7 minute read
Indian diaspora holds values of family, work & entrepreneurship
Eric Abetz, Patron, IndiaAustralia Strategic Alliance has a freewheeling discussion with India Business & Trade about how the ground was laid for India-Australia FTA, potential areas of collaboration, COVID learnings and pursuing a sustainable energy future.
IBT: How did the thought process evolve in Australia in favour of an FTA with India over the years?
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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 opportunities, which haven’t been fully explored. I thought it wouldn’t be strategically wise to 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 IndiaAustralia Strategic Alliance, I was in opposition. So when we won in 2013, we were 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 both countries. Also at that time, we saw a strong growth of young Indians coming to Australia to study.
The two countries 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. Ten years ago, I was encouraging, different groups to consider Australia for a visit to educate business migrants and investors. A number of them are doing exceptionally well and are well accepted in the community. So it’s been a very good journey for the last ten years. Today, everyone thinks the India-Australia FTA is a great idea, while it was very different 10 years ago.
IBT: 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. A lot of them have started from the bottom, driving taxis or whatever and then study and bring themselves up. The Indian community works exceptionally hard, wants to make a difference and be good citizens, so it’s very good.
IBT: What are the areas where you see bilateral potential post the agreement?
Eric Abetz: In the areas of education and professional services, I think there is there is a very real opportunity for Australia.
India has an 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 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 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 Indian company so interested in getting coal from Queensland, when there’s a lot more coal closer, like in Indonesia and elsewhere?” And the answer was the constancy of supply. But more importantly, the quality of coal, which is high energy, low emissions.
IBT: How do you see the role of the sustainability drive in global energy and economic stability?
Eric Abetz: Nobody’s against sustainability. But 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. Now, we are pursuing solar, wind, etc. and paying some of the highest energy prices in the world.
When people say to me 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, 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, ship it for the country, unload it, put it on a train into a power station. 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 doesn’t have these costs.
If I may add, the ‘clean options’, too, have environmental issues, like the toxicity of the solar panels after 10, 15, 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 either nuclear, or reconfiguring our coal fired power stations, that may be a better option. We could have instead retrofitted all Australian coal fired power stations cheaply, got a 30% reduction in emissions and made them more efficient. But instead, we were pursuing clean energy deployments.
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. And in Australia, we hold around 25-30% of the world’s uranium.
IBT: What is your perspective on how the pandemic changed the global economy?
Eric Abetz: 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? 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, the masks that you have to wear, there’s a little aluminium strip that goes over your nose. Even those strips are not made in Australia!
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. 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. So I think that’s the biggest lesson and there might be a retreat back to the nation state. There’s still room for FTAs, but I think there’ll be greater emphasis on ensuring that we have the capacity to look after ourselves for 1-3 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, more competitive, more affordable, etc.
So the question 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 with one month being better than just continually relying on the daily shipment to provide you with exactly what you need.
