AFR INDIA BUSINESS SUMMIT
THURSDAY, 22 NOVEMBER 2018
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Australia and India have a special kind of bond.
We share a lot more than an ocean.
We share a history.
Last week we commemorated the end of World War I.
In that war we fought and died together in Gallipoli, in France, in Belgium and in Palestine.
What’s not well known is the Australian Imperial Force included twelve Indian Anzacs.
Twelve Indian Australians.
All but one were born in India.
They fought for Australia.
Two died fighting for Australia.
They are buried in Belgium and their names appear amongst the more than 102,000 on the walls of the Australian War Memorial in Canberra.
They were Nain Singh Sailani, a 43 year old labourer from Perth, and Sarn Singh a 33 year old farmer from Adelaide.
A lot has changed in 100 years.
One hundred years ago India was still under the rule of the British Empire.
The British Raj.
Today it is proudly independent and a genuine economic super power in the making.
A hundred years ago Australia was a new country at the bottom of the world.
Largely white and determined to stay that way.
Today we are in the middle of the fastest growing region in the world – the Indo Pacific – and arguably the most successful multicultural nation on earth.
Here’s a statistic for you – 1 in 50 Australians were born in India.
Over the last 10 years the number of Indian Australians has tripled.
More than 30 million Indians live outside of India.
The biggest diaspora in the world.
And Australia has more Indian residents per capita than any other country in the OECD.
A living bridge between our two countries.
And something still largely under appreciated and untapped.
I will talk a little more about that later.
The point I want to make today is that while the Indian diaspora in Australia over the last few years has boomed, the same thing hasn’t happened with trade.
Australia’s two-way trade with India is about the same as it is with New Zealand, a country of about 4.5 million people – or about a quarter of the population of Delhi.
There are about 19,000 Australian companies that currently export to New Zealand.
And only about 2000 that export to India.
It’s not just New Zealand.
Think about this.
In the last ten years Australian exports to China have more than quadrupled in value.
In 2007 we exported $27.9 billion in goods and services to China.
Last year that number was nearly $116 billion.
The same thing hasn’t happened with India.
In fact between 2010 and 2016 the value of our exports dropped by about a quarter.
A lot of Australian companies have definitely looked north rather than north west in search of new opportunities.
There are some big Australian companies in India like Macquarie Bank, Bluescope Steel and ANZ.
But there are a lot of others who aren’t there and should be.
You know the story.
India is the fastest growing major economy in the world.
It will have the largest population in the world sometime in the next decade.
And it’s on track to become the third largest economy in the world, after China and the US.
India is a hungry country.
That’s what an Indian friend of mine told me recently.
He didn’t mean it is a country full of empty bellies.
What he meant is it’s a country hungry for growth, for success, for opportunity.
And it shows.
In contrast, I don’t think Australia is hungry enough.
We are not hungry enough in general.
Only 2.5 per cent of Australian companies are exporters.
And we are not hungry enough about India in particular.
To be fair, Australian governments haven’t always helped.
Over the years there have been a lot of attempts by different Australian governments to encourage more Australian businesses to export to and invest in India and to build closer economic ties between us.
But it has been sporadic and ad hoc.
As Stephen Smith has said:
“Australia’s past approach to India has been like a 20/20 cricket match: short bursts of enthusiasm followed by lengthy periods of inactivity.” [1]
But just lately something different has happened.
Peter Varghese, the former Australian High Commissioner to India and former head of the Department of Foreign Affairs and Trade, has authored a long term strategy for Australia to build and develop our economic ties with India between now and 2035.
It is full of ambitious targets – like making India Australia’s third largest trading partner – and is packed full of practical ideas.
Last month Labor committed to supporting its top recommendations.
They include things like:
- Setting up a ‘Study in Australia’ education hub in New Delhi;
- Exploring options for a consortium of Australian universities to be the lead partner in the establishment of one of the six new Indian Institutes of Technology;
- Promoting more direct air services between Australia and India;
- Establishing a Strategic Economic Dialogue where every two years the Australian Treasurer and Australian Trade Minister meet with the Indian Finance Minister and Commerce Minister to look at how we are tracking and what more we can do to deepen and strengthen our economic relationship; and
- Taking the lead in lobbying other countries to support India’s inclusion in APEC.
Not only that, we also think India should become a permanent member of a reformed UN Security Council.
We also think that Australian Government should organise annual trade missions to India.
There is a lot in Peter’s report.
As a report it is potentially as important as the one Ross Garnaut produced for Bob Hawke’s government almost 30 years ago.
That report Australian and the North East Asia Ascendency, encouraged the ripping down of our tariff walls, the further opening of our economy and the increase in trade with North East Asia.
Which brings me to a broader point – what is happening right across the Indo-Pacific right now.
The shift in economic gravity to our part of the world.
Half of the world’s middle class already lives here.
By the end of the next decade two thirds will.
Three billion people all potential customers.
The countries and companies that will do the best this century are the ones that understand this change that is happening all around us and are ready and bold enough to make the most of it.
I know Prime Minister Modi gets this.
As he told the Australian Parliament a few years ago this is a:
“Moment of enormous opportunity and great responsibility… since my government entered office, no region has seen more intense engagement on India’s part than the Asia Pacific region – because we understand how deeply our future is linked to this region.”
So does Labor.
To make the most of this we need an ambitious long term strategy for all of the Indo-Pacific – just like the Varghese strategy is for India or the Garnaut report was for North East Asia.
And that’s what Labor’s ‘FutureAsia’ plan is.
Three in every four dollars we make from trade we make in Asia.
A lot of credit for that belongs to people like Bob Hawke, Paul Keating and Bill Kelty who ripped down our tariff walls and opened up our economy.
What they did was make us more competitive and created new businesses and new exporters.
But that doesn’t mean we are doing everything we need to do to make the most of what’s happening in the Indo-Pacific.
We’re not.
Not by a long shot.
I said before we are not hungry enough.
We are not making the most of what the Indo-Pacific is today, let along what it will be tomorrow.
I talked earlier about New Zealand.
Think about this – we invest more in New Zealand than we do in India, China, Japan, South Korea and all of the rest of Asia combined.
That tells you there is something wrong.
I also talked about Australia being a great multicultural nation.
And we are.
One in every four Australians was born overseas.
Many in the Indo-Pacific.
It is an enormous asset, but it’s not utilised anywhere near as much as it could be.
In the office towers of the big companies around us you will find lots of young graduates whose mum or dad were born in India, China or Vietnam.
But not many of them are on the boards of those companies or in the senior executive roles.
That needs to change.
A lot of Australians speak another language – Mandarin, Vietnamese, Hindi – but that’s a product of immigration not our education system.
Our FutureAsia plan is about fixing all these things.
About further enmeshing ourselves in our own region.
We have announced a number of policies. To boost the number of Australians speaking an Asian language we have announced a $32 million plan to boost the teaching of Asian languages and literacy in our schools. This includes:
- 100 scholarships a year for Australians who are Asian language speakers to become Asia language teachers;
- Training up 5000 principals and school leaders on the economic changes happening in our region and the skills students are going to need;
- Adding Hindi to the Asia language App that schools use; and
- Establishing an Advisory Council of Asia capabilities to boost teaching and learning about the Indo-Pacific right across the curriculum.
It’s not a coincidence that one in two Australian exporters are born overseas.
You need to know your market.
Why would you put your home or your job or shareholders’ money on the line if you didn’t know the market you were getting into or how it works.
And here’s the crux of the problem.
Very few Australian business leaders have got any experience working in the Indo-Pacific.
A recent AsiaLink report showed only 10 per cent of board directors and senior executives of our top 200 listed companies have a high level of skills and experience working in Asia.
The real work to fix this has got to be done by business, but to help with that we will:
- Set up a program with the Australian Institute of Company Directors to mentor business people with these sorts of skills to get onto the boards of our top companies; and
- Help young Australian business graduates to get some experience working in the Indo Pacific – by setting up an internship program where they can work for 6 months learning how business in that country is done. The first three countries we would like to set this up with are India, Indonesia and China.
As you can see we have a big agenda.
And India is a big part of that.
Two weekends ago a memorial to those 12 Indian Anzacs was unveiled here in Sydney.
A timely tribute.
I suspect if they were with us today they would be very proud of the country we have become, and of the Indian diaspora in our midst.
Any they would be excited to see India come of age as an economic giant and eager for our two countries to work together to make the most of it.
I hope to be part of that too – if we are fortunate enough to win the next election – as Trade Minister in a Shorten Labor Government.
