Australia observed its Anzac (Australian and New Zealand Army Corps) Day of national remembrance for those fallen in war recently. Originally, it was also established as a day for remembering the importance of peace and the avoidance of war. This year’s commemoration, however, was marred by the Australian Defence Minister Peter Dutton telling Australia to prepare for war with China.
It was a call endorsed by the Australian Prime Minister Scott Morrison who, referring to the agreement between the Solomon Islands and China, declared that he will not allow a Chinese military base on Australia’s doorstep. Morrison also says Canberra would be in lockstep with Washington with their readiness for military intervention.
Why should Singapore investors worry about these internal political developments in Australia? Quite simply, these developments alter the investment landscape, not just for investments in Australia, but potentially for investment and business activity in the region. Australia has become a loose cannon adrift in a sea of already explosive tension and that increases investment risk in three ways.