With some imagination and greater investment of time and trust, India and Australia will find that the sea between them is not a barrier, it is their shared border
India’s southern neighbour Australia wants more from the bilateral relationship. But this may require a lot more investment and imagination from both sides. The Australian continent and the Indian sub-continent have been tied together since the ice age but the ice between them has only begun to break in recent times. This has been buoyed up by an increasingly prominent Indian diaspora in Australia (so prominent that the last two Australian ambassadors to India have been of Indian origin) and by growing appreciation over there about India’s potential as an economic and strategic partner. More recently, the two countries’ strategic relationship has been in the news after the resumption of the Quad.
Driven by diaspora but not dollars: The Indian diaspora in Australia is highly visible in the coastal cities and is the second largest Asian-origin diaspora there (after the Chinese) with some families almost six generations old. With their above-the-median-level education levels and wealth, Indian-Australians are now entering politics and policy-making in a big way. For its size (seven lakh in a population of 2.5 crore), Indian-Australians punch above their weight. In terms of economics though, two-way trade languishes at $21 billion, equal to a fifth of Australia’s trade with China. Trade deficit is decidedly in Australia’s favour. However, it is not so much the deficit that is troubling as is the under-realisation of the potential of the relationship. India-Australia ties continues to be driven by Governments and inadequately by businesses. Australian corporates are too conservative to invest in what they perceive as a “risky” and “volatile” business environment in India. Barely 0.3 per cent of Australia’s outward FDI in 2017 came to India. There is a perception among Australian corporates, perhaps far more than European or American counterparts, that Indian business environment is tumultuous with frequent Government interventions. On the other hand, large Indian corporates appear to view Australia largely as a market but not as an investment destination. Part of the challenge is that despite being a country endowed with natural resources, Australia’s GDP is largely driven by the services industry and Indian corporates need significant knowhow to muscle their way into it.
Australia’s resource paradox: The lure of Australia’s commodities continues to attract Indian investment, albeit at a slower pace. The single-largest Indian overseas investment proposal till date, Adani Group’s gambit to buy the Carmichael coal deposit in Queensland for over $16.5 billion, ran into a political storm and had to be considerably scaled down last November. Though political parties have largely supported the acquisition, environmental activists lobbied against the project. The controversy is symbolic of a larger paradox in Australia’s energy policy, which sits on some of the world’s largest coal deposits but a large part of its population now opposes using coal due to concerns about carbon emissions. Australia is, thus, turning away from coal-fired plants and is increasingly adopting renewables even as it remains the world’s second largest exporter of coal.
In fact, the Australian economy is so closely tied to coal exports that its currency went into a downward spin in February over rumours of China blocking its coal imports, after ships bearing Australian coal were delayed off Dalian. Australia’s biggest markets for coal, China and India, are now keen to move up the value chain to own the sources of production. But the fact that Chinese and Indian efforts have aroused more attention than Australia’s domestic coal production among the Australian public and the continuing dilemma of economics vs environmental responsibility in Australian politics, will play in the minds of Indian investors intent on Australia.
Australia is counting big on becoming a top destination for Indian students for higher education. The report, ‘An India Economic Strategy to 2035: Navigating from Potential to Delivery’ by Australia’s former Ambassador to India, Peter Varghese, stressed the potential for Australia in skilling India’s workforce for rapid economic growth. However, the value of an Australian degree in the Indian job market is not yet seen on par with an American degree. It’s also an open secret that for many Indian students headed to Australia, education is the first step towards settling down in the country. On the face of it, this appears to be a win-win solution for Indians as well as for Australia since the latter is under-populated, direly needs population in its interiors and would benefit from a skilled immigrant workforce. In fact, foreign students, who opt to attend universities in smaller cities like Adelaide, are even being awarded extra points when they apply for permanent residency.
However, there appears to be some reluctance in Australia to fully acknowledge in policy this linkage between foreign students, who come for education and the latent immigration aspirations of the foreign students. This may lead to mismatched expectations at some point: Australia welcomes Indian students so that it economically helps the local education industry and expects that they would return home after their study; but Indian students see Australian education as a conduit for migration.
The Peter Varghese report, released in April 2018, has won bipartisan support by both the Liberal and Labour parties. The report calls for targetted engagement with 10 Indian States. There is also a call for a regular Strategic Economic Dialogue between the Finance Ministers on both sides. In an upcoming parallel report by Amb Anil Wadhwa, India may similarly identify a set of priority areas. For the economic relationship to take off, Canberra and Delhi would merit coming up with a list of mutual actions based on these reports.
Learning political values from each other: Politically, the two democracies appear to move along parallel longitudes of history albeit in different hemispheres of reality. While India’s electorate is 60 times that of Australia’s, the latter’s electoral system, a full century older than the former, has had more time to mature. Despite the vicissitudes of unstable Governments, stable State institutions keep the economy ticking in Australia. India has had its share of coalition Governments and despite a stable Government, the even-handedness of State institutions remains a concern.
There’s much that both nations can learn from each other. Australia’s democracy with its compulsory voting rule has much to be envied. One can get a ticket to contest as MP in Australia by applying to a political party with your resumé, something that is unthinkable in the Indian political scene. Transparency in Australian politics is awe-inspiring. Australia has only recently begun to turn its back on a history of racial exclusionism. Social justice is a demand in both countries but the way India dissolves the layers in its stratified caste system is likely to be very different from the way Australia handles historical injustices against the native Aborigines. What both nations can, however, concur on is the undebatable need to ensure equality of opportunity — in India for women and socially under-privileged communities and in Australia for the people in the rural interior. In both cases, youth is an asset, which, if not managed deftly, can become a real challenge. The threat of extremism and disaffection from the mainstream is for real. If polarisation levels along religious grounds are likely to pose a clear and present challenge in India for years to come, the recent massacre in Christchurch by an Australian suggest the latent fury in a small section of its society that cannot be ignored. Given the way hate-mongers are sharing ideas across borders, the policy establishment in both countries needs to brainstorm together on ways to address cyber-radicalisation, irrespective of the ideological tint, and without sacrificing democratic freedoms.
Future areas for cooperation: Looking ahead, the bilateral relationship needs a heavy dose of imagination. Notwithstanding India-Australia cooperation in the high seas, including the recent bilateral naval exercises off Visakhapatnam, there is great scope for collaboration in other forms of international commons. In the internet, India’s IT power can be boosted manifold with Australia’s edge in cyber security technologies. And yet, private sector cyber collaboration may just not be enough.
Both democracies remain highly vulnerable to cyber-attacks. In February, Australia’s Government and political parties were hit by a cyberattack attributed to a “sophisticated state actor.” In March, the website of the ruling party in India was hacked. In an era where elections are won and lost over social media, cyber-security awareness needs to be ramped up among leaders of both countries. It is not just about protecting EVMs but about protecting all instruments that shape elections — from party websites to insulating against any foreign attempt to subvert election through fake news. Both will do well to collaborate here.
Space is another frontier. Despite a MoU between India and Australia, joint space collaboration remains nascent. Australia’s space agency, established in July 2018, stands to gain from working together with ISRO on missions such as oceanography and remote sensing in the Indian Ocean region. Climate change is arguably the most under-appreciated area for collaboration. India is reeling from a rise in Extreme Precipitation Events (EPEs) such as the recent Kerala floods and unseasonal droughts. For the last seven years, Australia has been faced with below-average rainfall and drought even as rising acidity levels in the ocean have been destroying the Great Barrier Reef. While the countries may differ in climate negotiations about ways to address carbon emissions, they acknowledge that climate change is a reality. Hence, there should be no hesitation in collaborating on developing and benchmarking climate adaptation policies that range from building regulations to forestry to addressing the security impact of internal displacement of people due to climate change.
Building trust bilaterally: For far too long, Australia and India have been bound together by a third country. Pre-independence, it was the British empire that ensured that troops from both countries fought and bled together in theatres as diverse as Gallipoli and Tobruk. In recent years, shared interests with the US have brought the nations closer. But is there a scope to enhance this relationship without a third country? This requires Australian and Indian civil servants and politicians to overcome some long-standing trust issues. A deep perceptional shift is needed. This goes beyond targetted measures to enhance security cooperation. Australians must understand that India will remain a land of paradoxical images which work together — democratic freedoms co-exist with disrupted Parliament sessions,water supply problems co-habit a land with anti-satellite weapons. The deeper, systemic stability of India needs to be understood for what it is. Indians, too, should understand that Australia today sees its future far closer to Asia than the Americas. The familiar bonding over cricket can co-exist with the strangeness of Australian National Football.
(The writer was a participant in the 2019 Australia-India Youth Dialogue. These views are personal)
