We had different visions of the future of Asia and our place in it

Former Australian Prime Minister Paul Keating

Malaysian Prime Minister Mahathir Mohamad has made his position clear - Australia is not part of Asia and he has opposed its participation in the region.

This is something that former Australian Labor Prime Minister Paul Keating conceded in his autobiography. "We had different visions of the future of Asia and our place in it," he said.

There also been friction with Indonesian over the past two years, largely because of the leading role Australia played during the United Nations peace-keeping presence in East Timor. Jakarta resented what it saw as the arrogant and superior attitude of the troops deployed there.

But both Indonesian and Australian diplomats say things have calmed down, despite the apparent acrimony over the issue of asylum seekers using Indonesia as a spring-board to get to Australia.

"The press have exaggerated the conflict," said an Australian diplomat who did not wish to be identified. "Both countries agree that illegal immigration needs to be discouraged and stopped.

"A process in now in place where this will be resolved."

Investment partners

Mr Howard says his critics put too much importance on Australia's relationship with Indonesia. He says relations with other Asian governments are also important and are in good shape.

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Australia has relatively strong bilateral relations with Cambodia, China and Vietnam, partly because of their role in assisting these countries to break their international isolation.

Japan, South Korea and Taiwan have developed strong economic ties with Australia. There is substantial Japanese investment in Australia, especially in the mining industry, and Japan is Australia single most important trading partner.

Over the past two decades Australian businesses have invested heavily in South East Asia. More than half of Australia's exports go to East Asia, while 40% of their imports come from Asia as a whole.

Long term strategy

Singapore has perhaps the warmest relations of all the South East Asian countries with Canberra. It has military exchanges with Australia and the two countries are negotiating a free-trade agreement.

"Australia is not part of Asia, it's a Pacific neighbour," said an Australian diplomat. "We do want to strengthen our engagement with the region.

"It's a long-term strategy and it is in our long-term interests to do so."

But this will not be easy. Already Canberra's offer to extend the Australasian free-trade zone, with New Zealand, to include South East Asian nations is running into problems. It has been agreed in principle but is unlikely to be happen in the near future.

Arrogant image

One senior strategic analyst in Singapore said Asia sees Australia as being too closely identified with the United States.

"During the Asian financial crisis four years ago, Australia did contribute to bail-out packages for Indonesia, Thailand and South Korea, but continually insisted that Asian cronyism caused the crisis and that this in effect be written into the financial package," he said.

It is this image of arrogance and insensitivity that hampers Australia's efforts to forge stronger links with Asia.

"Asians cannot accept Australians brash approach, and find them very insensitive," said one Singaporean foreign ministry official who didn't want to be identified. "They are just not team-players.

"Until Australia learns to be more diplomatic and accept the Asian way of diplomacy they will remain on the outside of the region."