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Australia's selfhood vanishes in the market

By Kenneth Davidson,
in The Age
5 February 1998

Is the Constitutional Convention a serious attempt to formalise Australia's status as an independent nation by replacing the British Queen with an Australian head of state? Or is it a collective spasm of cognitive dissonance as our leaders avoid facing the accelerating erosion of Australia's economic sovereignty?

Ironically, some leaders of the republican movement and the push for a new flag, are, in their professional lives, often the agents of foreign interests who still need Australian compradores to give them a local edge and a degree of respectability as they acquire Australian assets. (Compradores were Chinese nationals who opened the door for foreign interests in the Chinese treaty ports at the turn of the century.)

Malcolm Turnbull, who believes the constitutional monarchy is an affront to Australian sovereignty, was one of the leading locals in the 1991 push to get the Fairfax Group of papers (which includes _The Age_) into the hands of the Canadian and British media baron Conrad Black - even though most of the other daily capital city newspapers outside Perth and Canberra were in the hands of another foreigner, Rupert Murdoch.

Nick Greiner is opposed to the Union Jack in the Australian flag and is one of the organisers of the new flag competition. He is also a director of the Australian offshoot of the privatised British water utility, Northwest Water. The utility has been criticised in Britain for using its massive domestic profits for overseas investments and privatisations, rather than repairing its own antiquated reticulation system.

As far as Australia is concerned, the Queen can do nothing unless it is on the advice of her Australian ministers. The same cannot be said for directors of foreign companies with Australian operations.

We can be certain that foreign-owned businesses operating here will be run in the interests of their foreign owners. We hope that their interests coincide with Australia's.

The present system continues to give us a choice. Democratically elected Australian governments can choose to sell off public assets to foreigners, or they can put restrictions on such sales in favour of local interests. Australian governments can decide to put conditions on the sale of public or private enterprises to foreigners that might not apply to local owners.

Australian governments can also impose conditions on new, direct foreign investment. Such conditions may or may not be in the public interest. But the right to impose them is an essential precondition of economic and cultural sovereignty. The right to impose local content rules on broadcasters is an important example of this.

But for how much longer? While the nation has become distracted by the largely symbolic issue of the republic, Treasury officials are secretly negotiating the Multilateral Agreement on Investment under the auspices of the OECD. The agreement is designed to prevent signatory governments discriminating against foreign investment within their borders.

With the ending of the Cold War, the Paris-based OECD has joined the World Trade Organisation, the International Monetary Fund and the World Bank as extensions of the power of the United States. The Multilateral Agreement on Investment aims to break open direct investment markets to complement the opening of national financial markets via financial deregulation.

Seventy per cent of world trade is intra-industry or intra-firm, and the agreement reflects this. Forty per cent of US trade is between US multinationals. It is multinationals that are the driving force behind the agreement.

Wolfgang Reinicke, a senior scholar in the Washington-based Brookings institute, supports the agreement. Writing in the November/December issue of _Foreign Affairs_, he says that governments must strive to avoid the 'pitfalls of territoriality. Forming global government is unrealistic... it would require states to abdicate their sovereignty... *in a formal sense* (my emphasis). A more promising strategy differentiates governance and government. Governance, a social function crucial for the operations of any market economy, does not have to be equated with government?'

He predicts that: 'The nation-state as an externally sovereign actor in the international system will become a thing of the past... this requires policy elites to dissociate themselves to some degree from territory and create more dynamic and responsive institutions of governance... the nation state is a relatively recent form of governance and it has no claim to perpetuity.'

If democratic government must give way to multinational enterprise, democracy is decaying. Is this what we are already seeing? As our elites go about their real business of globalising the Australian economy, will the rest of us be happily distracted by the promise of our own head of state? A head of state who will only survive in his or her exalted position - like the rest of us in our less exalted positions - by the grace and favour of the multinational juggernauts that just happen to be mainly US-based and controlled?

Email: opinion@theage.fairfax.com.au