On Asia Pacific Focus this week, host Jim Middleton posed a question to guest John McCarthy, a long-term Australian Ambassador to a number of countries in the Asian region, and whose last posting was as High Commissioner to India. The question, as defined by Jim Middleton, was whether Australia's relationships with Asian countries were still mostly transactional in nature, that is mainly concerned with buying and the transfer of capital (his definition). He attributed the notion of "transactional relationship" to Dr Michael Wesley of the Lowy Institute, though I somehow think that Dr Wesley's definition would be somewhat more substantive.

From a government and business perspective, there is probably a great deal of reality in this statement. It is the nature of institutions that they exist to conduct some form of transactional activity in order to achieve a vision or a purpose.

It is one of the great pities of governments, businesses and media that they often cannot see what is happening all around them. They get so caught up with their self-imposed boundaries, their own day-to-day transactions, that they start to believe this is the way the world works.

On Boxing Day 2004, a massive earthquake created a giant tsunami that killed hundreds of thousands and devastated many Asian regions. Initially, the story wasn't taken too seriously in the Australian media. It occurred at the wrong time of year for major news coverage, many of the worst hit areas were relatively isolated and it was difficult to get information (and pictures).

It was the public reaction that changed the way that companies, media and even government acted. Many Australians were trying to get information, trying to understand the magnitude of the problems being faced.

The public reaction was driven by a number of factors:

• The personal connections between many Australians and people who live and work in these regions. Australia is now in its second or third generation of backpackers, post-degree travellers and family travellers, many of whom have spent considerable time in Asia, and not just in the business hotels and resorts. Many Australians have enjoyed the company of people in these regions as we visited these places.
• The multicultural nature of Australia which has resulted in most Australian schools having pupils from Asian backgrounds. As Asian immigration to Australia has increased, so too has the spread of Asian populations throughout Australian suburbs. You would be hard-pressed to find a school in Australia now that doesn't have students from Asian backgrounds. The people being affected by the tsunami were the family and friends of people who are members of our communities.
• The work of NFP in the area and the many Australian volunteers in the affected regions. The word was spread quickly by the people in these organisations and the public reaction was every bit as quick.
• International students in Australia, most of whom come here from Asia and make many friendships while they are here.

These descriptions are superficial and there are certainly many other factors, but it is important that as Australia creates its strategy for the Asian Century we realise we are well beyond the transactional relationships that apparently continue to occupy the minds of those in government, business and media.

We have so much more available to us to build on, if only we can break down the barriers that prevent us from seeing the relationships between people.

During the Asia Pacific Focus interview, John McCarthy used that Australian phrase to describe the importance of Asia: it is Australia's back yard. This phenomenally outdated phrase highlights how easy it is to fall into the trap of accepting boundaries and getting trapped into institutional thought. The reality is that Australia needs to work hard to move from the little lot down the road to become part of Asia's back yard.

We wrote last week about our hope that the development of the government's white paper on the Asian Century looks beyond trade-based relationships. There is a great deal more that Australia and Asia share today. Focusing on the transactional relationships is not the way to assure Australia's future.

After all, the global community is coming to Asia and they will all be bringing transactional relationships with them. Do we really want to compete against the globe in a transactional context or should we be looking at the other advantages that are available - the real, human relationships that have been developing between Australians and Asians that are so much stronger today than apparently understood by government, business and media.