 Mr. Frank Loewe, Chairman of the Loewe Institute for International Policy and Board members of the Loewe Institute, General David Hurley, Governor of New South Wales, General David Petraeus, 2015 Loewe Lecturer, members and Senators, Secretaries, Chief Executives, Ambassadors and Consuls General, Distinguished Guests, Ladies and Gentlemen, good evening and welcome to the 2015 Loewe Lecturer. I'm Michael Fullylove, Executive Director of the Loewe Institute. This is the most important event in our calendar and we're delighted that you could join us here this evening at the Sydney Town Hall, one of the most beautiful and important buildings in this city. The Town Hall has hosted many significant gatherings in our national life, including protest meetings, party conferences and memorial services. In 2013 we hosted Rupert Murdoch's Loewe Lecture here and we're delighted to be back here tonight for the 2015 Loewe Lecture. You will have been marked off as you came in by some of my excellent Loewe Institute colleagues and I'm delighted to say that our friends from the Border Force will be coming round later to confirm that all your immigration documents are in order. Ladies and gentlemen, let me say at the outset how delighted I am to see my Chairman Frank Loewe here tonight. The Institute is Frank's creation. I like to think that we inherited some of his ambition and his commitment to excellence. We certainly rely on his wisdom and his guidance. To use some football parlance, Frank has had some injury problems of late, a big fall in May that I think everybody saw and then just six weeks ago surgery to correct the after effects of that tumble. But Frank is always the most courageous and resilient player on the field. We're delighted, Frank, that your surgery was a success, that you're back on the job and that your prognosis is for a complete recovery. Welcome, Chairman. Ladies and gentlemen, Frank Loewe gave the Institute two missions, to thicken Australia's intellectual topsoil and to ensure that Australia's voice is heard abroad. And it's been another big year at the Institute. We've produced another of our flagship publications, the Loewe Institute papers, published by Penguin and available at bookshops everywhere on Australia's relationship with Indonesia. There's another one on the way on Australia's relationship with PNG. We've published cutting-edge research on important subjects such as foreign fighters and China's maritime objectives in Asia. We published the first digital map of Chinese aid in the Pacific. Everybody was interested in that, including the Chinese government, because we had better facts than they did. The Institute has welcomed speakers including presidents, prime ministers, chancellors and foreign ministers. Our experts have appeared in person and in print all over the world. We held a dialogue with the Council on Foreign Relations in New York this year on the subject of the US Pivot to Asia, a topic which General Petraeus will no doubt address in his lecture. Foreign Minister Julie Bishop was good enough to acknowledge publicly the influence of the Institute's research on the Abbott government's decision to expand Australia's diplomatic network. It is rare for governments to share credit like this, so when it happens you can't blame a think tank director for drawing attention to it. But this is the Institute's signature event at the Loewe lecture at which a prominent individual reflects on the world and the world's influence on Australia. Over the years the lecture has been delivered by many eminent people including in the last two years the chairman of News Corp. Rupert Murdoch and the Chancellor of Germany, I should say, Angela Merkel. So we're on a bit of a roll. And tonight we are honoured to host General David Petraeus. I'll introduce David presently. Sometimes I find that domestic politics in this country can be a bit disheartening. For that matter General Petraeus, your domestic politics can be a bit of a spectacle sometimes too. It's not enough that Donald Trump is the frontrunner for the presidential nomination of the Republican Party. This is the party of Abraham Lincoln. Now Kanye West has announced his candidacy in 2020. Kanye makes the Donald look like a cross between Thomas Jefferson and Henry Kissinger. So I think domestic politics, both in Australia and America, can sometimes get us down. But the lowly lecture can lift us up. It gives us the opportunity to look over the parapet and out to the world. And it's a sign of the importance of the lowly lecture in our public life that we have such a distinguished audience here this evening. We are joined by the CEOs of many leading corporations, the heads of many of our most important government agencies. The lecture will be broadcast live on the ABC and Sky News. It will be tweeted using the hashtag lowly lecture. Let me acknowledge in particular our corporate sponsors for this evening's event. Capital Group, DCNS and Qantas, three magnificent companies and their senior executives Paul Hennessey, Sean Costello and Alan Joyce, who are all present this evening. Thank you very much for supporting the 2015 lowly lecture. I'd also like to thank and acknowledge our corporate and government members who are listed in your program. They are a vital source of support for the institute's work. Ladies and gentlemen, let me say just a couple of words about the proceedings this evening. Entree and main meals will be served presently, after which I will return to the lectern to introduce the lowly lecturer for this year, General Petraeus. He will speak to us and then he and I will have a conversation from the stage and finally, institute board member Serangus Houston will move the vote of thanks. So you'll see a series of faces in a short amount of time, a little bit like when Australia bats at Trent Bridge. But ladies and gentlemen, I promise it will be interesting. Please enjoy your meals and I'll be back shortly. Thank you. Ladies and gentlemen, it's my pleasure to introduce our lowly lecturer, General David Petraeus AO. One of the key themes of Australia's foreign policy, arguably our deepest strategic instinct, is to make common cause with a like-minded global ally, first the United Kingdom and later the United States. And you've certainly seen this in the decade and a half since 9-11, when Australia's armed forces have been deployed alongside US forces across the Middle East. General Petraeus was a leading figure in these conflicts and he commanded many Australians in the field. In fact, David Petraeus is one of the leading US generals of recent times. He rewrote the US approach to counterinsurgency, he led the surge in Iraq, he oversaw coalition forces in Afghanistan and upon hanging up his uniform, he served as the director of the Central Intelligence Agency. As a result, he is one, he became one of the best known generals in the world. In fact, the former chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, told a funny story to this effect. Admiral Mullen joked at his retirement that he had once told a woman at a dinner party that he was the president's top military advisor and she replied, oh my goodness General Petraeus, I'm so sorry, I didn't recognise you. David Petraeus served in the US Army for 37 years. After graduating from the US Military Academy at West Point in 1974, he was commissioned into the infantry. As a junior officer, he was unusually committed to higher education, receiving a master's degree and a doctorate in international relations from the Woodrow Wilson School at Princeton University. General Petraeus commanded the 101st Airborne Division at the beginning of Operation Iraqi Freedom in 2003 before assuming responsibility for standing up the Iraqi security forces. In 2007, he returned to Iraq as the commander of all coalition forces in that country. He presided over the surge, which together with the Sunni Arab Awakening helped to stabilise Iraq. From October 2008, he served as commander of CENTCOM, in which capacity he was responsible for that quiet patch of the earth stretching from Egypt to Pakistan. From July 2010, he led coalition forces in Afghanistan, halting the momentum of the Taliban. He was described after that as one of the great battle captains of American history. In all of these commands, he worked closely with Australians. In 2009, he was made an honorary officer of the Order of Australia for his distinguished service leading coalition forces, including Australian forces. General Petraeus remains an influential adviser to US policymakers and as chairman of the KKR Global Institute, he is a leading thinker on geopolitical developments and America's role in the world. We are honoured that he has agreed to deliver the 2015 Loewe Lecture. His title is a grand strategy for greater Asia. Ladies and gentlemen, please join me in welcoming General David Petraeus to the lectern. Thank you very much and good evening to you all. I'm deeply appreciative of that kind introduction, Michael. I'm grateful for your generous words and for the opportunity to be here this evening. Indeed, I'm deeply honoured to have been invited to deliver this year's Loewe Lecture and in so doing to follow in the footsteps of such extraordinary figures as Chancellor Merkel, Prime Minister Howard and the incomparable Rupert Murdoch. And of course, to do so in this wonderful venue. In preparing my remarks for this evening's event, I was reminded of the story of the young schoolboy whose assignment was to prepare a report on Julius Caesar. So the young boy diligently researched this subject and after a few days of work, he proudly stood in front of his class to give his report. Julius Caesar was a famous general, the boy explained. He lived a long time ago. He won some important battles. He made a long speech. They killed him. Well thank you for laughing as some in the audience will appreciate when you reach my point in life you're only as good as the material they give you. And suffice it to say I will do my best tonight to avoid Caesar's fate. But I am a retired four star general and this is a microphone. So I hope you'll indulge some reflections on the alliance that our two countries have enjoyed over the years and on the challenges and indeed opportunities that we now face together. But let me begin by thanking our host organization, the Lowy Institute, and by thanking Frank Lowy, the extraordinary Australian businessman, philanthropist and patriot whose name it bears. Frank Lowy's life story is in fact an illustration of what makes Australia great and of why Americans feel such an affinity for Australia despite the vast ocean that separates us. Indeed President Obama eloquently captured this sentiment during his visit here last year. As he noted, Australia and America are cut from the same cloth, inspired by the same ideals of opportunity and equality. Both our nations have been built in large part by immigrants who like Frank more than 60 years ago arrived on our respective shores often with little more than a dream of a better future and the determination to make that dream a reality. As a son of an immigrant to the United States myself, in my case a Dutch merchant marine officer who came to the United States when the Nazis overran Holland, this is an experience with which I'm familiar. In this case, thanks to Frank, one of the dreams that has been made a reality for all of us is the Lowy Institute, which since its founding a little more than a decade ago has risen to become not only a leading center of foreign policy scholarship here in Australia, but an intellectual force on the world stage as well. Notably, the work of the Institute has been squarely in keeping with another long and distinguished Australian tradition, that of principled international leadership. From the battlefields of the First and Second World Wars, to the deserts of Iraq and the mountains of Afghanistan, from the islands of the South Pacific to the pirate-infested waters off the Horn of Africa, Australians have repeatedly stepped forward to shoulder more than their fear of the burden in the struggle for a safer, freer, more prosperous world. That is one of many reasons that Australia is such a treasured ally of the United States and why, for so many of us, it is impossible to imagine a better friend than Australia. That's a conviction that you'll find not just among government officials and foreign policy experts in Washington, D.C., but also among the members of my tribe, the American soldiers, sailors, airmen, marines, and coast guardsmen of the 9-11 generation. Those Americans who have had the opportunity to serve alongside your forces on the battlefields of the past 14 years and who have seen for themselves close up what Australians and our Alliance are all about. This is especially personal, deeply personal for me. As the Coalition Commander in Iraq and later in Afghanistan, as the Commander of U.S. Forces in the Middle East and as the Director of the Central Intelligence Agency, I was privileged to work in the closest possible partnership with a succession of extraordinary Australian soldiers, diplomats, and intelligence professionals for nearly eight years of the post-9-11 battles. During that time, I've stood alongside Aussie comrades at dawn on the 25th of April during Anzac Day commemorations around the world, from Fort Leavenworth, Kansas, to multiple locations in Iraq, from McDill Air Force Base in Florida to ISAF headquarters in Kabul, and I count the Australians with whom I have served among some of the finest and bravest people I have ever known. In Nasseria and Baghdad, in Aruzgan and Kabul, in the greater Middle East and indeed around the world, diggers and their diplomatic and intelligence service comrades have displayed extraordinary initiative, determination, innovation, and courage. And I want to take advantage of this opportunity to salute their contributions, their achievements, and above all, their sacrifices. I treasure the experiences I had with them as do all of those who have been similarly privileged, performing missions of consequence against resilient, often barbaric enemies under the toughest imaginable circumstances. So if you leave tonight with nothing else, I hope that you will take with you one very simple message, a message of eternal gratitude to your country and those who have served it, and a solemn promise that the service and sacrifice of your men and women far from home will never be forgotten by those of us on the other side of the Pacific who were so honored to serve in their company. Now, the fact that the United States and Australia work so well together is a good thing because events in the world are making our alliance even more important. In truth, we're in the midst of a period of unprecedented upheaval around the globe. The rules-based international order that Australia and the United States have worked so hard to develop and defend over the past seven decades is under serious assault as a result of multiple challenges in multiple places. In the Middle East, the collapse of state authority in several countries has created a vast swath of ungoverned territory and a violent, radicalizing struggle for power, both among rival groups within these countries and between different countries within the region. The two biggest beneficiaries of this dynamic have been Sunni extremists, like the Islamic State in al-Qaeda on the one side and the Islamic Republic of Iran and its proxies on the other. Both have exploited the chaos and both have exacerbated the chaos, expanding and entrenching their respective positions across the Middle East. The result is that we see the creation of multiple terrorist sanctuaries on a scale unparalleled since 911. Only now, they are just a stone's throw from Europe. At the same time, we also see the specter of a kind of new Iranian empire in which Tehran trains, funds, equips, and arms, extremist proxy groups then seek to become the dominant elements in various neighboring Arab countries. In the Asia Pacific, the challenges are very different but equally urgent and important. Here, too, we see unprecedented challenges to bedrock principles of the international order, such as freedom of navigation and the territorial integrity and sovereignty of independent countries. In particular, as China has become more prosperous and powerful, a process enabled by the existing international order, it has taken a range of actions in the South China Sea, in the East China Sea, on its land border with India, in cyberspace, that have challenged the existing order. The recent large-scale campaign of island building in the South China Sea and impression that in order and apparent militarization of these islands is a particularly aggressive and worrisome example of this. Indeed, it is not an overstatement to say that a leading driver of geopolitics across Asia today is uncertainty among most of China's neighbors about what kind of great power China intends to be. In Europe, 25 years after the collapse of the Soviet Union, we're seeing the return of history with a vengeance. As Russia, under Vladimir Putin, has used military force to redraw international borders, grab pieces of neighboring countries, and attempt to re-establish a Russian sphere of influence. Although Russia's aggression has been focused on its near abroad, the consequences have been global in scope. The despicable shoot-down of Malaysian Airlines Flight 17 by separatists armed and supported by Russia, and Russia's ongoing efforts to thwart an international investigation of this atrocity in which so many innocent Australians lost their lives is only the most graphic illustration of this. Tonight, I'd like to use my remarks to focus on two of these regions, the Greater Middle East and the Asia Pacific region. In particular, I'd like to suggest that over the past several years, we in the United States have too often fallen into the trap of treating our involvement in these parts of the world as a kind of zero-sum game, encouraging the impression that in order to be successful on one side of the Asian landmass, we must by necessity downgrade or curtail our activities on the other. In my view, that is a mistake. The fact is that the United States has absolutely vital national interests in both these regions, the Middle East and Asia Pacific, and the two regions themselves are much more intertwined and independent than we typically acknowledge. Our security and prosperity are tied to what happens in both, and we therefore cannot afford to disengage or withdraw from either. A bit of historical context is important here. 15 years ago, at the beginning of this century, many policy makers in the United States and Australia assumed that the strategic focus of both our nations would turn increasingly toward Asia over the decades ahead. More than anywhere else it was thought, the history of the future, the character of the 21st century would be decided by developments and decisions here in the Asia Pacific region. But history has a way of surprising us, and on September 11, 2001, much of what we thought we'd do about the future was suddenly upended. In the wake of that terrible day, the bulk of high-level attention in Washington shifted to the Middle East. Asia was still understood to be hugely important, but it was the threats coming from the Middle East that were seen to be the most potent and urgent. As a consequence of this, a perception began to develop over the next several years on both sides of the Pacific that Asia had become a second-tier priority in American foreign policy and that our efforts in the Middle East were distracting us from work that needed to be done in this part of the world. In truth, there was much about this perception, this critique that was exaggerated or unfair. For even during the height of the wars in Iraq and Afghanistan, the United States never disengaged from the Asia Pacific region. On the contrary, it was in the wake of 9-11 that the U.S. undertook a number of significant initiatives, diplomatic, economic, and military that strengthened our position here. It was in the mid-2000s, for instance, that the U.S. and India forged a historic strategic partnership anchored in a path-breaking deal on civilian nuclear cooperation. It's difficult to imagine a more consequential development for the strategic future of Asia than the great power convergence between New Delhi and Washington that was engineered painstakingly during these years and that has since continued to deepen. It was also in the period after 9-11 that the U.S. took steps to bolster our bedrock alliances with Japan and South Korea, while also upgrading our strategic partnership with our old friends Singapore and starting to explore possibilities for cooperation with emerging partners like Indonesia and Vietnam. At the same time, we doubled down in our economic commitment to the region, negotiating free trade agreements with South Korea, Singapore, and, of course, Australia. But despite these and other actions, appearances sometimes matter as much as substance in matters of foreign policy. And there is no denying that the perception after 9-11 was that the Middle East had eclipsed Asia Pacific as the priority for Washington. There is also no question that as the Bush administration drew to a close, demand for U.S. leadership in Asia was starting to outstrip supply. Under President Obama, therefore, the U.S. began taking a number of wise steps to strengthen our engagement, to reaffirm our commitment across the Asia Pacific, a policy that ultimately came to be known as the pivot or the rebalance. In practice, this has meant further modernization of our alliances and partnerships in the region, including not just bilateral, but increasingly trilateral security cooperation, modernizing, upgrading, and expanding our military force posture, including the rotational deployment of U.S. forces in Darwin and greater presence in Southeast Asia. Greater cooperation with regional organizations like ASEAN, pursuit of the Trans-Pacific Partnership, the most ambitious free trade agreement in a generation, and intensified dialogue with China. Unfortunately, around the time that the rebalance was officially declared, some took the argument for it in a different direction, suggesting that in order to strengthen its position in Asia, the United States needed to pull back from the Middle East and reduce our commitments there. As a result, when the White House announced the rebalance, it was portrayed and perceived in some quarters, not just as a pivot to Asia, but as a pivot away from the Middle East. And this had a number of unintended consequences. First, it unsettled many of our friends and partners in the Middle East at a moment when there were already doubts about America's intentions and wherewithal as we exited Iraq and as the Arab Spring convulsed the region. Second, when crises in the Middle East later flared up, as they inevitably do, and these crises demanded high-level U.S. attention, this was then seen by some in Asia as evidence that the commitment to the rebalance was flagging or that the whole policy was never meant seriously in the first place. The result was that we arguably ended up raising rather than resolving questions about American commitment and credibility in both the Middle East and Asia. Looking back now, there are several lessons this experience suggests, lessons that should inform policymakers going forward. First and foremost, we need to avoid any foreign policy concept that appears to elevate the priority of either the Middle East or the Asia Pacific at the expense of the other. Doing so will only serve to make it harder for us to achieve our ends in both of these critical theaters. The truth is that developments in the Asia Pacific and in the Middle East are going to have a direct impact on the safety and well-being of our citizens and our allies for the foreseeable future. We therefore need to state clearly and unambiguously to our friends, to our adversaries, and not least of all to our own people that the United States considers itself to be a permanent resident power in both these regions and that we are not going away. This leads to a second point which is that we need to recognize that the greater Middle East and the Asia Pacific for all the differences that distinguish them are actually bound together and profound if not always self-evident ways. Consider, for instance, that the economic expansion of Asia has been fueled quite literally by the hydrocarbons extracted in the Arabian Gulf region that then pass through the Strait of Hormuz across the Indian Ocean through the Strait of Malacca and into the South China Sea. In practice, this means that the growth and prosperity of East, Southeast, and South Asia depend in no small part on the security and stability of energy exporters in Southwest Asia. It also means that the economic well-being of these Gulf energy exporters depends on freedom of navigation in the waterways of the Indo-Pacific. Any disruption to any element of this equation would pose a grave threat to the functioning of the entire global economy. That is one reason why the U.S. continues to have a vital stake, a vital national interest in ensuring the free flow of energy resources from the Gulf, even as our own direct consumption of Middle Eastern oil and gas shrinks thanks to the North American Energy Revolution. We should, in short, never forget that Middle East energy resources fuel our Asian and our European trading partners. Now, just as the economies of Asia and the Middle East are intertwined, so too is their security. Most recently and tragically we've seen this in the long reach of the Islamic State, which from its safe haven in Syria and Iraq has been able to recruit and incite followers in Southeast Asia and tragically right here in Australia. There are other examples of this, too, including the proliferation of nuclear and ballistic missile technologies over the past 20 years. Consider the AQKON network, which was headquartered in South Asia, manufactured at centrifuges in Southeast Asia and exported them to rogue regimes in Southwest Asia. Or consider the reported role of North Korea a few years ago in secretly building a heavy-water reactor in Syria before it was fortuitously destroyed. Perhaps the most profound linkage between these regions, however, is the indivisible fate of the international order itself and the credibility of our commitment to defending it. Rather than looking at our leadership in East and Asia-Pacific as an either-or proposition, therefore, we should recognize that we have a chain of interlocking interests that stretches from the Levant to the Arabian Gulf into the Indian Ocean and across to the Western Pacific. What we do at any specific point along that chain sends reverberations that are likely to be felt along its entire structure. The same is true, I might add, in Europe and Eurasia as we face a renewed set of challenges from Russia. This is especially the case. Whatever and wherever American security guarantees are called into question. Few factors matter more for the preservation of the international order than the trustworthiness of America's promise to come to the defense of allies and partners in the face of threats to their sovereignty, independence, and territorial integrity. Two years ago, we saw how hesitation to enforce a declared U.S. red line in Syria caused tremors not only in the Middle East, but also among some of our friends in the Western Pacific who also have a strong stake in America upholding its red lines. And although the ultimate outcome had had some positive dimensions with the removal of a significant share of Syria's chemical weapons stockpile, there is no clearer, more cautionary tale about the indivisible nature of American credibility in Asia and the Middle East. No more dramatic illustration that how the way we act or don't act in one theater can have an impact in the other and far beyond. The bottom line then is that rather than thinking of the Middle East and the Asia Pacific as two autonomous spheres that are sealed off from each other, we need to approach all of Asia as an increasingly integrated and interdependent strategic whole, east, west, north, south, and central. This also means that we need to work toward a comprehensive concept, a grand strategy, if you will, that reconciles and integrates our interests across this space which might be called Greater Asia from the Mediterranean to the Sea of Japan and from Western Russia to Southeast Asia. This fundamental challenge is not entirely new for us. During the late 1940s in the early days of the Cold War, General George Marshall, the greatest American statesman and strategist of all times, observed the tendency of military commanders to advocate for their particular regional area of responsibility rather than thinking about the global big picture. General Marshall called this problem Theatritis and it remains a challenge today. But diagnosing Theatritis is a lot easier than curing it. Indeed, some might question whether our governments really have the power, resources and skill to balance the full panoply of challenges presented by the Middle East and Asia Pacific. Or whether by necessity whenever we focus on any point on the map, it will in practice end up being at the expense of somewhere else. Militarily, to be sure, the threat posed by groups like the Islamic State is that we invest in a somewhat different mix of capabilities and platforms from those needed to deal with the growing anti-access area denial challenge in the western Pacific. Certainly there are assets needed in both areas. Beyond that, the challenge is obviously much more than just military as underscored by the recent missteps over the Asian Infrastructure Investment Bank and also by the enormous importance of completing the Trans-Pacific Partnership. There is in fact only so much political and diplomatic capital and there are only so many working hours that the President and his national security team can devote to the different problems of the world. Despite our best efforts, none of us has yet figured out how to be in two places at the same time. So there's no question. It's going to be hard to develop and implement a grand strategy for this incredibly diverse, dynamic and complicated space. But hard is not hopeless and to be blunt, being a responsible global power means that you have to keep many plates spinning simultaneously. I for one believe that the US and its allies are capable of rising to that challenge. Indeed contrary to predictions of American decline I would posit that there is no region in the world better position to compete over the coming decades than the United States and indeed North America more broadly. Especially when coupled with our great neighbors, Canada and Mexico over two decades into the American Free Trade Agreement the United States has extraordinary advantages including ongoing revolutions and energy production information technology advanced manufacturing and the life sciences as well as favorable demographics an absence of geopolitical rivalries or tensions with our neighbors and shared values with those neighbors including common commitments to free market capitalism and liberal democracy. Indeed I think we will see those advantages, shared beliefs and blessings play out impressively for the United States over many years indeed many decades ahead even as others such as China may struggle to maintain the kind of growth they've enjoyed over the past few decades. The United States also has the benefit of an unrivaled worldwide network of allies and partners who have benefited enormously from the international order of the past seven decades and who do not want to see it end up on the ash heap of history anytime soon. Arguably in fact, no nation has benefited more from the international order than has China and that should be a cautionary reality for it and other countries that may be tempted to challenge that order. The biggest obstacle in the United States frankly is not structural or driven by resource constraints it is simply political. Can we in the United States summon the leadership necessary to take the legislative actions and make the policy reforms necessary to unleash our full potential? Addressing such polarizing domestic issues as immigration the federal budget, education and infrastructure investment among others. The sad reality is that we continue to be paralyzed by partisan infighting in Washington though the past legislative season has seen some significant achievements including the provision of trade promotion authority to the president that hopefully will enable final agreement on the Trans-Pacific Partnership. Regardless the record of recent years in the U.S. has left much to be desired. To take one example the United States needs to follow Australia's example and increase our defense spending which has been strangled over the past several years due to the failure of our political parties to reach a common sense compromise on the broader budget and do away with so-called sequestration. Now, given the deterioration of global security over the past year what began as an inadvisable and risky approach has become truly indefensible. Winston Churchill understood America as well as if not better than anyone in the past 100 years famously observed that you could always count on Americans to do the right thing after they tried everything else. That cautionary note notwithstanding I remain hopeful that all of the challenges we've discussed the United States will do the right things in the end. And importantly we will continue to do so and be grateful for the partnership WISE Council and steadfast friendship of extraordinary allies, trading partners and fellow democracies like Australia. Well as I close this evening I'd ask that you allow a final moment of reflection. Addressing you tonight has been a distinct honor for me. But any honor that I have received in recent decades has been one that I have accepted only in as much as I could do so on behalf of those in the military and the CIA with whom I was privileged to serve in the wars and missions of the post-911 period. It is they who were outside the wire on a daily basis under body armor rucksack and Kevlar helmet never knowing if they'd be greeted by a handshake or a hand grenade but prepared to respond appropriately to either. Thus any accomplishments which brought recognition to me were their doing and a result of their service and their sacrifice on long tough tours and typically inhospitable places. I therefore accept the honor of addressing you this evening on their behalf on behalf of the Americans the Aussies and all the coalition and host nascent troopers spies and diplomats with whom I was privileged to soldier in the wars of this young century. Shortly after I resigned from the CIA nearly three years ago I got an email from one of my great British deputies during the surge in Iraq it contained some very kind words and it quoted an SAS Colonel from the World War II era true riches cannot be bought the Colonel had observed one cannot buy the experience of brave deeds or the friendship of companions to whom one is bound forever by ordeal suffered in common such true friendship is an emerald simply beyond price I have been fortunate over the years to accumulate a number of these priceless emeralds the true friendships of which the SAS Colonel spoke forged under pressure and the most challenging of times they have since withstood the test of time many of those friendships have been with your countrymen with leaders like Angus Houston and Nick Warner and Mick Crane with special operators like Jeff Sangleman and others who will remain nameless with long time dedicated government servants like Dennis Richardson, Kim Beasley and Duncan Lewis and with a host of leaders across your political spectrum it is in fact they and those they led in your defense and intelligence and diplomatic services that I think of when I place the order of Australia here in my lapel for the shared experiences I've had with the men and women who have worn your country's flag on their shoulders and defended it with their lives will forever be close to my heart for that I am now and will always remain grateful beyond words as I am as well for the honour of speaking to you this evening. Thank you very much Well Dave thank you on behalf of all our guests for a very substantive set of remarks and for providing a helicopter view of the global scene from North Africa to China's near seas and thank you also for agreeing to participate in a conversation with me and let me ask you about the two theatres that you spoke about at least and then let me come to Asia let me start with the fight against Islamic State as you know the Australian Government is this week considering extending our airstrikes against Islamic State to Syria as well as Iraq is there a danger that bombing Islamic State forces in Syria will help the regime of Bashar al-Assad a regime that is responsible for the deaths of hundreds of thousands Is it a smart thing to do? Well at the risk of you know I learned as an Infantryman years ago that if you encounter a minefield you should generally go around it rather than through it You're welcome to go through it because it will make more news At the risk of blundering into the minefield and having had a very good conversation with your extraordinary Foreign Minister today I think that taking such an action together with the other coalition members will do damage to ISIS it will add it will compliment augment the actions of the US and the other coalition partners that are indeed engaging ISIS not just in Iraq but in Syria as well to be sure ISIS is an enemy of Bashar al-Assad and also of the moderate opposition that we have been trying to support and that we have to support ultimately to defeat ISIS and oh by the way Jabhat al-Nusra the al-Qaeda affiliate the Orison Group established to try to project terrorism into Europe and the United States So again you have a situation where going after one actually could help another that is indeed a despicable barbaric autocratic regime responsible for the deaths of somewhere around 250,000 Syrian citizens and the displacement of millions and millions more and the damage of the infrastructure and so forth but at the end of the day there's a reason why the coalition countries in the US have taken that action and again I think that that is one that ultimately would be one that Australia should consider with that in mind Let me ask you, you mentioned splitting off different forces and a big story has run around the world in the past 24 hours that you favor peeling off and co-opting moderate members of al-Qaeda's Nusra Front to fight Islamic State in Syria and thank you for taking this lecture by causing this mini-controversy general But let me ask you, should the West Any publicity is good publicity when it comes to promoting a lecture Let me ask you, should the West really be cooperating with jihadists like Nusra? Well it should not be cooperating with the leaders of an al-Qaeda affiliate, Jabhat El-Nusra It should certainly consider doing what we did in Iraq We were confronted by an industrial strength extremist insurgent movement, al-Qaeda in Iraq and associated Sunni-Arab insurgents and we recognized that we could not kill or capture our way out of this industrial strength insurgency We needed to strip away some of the fighters, some of the shakes of the tribes that were either tacitly or actively supporting al-Qaeda and so what I'm suggesting that we consider here is that there are elements of Jabhat El-Nusra certainly not the leaders but some elements and certainly some of the fighters who for reasons of opportunism or convenience ended up fighting under Jabhat El-Nusra as they realized that the moderate opposition was not yet sufficiently resourced and the opportunities for fighting against Bashar al-Assad were better there than again with say the moderate opposition and so I think that it is certainly an option that we should consider. I frankly think that it's an option that has some prospect for achievement. I don't know whether it means that there would be thousands tens of thousands, the kinds of tens of thousands that we were able to strip away from the Sunni insurgents in al-Qaeda in Iraq were so instrumental ultimately in not just defeating it but destroying it by the end of the surge and it remained destroyed for several years there after until actions by the Iraqi government alienated the very population which sought to bring back into the fabric of society and created fertile new grounds for the planting of seeds of extremism, the reconstitution of al-Qaeda in Iraq as ISIS and it went over to Syria through new strength from the fight against Bashar al-Assad. Let me ask you about another challenge in the Middle East that you mentioned in your remarks and that is Iran. It looks like President Obama will get the numbers in Congress to pass his deal and in a Washington Post op-ed last week you urged him to state, to state very clearly that he will use force against Iran if Iran tries to dash towards a nuclear weapon. Why is it necessary for Obama to say that, do you think? Well, I think it's critically important not only that the White House not only the President but really Congress also make it crystal clear that it is unacceptable from a U.S. and ideally from the entire coalition from the P5 plus 1 perspective that any movement to enrich to weapons grade uranium for which there's only one reason that is to use it to make a nuclear device would be unacceptable and would be prevented. Indeed, the energy sector of the United States was unequivocal in public testimony when asked what we would do if we saw Iran enriching the weapons grade and you said we would prevent it. The President has done that to a considerable degree in a letter to a member of Congress but there seemed to be a tiny bit of qualification of that. And again, Ambassador Ross and I who did that op-ed, he a member of the Obama administration and his top National Security Council staff member for the negotiations for a period of time when I was privileged to be the director of the CIA for President Obama. We both think it's very, very important that this be very, that this is absolutely crystal clear. And also frankly that another element be very, very clear and quite detailed and that is the actions that the U.S. together with the coalition of countries will take to ensure that Iran doesn't now just use some of the money that they're going to get to fund adventurism and support for Lebanese as Bala and Hamas and the Houthis in Yemen and a variety of other actors in the region that are causing problems in the countries in which they reside. Because there's a lot of opponents of the deal who say we see all the trouble Iran is causing now when it's under intense sanctions. Imagine the difficulties it can cause when those sanctions melt away. And that's precisely exactly what Ambassador Ross and I were seeking to present. That's exactly the argument that we were making. Let me take you further to the east and ask about Afghanistan, a country where you commanded all the coalition forces. What are the prospects do you think for that country after 2016 when most of the western troops are due to withdraw? Well, I think it depends on the level of support that we continue to provide. In fact, I've written on that recently as well and publicly stated that my hope is that we will continue to provide a level of support not just again the U.S. but the coalition of countries. My hope would be that in fact at the 2016 summit in Warsaw there would be yet another commitment to continue the mission as there was at Lisbon on my dad when I was the commander in Afghanistan in late 2011 and after which by the way your Prime Minister, Prime Minister Gulag was the first national leader to commit to continuing it beyond even the end date of that particular extension. So again, my hope would be that that will be the course of action that's taken. The Afghans have shown enormous willingness to fight and die for their country. They have done so sadly in considerable numbers this fighting season. They have prevented the Taliban from hanging on to any important area that they've been able to seize. They have taken it back and by and large they have shown that the confidence that we've had in them was well placed as long as we continue to provide certain so-called enablers and certainly the resources, the funding, the equipment and so forth to enable them to continue. Let me bring your gaze closer to Australia to Asia. You made a strong argument it was probably your central thesis in your remarks that the United States can be present in Middle East and Asia at the same time and indeed there are critical links between the two theatres. But isn't it also true that in a world of limited resources if Washington doesn't prioritise then the important will always be trumped by the urgent and that probably means continued focus on the Middle East and insufficient focus in Asia. Well, first of all there is obviously always a need to prioritise. I can assure you having commanded both theatres, there's never been a general in history who felt that he had enough forces, enough funds, enough allies, enough partners, enough bandwidth nowadays, enough predators, whatever it might be. So there has to be a prioritisation. Theatritis as I mentioned does afflict commanders of certain regions. But having noted that first of all I would observe that even with sequestration constraining our defense budgets in past years although we've worked around it this year even with that the United States defense spending has been more than that of the next nine countries all put together. So yes it's not all that many of us would have hoped it would be but it is still very, very considerable relatively speaking and even with China's increases I think we spend at least four times what they spend and some of our capabilities are vastly beyond what they can expect to have in a matter of decades so certainly well beyond years. Beyond that though I mean the whole region to have a grand strategy, the whole reason to think this through is so that you don't let the urgent constantly trump the important so that there is an understanding of what is necessary over the long term even as you do obviously have to deal with the urgent, that you have to deal with the threats that emerge because they are real and they are pressing. Let me take you to one of those challenges, one that is occupying a lot of the minds of strategists in Australia as well as the United States. You and I were together at the Shangri-La Dialogue in Singapore and there were many concerns expressed not only by the US Defense Secretary but by a lot of the other Asian countries about China's behaviour in its near seas, in the East China Sea and the South China Sea. As a former director of the Central Intelligence Agency do you share these concerns and what do you think China wants ultimately? Well I do share the concerns and indeed there is a lot of apprehension in the region in particular about what China's goals are and frankly how it will act as a great power. In fact, I think there's a cautionary tale there for China because the more that they have taken aggressive actions again in the South or East China Seas and the border with India and cyberspace, you name it the more they have actually pushed countries into bandwagoning usually trying to bring the United States in against them rather than necessarily acquiescing to them. The fact is the Philippines are a perfect example we were actually invited to leave the Philippines as you'll recall a couple of decades ago and now we are actually more than invited to return and the reason is very very simple the Philippines feel very threatened by the aggressive activities of China in the South China Sea in particular. So clearly the Chinese leaders need to determine how are they going to evolve are they going to be again a contributing member of global society or are they going to in some cases continue to take actions that are seen as quite reprehensible such as the cyber theft of what now is accumulated to be somewhere around a trillion dollars of intellectual property just from the United States alone. The big big issues they are issues that now are perhaps made even more difficult because China has to confront the reality that its main drivers of growth in the past are not working as effectively as they did and that they are it appears destined to achieve considerably slower rates of growth with all of the effects that that has domestically and indeed of course in the region including Australia. And what is it that's driving this Chinese behavior? Is it just a desire for respect or is it something more than that? I think it is that but I think it is also there are certain nationalistic tendencies that result in something more than just a desire for respect. It's respect plus it's a desire essentially for hegemony in certain of the areas around China and again it's otherwise it's very difficult to comprehend or to understand why the militarization I mean again these islands this is not land reclamation as some folks have termed it this is land construction this is on rocks that were below the surface of the sea at high tide gave them no benefits whatsoever under the UN convention on the law of the sea have now been turned into islands with very substantial air fields and port facilities on those essentially militarization of these locations which again has caused great apprehension among virtually every neighbour of China in the maritime space. Let me ask you you were very generous in your comments about Australian policy and Australian contributions the human contributions we've made to the United States and to the causes that both our countries believe in. Australia has a strong track record of saying yes to American requests for assistance especially in the Middle East in fact most people would say I think we're the most reliable ally that the United States has the only country to fight beside the United States in every major conflict but this is being complicated arguably by our economic links to China what will happen if Australia starts to say no do you think to requests for American assistance especially in Asia look to be honest I think that's a hypothetical that is unlikely to materialize clearly China has an extraordinarily important economic relationship with China it's evolved over time certainly as do many other countries in the world when we were talking with your foreign minister today we noted that there are dozens of countries for whom China is the number one trading partner and that obviously complicates certain security relationships alliances indeed and the resulting actions taken in acting upon those alliances but I think China has navigated this challenge very skillfully and my expectation is that they'll continue to do precisely that can I ask you about alliances and how to manage how a smaller ally manages a larger ally one of my favorite alliance stories comes from the Second World War when Winston Churchill whom you quoted stayed at the White House in 1941 and he stayed in the residence upstairs and one day FDR came to see Churchill to ask him about something and he was horrified to find Churchill in the bath and he wheeled himself out started to wheel himself out but Churchill called him back and stood up in the bath and stood in front of him naked plump pink and dripping and Churchill declared the prime minister with a drink I assume but with a drink in his hand probably with a drink in his hand and a cigar but naked I think is the critical point and he called Roosevelt back and he said come back Franklin the prime minister of Great Britain has nothing to hide from the president of the United States I'm in favor of alliances general but alliances can be too close and that to me is an alliance it's too close but this is the difficulty that the smaller parties in an alliance sometimes have it's hard in a way it's sometimes difficult being an ally of a country that is the most powerful country in the world how do you think we do at managing the alliance at the moment how could we do better well first of all you know it's also instructive to remember that Churchill also observed that there's nothing worse than allies except not having any and I experienced that as a coalition commander on a number of occasions but I mean how is Australian doing I think it's doing brilliantly I think it influences the alliances it influences American foreign policy security policies economic policies you know it's a little trite to say that Australia is a middleweight power that punches at the heavy or super heavyweight level but it clearly punches way above its weight class and the reason is because of the enormous value that we put on that alliance and on Australian contributions I was explaining to someone earlier today that you know if you name the countries that you want to have and I have done that by the way I mean I have been a guy who said I'd really like to get some Aussies in fact you know Angus Houston who's here tonight and he's your chief of defense staff as someone to whom I went on a handful of occasions said look Angus I need help really quickly here we're trying to stand up the train and equip mission my own country is going to provide an industrial strength contribution but it may take a little while to get that request for forces back through central command to the Pentagon up to the next floor and on a Thursday when the SEC DEF is actually there signing deployment orders and in a week and a half he had 60 grade Aussies over there helping stand up the logistics aspect or whatever it was that we needed at that point in time I mean that's what you really value and by the way that's not just 60 warm bodies that's 60 great well educated professionally expert individuals from a country that generally speaks the same language as we do well I think we understood you fine tonight if you're wondering let me ask you one final question if I may you were upbeat about about US prospect in the world you had some useful cautions about the US political system which probably applied to the Australian political system too but you were pretty upbeat about it but let me challenge you on it and I mean a lot of critics of President Obama's foreign policy would say that under his presidency America has stepped back from the world that he over-learned the lessons from the Bush presidency and he's been too cautious if you look at European countries they are increasingly parochial increasingly focused on their own internal economic debacles even Britain which for so long was the most important US ally seems to have stepped back from the foreign policy front line cutting its armed forces cutting the foreign office and the BBC World Service is there a argument to be made that the west of which the United States and Australia are founding members has lost its confidence and how can we restore its confidence well first of all I think it's understandable I mean you're a historian a diplomatic historian in fact a scholar of FDR among others I think it's natural that when countries go through very serious experiences frustrating costly casualties and so forth such as we did experience and continue to experience in Iraq and Afghanistan it's natural that there will be a pendulum away from those kinds of activities I mean the United States has had the no more Koreas the no more Vietnam's the no more Somalia's and to some degree I guess no more rocks or Afghanistan's but I think actually we've already passed the point of the pendulum swinging in one direction and it actually has come back the fact is we are back in Iraq we're actually gradually doing more and more allies are back one of the largest coalitions if not the largest in history and oh by the way it also features some new members the countries in the region themselves the Gulf Cooperation Council countries Arab states who are engaged there as well as the western countries and to be sure the economic challenges that we've had the great recession of 2008-2009 I think shook the confidence of all of the countries that experienced that at the time but now I think there is actually a new confidence certainly building to a degree in the United States don't get me wrong there's a host of challenges as I explained there are numerous issues we have to confront that are very divisive and very difficult in political domestic terms but at the same time I think there is a recognition that we are on the threshold not of the Chinese century nor of the Asian century frankly as well as it will do in Australia will be among the leaders of it but that we're actually on the threshold of the North American decades and that is founded on the renewed economic strength above all of the United States and the four revolutions that I mentioned energy, manufacturing, IT and life sciences in partnership with two countries who are so highly integrated all three that we are the number one and two trading partners of each other despite them being relatively again modest in world terms economies I think that is giving the United States some degree of renewed confidence we have modulated how we are carrying out our missions there's progress in those missions and I think there is some degree of that happening in the Eurozone also in the UK where there is renewed growth it's differentiated, it's halting it's accompanied by challenges like the problems in Greece but with Germany driving it forward I think again you're seeing some degree of renewed confidence despite to be sure some lower defense spending in some of those countries and so again I actually am quite hopeful this is founded on touch wood on scholarship I actually teach a course called the coming North American Decades and I was questioned about it three academic years ago when I first unveiled it and asked if I needed to go sit under a tree until the thought passed and I think now people have actually conceded that the idea at that time founded on the beginnings of these revolutions is now becoming quite apparent and now not something that we welcome we'd like to see China prosper and continue to grow frankly it's hugely important not just for this region but for the entire world it was the source of the greatest amount of growth over the last decade alone but you're seeing now a year in which the United States will grow more in absolute real dollar denominated GDP than China does for the first time in nine years and the prospect is that that that may continue for some time so I think again that not only has the pendulum swung back to a degree in terms of our willingness to engage and our recognition of the need to engage but that there's a bit of a foundational strengthening because all of our foreign policy endeavors again ultimately are launched from a foundation that's based on our economic strength and I think we see that returning well ladies and gentlemen I said that we hope that the low-e-lecture lifts you up and I'm feeling more optimistic having spoken having heard that last answer ladies and gentlemen to move the vote of thanks for David Petraeus I'm delighted to call upon Serangus Houston he is one of my distinguished members and one of Australia's finest military leaders who continues to serve Australia in many capacities including as the PM's envoy in relation to Malaysia Airlines Flight MH370 and MH17 among his many other distinctions Angus was the CDF from 2005 until 2011 in which capacity he worked closely with General Petraeus Angus Thank you very much Michael Ladies and gentlemen I'm delighted to offer this vote of thanks on behalf of Frank Lowey and the other members of the Lowey Institute Board I first met David Petraeus in 2005 and in the that was when I first started as CDF I think I was about 30 days into the job at that stage and over the next six years I engaged him frequently we became very close professional colleagues and good friends I observed him quite closely and I saw a brilliant agile general who was the best of his generation in terms of generalship he did a masterful job in Iraq as I think most of you know have been wonderfully well as Commander Central Command and then went to Afghanistan where he again excelled Tonight we have been privileged to listen to a stimulating and insightful lecture General Petraeus reviewed the strategic outlook in the Middle East the Asia-Pacific and in Eastern Europe with great clarity he then argued a compelling case as to what the United States needs to do to address its strategic challenges in the Middle East and the Asia-Pacific he emphasised the imperative of avoiding theatritis as he called it to embrace an integrated whole of Asia grand strategy and I think Russia I think very well because with a very optimistic outlook about the United States on the back of the great economic progress there in recent times and of course we then had a very frank and open question and answer session which I think topped the evening off beautifully on behalf of everybody here and particularly Frank Lowy I'd like to thank you for an outstanding lecture I think you gave a very good overview of the major problems in the world today there are big challenges out there and I think you addressed them with great clarity Thank you also for your very generous words about Australia and the contribution that we have made on your watch I must say it's always been a pleasure working with you and I think everybody here would understand he's very persuasive and it didn't take much to get those 60 troops logistics training people out to David so he could do it so again David great to see you in Australia your great friend of Australia and thank you very much for the great treat we've had tonight it was absolutely fascinating and it was very stimulating and dare I say it entertaining thank you very much Thank you ladies and gentlemen please enjoy your desserts and I'll come back in a little while thank you ladies and gentlemen this brings us to the end of the formalities for the evening let me echo Angus's thanks to David Petraeus Dave I know the motto of the 101st airborne which you commanded is a rendezvous with destiny Dave you had a rendezvous with Sydney and we're delighted you kept your rendezvous so thank you very much let me thank once again our sponsors for the evening Capital Group, DCNS and Qantas and finally let me thank my outstanding colleagues at the Lowy Institute this is a big event for a small organisation and we do it all ourselves the planning started almost a year ago and it's all hands on deck on the night everybody has contributed but in particular let me mention Kate Tara Andrea and Anthony, Steph, John, Colette and Emilia for their hard work finally ladies and gentlemen thank you for joining us tonight and we look forward to seeing you at the Institute's headquarters on Bly Street soon thank you and good evening