LAST September, with some fanfare, Julia Gillard promised by mid-2012 she would present a white paper on Australia in the Asian century. We are still waiting.

There is speculation its chairman Ken Henry and his team prepared a draft but it was sent back for a rework.

Whatever its fate, the federal government’s blueprint is a keenly sought addition to Australia’s engagement with Asia. This is because, effectively, Australia has no choice but to bet its future on the Asian century.

With two decades of economic instability looming in Europe and the US, the many nations that make up Asia offer the best hope of a secure future for our political, business and social sectors. Little wonder both sides of government are embracing its potential.

The Prime Minister sees more and more Asian cities built from Australian steel. Tony Abbott wants 40 per cent of Australian schoolchildren speaking an Asian language within a decade. Opposition Treasury spokesman Joe Hockey envisages three northern Australia hubs, individually providing resources, services and food to Asia.

But grasping those future opportunities is still being held back by the mixed messages being conveyed. A long-promised free trade agreement with China is still in the works while our two-way trade exceeds $100 billion a year.

In a speech last month in Hong Kong, Wayne Swan warned of Australia’s complacency in dealing with its biggest economic partner.

“Given the massive economic dependency Australia has on Asia, and in particular on China, it is clear that a much more sustained effort has to be put into framing the relationship in the region,” the Treasurer said.

After last year’s sudden ban by the Gillard government of live beef cattle exports to Indonesia, no matter what the government says our neighbour remains suspicious.

That decision alone did irreparable damage to our national reputation in the archipelago when Australia cut a primary source of protein to millions of people. While the trade may have been partially restored, the collateral damage will take many years to repair in the eyes of many influential Indonesians.

The opposition has its own message to the region. Regrettably the Opposition Leader’s speech in Beijing on foreign investment in Australia was misconstrued as a “pull down the shutters” approach.

“Chinese investment is complicated by the prevalence of state-owned enterprises,” Abbott said.

“It would rarely be in Australia’s national interest to allow a foreign government or its agencies to control an Australian business. That’s because we don’t support the nationalisation of business by the Australian government, let alone by a foreign one.”

Abbott’s good intentions were buried as he tried to juggle the importance and need for foreign capital while sending a coded message to protectionists who fear the international tide.

In fact, sensible Liberal Party thinkers won the foreign investment battle within the Coalition.

This all means that the task confronting the white paper group is immense. Henry has become the government’s heavy lifter. His 2009 taxation inquiry was comprehensive and forward-thinking. But given that the Rudd-Gillard government has barely used a handful of his 138 recommendations, Henry must be wondering what happens with his next report, which would still be a worthwhile exercise even if it simply succeeds in placing greater attention on our crucial regional relationships.

Henry’s white paper also should provide a pathway on one Asian trend that will soon capture more attention: the so-called demographic dividend, where most of a country’s population is in the 15-to-64 working-age range.

The Chinese manufacturing story is well-known, but age and the demographic bubble as a result of the one-child policy is catching up with its workforce.

An ageing workforce similarly challenges other regional heavyweights such as South Korea and Japan. It’s not critical yet but a younger, more mobile workforce is rising in the developing nations of Indonesia, The Philippines and Malaysia. Smart manufacturers are taking advantage by shifting factories for a cheaper and more readily accessible supply of labour.

The International Monetary Fund predicts a 5 per cent annual growth rate in The Philippines by 2017, compared with 3.7 per cent last year. Vietnam is set for an even better result, reaching gross domestic product growth of 7.5 per cent a year by 2017, up from 5.9 per cent last year.

Looming farther west is India, which has a population of 1.22 billion and is potentially the biggest winner in the new demographic dividend with its labour force growing by almost 100 million within eight years.

This all points to the continuing inexorable shift in Australian manufacturing to Asian markets. More reason, then, that the findings of the white paper are so crucial for Australia. There should be nothing to fear in tying our future with Asia, and the newest Henry report should identify the opportunities available to take advantage of the emerging middle class of 2.5 billion people.

A year ago, the sometimes underestimated Hockey noted in a Hong Kong speech that “the Asian resurgence is under way. This is an opportunity for Australia, not a threat.”

But Hockey’s main point is one that cannot be lost on Australian policymakers: “The key to our relationship with our region is that Australia must be a consistent, reliable and stable business partner. We should be the blue-chip stock of our time zone. We will never be the biggest, but we strive to be the best and most trustworthy. We must be a predicable friend and trading partner.” Amen to that.

Emeritus professor of history and politics at Griffith University, Ross Fitzgerald is the author of 35 books, most recently the co-authored satire Fools’ Paradise, set in a fictitious Mangoland.

The Weekend Australian August 25 -26, 2012, Inquirer, p 19