Indian diaspora in Australia holds values of family, reward for effort & entrepreneurship

Eric Abetz, Patron, India-Australia Strategic Alliance has a freewheeling discussion with India Business & Trade about how the ground was laid for India-Australia FTA, potential areas of collaboration post agreement, COVID learnings and pursuing a balanced approach to a sustainable energy future.

Eric Abetz_India-Australia Strategic Alliance

India Business & Trade: How did the thought process evolve in Australia in favour of an FTA with India over the years?

Eric Abetz: Ten years ago, we formed the India-Australia Strategic Alliance. At that time, the general thought process was, “China is the future. Why are you bothering about India?” We had some very practical reasons. The Indian population was on a trajectory to overtake China and we felt that there were a lot of trade opportunities, which have not been fully explored. I thought it would be strategically wise to not put all our economic eggs in the China basket.

In that regard, I thought India would be a very good country. Whatever our differences might be, India and Australia are democracies that believe in the rule of law. We are in general, freedom loving countries involved in defence and protecting the freedoms and interests of other countries. But we haven’t ever been sort of expansionists. So for me, there was a strong, practical reason to strengthen that relationship.

When we started the India-Australia Strategic Alliance, I was in the opposition. And so when we won elections in 2013, we started encouraging the government to take the focus a bit more West, rather than directly north to China, and look at India. The then PM Tony Abbott, with whom I was very close, was able to establish very strong ties with India, and that was a benefit for our two countries. And also during that time, we witnessed a strong growth of young Indians coming to Australia to study.

“Whatever our differences might be, India and Australia are democracies that believe in the rule of law. We are in general, freedom loving countries involved in defence and protecting the freedoms and interests of other countries.”

While some people don’t like to talk about it, one of the benefits of the two countries is that we were both British colonies at one stage. And from there, we have a sense of democracy, rule of law, and cricket as well. Moreover, English, to a large extent, is a common language, which allows easier dialogue and understanding.

So, 10 years ago, I was encouraging, different groups to consider Australia for a visit that will educate investors, business migrants and investors. And a number of them have, and are doing exceptionally well and are very well accepted in the community. I think the Indian community has every mind, to be part and parcel of the community and see themselves as being in if you like, project Australia together. So it’s been a very good journey for the last ten years between our countries. Today, everyone thinks the India-Australia FTA is a great idea, while it was very different 10 years ago.

India Business & Trade: How important is the Indian diaspora in the blossoming of this relationship?

Eric Abetz: The Indian diaspora in Australia is growing rapidly. It has overtaken China and is now the third largest group after Australians and Englanders. Indians hold values which are very close to what I believe in – family, work, reward for effort, entrepreneurship – things which help build family community in the country. There are some other migrant communities in Australia that just want the handout, whereas the Indian community works exceptionally hard.

A lot of them have started from the bottom, driving taxis or whatever and then study and bring themselves up. I identify with that because when I went to university, I drove taxis overnight to help earn some money. And that is why I think I was able to bring a different dimension to Australian politics. The Indian community works exceptionally hard, wants to make a difference and be good citizens, so it’s very good.

India Business & Trade: How would you view cricket as a connecting factor?

Eric Abetz: Indeed, cricket is a key component of our ties. During my first visit, which was about two years ago, I was asked to give all sorts of talks at different places, which I did and got polite applause. But when I said that I come from Tasmania, the state of David Boon and Ricky Ponting, the applause was thunderous! And afterwards, everybody wanted to know, “Have you met Ricky Ponting/David Boon?” “Have you shaken their hand?” Yes, India and Australia are very cricket oriented. It’s a wonderful sport if it’s played in the right spirit. And I think most of the time, cricketers do so and that’s why it’s such a good strong bond between our two countries.

India Business & Trade: What are the areas where you see potential between the two countries, now that the agreement has been signed?

Eric Abetz: In the areas of education and professional services, I think there is a very real opportunity for Australia. India has the opportunity in IT and telecom, where it is quite a leader. And there can be a lot of collaboration in defence production. A businessman I met recently was talking about drone manufacturing, and also protection from drones, for which they are working in partnership with an Australian firm and an Israeli firm. As the doors open, people will think of those opportunities in a lot more ways. I understand that in India, there has to be 60% local content, so they’re working through that. At the end of the day, we understand that India needs to develop the capacity to produce its defence equipment here, just as we do in Australia or Israel.

“The task of those in government and in leadership roles is to try to get that balance. In my own view, nuclear will in fact be the future. It is sustainable with virtually no CO2 emissions or ugly footprints, due to acres and acres of panels and windmills.”

I assume there will be areas that we haven’t even thought of. So for any opportunity that comes along, I would like to be able to assist – education to farming to defence to IT. Coal production in Australia is important with Mr. Navin Jindal focused on Wollongong and the Adani mine in Queensland, getting high energy, low emissions coal to India.

I went to Australian importers in Queensland, and asked, “Why is an Indian company so interested in getting coal from Queensland, which it North of Australia, when there’s a lot more coal closer, like in Indonesia and elsewhere?” And the answer was the constancy of supply. But even more importantly, the high quality of the coal, which is high energy, low emissions, was a critical factor. When considering the environmental aspects, it is much cleaner than the alternatives that are available or are closer.

India Business & Trade: How do you view the role of the sustainability drive in global energy and economic stability?

Eric Abetz: Nobody’s against sustainability. I’m one of those who think that the carbon emissions discussion has nearly become a religion. The practical approach has being lost and everything is now blamed on human kind. We should ask ourselves:

  • Has the world been warmer in the past? The answer is yes.
  • Has it been colder in the past? Yes, it has.
  • And were humans responsible for that in our past. No.
  • So, should we be limiting our emissions? Of course we should.
  • Should we be good environmental stewards? Of course we should.
  • But does that mean that we have to turn off absolutely everything? I don’t think so.

Instead, I think a more considered approach is needed. In Australia, we’re starting to suffer the same sort of energy crisis that Europe is going through. In the 1990s, Australia’s economic fortune was based heavily on low energy cost. We became a first world economy, because we had one of the cheapest sources of energy in the world. Now, we are in pursuit of solar, wind, etc. and paying some of the highest energy prices in the world.

When people say to me in Australia, for example, that it’s not efficient to have coal-fired power stations, I simply ask the question. How is it that we can build a coal-fired power station in a coal mine and virtually shovel it straight in? On the other hand, countries like India, China, South Korea, Japan, will dig up the coal, put it on a train, send it to a port, load it onto a ship, dispatch it for the country, unload it, put it on a train and then finally into a power station?

Why are they doing it if coal is not the cheapest? They are only doing it because they want cheap, reliable energy for their people. And if they can make it work , why shouldn’t we, as Australia does not have these costs. I think that we have unfortunately been going down the track too much of pursuing clean energy options.

If I may add, these options, too, have environmental issues, like the toxicity of solar panels after 10, 15 and 20 years. The same is true with big blades from wind turbines that go into massive landfills after 15 years. So, if we would have put a lot of that investment into nuclear, or reconfiguring our coal fired power stations, that may be a better option.

Scientific research has a proven track record. Around 40 years ago, our motor vehicles worked on miles per gallon, but we are now a lot more fuel efficient. The same is true for our coal-fired power stations. We could have retrofitted all Australian coal-fired power stations cheaply, got a 30% reduction in emissions and made them more efficient. But we didn’t, because we were pursuing clean energy. And of course Europe and the UK are now facing this challenge. They went too fast into clean energy, just because it was like a religion. India, Japan, South Korea and China are still building coal-fired power stations, and Australia cannot. For me, that’s been very frustrating.

The task of those in government and in leadership roles is to try to get that balance. In my own view, nuclear will in fact be the future. It is sustainable with virtually no CO2 emissions or ugly footprints, due to acres and acres of panels and windmills. Nuclear does away with all that and it’s reliable. And in Australia, we hold around 25-30% of the world’s uranium. So we have more than that. We export our coal and uranium, but we’re not using it as we should.

India Business & Trade: So what has been your perspective on the pandemic and what has it really changed in the global economy trade?

Eric Abetz: The world is going to be a lot different place. In Australia, we have got together and are trying to establish a National Resilience Institute. The pandemic showed us that in an ideal world, there is a supply chain that lets everything run very smoothly. For example, do you know the base product for the pain killer Panadol comes from India? So we just continually rely on the shipping of that product from India to Australia.

“In Sydney, most people don’t know that its water and sewage supply was within one week of shutting down (in the middle of the pandemic-induced lockdowns). The spare parts needed to keep it going were coming in from China.”

During the pandemic, we experience some typical situations, like some ships are not able to sail or some manufacturers in India are not able to produce (because workers are sick or not allowed to go to the factory). All of a sudden, there was a shortage of the most basic painkiller in Australia. Similarly, in the masks that you have to wear, there’s a little aluminium strip that goes over your nose to keep it in place. Even those little aluminium strips are not made in Australia. We relied on them being imported.

What COVID has taught us is that good supply chains, uninterrupted, are fantastic and really allow the world economy to hum long, very efficiently. But as soon as they become interrupted or disrupted, what do we do? It’s something every country is now thinking about. For example, in Sydney, most people don’t know that its water and sewage supply was within one week of shutting down. The spare parts needed to keep it going were coming in from China. All of a sudden, they stopped coming in from China. It was very fortunate that people swung into action and we were able to make the parts in Australia.

Some of our towns and cities were wholly reliant on tourists, especially Chinese tourists. Overnight, it was gone. And so I think that’s the biggest lesson and there might be a retreat back to the nation state. There’s still room for free trade agreements, but I think there’ll be greater emphasis on ensuring that we have the capacity to look after ourselves for one to three months.

If you run a business of supplying sugar, and if you have to keep a stockpile that big, then each time you sell sugar, the cost to the customer includes keeping the stockpile. If you could rely on the sugar coming in always as needed, you’ll be able to sell your sugar at a lower price, making it more competitive, affordable, etc. And you can see all the benefits.

So the question then is, do you just have that supply chain or do you keep a reserve? If so, how big should that reserve be? The chances are that you shouldn’t keep a reserve of two years, but even one month will be a better option rather than just continually relying on the daily shipment or flight or whatever to provide you with just exactly what you need.


Eric Abetz is Patron, India-Australia Strategic Alliance. He is a former Senator for Tasmania from 1994 to 2022, representing the Liberal Party. He was also the Minister for Employment and Leader of the Government in the Senate in the Abbott Government from 2013-15. Views  expressed are personal.

Chaired by Dr Jagvinder Singh Virk, India-Australia Strategic Alliance (facebook.com/iasaorg) has been set up as a forum to contribute to the development of India and Australia’s resources by encouraging India and Australian business to engage in international trade, effective representation to government on market access and facilitation issues, delivery of practical professional development programs and forums that foster the exchange of ideas and knowledge and reward excellence. Since its inception IASA has been working to boost diversification of trade and relationship between India and Australia by organising delegation visits.

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Raj Pahwa
Raj Pahwa
2 months ago

Excellent

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