Australia's Chief Rides Herd On Nation Altering Direction

Keating is forging closer ties with Asia and trying to change ties with Britain

PAUL KEATING, Australia's take-charge prime minister with aspirations to become a world statesman, was facing diplomatic embarrassment.

Here was United States Secretary of State Warren Chris-topher on an official visit to the Australian capital in February. And Mr. Keating, a no-nonsense manager with a distaste for populist politics, was forced to escort Mr. Christopher past a blockade of logging trucks and thousands of angry timber demonstrators. The group was protesting new government limits on wood-chip exports.

''The government will never let this happen again. Next time, we won't be passive. It will be handled firmly,'' a Keating aide said of the prime minister's fury over the incident.

Impatiently and with fierce determination, Keating is reshaping Australia's profile at home and abroad. He has pushed Australia onto the world stage and tried to forge closer diplomatic and economic links to Asia. He has fueled a growing Australian nationalism by urging an end to the country's constitutional tie to the British monarchy and wants to declare Australia a republic.

And he has turned his back on the populist politics of predecessor Bob Hawke in favor of a style in which he commands the Parliament and his party almost like a dictator, often lashes opponents with vulgarities, pushes for more equality for women and Aborigines in a white, male-dominated society, and treats the country like a child that needs to be shown the way.

''He is very far ahead of the country in many ways,'' says Hugh McKay, a respected political analyst and pollster in Sydney. ''He's not a popular or a populist figure. Keating is there to do the job and get things done.''

''This is a crucial decade,'' Mr. Keating said in a recent speech. ''It's enough to say that now we are becoming a different country.''

Keating's agenda and can-do approach will be tested in upcoming national elections, required by early 1996 but expected earlier by many political observers. He came to power in 1991 after leading an internal Labor Party revolt against Mr. Hawke.

The Labor Party, a narrow victor in the last federal election in 1993, faces the opposition Liberal Party, which is beset by weak leadership and internal dissent but still only lags behind the ruling party by a slight margin.

The opposition's John Howard, who was recently named Liberal leader after heading the party for four years in the 1980s, is regarded as a formidable a debater and campaigner as Keating.

The Labor Party is closely watching the outcome of the March 25 state poll in New South Wales, which is regarded as a harbinger of the coming federal election.

In a setback for Keating that throws a shadow over the planned national elections, Labor was ousted in a by-election in Canberra, a longtime Labor stronghold. In the state of New South Wales where Keating's party should have won comfortably, it barely held control.

Reining in Australia's fast-growing, inflationary economy is Keating's biggest challenge.

With inflation at a three-year high, the economy has been booming at more than 6 percent annually and the budget deficit is running 70 percent higher than previous estimates for the fiscal year ending June 30.

The government, which raised short-term interest rates last year, has been denying reports of another imminent rate increase.

Instead, it projects that economic growth could moderate by next year, even though inflation is expected to continue its climb.

Another election unknown is retaining support of the environmental vote, which is more powerful in Australia than in the US and was crucial to Labor's last election victory.

Keating enraged timber interests last January when he suspended some wood-chip export licenses to logging companies and froze access to hundreds of other logging sites after a court ruling questioned the licenses' legality.

But he has also alienated green voters who decry the government's middle course and want to end all logging in native forests by the turn of the century.

''This issue is a very tricky one because it involves a whole range of interest groups,'' says a Keating staffer. ''We have to keep finding a balance. There's a perception over the last few years that we've gone less green, but that's too simplistic. We feel we've kept our green credentials intact.''

The prime minister has created another political hornet's nest by pushing hard to abandon Australia's ties to the troubled British monarchy and become a republic by the turn of the century. Australia, founded as a colony for British and Irish convicts, has been independent of British rule since 1901.

Still, constitutionally, the queen remains the official head of state and is represented in Australia by a ceremonial governor-general.

Keating wants to switch to a system with a presidential head of state, ideally in time for Austrailia's first president to open the Summer Olympics in Sydney in the year 2000.

But that will require political and constitutional change and leave Australia open to the abuses of the US presidential system, critics say. ''That makes most Australians wince, because we don't like the American model. It's a system in which political leadership is entirely based on election costs, lobbying, and interest groups,'' says Kerrie Jones, executive director of Australians for a Constitutional Monarchy.

Still, analysts say public opinion, which now slightly favors the monarchy, is shifting toward some kind of republican system, particularly among young Australians who are increasingly nationalistic and more focused on Asia than Europe.

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