ONE evening this February, Cavan Hogue, Australia's urbane ambassador to Thailand, attended a reception in Bangkok. An aide introduced Ambassador Hogue to the guest of honor, President Nouhak Phoumsavan of Laos.
The Laotian president's stern countenance did not exactly come alive with good feeling. But it had been a long day, full of presidential formalities.
Hogue must have been discomfited. Australia had recently completed a $30-million bridge over the Mekong River, which divides Thailand and Laos. The project was intended to boost regional commerce and help the struggling Laotian economy. It was also intended to win Australia some goodwill in the region. But at this moment, $30 million was getting Hogue nothing but a tired look.
The aide leaned into the president's ear. ''The ambassador of the bridge!'' he whispered. The president's ''face lit up,'' Hogue recently recalled. ''He gave a great big grin and nodded his head vigorously. Clearly that,'' Hogue says of the bridge, ''had registered.''
Hogue's introduction was perhaps not one of the greatest moments in the annals of diplomacy. But for Australian envoys, even minor indications of acceptance and recognition from Asian rulers are signals that a long process of national reorientation may actually be working.
Australia's leaders see that their country's future lies in integrating socially, politically, and above all, economically, with Asia. It's hard to exaggerate the magnitude the attitudinal shift that Australians have attempted over the past decade. Australia's European settlers were only marginally more accommodating of the continent's first Asians -- its aboriginal inhabitants -- than the Europeans who decimated the native populations of the Americas. To this day, Aborigines are still struggling for control of their lands and access to adequate public services.
The land Down Under became a nation of suntanned Caucasians who pursued a restrictive immigration policy known as ''White Australia'' and joked about Asia as a place one flew over on the way to Europe and America. Historians and philosophers ruminated on the ''tyranny of distance'' that separated Australia from the rest of the world -- in other words, Europe and America.
In the old days, hoping for a warm smile from the president of Laos was not a diplomatic priority. But all this is changing.
The country has opened its Anglo-Saxon shutters and looked anew at the people in the neighborhood. For the first time since Australia was colonized by the British in 1788, its citizens have decided that the country's location on the planet is an advantage and not a liability.
This process has had dramatic effects within the country, changing the ethnic demography of Australia's cities and the way Australians are educated.
But in many ways, Australia's Asian ''enmeshment,'' as the policy is sometimes called, has been a top-down transformation brought about by politicians and academics. Diplomats have worked to make their country an accepted ''middle power'' in Asia.
The policy has its critics. As Helen Hughes, a former World Bank economist, bluntly opines: ''Australia is nothing in Asia. Absolutely nothing.''
Ms. Hughes argues that Australians must instead concentrate on domestic economic reforms that would create an inwardly focused and prosperous country -- a Switzerland of the South Pacific. She rejects the diplomatic posturing that imagines Australia as an Asian leader. ''We have no role in Asia,'' she concludes. ''We are not an Asian country.''
Hers is a minority voice, however. The authors of the reorientation have the advantage of being in power -- Prime Minister Paul Keating and Foreign Minister Gareth Evans are first among equals in pursuing enmeshment. More importantly, they are tapping into and exploiting a complex set of anxieties about the nation's future.
The country is, of course, the world's largest island nation. But where most island states worry about what will be lost if they make it too easy for foreigners to come in, Australians have opposite concerns. They worry about isolation, about being cut adrift politically, culturally, and economically from the rest of the world.
A gradual reorientation
Some Australians cite the administration of Prime Minister Gough Whitlam, who led the country from 1972 to 1975, as the beginning of the country's gradual reorientation. Mr. Whitlam pulled the last of Australia's troops out of Vietnam, where they had fought at the behest of the US, and established relations with China.
On the domestic front, the ''White Australia'' policy was effectively dismantled before Whitlam's rule, but he generally gets credit for its final abandonment and for the first pro-Asia steps outside the country. ''Whitlam changed the fundamental orientation of our foreign policy,'' says Stephen FitzGerald, Australia's first ambassador to Beijing and now a professor at Sydney's University of New South Wales.
The next leader, Malcolm Fraser, opened the country to Vietnamese boat people and other Asian immigrants. Mr. FitzGerald says that Asian arrivals in the late 1970s surged to 30 percent of all immigrants, a figure that now reaches 50 percent.
But these steps were less a part of a coherent policy and more a set of reactions to the inescapable, such as the arrival of Vietnamese refugees. Prime Minister Bob Hawke emphasized ties with Asian countries as a complement to the country's Western links, but the current leader, Mr. Keating, has been more focused. In 1991, ''Keating came in and said we have to turn to Asia. Full stop,'' says Stuart Harris, a professor of international relations at the Australian National University in Canberra.
Although some Australians have long urged greater awareness of and education about Asia, the economic recession of the late 1980s -- while economies in East Asia boomed -- gave the ''Asianists'' some momentum. ''It was clear,'' FitzGerald recalls, ''that no one was going to listen unless you could make economic arguments.''
Keating's eyes have been on the economy. Both as federal treasurer under Mr. Hawke and then as prime minister since 1991, Keating has deregulated parts of the economy. As journalist Paul Kelly noted in a seminal 1992 book, ''The End of Certainty,'' Australia's ''bedrock ideology was protection.'' Industries and unions were coddled by leaders convinced that the country's vast natural resources would ensure prosperity.
Indeed, up until the middle of this century, Australians had the largest per-capita share of gross domestic product in the world. But over the decades that measure of wealth has shrunk consistently; now Americans and Japanese, among others, earn more.
As Mr. Kelly writes, ''This framework ... is undergoing an irresistible demolition.'' Keating freed the financial markets and lowered tariffs, resulting in dislocations that have produced high unemployment. Nonetheless, he has stressed the need for Australia's companies to take advantage of rapidly growing export markets in Asia. It hasn't been easy.
''It's been a big effort to get [companies] first of all into an export culture frame of mind,'' Foreign Minister Evans said in an interview. ''That was the big effort through the early '80s... [It was] a matter of getting them specifically Asia-focused, neighborhood-focused.''
Australia's Asian exports have grown, although the majority of those products are raw or minimally processed materials, goods that do not generate the profits that high-tech products do. Officials point with pride, however, to statistics that show that in the 1993-1994 fiscal year, high-tech items made up 18 percent of the country's exports, double the figure a decade ago.
Despite Keating's efforts, Australia is still not as much of a export-based economy as he would like. Labor costs and other supplies are significantly higher in Australia than in many Asian countries, making them less competitive in those markets, and there are constant grumblings about the productivity of Australian workers.
The country's goods sold overseas account for about 20 percent of GDP. ''Less than a decade ago, that percentage was about 8 percent,'' says Trade Minister Bob McMullan. ''That's not to say we're satisfied ... it's to say there's been a significant change. We've been asleep for a very long time.''
One world trend that has jarred Australians into action has been the emergence of regional trading blocs, such as the European Union and the North American Free Trade Area. Just this month, the countries of South Asia announced the formation of a new trade area.
In a post-cold-war world where trade and economic growth have become the prime determinants of national success, Australians have increasingly felt left out. ''Britain and Europe are not the slightest bit interested in us, nor is the US, in economic terms,'' says FitzGerald, the former ambassador. ''To me,'' he adds, speaking for a large group of influential Australians, ''our only salvation is to become part of whatever is emerging in Asia.''
The Australian need to make friends in the neighborhood goes beyond a desire for trade partners. Australians have long anguished over the country's sheer distance from their former homelands and the sources of their culture.
Wolfgang Kaspar, an economist at the Australian Defense Force Academy in Canberra, the capital, sums up the national anxiety this way: ''We do not belong in any family. We are not loved by anyone.'' Asia strikes many Australians, particularly younger ones, as a place to belong.
There is also a security argument. Until the end of World War II, the country's place in the British empire had guaranteed protection, and since then its strategic alliance with the US has done the same. But many here can imagine a day when the US will not have such a strong presence in Asia.
''Militarily, Australia's best friend in Asia is the US,'' says a senior Australian defense official who prefers anonymity. Although he expresses no doubt about the future of the US-Australian alliance, he foresees diminishing US influence. ''I think Western values are very influential in the ... region, but we certainly cannot assume that countries in this part of the world will have the same attitude on the use of force as we do.''
Andrew Mack, a defense and international relations specialist at the Australian National University, notes that growing economies -- now commonplace in Asia -- are the surest determinants of bigger militaries. The expansion of China's military is particularly worrisome to Australians. ''The military balance is going to shift inexorably against us,'' Mr. Mack says.
Where Australia, during the cold war, had privileged access to Western defense technology, many Asian countries can now obtain the same systems without hindrance. ''We no longer assume that we're just going to have the better stuff,'' concurs the defense official.
In addition to pursuing political and economic ties, this line of thinking goes, Australia now must work hard to forge warm security and military relationships with Asian countries. The only other option, proponents argue, is weakness and vulnerability.
Fostering better ties
But Australian leaders realized that sidling up to Asia was not going to happen at the grass-roots level, and the country's diplomats have tried to lead hoping that their countrymen would follow.
The first order of priority has been to foster stronger bilateral ties in Asia. Most notably, officials in Canberra now have relationships in the Indonesian capital of Jakarta that would have been unthinkable a decade ago. Australian defense planners used to see Indonesia as a major threat. But in March, Indonesian troops participated in unprecedented military exercises on Australian soil, the most visible part of a burgeoning defense relationship.
Establishing closer ties with Indonesia has been a delicate proposition, since many Australians view the 1976 Indonesian annexation of East Timor as a ruthless occupation. While Australian critics of the closer relations have lambasted officials for coddling dictators, Evans has managed to criticize the region's human rights abuses, and argues that closer relationships make Asian leaders more receptive to unsolicited advice about the best ways to treat their citizens.
In pursuing more ambitious multilateral initiatives in the region, the Australians have assiduously sought Indonesian assent and assistance. Indeed, says Indonesia's ambassador to Australia, Sabam Siagian, ''They can only be successful if there is cooperation from the biggest country in Southeast Asia -- and that's Indonesia.''
And for Indonesia, as is the case with many other Asian countries, Australia is emphatically not a threat. ''Australia is modern enough to be useful to Indonesia,'' adds Mr. Siagian, ''but Australia is not big enough to worry us.''
Australia's diplomats have tried to turn military weakness into a strength, by casting themselves as a ''middle power'' that can link countries that might not otherwise work well together. It is no accident that Australian money has funded bridge-building projects in Laos, Cambodia, and Vietnam -- the country's diplomats often style their nation as a bridge between East and West.
In 1989, Australia played a key role in the establishment of the Asia-Pacific Economic Cooperation (APEC) forum, a group of primarily Asian economies that also includes Australia and some nations on the eastern shore of the Pacific.
APEC is trying to encourage free trade in the Asia-Pacific region without preferential or exclusive arran- gements, and it remains to be seen whether the group can achieve those ends. But it stands as a symbol of what Australian ''middle power,'' bridge-building diplomacy seeks to accomplish: It invol- ves Asians and non-Asians, encourages Asians to see Australia as a contributing participant in the region, and focuses attention on closer economic ties, the thing that Australia needs most from its neighbors.
''We have been forced by geography and changed circumstances to fully explore the art of the possible in middle-power diplomacy,'' says Evans. ''We did have this perception and self-perception as an Anglo-Saxon outpost imprisoned by geography.... All that imagery started to fade a little in the context of the reality of the new Asia.''
Wanting to be a part of the ''new Asia'' has encouraged Australia to take diplomatic risks. From late 1989 until October 1991, Evans devoted a great deal of his own and his ministry's time to the peace process in Cambodia. Although the idea of having the United Nations run Cambodia in the prelude to an election had been voiced before, Evans is credited with bringing this arrangement into reality by organizing the support of more than a dozen instrumental countries and parties. In May 1993, Cambodia held its first free elections, under the aegis of a $2 billion UN operation.
The Cambodian peace process, says Evans now, was a matter of ''relying on imagination, creativity, stamina -- plus the techniques of persuasion, finding the right people to persuade, and building coalitions around them.''
In many ways, it is clear that Australia's work in Cambodia is paying dividends beyond the satisfaction that comes from putting an idea to work. Australia's stature in that country, and in other parts of Southeast Asia, has been boosted.
Competing for influence
Susan Boyd, Australia's new ambassador to Vietnam, tells a story about being introduced to the French envoy to Hanoi. France, the former colonizer of Indochina, is now bent on regaining its prominence in the region by facilitating French investment and pushing French culture.
''Madame,'' said the French envoy to his Australian counterpart, ''you are the competition.'' Some critics might observe that both the Australians and the French are out of the running in Vietnam, which seems focused on building its closest ties with the economically robust countries of East Asia.
Australian officials dismiss questions about possible ulterior motives for their work in Cambodia, but this fact remains: The resolution of the Cambodian crisis has made it easier for Western nations to invest in Vietnam. The Vietnamese had invaded Cambodia in 1979 and the lingering unrest in Cambodia tainted Vietnam in the eyes of some governments.
Andrew Messenger runs the Hanoi office of a large Australian law firm. He quibbles about the help his government provides to Australian companies seeking to invest in Vietnam. But on what he calls the ''soft issues'' -- Australia's efforts to raise its national profile in Southeast Asia -- Mr. Messenger has no complaints. He says he couldn't ask for much more.
Australia's attempt at Asian integration is very much a work in progress. The success of its two major diplomatic initiatives, APEC and the Cambodian peace process, are still uncertain. It's also unclear whether Australian businesses can compete in the region.
Ask Asian observers about Australian enmeshment, and the answers are mixed. Cambodian Foreign Minister Ung Huot says, ''We are grateful to ... the Australian government for their continuing support to get [the] agreements'' that created the peace process.
On the other hand, muses Julius Caesar Parrenas, director of Manila's Institute for International and Strategic Studies, ''The Australians for some reasons have not made their presence felt. They have to do a lot more. They have to choose to be Asians.... Basically they're still Western.''
Most Australians make no claim to being Asian, arguing instead that they want to be full partners in an Asia-Pacific community. But the obvious cultural differences remain a barrier between Australia and the countries it is courting.
Sometimes it is in secret that people identify themselves most clearly. At the end of an interview, one of Australia's ambassadors to Asia was asked what attribution he preferred for a set of sensitive comments about the nation where he serves. Could he be described as ''an Asian diplomat?''
''The cap doesn't fit just yet,'' the envoy responded with a smile. Dr. Parrenas would not be surprised by the ambassador's suggested self-description: ''Western diplomat.''
* Next week: The future for ethnic Asians in Australia.