
that you need to take advantage of the opportunities without that. … There has
been an assumption that a minister flying in once every two years can sort of
get the relationships going and give you enough purchase in a country. I just
do not think that is right …
As you know, when you go into an [Expenditure Review
Committee] meeting and put up a case for a new post, the first thing Finance
say is: ‘Why? What’s the value? What’s the net economic value of this?’ And you
have to argue that through. They take the view that, unless it is completely
beyond argument that we have a need for a post in a certain place, we should
not have it. …
I do not think they have any objective evidence. …
I think they have a very subjective, Finance view of the
world. It is a trade-off. Why should we spend $5 million here when we could spend
No, there is no linkage. North Korea has one here; we don’t
have one there. Syria still has one here; we don’t have one there. There are
quite a few examples; that is just decisions they have made. …
You quite often hear from an ambassador from one of those
types of countries where we do not have postings that they are here in fact to
try and work out with us what is going on with our bigger neighbour to the
west, with whom we are close. It is just part of a geopolitical decision to
come here. We should not operate our foreign policy or diplomacy on that basis.
The Australian Consulates managed by Austrade are also included in the
Table 2.1. This results in Australian diplomats being located in an additional
two countries—Mongolia and Columbia.
Honorary consuls do not have diplomatic status. For this reason,
Australia’s Honorary Consulate network, while providing an on-the-ground
presence in an additional 26 countries, has not been
incorporated into Table 2.1. Similarly,
the locations of officials of Australian Government agencies and those of other
jurisdictions have also been omitted from Table 2.1.
A measure of diplomatic effort in each geographical region has been
attempted through calculating the number of countries in the region which has
Australian diplomatic representation as a proportion of the total number of
countries hosting Australian diplomatic missions, either through DFAT or
A similar calculation has been made using the total number of Australia’s
diplomatic posts in a country because several countries have an Australian
Embassy or High Commission together with several Consulates. A complicating
factor is that four posts are dedicated to providing diplomatic representation
to multilateral bodies such as the UN (2), the World Trade Organisation (1),
and the Organisation for Economic Co-operation and Development (1).
As geographic regions have different numbers of countries, the proportion
of the countries covered by Australian diplomatic posts has also been
calculated to provide information on the diplomatic coverage of the region.
Table 2.1 provides a snapshot of Australia’s diplomatic footprint. It
shows that Australia’s diplomatic effort, measured by proportion of DFAT and
Austrade posts in the region, is highest in Europe followed by South and
South-East Asia. On this measure, Australia’s diplomatic effort is the lowest
When measured on the basis of whether or not Australia has a diplomatic
presence in a country, Australia’s regional coverage is best in South and
South-East Asia followed by North Asia and the Middle East. Africa and the
Americas are the least covered regions.
The Committee notes that the Table does not provide an accurate indication
of the depth of engagement with the region (discussed later in this Chapter) as
it does not show the size of diplomatic posts or the expertise and experience
of staff. It does, however, reflect to some degree Australia’s focus on Asia.
The poor coverage of Africa shown by both the number of posts and
regional coverage seems incompatible with Australia’s increasing interests in
The Committee notes that the size of Australia’s diplomatic network
ranks 24th out of the 35 OECD countries. This is discussed later in the
A way of extending Australia’s representation, albeit not at the
diplomatic level, is through the appointment of honorary consuls.
Honorary consuls are usually a private businessperson (mostly an
Australian citizen) who agrees to perform limited consular functions on a
part-time basis, in a city where Australia does not have an Australia-based
representative. Such appointments assist in extending Australia’s consular
coverage in areas which are not within close proximity to Australia’s regular
overseas missions. Suitable candidates are identified by DFAT and are
recommended to the Minister for Foreign Affairs who makes the appointment.
DFAT told the Committee that while honorary consuls did not have the
same standing with the host country as an ambassador, consul general or consul,
in some situations they were ‘really important and really valuable in being
able to represent you and wave the flag more widely than you could otherwise do
and therefore increase your representational reach.’ DFAT added:
Normally, an honorary consul gets a small amount of money a
year. They are normally someone of considerable standing in their own
community, in their own country. They normally have another job, so being an
honorary consul is an add-on to what they otherwise do. They are not looking at
it occupying a big part of their time.
The United Macedonian Diaspora agreed that honorary consuls were ‘used
by many countries as a way of reaching out to various societies with minimal
investment.’ If they were provided with resources they could initiate ‘high
impact projects’, but ‘without funding it is just talk and very little action.’
The Australian Industry Group was not convinced as to the value of
honorary consuls—the witness doubted whether they had ‘much effect at all in a
real, overall sense, except [as] a feel good factor.’
Turning to a specific region, the Australia Africa Mining Industry Group
(AAMIG) commented that there were ‘fewer honorary consuls in Africa than
anywhere else.’ This was because there were insufficient government resources
on the ground for a successful honorary consul appointment initiative.
During its inquiry into Australia’s relationship with the countries of
Africa, the Committee received positive comments regarding the success of
honorary consuls in Mozambique and Angola.
Recognising the need to increase Australia’s representation in
Francophone Africa and elsewhere on the continent, the Committee recommended
that as a short to medium term measure, the number of honorary consuls
appointed in African countries should be increased.
The Government agreed with the recommendation and advised in March 2012,
that there were now five Honorary Consulates operating in Africa;
one temporarily closed; and five more at various
stages of being established.,
Criticisms of Australia’s footprint
Debate concerning the adequacy of Australia’s diplomatic footprint has
been underpinned by two reports by the Lowy Institute:
diplomatic deficit: reinvesting in our instruments of international policy,
March 2009; and
Disrepair: rebuilding Australia’s international policy infrastructure,
The first report suggested that Australia’s diplomatic network had not
kept pace with Australia’s ‘interests or with a changing world. … overseas
representation compared very poorly with almost all other developed nations’,
and was constraining DFAT’s ability ‘to understand, interpret and influence Australia’s
rapidly changing external environment.’
The second report acknowledged some improvements in the situation such
as the broadening of the footprint by establishing posts in Ethiopia and Peru;
and deepening the footprint for example by opening Consulate-General posts in
India and increasing overseas staff numbers. Funding had increased as well as
language training for diplomats.
The report, however, remained critical:
Australia has the smallest diplomatic network of all G20
nations, and only nine of the 34 OECD countries (all far smaller than
Australia) have fewer diplomatic missions. …
The average number of posts for an OECD nation is 133.
Australia has only 95, and sits at 25th of 34 nations in the OECD league table
of diplomatic representation—numbers which are wholly incompatible with
Australia’s standing in the world.
The Lowy Institute’s submission concluded:
Our traditional diplomatic footprint is simply outdated and
inadequate. … Australia is over-represented with missions in Europe compared
with higher priority regions.
New posts are needed in emerging centres of influence and
economic opportunity, particularly inland China and Eastern Indonesia—both
increasingly important to Australia. The Gulf, Latin America and Central Asia
are also priorities. … Our 2009 recommendation in Diplomatic deficit
that Australia should open 20 new missions over the next decade stands. 
Witnesses from the Lowy Institute told the Committee that Australia was
heading into a much more complex international environment with the emergence
of new powers, increasing competition for scarce resources, and extraordinary
global economic instability. Some of Australia’s neighbours were coming under
growing stress and strain. In contrast, Australia’s
diplomatic footprint was:
… still very much that of the 1980s when we were focused,
rightly, on North Asia and to a lesser extent on South East Asia. If you look
at places like Francophone Africa, in particular, where a lot of the big miners
are, they are operating in a vacuum. … there should be some alignment of our
resources with our emerging economic opportunities.
The Lowy Institute commented that an increase of 20 posts recommended in
its report was below the 35 posts which would be needed to restore Australia to
the middle of the OECD table.
The AAMIG compared the diplomatic effort of the G20 country South Africa
South Africa, with a GDP of $354 billion in 2010 has a total
network of 117 overseas posts, including 102 embassies or high commissions. Australia,
with the GDP of $1.22 trillion, has a diplomatic network of 108 posts, with 80
embassies or high commissions. It is hard not to conclude that South Africa
attaches far more importance to its engagement with the rest of the world to
secure its interests than does Australia.
The ACT Labor FADTC commented that Australian mining companies had a
large number of projects in Africa and significant investment, yet countries
such as Zambia, Tanzania, Botswana and Angola with substantial Australian
mining operations, had no Australian diplomatic missions.
Professor Langmore agreed that Australia was underrepresented in Africa,
as well as in Latin America.
The ACT Labor FADTC also drew attention to the fact that Australia’s
representation to China, India, Indonesia, Vietnam was collectively equal to
Australia’s presence in the United States alone. Also, while the number of
Australian diplomatic missions in Europe (25) and was almost the same as to
East Asia, South Asia and ASEAN combined (28), trade to the EU accounted for
only 14 per cent of Australia’s foreign trade compared to almost 70 per cent in
the Asia-Pacific. This mismatch was made worse by the fact that 45 per cent of
Australia’s trade with the EU was with the UK.
This view was supported by the ANZ bank which suggested:
… consideration should be given to reallocation of resources
to align Australia’s diplomatic representation with our economic and strategic
interests as a country. To be a little more candid about it: it may be less in
Europe and North America and more in the Asia-Pacific region.
Notwithstanding the criticisms of Australia’s current diplomatic
footprint, both DAFF and Defence indicated they were content with the current
In contrast, both Austrade and the Department of Innovation, Industry,
Science, Research and Tertiary Education said they would benefit from an
increase in DFAT’s diplomatic network.
Consequences of an inadequate diplomatic footprint
The Committee challenged the witnesses from the Lowy Institute to
provide examples of opportunities lost to Australia arising from its relatively
small diplomatic network.
The witnesses responded in a supplementary submission by pointing to the
diplomatic standing of small European countries such as Norway, Sweden and
More recently Argentina and South Africa had achieved considerable
success internationally—Argentina had been included in the G20 despite its 27th
position in economic importance; and South Africa had been recognised for its
work on democratisation, reconciliation and nuclear non-proliferation despite
its mixed record in peacekeeping and lack of intervention in African conflicts.
Argentina has 144 diplomatic missions globally, and South
Africa has 117. They are ranked, respectively, the 27th and 28th largest
economies in the world—around a quarter of the size of Australia’s economy.
The Lowy Institute also suggested that diplomatic success might be
measured by the nation’s leadership records in key multinational organisations:
… it is apparent that many of the smaller OECD and G20
nations have gained significant traction in the principal organs of the global
governance framework: the UN Security Council, the International Monetary Fund,
the World Trade Organisation, the World Health Organisation, the International
Court of Justice, the UN Development Programme, the International Atomic Energy
Agency and the UN Economic and Social Council.
The nations which recur frequently in these lists are
Argentina, Belgium, Chile, Mexico, Portugal, South Africa, Poland, Netherlands,
Denmark, Norway, Turkey, Sweden, Austria, Korea and Switzerland. These are
all nations with smaller economies but larger overseas networks than Australia.
By comparison, Australia’s representation on these lists is slight.
It was acknowledged that while such a comparison was an imperfect
measure because of other influencing factors, there were no perfect
measures of diplomatic success. The Lowy Institute
It remains impossible to provide the Committee with
irrefutable proof that Australia would have been better served with a more
comprehensive foreign presence.
However, in the absence of such unattainable proof, the
quantitative analysis … which correlates overseas representation against senior
positions in key international organisations, is an available concrete measure
of these opportunity costs.
Benefits of a deeper engagement
An example outlining the benefits of a deeper engagement was provided by
the AAMIG. Nigeria is Canada’s largest sub-Sahara trade partner with two way
trade in 2011 amounting to $2.7 billion. In contrast Australia’s two-way trade
with Nigeria in 2010 was $302 million, largely comprising Nigerian exports of
crude oil to Australia.
In 2003, Export Development Canada returned to Nigeria and was based in
the Canadian Lagos Consulate. Since that time Canadian exports to the country
had increased by ‘more than 300 per cent.’ The AAMIG concluded:
All in all we could say that the levels of Australian and Canadian
commercial engagement with Nigeria do reasonably parallel the respective levels
of government engagement in the country.
The Committee agrees with the Lowy Institute that Australia’s overseas
diplomatic representation is less than it should be for a nation which is a
member of the G20 and OECD. DFAT, in fact, has acknowledged that the Lowy
Institute ‘is not telling the department anything it does not know, and … is
not saying anything that the Department itself has not been drawing attention
The Committee agrees that it is impossible to demonstrate the missed
opportunities resulting from a sparse diplomatic network. The evidence that
Australia has not often enjoyed a leadership position in world bodies provided
by the Lowy Institute, however, goes some way in providing evidence of such
Australia should not shirk from putting itself forward for leadership in
world bodies. This is precisely what a middle power would be expected to do. Australia
has a substantial economy and if it wishes to cement its position as an
influential middle power it should have a diplomatic network to match.
The Lowy Institute noted that its recommendation of an increase of 20
diplomatic posts was well below the 35 needed to bring Australia to the middle
of the OECD table. The Committee believes such a goal is achievable and
worthwhile in the medium term as Australia restores its budget to surplus.
The Committee recommends that, in the medium term, Australia
should substantially increase the number of its diplomatic posts to bring it
to a level commensurate with its position in the G20 and OECD economies. This
increase should be by at least twenty posts.
Funding an expanded footprint
Costs associated with opening and closing diplomatic posts
DFAT told the Committee that opening a post ‘costs a fair amount of
money in the first four years.’ It included a one-off
capital setup cost:
… to fit out and secure the Chancery as well as Head of
Mission and staff residences, and to purchase the equipment needed to operate
the post (e.g. motor vehicles, computers). This would generally be spent over
the first 12 months.
In contrast, DFAT added:
Closing a mission saves very little, the reason being once
you have got a mission up and running your running costs are quite low. It
might cost you $25 million over three or four years to open a post, but if, 10
years later, you were to close that post you would probably only save about $2
million a year.
Closing diplomatic posts and reallocating resources
The AIG suggested that there needed to be a ‘hard-headed rigorous
analysis’ of the value of Australia’s diplomatic posts, especially the smaller
… do they provide benefit or … are you better off bringing
them back closer to home to the markets that matter while perhaps putting
consulates or other offices in those markets?
The value of posts in Malta, Denmark and Hungary was questioned.
Support for closing Hungary was provided by Mr Kerry Fisher who added Portugal
to the list. He advocated closing those two posts and opening Norway and
The AIG acknowledged that closing embassies would ‘annoy some of our old
historical friends and partners’. The Lowy Institute too
suggested that careful strategic consideration should be given to closing
embassies because ‘turning posts on and off is really damaging to us because it
causes enormous resentment.’ The need for consistency
and ‘greater strategy’ was also advocated by ACT Labor FADTC.
An innovative solution canvassed by the Committee was the creation of a
‘super embassy’ to the EU countries situated in Brussels with a rationalisation
of the posts in the various EU countries.
The AIG responded that it was ‘theoretically possible’, but had not been
tried before. A key issue would be where to site the post—whether in Brussels,
Geneva, Berlin, or Paris:
Brussels is the headquarters of Europe, but they are still
covered off in each of those markets. I think that is a hard one because these
are still separate economies of scale, and each have cultural
differences—different ways of doing business, different approaches to the
globe. I think we need to respect that and take it seriously. But some of the
smaller, what I would say were more satellite posts in Europe, you might want
to have a hard-headed look at.
DFAT responded to the concept of a super embassy in Brussels:
I think it is bizarre and fails to understand the nature of
the EU and the nature of the relationship between the members of the EU and
Brussels. You would not be able to do the bilateral work that you need to do
with countries such as France, Germany and the like by doing it through
Brussels. They simply would not wear it. If you are a small country with very
few resources then that would make sense, but not a country of our size.
DFAT provided further information in a supplementary submission:
To downgrade an already existing Embassy/High Commission to a
Consulate-General/Consulate would risk harming relations and affect diplomatic
protections/privileges for posted staff. It also requires the permission of the
host country, most of who are unwilling to host Consulate-General/Consulates in
their capital cities. …
It would not be at all practical to try to manage our
relations with the major European powers, including the UK, Germany and France,
remotely from Brussels. Given the very broad scope of our engagement with those
countries, our diplomatic missions need to engage with, and develop a network
of contacts in, a wide range of government and non-government actors. That
could not realistically be done from another country.
In a supplementary submission, the Lowy Institute indicated it did not
support the closing of Australian diplomatic posts. It drew attention to DFAT’s
evidence indicating the small savings gained from closing a post when compared
to opening one, and commented:
Given the now wider acknowledgement of the thinness of
Australia’s overseas representation, the closing of posts is not a viable
option and is a threat to Australia’s interests.
Taking funds from other portfolios and programs
Professor John Langmore suggested there needed to be a more holistic
approach to the funding of Australia’s overseas related expenditure such as
‘defence, diplomacy, intelligence and aid.’ A paper reviewing the
2009 Australian Defence White Paper suggested that it was a fundamental
misjudgement to treat defence as ‘a silo remote from other aspects of foreign
policy.’ It prevented discussion of the ‘relative priority and weight given to
other aspects of foreign policy’. As well:
Increasing conventional capabilities do little to equip
Australia to be active in setting international conditions in its favour.
Rather increased military spending resembles an insurance policy that Australia
may hope to defend itself if the international system deteriorates.
Professor Langmore noted that in the May 2010 Budget, Defence funding
was budgeted to increase by $1.57 billion which was greater than DFAT’s total
annual budget. The intelligence community was also being financed at about the
same level as DFAT.
DFAT did not support Professor Langmore’s suggestion:
… I do not believe increased funding to DFAT should
be at the expense of Defence. I have stated that publicly, so my own personal
view—others would disagree with me—is that Defence just happens to cost a lot
of money. …
I think 1.9 per cent of GDP is not an unreasonable amount for
a country in our strategic circumstances to be spending on defence.
An alternative way to increase funding of DFAT—by taking from increases
to the aid budget—was suggested by the Lowy Institute:
… we are looking at increasing aid from 0.35 per cent
[gross national income] to 0.5 per cent GNI over the next four years—that could
be delayed or you could take a tiny percentage of that growth.
We are not talking about cutting existing programs …
If you took just six percent of the growth over the next four years of the aid
budget which is going from $4 billion to $8 billion, you could take, say, $200
million of the money and open five new posts.
… we are a substantial donor but we are not overly
generous. The OECD average of the donors, … is 0.49 per cent of GNI. We are
currently at 0.35 percent of GNI, and the target we have been set and which has
bipartisan support is to get to 0.50 of GNI. That will place us, when we
achieve that, at 0.01 above the OECD average. If you look at the OECD donors,
we are the only one physically located in the developing world. Twenty-two of
our 24 closest neighbours are developing countries. …
We provide approximately 50 per percent of all aid
that goes to Pacific island countries. … their development prospects are
long-term at best. We have an ongoing and enduring responsibility to engage
with that region and to engage on the issues that are important to them, which
are development issues. … trying to convey that somehow the aid budget is over
generously provisioned is wrong …
The Committee canvassed the seeking of funds from those businesses who
benefit from DFAT’s overseas diplomacy. The AAMIG responded that it suspected
the mining industry ‘would say they already pay their fair share of taxes and
therefore have the right to get something back for them.’
The Committee recognises current budgetary constraints mean that
substantially increasing DFAT’s funding for diplomacy would be difficult. The
Committee also considers it unrealistic to expect DFAT to increase Australia’s
diplomatic network from reallocating its existing resources.
Evidence from DFAT concerning the cost of opening a post and the
financial benefit due to closing a post show that on economics alone it is not
feasible to close embassies to save enough funds to open another—on DFAT
figures about 10 embassies would need to close to open just one new post.
The Committee agrees with the Lowy Institute that embassies should not
be closed, rather new posts should be opened so there is a net increase in the
The Committee also agrees with DFAT that creating a super-embassy to
cover a number of countries is not a practical option.
The Committee also considers it impractical to obtain funds from
businesses and individuals who might benefit from increased diplomacy. Placing
a value on the potential benefit of increased diplomatic representation and
apportioning it to various businesses and individuals is not possible.
The Committee believes that as the Government’s budgetary situation
permits, DFAT should receive increased funds. The goal should be to provide
DFAT with a fixed percentage of GDP sufficient to enable it to create an
appropriately sized diplomatic network.
The Committee recommends that the Department of Foreign
Affairs and Trade’s funding be increased in the long term to a set percentage
of gross domestic product sufficient for the creation of a diplomatic network
appropriate to Australia’s standing in the G20 and OECD.
Specific proposals for expanding the footprint
The Committee received a number of proposals for Australia to open posts
in additional countries thereby broadening the diplomatic footprint. Deepening
the footprint by increasing the number of posts within particular countries is
discussed later in this Chapter.
The Committee was impressed by the range of interest shown and the
arguments which were put.
The AAMIG advised the Committee that Africa was experiencing growth in
the natural resources sector. The continent had 30 per cent of global mining
resources, but currently received only five per cent of global exploration
expenditure. There were at least 230 Australian resource sector companies
active in the continent undertaking 650 individual projects in 42 countries:
The total investment is at least $24 billion with many more
billions in the pipeline. …
But the relatively few Australian officials on the ground has
to mean that significant Australian interests in many countries of non-resident
accreditation can only receive relatively modest attention or attention at the
expense of other significant priorities. Major Australian mining engagement in
countries of non-resident accreditation include Guinea, the Democratic Republic
of Congo, the Republic of Congo, Burkina Faso, Niger and Cameroon.
In addition, there was only one A-based Austrade post in Africa as
opposed to four in Latin America. Anomalously, the
positions in Latin America included a mining specialist trade commissioner
despite there being 70 ASX mining companies in Latin America as opposed to 230
ASX mining companies working in Africa.
The AAMIG recommended that Australia establish an embassy in Francophone
Africa and also significantly strengthen its Austrade presence in the continent.
The AAMIG subsequently told the Committee that Senegal followed by Côte
d’Ivoire would be good candidates for a new mission, although the latter
country ‘had some issues’. Opening a purely Francophone post would also provide
some relief to the posts in Ghana and Nigeria allowing them to give more
attention to their other accredited countries.
The Lowy Institute also noted that Australia was not represented in
Mozambique and Tanzania which were in the top six Australian export
destinations in Africa. It suggested that based on Australia’s mining interests
two other countries worth considering for new posts were Zambia and Botswana.
The view from the ANZ Bank was that Africa was ‘appreciably changing’
and was an area where the Australian brand could grow:
It is an area where there is a lot that Australia can offer
with its expertise, particularly in the mining sector, and our mining corporations
have been the forerunners in investing in there and running the risks that are
associated. So Africa would possibly be for us the second stage after we build
our Asia business to a really substantive level.
In contrast to these views, the AIG suggested that beyond South Africa,
Africa was of ‘marginal interest’.
During its review of Australia’s relationship with the countries of
Africa, the Committee received much evidence proposing the opening of
additional posts in Africa and in particular French speaking West Africa. As
part of the inquiry, a delegation from the Committee also visited South Africa,
Zimbabwe, Ghana and Ethiopia. This visit helped to inform the Committee’s views
on Australia’s representation in Africa.
The Committee subsequently recommended that DFAT undertake a
comprehensive review of Australia’s diplomatic representation in Africa with a
view to opening an additional post in Francophone Africa.
The Committee notes that DFAT has acknowledged that Australia was ‘underdone
in Africa’ and that ‘there would be some merit in further representation in
Africa, noting that we have no representation in French speaking Africa at all.’
The Government confirmed this view in agreeing to the Committee’s recommendation:
The Government sees value in the establishment of an
additional diplomatic post in Francophone Africa. The composition of the
network of diplomatic posts overseas is under constant review and the
Government will pursue the establishment of a new post in the region as soon as
In May 2012, the Government announced that a new embassy would be opening
The Committee received evidence from the Ambassador for the Kingdom of
Morocco putting forward the advantages of Australia opening an embassy in
Morocco. The reasons provided included:
- Morocco was a ‘very
stable country’ in the Arab Maghreb; it was a multi-party state with elections
and where ‘there are alternatives between political parties who wish to rule’.
- There were ‘more than
100 international representations in Morocco between embassies and
international organisations.’ Rabat was one of the African capitals with the
highest number of embassies including all the members of the G20.
- Morocco had very good
transport infrastructure including the trans-Saharan road and good connection
by ferries to Europe and the West African coast.
- Morocco could provide
a hub for the delivery of humanitarian aid to third countries in North Africa.
- Morocco had a very
good investment climate with the possibility of 100 per cent foreign ownership
of companies and generous tax benefits to companies which exported goods from
Morocco. There was also the opportunity to take advantage of free trade
agreements with other countries and groupings such as the EU, US, Egypt,
Tunisia, Jordan and in the ‘near future’ all the Gulf Cooperation Council
- Morocco was the
second major African investor in the continent after South Africa. It was the
first investor in West Africa. Half of Morocco’s foreign investments were in
- Morocco had an active
education sector providing education to ‘8000 students from 42 African
countries, 6500 of whom are granted scholarships by the Moroccan government.’
- Some ‘33,000 Australian
tourists visit Morocco every year’ and there is a corresponding demand for
AusAID commented that if it continued to expand in Africa it would need
a Maghreb hub:
We have just opened in Cairo last year as a result of the
so-called Arab spring, and there is a lot more work that we are doing there to
support the transition to democracy. It may be that that is something that is
needed in the future.
When questioned by the Committee, DFAT responded that an embassy in
Morocco would increase Australia’s capacity to engage with ‘a significant
player in North Africa, including in the Arab League and the Organisation of
On the other hand, DFAT noted, ‘opening an embassy in Rabat could raise
expectations among Morocco’s neighbours for similar resident Australian
The AAMIG which represents the Australian mining sector in Africa also responded
to the question of whether an embassy should be opened in Morocco. It said that
it was more a question for the Australian ambassador in France, but if a choice
was to be made it would instead ‘choose a sub-Saharan Francophone post.’
In its submission, the Lowy Institute identified Latin America as one of
a number of emerging centres of influence and economic opportunity and
suggested it should be a priority of opening new posts,
even though it had noted that Australia had recently reopened a post in Lima,
Professor Langmore also identified Latin America (along with Africa) as
being a region where Australia was ‘severely under represented’.
The Committee received a submission from the Venezuelan Embassy which
suggested opening an Australian post in Venezuela would ‘provide a better
service for Venezuelan migrants coming to Australia’ and would strengthen
relations between the two countries.
The AAMIG did not support opening a post in Venezuela, but rather
… if we open another post in that region we should go into
Colombia, not into Venezuela. I think we opened the post in Venezuela in 1975.
… There was a lot of oil. … Venezuela is a complicated country and now there
are a lot of political issues in Venezuela, but it has never been a driving
force in Latin America.
If you look at the Northern region—Venezuela, Colombia,
Ecuador—you would say that Colombia is the key country.
The Committee received a number of submissions and received evidence
from witnesses advocating the opening of embassies in several European
These included brief submissions from the Embassy of the Czech Republic,
and the Embassy of the Slovak Republic.
The Ukrainian Charge d’Affaires supported by the Australian Federation
of Ukrainian Organisations (AFUO) and the Ukrainian Youth Association of
Australia (UYAA) called for Australia to open an embassy in Kyiv. Reasons provided
- Ukraine was the
biggest country of the former USSR outside of Russia and was strategically
important in the region;
- with 46 million
consumers, Ukraine was the biggest market in Eastern Europe and presented huge
potential for trade and investment;
- levels of trade had
fluctuated in recent years and an embassy would foster business and investment
- there was a potential
for significant numbers of full fee paying Ukrainian students to study in
- there were increasing
numbers of Australians visiting Ukraine for tourism and business reasons;
- Ukrainians had to
obtain Australian visas from Australia’s post in Moscow—this was inconvenient
and a disincentive;
- an Australian post in
Kiev would provide more accurate travel alerts—DFAT issued travel alerts had
been disputed ‘on numerous occasions’;
- there were close
people-to-people links between the two countries;
- of the G20 countries,
only Australia did not have an embassy in Kyiv;
- an embassy would
provide support for human rights in Ukraine and send a message to the region.
Regarding human rights, the European Commission and the High
Representative of the Union for Foreign Affairs and Security Policy published a
country progress report for the Ukraine in May 2012. The report, commenting on
the political dialogue and reform, included:
The area of deep and sustainable democracy experienced a
further deterioration in 2011. Several leading opposition figures, including
former Prime Minister Tymoshenko, were subjected to selective justice,
characterised by un-transparent judicial processes. …
Authorities are increasingly hostile to public displays of
discontent and on occasions tried to limit freedom of assembly. Concerns are
also expressed regarding the future of media freedom.
Despite the adoption of a National Anti-Corruption Strategy
in October, corruption perception remains high. Conditions for business and
investment has further deteriorated.
Cases of discrimination on the basis of nationality or ethnic
origin continue to be reported. Roma, Crimean Tartars, as well as other
minority groups are affected.
DFAT advised that an Australian embassy in Kyiv:
… could enhance Australia’s trade and investment outcomes
through a presence in a key European growth economy with large, developing
natural resource reserves [and] also increase engagement on trans-national
On the other hand, DFAT considered Ukraine was well served by Australia’s
embassy in Vienna:
… due to cost-efficiency, policy alignment with other
non-resident accreditations, the frequency of visits by Post, helpful consular
sharing arrangements and the appointment of a new Honorary-Consul in Kyiv.
Support for opening a post in Kyiv was provided by Mr Kerry Fisher who
commented that Ukraine was ‘a major player in the future of East Europe, is a large
country with yet-unrealised economic potential, and is a source of many
immigrants to Australia.’ A further reason
elicited during the inquiry was the potential for graduates from Ukrainian
mining institutions to meet the demand for skilled labour in Australia’s mining
Responding to whether there was a demand for visas for Ukrainians
wishing to migrate or travel to Australia, the Department of Immigration and
Citizenship (DIAC) advised that ‘the demand for Australian visas by Ukrainian
clients is comparatively small.’ The submission continued:
It is not necessary for Ukrainian clients to visit the [Moscow]
office in person to lodge a visa application. Most Ukrainian clients choose to
lodge their applications by courier or in person. The department conducts a
small number of interview trips to the Ukraine each year to follow up on
DIAC added that skilled Ukrainians working in the mining industry could ‘generally
apply for a General Skilled Migration visa online or by post or courier.’ The
applications would be processed at the Adelaide Skilled Processing Centre.
The Lowy Institute did not think a post in Kyiv would be a major priority:
I think it would be possible to construct a case for opening
in Kyiv, but for me, it would not be the same priority as what we have talked
about. I think inland China, eastern Indonesia, Phuket and beefing up in Africa
would come ahead of that.
The opening of an Australian Embassy in Bucharest was proposed by the
Romanian Ambassador to Australia, supported by a submission from the Australia
Romania Chamber of Commerce. Reasons provided included:
- Romania was
geo-strategically located on existing and forthcoming energy transport
networks. It also provided
alternative maritime transport access to the European market thereby shortening
travel time and distance.
- Romania was in a
sound economic situation with positive economic growth, a balanced external
debt and current deficit, and inflation and unemployment below the EU average.
Consequently, it was experiencing increasing foreign direct investment.
- Romania was a leader
in the field of green energy (wind) and IT with a ‘rapidly growing fibre optic
network’ and a ‘substantial number of very good’ computer software companies.
- There were ‘extensive
possibilities and opportunities for economic cooperation, and investments, not
only direct, bilateral ones, but also on third regional markets.’
- There was increasing
interest being shown by Australians wishing to travel to Romania.
- Bucharest hosted the
embassies of 82 countries and permanent missions of ‘14 important international
- Romania was an
important NATO member ‘with substantial contribution to various NATO missions’
and ranked seventh in population size in the European Union.
Former Yugoslav Republic of Macedonia
The United Macedonian Diaspora (UMD) provided the following reasons for
opening an Australian post in Skopje:
- the country was
growing economically through developing economic relations with ‘the east’
including the Gulf states;
- an embassy would
strengthen ties at the government, business, academic, and sporting levels; and
- an embassy would
serve the ‘unmet needs of tens of thousands of Australians who visit Macedonia,
Kosovo and Albania and other parts of Southeast Europe.’
The UMD also suggested that:
Australia still does not have an embassy in the Republic of
Macedonia in order to appease Athens and the Hellenic lobby in Australia rather
than advance its own commercial and strategic interests in Southeast Europe.
The Australian Gulf Council proposed that Australia should open an
embassy in Qatar. The reasons provided were:
- the Gulf region
collectively was a significant trading and investment partner for Australia;
- the absence of
diplomatic representation particularly in Qatar, was ‘a real deficit and does
not match the level of interest both from Qatar into Australia and into our
market and also the other way around’;
- there was ‘an
enormous amount of sovereign wealth, [creating] an insatiable demand for
education and training, health and transport infrastructure’; and
- there was increasing
demand on existing Australian embassies in the region due to increasing
business visits and ministerial and heads of government visits.
The Lowy Institute noted that ‘the Middle East benefits from a
significant level of Australian diplomatic representation.’ It also commented,
however, when suggesting that new posts were ‘needed in emerging centres of
influence and economic opportunity,’ that the Gulf was one of a number of
Kurdistan Region of Iraq
The Kurdistan Regional Government-Australia proposed that Australia
should open a diplomatic post in its capital Erbil. The arguments included:
- the international
community had recognised the economic potential of the region through the
opening of 25 consulates and foreign offices;
- it would enable
accurate Australian travel advice which currently did not distinguish the
Kurdistan Region from Iraq as a whole—there had been no Coalition or western
fatality in the region since 2003;
- ‘thousands of foreign
companies, businessmen and citizens [were] now living and working in the
- there were
opportunities for tourism following the listing of the region by National Geographic
and the New York Times on their lists of ‘top places to visit in 2011’; and
- there were
opportunities for Australian universities to benefit from ‘the $100 million
international scholarship program provided by the Kurdistan Regional
Deepening the diplomatic footprint
While the distribution of embassies and high commissions indicates the
breadth of Australia’s diplomatic footprint, the number of diplomatic posts,
whether consulates or consulate-general posts, within a particular country provides
a measure of the depth of that footprint.
DFAT has consulate or consulate-general posts in the following
- China—Guangzhou, Hong
Kong, Shanghai, and the recently announced Chengdu;
- India—New Delhi, Chennai,
- Indonesia—Bali (Denpasar);
- US—Chicago, Honolulu,
Los Angeles, and New York; and
- Vietnam—Ho Chi Minh
Austrade also manages diplomatic posts providing consular services.
Countries where Australia has an embassy or high commission and where there are
also Austrade posts thereby deepening the relationship include:
- Brazil—Sao Paolo;
- Japan—Fukuoka, Osaka,
- United Arab
- US—Atlanta, and San
The Lowy Institute welcomed the recent opening of four diplomatic posts,
including Chennai and Mumbai in India, as being ‘consistent with Australia’s
expanding economic and other interests in these regions.’
In its submission, the Lowy Institute suggested that Australia should ‘urgently
address its underrepresentation’ in China, particularly in the inland cities
such as Chongqing and Chengdu:
Chongqing has a population of 30 million. … It is a city the
size of a province and it is moving into high technology in a big way. Annual
laptop production capacity is set to hit 100 million units by 2015. The
numbers, to my mind, are compelling.
Chengdu, the other one that we mentioned, has a population of
14 million. Shenzhen has 13 million and so on. The other point that is
pertinent here is that, because they are earlier in the development curve,
growth has actually slowed down a bit along that coastal belt. These cities are
growing much faster, at an average of between 10 and 15 per cent over the last
five years, whereas growth on the seaboard has slowed to a dreadfully sluggish
10 per cent! The centre of growth, or the engine of growth, in China has moved
and we are still where it was 20 years ago.
The ANZ Bank told the Committee that Chinese government policy had
determined that Chongqing and Chengdu would be the cities which would ‘capture
the growth of western China’:
China needs to grow those areas substantively because the
economic gap between the eastern seaboard and western China has widened
considerably over the last 15 to 20 years. They realise that they need to bring
western China into the high-development models and Chongqing is the designated
city to do that.
Deepening Australia’s diplomatic footprint in Indonesia was also
Surabaya, the capital of East Java, was identified by Ms Herlina Yoka
Roida, as a potential site for an additional Australian diplomatic post. The
city was strategically placed between the large provinces of Central Java and
Bali and was a growth centre for industry and trade—its growth rate in 2009 had
exceeded that for Indonesia. It was also the home of the highest number of
universities in Indonesia.
This view was supported by the Lowy Institute which explained:
… Indonesia has always been important to Australia, but it
has largely been important for reasons to do with its weakness. That is all
changing. Indonesia is growing at about 6½ per cent. … it will be in the top
five or six economies in the world in a couple of decades, yet our diplomatic
representation there is confined to Jakarta and Denpasar. The other reason is
that in Indonesia power is being devolved away from the centre to the
provincial level of government, which means that you need to be there when the
policy decisions are made and when the big contracts are awarded. … Indonesia’s
middle class will be 50 million in size within a decade from now. They are not
all going to be in Jakarta, and we need to be there. If you take Surabaya, for
example, it is the second largest city in Indonesia. It has nearly 6 million
people in it. East Java, alone, has nearly 50 million people.
The AFP told the Committee that increasing DFAT representation in
Indonesia would have a ‘positive flow on to the AFP’ especially in the area of
combating people smuggling. In contrast, the
Commonwealth Bank told the Committee that its business had not been affected by
inadequate Australian representation in Indonesia.
Support for deepening Australia’s diplomatic footprint in China, India
and Indonesia was provided by ACT Labor FADTC, the ANZ Bank, and the AIG.
Responding to the Lowy Institute report, DFAT told the Committee that it
believed Australia’s diplomatic representation in China was ‘underdone,
particularly in western China’, and there ‘would be value in consular
representation in Phuket in Thailand.’ Further representation across the
Indonesian archipelago could also be considered, but this was not as big a
priority as China.
Subsequent to the Committee’s hearings, the Government announced it
would open a new diplomatic post in Chengdu, the capital of China’s Sichuan
Province, with funding being provided in the 2012–13 Budget.
It is generally accepted that the centre of global growth is in Asia and
in particular in North Asia and India. If Australia is to maintain and increase
its participation in this growth through providing resources and engaging in
trade it must have an adequate diplomatic network to promote Australian
The Committee agrees that Australia’s diplomatic representation needs to
be deepened in North Asia and in particular in China.
The Committee has seen at first hand the value of Australia’s embassies
through its delegation visit to four countries in Africa in April 2011. A
Committee delegation also visited Indonesia in November 2011 and saw for itself
the economic and trade potential of Surabaya in East Java. Indonesia as a whole
is increasing in importance as its economy grows. The Committee believes that
deepening Australia’s representation in Indonesia by opening a post in Surabaya
Such an initiative is consistent with the importance of the Australia-Indonesia
relationship which has been recognised as a ‘true strategic partnership of
great importance to both our countries.’
The Committee notes that Australia opened an embassy in Kazakhstan in
1995 in support of Australian commercial activities. Unfortunately, the
expected benefits were not achieved and the post closed in 1995.
The Committee recommends that Australia should increase its
diplomatic representation, including increased Austrade representation, in North
Asia and Central Asia, and in particular China.
The Committee recommends that Australia should deepen its
relationship with Indonesia by opening a diplomatic post in Surabaya, East
The Committee’s review of Australia’s relationship with Africa and the
evidence received in this inquiry has highlighted the potential of the
continent for investment and, with a growing middle class, as a trading
partner. The Committee notes the Government’s acceptance of its recommendation
that an embassy be established in Francophone Africa and its decision to open
an embassy in Senegal.
The Committee also considers there is merit in opening an embassy in
Morocco to serve the Maghreb and notes that this is in DFAT’s plans for an
expanded network should it receive sufficient funds.
Regarding opening other new embassies elsewhere in Africa and Asia, in Europe,
and the Gulf, the Committee does not have the full range of evidence to properly
assess the various suggestions made during this inquiry. Whether or not to open
a new post needs careful and rigorous analysis against national interest
criteria. The Committee expects DFAT and other interested departments to
undertake such an assessment.
It is for this reason the Committee has recommended the preparation of a
Government White Paper (see Recommendation 1).
Priority areas for overseas diplomacy
The Committee challenged DFAT to set out its priorities for increasing
Australia’s diplomatic footprint under three increased funding scenarios—annual
increases of $25 million; $50 million; and $75 million.
DFAT replied that it would open a mix of new posts and new positions at
existing posts. Table 2.2 summarises DFAT’s information. It does not include
DFAT’s highest priority post—Chengdu, China—since its opening had already been
Table 2.2: DFAT's priorities for increasing Australia's
positions at existing posts
m per year—$100 m over the forward estimates
new positions prioritising G20 and consular locations
m per year—$200 m over the forward estimates
new positions prioritising G20, regional and consular locations
Dar es Salaam, Tanzania
m per year—$300 m over the forward estimates
new positions prioritising G 20, East Asia Summit, smaller posts and consular
Dar es Salaam, Tanzania
Source: DFAT, Submission No. 51,
Information provided by DFAT and presented in Table 2.2 provides an additional
insight into the costs of expanding and deepening Australia’s diplomatic
footprint. It also shows that any increase in the network would largely focus
on Asia and Africa.
The Committee notes that Table 2.2 represents DFAT’s priorities, but
considers that decisions concerning any increase in Australia’s diplomatic
representation should be transparent and subject to bipartisan support.
The Committee has considered at some length the arguments for opening an
embassy in Kyiv. On the one hand, the country offers potential in terms of
trade and as a hub for the representation to the former Soviet republics.
On the other hand, there is ongoing concern regarding human rights. The
Committee also notes the decision by France, Germany, and UK Ministers and
European Union Commissioners to not attend 2012 European Championship football
games in Ukraine because of human rights concerns.
During its deliberations, the Committee discussed its own priorities for
establishing new diplomatic posts. The Chair of the full Committee and some members
of the Committee strongly advocated opening an embassy in Ukraine citing the
large population and the wealth of technically skilled students graduating from
various mining institutes in that country.
The Committee concludes that there would be value in Parliamentary
committees becoming involved when new embassies are proposed either by way of
Parliamentary briefings or Parliamentary inquiries.
The Committee recommends that the Department of Foreign
Affairs and Trade discuss the reasons for proposing to open or close
Australia’s diplomatic posts either by way of private briefings or public
hearings before this Committee.
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