India and Australia in the Asian Century

Keynote Lecture by Professor the Hon Gareth Evans AO QC, Chancellor of The Australian National University, Professorial Fellow at The University of Melbourne and former Australian Foreign Minister, to the Australia India Institute and University of Calcutta Conference The Asian Century – Security, Sustainability and Society: An India Australia Dialogue, Kolkata, 5 December 2011

The decision yesterday by the Australian Government’s national party conference to open the way for the sale of Australian uranium to India creates the prospect of a new maturity in Australia-India relations – long overdue in the conduct of our relationship generally, but particularly necessary and important in the context of the new geopolitical and economic reality now being more or less universally described as the Asian Century.

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The reality, and scale, of the shift of global wealth and power to Asia – or, as historians remind us, back to Asia – that is now going on has become unequivocally clear. It’s always dangerous to extrapolate from current trends, but relative economic growth rates, trade and investment patterns, population futures, defence capabilities, and influence in global decision-making forums are all pointing in one direction.

The economic numbers, as spelled out by Australian Prime Minister Julia Gillard in September when announcing the commissioning of a White Paper on Australia in the Asian Century, are simply breathtaking. All the previous advances by Japan, then the ‘Asian Tigers’ (South Korea, Singapore, Hong Kong and Taiwan), and more recently by Malaysia, Thailand, Indonesia and Vietnam, have been put in the shade by the dramatic performance of China and India. In twenty years, these two giants – already containing nearly 40 per cent of the world’s population – have increased their absolute economic size nine-fold, with at current rates China doubling the size of its economy every eight years, and India every eleven.

They have together grown in just two decades from less than a tenth of the global economy to almost a fifth, and over the next two decades are projected to grow from a fifth to a third. Already the world’s second largest economy, China is on track to become the largest within twenty years, and India is set to surpass the U.S. economy for size by mid-century in purchasing power terms. All this is tempered, of course, by the reality that neither China nor India will be rich in per capita terms for a very long time yet, with all the internal distributional problems and tensions that involves – but it doesn’t alter the basic reality of a huge wealth shift.

Economic growth has been accompanied by significant increases in military expenditure by both China and India with, on the latest 2010 figures, China ranking second in the world after the U.S. and India ninth – after the UK, France, Russia, Japan, Germany and Saudi Arabia.1 Here, however, relative standings are rather overwhelmed by the absolute numbers, with the U.S. spending $698bn (43 per cent of the world total) as compared with China’s estimated $119bn (7.3 per cent) and India $41bn (2.5 per cent). But in the contemporary age, when war between the world’s major powers has become almost unthinkable, power is about perceptions, and political influence, as much or more than it is about raw military capability, and in this context it is clear that China, and increasingly India, are punching well above their absolute military weight.

Further signs of the times are the emergence of the G20 as a significant global policymaking forum, gradually superseding the G8 (with the G20 having five Asian members – China, Japan, India, ROK and Indonesia, as well as Australia, as compared with the G8’s one, Japan); the emergence of the BRICS group (Brazil, Russia, India, China and South Africa) as a significant force in UN and other multilateral decision-making, in contexts ranging from climate change negotiations to Middle East peace and security; and the emergence of the East Asian Summit as a new institutional focus for both economic and security dialogue demanding the attention and engagement at presidential level of the United States.

Of course the United States is not going to fade from the equation any time soon – it will remain the world’s dominant military power for the indefinitely foreseeable future and continue to be an economic superpower even when overtaken, as it will be soon enough, in total GDP terms. But with Europe’s paralysed institutional response to the ongoing Euro financial crisis dramatically eroding its economic credibility, and its relative military capability a very pale shadow of the past; and with Russia’s capability, its nuclear arsenal apart, lagging way behind Vladimir Putin’s aspirations for imperial revival – the Euro-Atlantic is simply no longer the centre of the action. That mantle already belongs to the Asia Pacific, broadly defined so as to embrace the Indian sub-continent as well as East Asia.

With the perception, and reality, of India’s growing role within this broad geographical construct, it’s only a matter of time before the terminology we are all most routinely and comfortably using will be not the Asia Pacific but the Indo Pacific. That construct is still broad enough to include the U.S. as the major Pacific economic and military power, but it reflects the fact that trade volumes between East Asia and South and West Asia have been growing much faster than, and now far outweigh, those across the Pacific. Much of that, true, is Gulf oil fuelling China’s growth, but a lot of it is also burgeoning bilateral trade between the two giants, and the overall trend is unmistakeable. The “Indo Pacific” it will be.

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In the context of the new Asian Century I want to suggest that it is abundantly in the national interests of both Australia and India to bring a new maturity to our relationship, as it works itself out not only bilaterally but regionally and globally as well. In what follows, in developing that theme, I want to offer some thoughts about the present level of maturity in our relationship, about the nature of our respective national interests, and about the particular ways in which that new maturity might manifest itself.

I think it is fair to say that our relationship has continued to lag well behind its full maturity potential – despite the efforts over many years of an enormously talented series of diplomats on both sides, several of whom are with us at this conference; despite periodic shows of great enthusiasm by governments, particularly on the Australian side, for developing some real substance in our relationship, reflected for example in the establishment of the Australia India Council and now the Australia India Institute; and despite very rapidly developing business and people-to-people contacts, not least in the education sector.

It would be much too crude to describe us as stuck in the old “cricket, curry and Commonwealth” time-warp – though there are no doubt legions of our respective citizens whose perceptions have not advanced much beyond that. For a start, we do now have a very strong, albeit one-sided, economic relationship. Since its historic decision in the early 1990s to open its economy, India has become a very large market for Australian natural resources (coal, gold and copper in particular) and educational services: overall this is our fourth largest export destination for goods and services (after China, Japan and Korea), and very much has the potential to become the second.

In diplomatic terms, our relations from the beginning have been cordial – albeit limited during the Cold War years because of different strategic alignments, some formidable personality differences between Prime Ministers Nehru and Menzies, and fallout from India’s nuclear tests in 1974 and 1998 – and we have worked together well on particular issues over the decades, most notably, in my personal experience, in the endgame struggle against apartheid we waged in the late 1980s and early 1990s.

We have had the beginnings of security cooperation with the conclusion of a “strategic partnership” joint declaration in 2009 which both continued and foreshadowed a significant program of pol-mil talks at ministerial and official levels, and service visits and exchanges: this has not yet borne much fruit in terms of joint military exercises or other substantial defence cooperation, but the foundations have been laid.

And we have had a long tradition of people to people contact, not only on the sporting field, but with generations of young Australians – including me in my long-ago youth – spending months of their lives travelling in India, getting to know and love the country. In recent years around 100,000 young Indians have been enrolling annually in Australian higher education and vocational training institutions, and (notwithstanding the unhappily overblown press reports of a couple of years ago) manifestly enjoying themselves. In a 2010 Survey of International Students, in which 85 per cent expressed themselves satisfied with their living and learning experience in Australia, Indian students were the most satisfied of any nationality group.

But all that said, the India-Australia relationship simply hasn’t had the weight and priority that it could – and I, for one, believe should – have had. It is one that has not been terribly good at taking small bumps in its stride, as a genuinely mature relationship does. There has been periodic irritation on the Indian side with Australia’s recurring interest– including certainly from me when I was Foreign Minister – in initiating more substantial cooperation arrangements in the wider Indian Ocean region, which India has regarded as very much its own domain; in any show of interest by Australia – at least since Sir Owen Dixon’s time as a mediator – in any international route to resolution of the long running Kashmir issue, which has been at the heart of so much of the ongoing tension in South Asia; with – at least until recently – our perceived closeness with the U.S.; and with some of our other international activism. Most recently, and obviously, there has been intense irritation over the issue of uranium sales. Whether or not that or any other substantive issue had anything to do with his absence, there was certainly real disappointment on the Australian side that Indian Prime Minister Manmohan Singh did not find it possible to attend the recent CHOGM meeting a not very long flight away in Perth.

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The way forward – and yesterday’s removal of the uranium obstacle creates the environment for this – is for both India and Australia to focus on their respective national interests, rethink what these mean in the new economic and geopolitical environment of the Asian Century, and recognize that they can be very usefully enhanced by consciously trying to develop some new and enhanced dimensions to our relationship.

In this context, I think it is important to spend a few moments talking about what exactly we should mean when we talk about “national interest”. This is traditionally conceived, and I think this is very much true in India, in terms of two very familiar dimensions, and two only: viz. economic and trade interests on the one hand, and geostrategic and political interests on the other.

Supremely important as these continue to be, I have long argued that in addition to security and economic interests narrowly defined, every country has what it should recognise as a third national interest, that in being, and being seen to be, a good international citizen. This becomes most relevant in the context of meeting a series of global and regional challenges (or, putting it another way, advancing global public goods) which cannot always be clearly or directly seen as being in a country’s immediate hard-headed economic or strategic interest: these include climate change, mass atrocity crimes and other major human rights violations, international piracy, drug trafficking, out of control cross border population flows and eliminating weapons of mass destruction.

The idea, in a nutshell, is that to seek to make a cooperative contribution to meeting these challenges, even if in particular cases there is no immediate economic or strategic return for one’s own country, is not just the foreign policy equivalent of boy-scout good deeds (although there is of course a moral dimension to this: acting simply because it’s the right thing to). Rather it does actually work to a country’s advantage.

The argument in essence, and I have often seen this dynamic at work in my own experience, is that good behaviour does encourage (even if it doesn’t guarantee) reciprocal good behaviour. To the extent that selflessness is involved, to the extent that we support, and spend time and energy and political and financial capital on, things that are much more important to others than to us and from which we don’t stand to derive, directly or indirectly, any obvious economic or security benefit – like Australia supporting a particular aid project in a country with no oil or mineral resources, or India contributing, as it so often has, to international peacekeeping efforts in Central or East Africa, or either of us trying to mediate a far-away conflict – nonetheless a reputational advantage accrues which can be very useful indeed when an issue comes along that is more important to us than to others, and on which we want others’ support.

Australia squarely embraced good international citizenship as a third pillar of national interest when I was Foreign Minister in the Hawke and Keating governments; this was then specifically disavowed by the Howard government (substituted by a focus on ‘Australian values’, which quite a few observers found as jarring as Washington talking to the world about ‘American values’); but has now made a regular reappearance in the policy pronouncements of the Rudd and Gillard governments. While Indian foreign policy has always had some visibly idealistic dimensions – e.g. its traditional strong support for development in the global South, and its support, most passionately expressed by Rajiv Gandhi,for a nuclear weapons free world – official articulations of national interest, by contrast, seem to be very much cast in the traditional dual economic and strategic form, and there is a strong reluctance – noted in a just published EDAM discussion paper by George Perkovich 2 – for India to become a partner with anybody in advancing global public goods of the kind I have mentioned. Maybe this is a dimension of Indian policy thinking that could usefully evolve a little further in the new international context we are all experiencing: it is not necessarily odds with what Perkovich describes as “India’s abiding determination to be and appear autonomous”

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What, then, are the specific ways in which a new maturity in India Australia relations might manifest itself in each of the three national interest areas I have mentioned? In addressing these issues I am conscious of the need for Canberra not to demand too much of New Delhi. We should never sell ourselves short, and we have no cause to do so – ranking as we do around the 13th largest economy in the world (depending how you count it), the 13th largest military spender, a fellow member of the G20, and a lively and creative practitioner of middle power diplomacy in the region and globally. But we do need to be conscious that India has a very crowded diplomatic agenda, innumerable other priorities, and a very undersized diplomatic service which limits its capacity to pursue a more intensive relationship with almost any other country, and tailor our aspirations accordingly.

The economic relationship is the most obvious place to start, because it has so much inherent momentum already, and so much of it is a function of private sector rather than governmental activity. As has regularly been pointed out by commentators, 3 the two countries’ endowments are highly complementary, with Australia’s huge resource deposits and a highly developed, stable economy matched by India’s massive demand for minerals and energy and exceptional human capital. For India, needing to increase its total energy use many times over to keep developing and offer decent life opportunities to hundreds of millions more of its people, energy security is central – and Australia is perfectly geographically placed to make a major contribution to meeting that need, party through supplying uranium for nuclear energy, but much more significantly through exports of coal and gas.

And, wearing both my ANU and Melbourne University hats, I’d be remiss if I didn’t make the point that with our strong higher education tradition of research and teaching excellence, straddling as we do both the Indian and Pacific Oceans and with a long and intense commitment to the region going back to the Colombo plan, it makes sense for India – with its unmet demand for university places currently running at some 4.7 million each year – to continue, along with other countries in the region, to continue to rely strongly on Australia as a higher educational provider.

If our bilateral trade and investment relationship is to reach anything like its full potential, there needs to be closer economic integration through a comprehensive and liberalizing trade agreement of the kind that Australia is negotiating with our three largest partners – China, Japan and Korea – and has just launched in May this year with India. A truly liberalizing FTA would assist in broadening the base of merchandise trade, remove the barriers that impede trade in services, facilitating and encouraging investment, and addressing behind-the-border trade restrictions. Negotiating agreements of this kind is always a very long and complex task, and negotiations with India can be expected to be particularly so – not least given its understandable sensitivities about agricultural market access – but it would be very much in both countries’ interests to conclude a mutually acceptable agreement sooner rather than later.

The defence and security relationship between our two countries has the most intriguing potential of any area, with the capacity to significantly enhance both Indian and Australian geopolitical, strategic and security interests. The most obvious way forward, as has been regularly urged by commentators like Raja Mohan and Rory Medcalf, 4 is to make some really serious efforts at maritime security cooperation, to strengthen the level of naval engagement both in the Indian Ocean region and in our South East Asian neighbourhood, aimed at addressing transnational seaborne challenges like piracy and people-smuggling; developing further disaster management capability of the kind that was used to such good effect when India and Australia, along with the U.S. and Japan, led the response to the December 2004 Indian Ocean tsunami; and perhaps also – although this raises more sensitive questions I will come to in a moment – working to build a rule-based maritime order in the Indian Ocean, and supporting one in the South China Sea.

It has also been suggested, in a recent joint project of the Lowy Institute, Observer Research Foundation and – an interesting source for me to be quoting! – The Heritage Foundation, 5 that India-Australia defence collaboration be taken a quantum leap further, so as to extend not only to maritime exercises and patrolling but to some major military acquisitions: “Both have ambitious plans for modernizing their blue water navies and would benefit from sharing lessons and insights. Both are acquiring P-8 maritime surveillance aircraft from the U.S., and it would be logical for them to cooperate in training and maintenance, and possibly even share surveillance data.”

The reaction to these kinds of proposals is bound to largely depend on how they are seen in relation to China, about whose longer term intentions there has been a considerable degree of regional nervousness since the more aggressive posture it manifested in several ways in 2010 in relation to its maritime claims in the South China Sea, the less than robust response to North Korea’s military adventurism on the ROK border last year, and – to a lesser extent – its apparent interest in developing a more substantial naval presence over time in the Indian Ocean itself.

India, while certainly sharing those concerns will, with its traditional resistance to entering into any kind of defence alliance, be wary about having anything to with anything that could be so characterized. As Australian High Commissioner to India Peter Varghese has described it, while happy enough to pocket a strategic dividend from those who have a balancing-China agenda, India will not play the part of an anti-China chess piece on anyone’s chess board.

Australia, for its part, is no keener than any other of China’s major trade and investment partners to see its relationship with Beijing end in tears; and has constantly said, like India, that it has no interest in applying to China anything resembling a Cold War containment strategy. But Australia has also, I think rightly, not been reluctant to join with the U.S. and its South East Asian neighbours in some appropriate push-back after the South China Sea events. And the government, while rightly making no judgement at all about any kind of hostile intent on the part of China, has also being developing, I think justifiably, a hedging strategy based on its assessments of present and future capability of China and other major players in the region.

This is articulated to some extent in the much discussed Australian Defence White Paper of 2009, and has become a little more obvious with the Gillard government’s enthusiastic recent embrace of a training base in northern Australia for 2,500 U.S. Marines, a significant new capability within easy reach of both South East Asia and the Indian Ocean. And it is an approach which, on the face of it, would lead to Australia being quite welcoming of any proposal for greater defence cooperation with India, perhaps – as the U.S.-India relationship continues to gather momentum, as it has since the nuclear deal – on a tripartite basis with the U.S.: Foreign Minister Kevin Rudd is reported as having said last week that such an idea was “worth considering”. 6

But if the idea is to be further considered, it will need to be with a lot of careful consideration being given to both substance and presentation, lest it push China into exactly that posture of defensiveness and hostility it is very much in the region’s interest to prevent. We have been some way down that track before with the ‘quadrilateral dialogue’ between the four big Indo Pacific democracies – U.S., Japan, India, and Australia – which was initiated in 2007 in the aftermath of their successful tsunami cooperation and which, although it never went further than preliminary officials talks about possible further cooperation on disaster relief and sea-lane security, generated a very hostile response as a nascent exercise in containment, partly because it seemed to Beijing to mesh so closely with newly elected Japanese Prime Minister Abe’s vision of an “arc of freedom and prosperity” which pointedly excluded China.

The basic message is that a lot can be done by bilateral or minilateral maritime cooperation to serve a variety of transnational public goods objectives, and at the same time build basic hedging capability against possible future risks, without necessarily overtly getting into the face of those against whom one is hedging by using the ‘C’ word (containment) or the ‘D’ word (maintaining the dominance of the U.S. and its allies in the region) when at most what is involved, and likely to be able in practice to be delivered, is the ‘B’ word: balance. In diplomacy words have always been bullets and it’s important not to fire them prematurely or unnecessarily.

The remaining area where it might be possible, and would certainly be desirable, to introduce a new level of maturity into India-Australia relations, is in relation to our respective national interests in what I have described as being and being seen to be good international citizens. Maritime cooperation in disaster relief and sea-lane protection from piracy and terrorism is one such area, which I have just discussed in the context of defence and security cooperation more generally. There are two other areas which I’d like to mention, albeit much more briefly than the importance, and I think interest, of the subject matter requires – in both of which I have been closely personally involved in recent years wearing other hats.

The first is the global response to internal mass atrocity crimes of the kind which the international community has been lamentably failing to prevent for centuries, but spectacularly so in the Rwanda and Balkans catastrophes of the 1990s, and which led to the unanimous embrace by the UN General Assembly, at the 2005 World Summit, of the concept of “the responsibility to protect”. The doctrine – unlike the “humanitarian intervention” concept it was designed to replace – is nuanced and multidimensional, and allows coercive military intervention only in the most extreme and exceptional circumstances and when authorized by the UN Security Council, and ir has won, at least in principle now, close to universal support.

But there is a real question now as to how strong that support, from India in particular, will be in the future. The first time the Security Council clearly authorized military action for civilian protection purposes was in Libya in March this year, in the face of Gaddafi’s imminent assault on the people of Benghazi. At the time the resolution, which India as a Council member did not oppose, was remarkably uncontroversial, but it has become much more so since given the way in which the intervening NATO-led forces stretched their civilian protection mandate – some would say to breaking point, others beyond it – so as to encompass regime change, and taking sides with rebel forces in a civil war to achieve that. Unhappiness with that development has led the Security Council to badly drag its feet even in uttering condemnation of the current situation in Syria, which on most accounts has involved even larger scale killing by the regime of protesting civilians than in Libya.

Rather than turning back the clock on a principle that most have seen as a huge advance in the recognition and protection of our common humanity, my plea to India and other countries who – I think understandably enough – feel as it does, is to respond productively to the way in which the Libyan mandate was agreed and implemented, by supporting the adoption by the Security Council of carefully drawn guidelines as to when coercive military force might be legitimately authorized and implemented. Such guidelines, which were widely debated in the run up to the 2005 adoption of the responsibility to protect, but not then approved, would contain explicit requirements that, among other things, the military response be proportional to the harm feared, a line that many would argue was crossed in Libya. This seems to me to be exactly the kind of improving-global-public goods campaign on which India and Australia could cooperatively work.

The other such area I can’t forbear from mentioning is nuclear non-proliferation and disarmament, where India and Australia have long been prominent and articulate supporters of both, but where differences of view about basic strategy – particularly since India itself acquired the bomb in 1998 – have made it difficult to find constructive common ground. My view about the Nuclear Non-Proliferation Treaty (NPT) is that while it has flaws, and should have been much stronger in the disciplines it imposed on the nuclear weapons states it recognized, it has been from the beginning, and remains, a hugely important vehicle for both limiting the spread of nuclear weapons and ultimately securing their elimination. But it is also my view, reflected in the report of the international commission I recently co-chaired, 7 that it is quixotic and unproductive to demand of the three states who stayed outside the treaty from the beginning and who are now nuclear armed – India, Pakistan and Israel – that they join the NPT as non-weapon states as a necessary (if not sufficient) condition for any nuclear dealings with them.

A far more productive approach would be to encourage these states, while they formally remain outside the treaty so long as they possess weapons, to nonetheless systematically embrace the various parallel disciplines – relating to both non-proliferation and disarmament – that most NPT members have accepted or expressed a willingness to accept. Some of the most important of such disciplines – which it is to be hoped that India might be prepared to accept, even if only on the basis of simultaneous agreement by others – are signature and ratification of the Comprehensive Test Ban Treaty (CTBT), a voluntary moratorium on the production of fissile material for weapons purposes until a formal treaty is negotiated, and a cap on the production of any new weapons.

There was a small hope, which I and others had at the time, that the U.S. and others might have been able to negotiate one or more such commitments as the price of acceptance of the U.S.-India nuclear deal, but that is now water under the bridge. My present hope – which no doubt some here will regard as equally soft-headed, but I remain a congenital optimist about these things ¬– is that with the Australian government now prepared to relax its ban on the supply of uranium (no doubt on the condition, which I am sure will be acceptable to New Delhi, that it is not used for military purposes), it may be possible for us to work together to fundamentally advance the agenda, to which I believe we are both committee, of a nuclear weapons free world, exploring again in that context some of the areas in which India might play a leadership role, starting with the CTBT. India has always been – so far at least as third countries are concerned – a responsible non-proliferator, and Australia could help kickstart a working relationship here by supporting its immediate membership of the Nuclear Suppliers Group, Australia Group, and other major non-proliferation export control groupings.

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Let me conclude where I perhaps, more conventionally, ought to have begun, by saying what a privilege it is to be able to address this Dialogue on subjects that are so close to my heart in a country that is so close to my heart. I first visited India over 40 years ago, as so many of my generation did, going to the UK and back to study: no black cars or motorcycle outriders, no money to stay in anything but the cheapest hostels, and three months travelling around great swathes of the country in third-class trains, often with nowhere to sit, let alone sleep. But as rugged as it was, this was one of the most extraordinary and enduring experiences of my life, producing friendships that have endured for four decades, and memories that have remained with me all my life.

One such experience was on a train somewhere in central India, maybe on the line between Sanchi and Jhansi, when at one point an old blind beggar made his way into my as usual hopelessly crowded carriage, and began to sing in a lovely, lilting voice, which I began to record with the great, clunky plastic covered brick of a tape-recorder I was carrying: no i-phones then. When he stopped to hand around his begging cup, I started to play the tape back. But rather than enjoying the moment, the blind man’s reaction was one of total rage that some interloper was trespassing on his pitch. My fellow passengers managed to calm him down and explain that the voice he was hearing was his own, that he was hearing for the very first time in his long life. What followed then was an hour that I won’t, and I don’t think anyone there will, ever forget – as he sang and listened, and sang again, and listened again, all the while with a smile of the most sublime enchantment.

It’s these kind of experiences, rather than anything we talk about in conference rooms, that remind us of our common humanity, and just how unbelievably important it is that we find ways to overcome the things that divide us – be they nationality, race, religion, class, ideology or anything else. And that remind us how critical it is to resolve without deadly conflict the differences we are bound to have, not least as the world turns on its axis and we wrestle with all the existential tensions and pressures that are bound to be part and parcel of this new Asian Century.

References

1 Australia – spending USD24bn, 1.5 per cent of the world total - comes in at thirteenth, after Italy, Brazil and South Korea, but ahead of Canada and Turkey: SIPRI 2011 Yearbook.

2 George Perkovich, ‘The West’s New International Security Challenges’, Centre for Economics and Foreign Policy Studies, EDAM Discussion Paper Series 2011/5, November 2011

3 e.g. Raja Mohan & Rory Medcalf, ‘Time to Forge a Partnership for the Asian Century’, The Australian, 19 September 2011

4 Ibid

5 ‘Shared Goals, Converging Interests: A Plan for U.S.-Australia-India Cooperation in the Indo-Pacific’, 2011, accessible at http://report.heritage.org/sr0099

6 ‘India, US Pact worth a look: Rudd’, Australian Financial Review, 30 November 2011

7 Eliminating Nuclear Threats, Report of the International Commission on Nuclear Non-Proliferation and Disarmament 2009 (www.icnnd.org )