John Howard, Australia's second longest serving prime minister, is now in his “legacy” period. Unlike many, Howard may be smart enough to leave the scene with style, handing over to his successor (presumably the current Treasurer, Peter Costello) with ample time before the next election. From mid-year, Howard will have control of the Senate, which will give him the chance to round off his domestic reform agenda. From unpromising beginnings, Howard may end up being regarded as Australia's most successful prime minister since Sir Robert Menzies.

Howard has also done much to solidify the alliance with the United States, while ensuring that Australia continues to benefit from the booming resource trade with China, which contributed considerably to the 40 per cent rise in the Australian stock market in 2004. Now Howard is intent on improving relations with neighbouring Indonesia.

Having won four successive elections, Howard has also presided over one of the world's strongest economies. Before he retires from the scene, Howard is intent on proving wrong the critics who said that his strong support for the United States in Iraq would undermine Australian interests in Southeast Asia. The success of the Australia-New Zealand-ASEAN summit in Laos in November 2004 provides reason for optimism.

It is a hoary fallacy to claim that Australia's alliance with the United States is at odds with a close relationship with Southeast Asia. Indeed, the opposite has always been the case. Australia's alliance with America has helped underpin strategic stability in East Asia, an area in which great power tensions continue.

Strategic security in Southeast Asia still depends on a maintenance of a balance of power among the East Asian quadrilateral — the United States, China, Japan and Russia. Unlike in Europe, great power tensions were not resolved with the liquidation of the Cold War. These tensions arise in North Asia, not least in relation to the Korean peninsula. But because East Asia is mostly a maritime theatre, great power tensions manifest themselves around the vital straits that connect the Indian and Pacific Oceans.