Photo of Mr Peter Varghese

Australia-India Institute Oration – "Our journey with India"

Speech by Mr Peter Varghese, Secretary of the Department of Foreign Affairs and Trade

16 May 2013

Acknowledgements

Introduction

I am honoured to be invited to deliver the fourth Australia-India Oration. And humbled to be following such a distinguished list of previous speakers: Kapil Sibal, with whom I worked closely when he was India's Education minister; Glyn Davis who as Vice Chancellor of Melbourne University has been a strong advocate of education links with India; and Shashi Tharoor whom I may be able to match in Malayalee genes but whose eloquence is in a league of its own.

This oration is one of many initiatives that the Australia India Institute has taken to strengthen the bonds between Australia and India.

The Institute plays an important role in expanding our understanding of the relationship and in encouraging discussion about its future direction. I would like to commend Professor Amitabh Mattoo, for his work in these areas, drawing as it does, on an impressive network of contacts among India's foreign and strategic policy community. I can vouch for the fact that he has well placed contacts, including former students, throughout the Indian system. So to Amitabh and to Robert Johanson, the chair of the AII, I extend my appreciation.

A personal journey

In inviting me to deliver this lecture, Amitabh suggested I might want to talk about both my professional and personal association with India. So let me begin with some remarks about my own journey with India.

India was in my blood long before it was ever on my mind. My parents were both born and grew up in Kerala, in the south of India: members of a Syrian Christian community which insists, probably correctly, that it dates back to St Thomas the Apostle. My parents, both now deceased, were unusual by any measure, and by the measure of their times they were extraordinary.

They were strong-willed risk takers. They both went from village to university, decided they would marry for love, not by arrangement, left India soon after their marriage to make careers as teachers in Kenya. And most extraordinary of all took a family of nine children to a country across the world where they knew not a soul and for which they were given only a two year visa.

That country was Australia in 1964. The visa was for two years because the White Australia policy was still in place and my father, by then a senior principal in the Kenyan school system, came under a special program for distinguished Asians.

So my connection with India is once removed. I have been a culinary Indian all my life and religion played a much bigger part in our upbringing than the culture of Kerala. All of us were taught from an early age to think for ourselves and to believe that there was nothing to which we could not aspire. The result was a clan of argumentative Australians.

When I went to India in 2009 as Australia's High Commissioner I did so primarily for professional, rather than personal reasons. My view then, as now, is that for an Australian diplomat there could be no more exciting an appointment than to India. The reason was simple: India was the only big relationship which still had so much room for growth which meant that a High Commissioner could make a real difference. With Australia's other large, and much more established relationships, a Head of Mission may be able to shape ten or twenty per cent at the margin.

But with India, it seemed to me, that number was more likely to be closer to forty to fifty per cent.

When I arrived in India in August of 2009 the student safety issue was reaching a crescendo and the Indian media immediately assumed that I had been cunningly sent because of my Indian background. Little did they know that such acts of cunning – or indeed imagination – would be rare indeed in our postings system!

So what I have to say tonight about India are not the words of an India expert or even of an expert on the bilateral relationship. Instead they are reflections on what I observed during my time as High Commissioner, leavened in part with the instinctive understanding which we sometimes arrogantly claim when something has been in the background of our lives for so long.

The Australia India Journey

The Australia India relationship can be seen in three distinct phases. The period of empire, the decades between Indian independence and the opening of the Indian economy in the early nineties and the years since then.

I am not including in these three phases our geological connection because if you go back 300 million years, Australia and India were literally joined at the geological hip before continental drift separated us.

The days of empire, from first settlement in Australia in 1788 to Indian independence in 1947, were actually remarkably close.

In the early decades of our penal settlement, India was arguably our largest trading partner, linked through the infrastructure of the British empire and sustained by a network of army officers and officials who made lives in both countries. The Sydney-Calcutta sea link was a vital supply chain.

This was however for the most part a connection with India, not Indians. When the relationship with Indians in an independent India did commence, it was narrowly focused, although many of the personal links continued.

Seen from a state perspective, the stunted nature of the Australia-India relationship from the late forties to the early nineties should not surprise us. For the first four decades after India's independence we inhabited different worlds. Our hard interests, strategic and economic, rarely intersected.

India's economy went down the path of self-sufficiency, not global trade. Strategically we inhabited different universes. India was a leading light of the Non Aligned Movement, comfortable with the high moral tone of its foreign policy. Australia was a paid up member of the western alliance, a staunch ally of the US.

Today it all looks so different. India is in the top bracket of our international relations. We have committed to a strategic partnership. The economic relationship is booming. Our geo strategic interests are converging. We are finding more common ground in multilateral for-a: a welcome if still nascent change from the days when differences over trade and non-proliferation soured a generation of Australian and Indian diplomats towards each other.

And the rapidly growing Indian diaspora in Australia – now just shy of 400,000 – is forging links which will add much needed depth and texture to the people-to-people relationship.

The turning point in all of this was India's 1992 decision, led by Narashima Rao and crafted by Manmohan Singh, to open its economy: a move which will be judged by history as every bit as significant as Deng Xiao Ping's decision to open the Chinese economy.

The opening of the Indian economy did what decades of diplomatic endeavour could not: it put India on a glide path which would see it redefine its economic and strategic interests and in the process create a convergence of interests between our two countries which has a long way to run.

Converging interests

This growing convergence applies to both our strategic and economic interests, the latter driven by a structural complementarity in trade and investment. Indeed it is the economic relationship which, in my view, will be the load bearing pillar of the relationship in the medium term.

The Indian economy is on a growth path, even if it is performing lower than expected. It is driven by domestic demand, high savings and good demography. It is a very different model to the East Asian success story in that it is not export-led. Its closest historical parallel is probably nineteenth century America.

Indeed the more one looks at India the more one is struck by the similarities between India and industrialising America, although the latter did not have the statist history which is so much a part of India's political culture, and which some would argue still holds it back. Still there is in India an emerging sense of exceptionalism which has echoes of the US experience. Also, both are deeply religious societies which place a premium on individualism.

India faces some very big economic challenges, both structural and current. Its private sector still does not have the headroom it needs to drive growth. The license raj may no longer reign but it often still rules. The challenges of land acquisition hobble infrastructure development which in turn severely limits the capacity of the economy to grow and for manufacturing to be globally competitive.

But for all its economic challenges and for all the frustrations that Indian economic reformers daily face, it is very unlikely that we will see a derailing of India's growth path over the next two decades. Even on a little-further-reforms basis, pent up demand and entrepreneurial flair will combine to clock up around 6 per cent annual growth over this period. And the world's third largest economy growing at 6 per cent a year is a transformational development.

Those who lament that Australia has not paid enough attention to India miss the point that until India opened up its economy there was not much that would have brought us together. Indeed if anything I think you could make the case that Australia in those first four post-independence decades invested more in the relationship than our underlying economic and strategic interests then warranted.

That was certainly the case with our diplomatic representation in the fifties and sixties with the likes of Walter Crocker, Peter Heydon, James Plimsoll, Arthur Tange and Patrick Shaw serving as High Commissioners. They were the outstanding diplomats of their generation. Hardly the roll call of the diplomacy of neglect.

I recently re-read Walter Crocker's 1966 biographical profile of Nehru, described by Ramachandra Guha, perhaps India's most impressive contemporary historian, as without question the best brief life of Nehru.

It is indeed an insightful portrait from a sharp mind. But what struck me about that book was that it had nothing to say about Australia and India. Here was a book about India's longest serving prime minister by Australia's longest serving High Commissioner and not a word about the bilateral relationship.

That tells us something about the nature of the relationship at that time. Australia took India seriously; recognized that it was a country which demanded attention; was willing to invest in the relationship. But even with all that, and bearing in mind that this was a period in our foreign policy when we had no diplomatic relations with China, we struggled to find traction in the relationship. The grip of strategic and economic interests just was not there. And the ties of history, language and Commonwealth connections were not enough to compensate.

Indian democracy

This is all the more remarkable because at that time India was one of the very few democracies in Asia and Australian foreign policy was anchored in the hope that democracy would be a bulwark against communism which was seen then as the biggest security threat to the stability of our region.

Measured by the standards of the times, India's embrace of democracy was truly remarkable. Here was a country mired in poverty, largely illiterate, framed by the caste system, not naturally inclined to the spirit of egalitarianism. And yet its constitutional drafters insisted on one person, one vote. And it embedded in India's political culture the concept of the rule of law, the independence of the judiciary and the separation of powers.

Some have ascribed India's choice of liberal democracy to a long tradition of public discourse, and argument and debate.

Amid a lifetime of invaluable insights, Amartya Sen, author of The Argumentative Indian, makes two points about India relevant here.

On argument and the roots of Indian democracy, Sen says this:

"The historical roots of democracy in India are well worth considering, if only because the connection with public argument is often missed, through the temptation to attribute the Indian commitment to democracy simply to the impact of British influence … But … India has been especially fortunate in having a long tradition of public arguments … When … independent India became the first country in the non-western world to choose a resolutely democratic constitution, it not only used what it has learned from the institutional experiences in Europe and America … it also drew on its own tradition of public reasoning and argumentative heterodoxy".

Separately, Sen has written: "Prolixity is not alien to us in India."

For proof of that, incidentally, he points us to Krishna Menon's record – still standing after more than a half-century – for the longest speech ever delivered at the United Nations (nine hours long, in January 1957).

In March 1950, two months after India's proclamation as a republic, Jawaharlal Nehru appointed mathematician and public servant Sukumar Sen India's first Chief Election Commissioner.

In The Life and Death of Democracy, Australian-born academic John Keane spells out the numbers facing Sen in an unprecedented experiment in democratic arithmetic: 489 federal seats, 3,375 seats in state assemblies, 176 million voters aged twenty-one and over, an electorate where only 15 per cent of voters were literate. And something that can't be said for all nascent democracies: both women and men were able to vote.

Sen needed 224,000 polling booths, 2 million steel ballot boxes, 16,500 clerks to maintain the electoral rolls, 56,000 presiding officers, 280,000 support staff, 244,000 police officers and 400,000 phials of indelible ink. And remember this was 1950 when democracy was alien to Asia.

Nehru won that election which forged Indian democracy at a time when global democracy was far less deep-rooted than it is today.

But for Nehru, as Keane goes on to write, "democracy stopped at India's borders".

Keane argues that it is an "undeniable fact that democracies always fare better when they band together, under a tent of multilateral, cross-border institutions".

But Nehru's profound suspicion of the United States and the free market led him – and Indian foreign policy – in a different direction. He chose the path of non-alignment.

There is of course nothing inherently contradictory about a democratic nation choosing non-alignment. But the combination of non-alignment and a strong belief in the non-interference in the internal affairs of countries has meant that India has been cautious about promoting abroad a democracy or human rights agenda.

It may continue to do so. But one of the fascinating questions about India's role in the world is how will it choose to navigate between interests and values.

More broadly, what role will India play in global affairs?

The emerging international order

For Australia that question is closely linked to where we place India in our regional compass.

Increasingly, we are referring to our region as the Indo-Pacific. Not because Southeast Asia or Northeast Asia are of any less importance to us than they have been, but because a new Indo-Pacific strategic arc is beginning to emerge, extending from India to Northeast Asia, including the sea lines of communication on which the region depends.

As the Defence White Paper has made clear, the strategic importance of this broader region is being forged by a range of factors, not least of which is the growing impact of the Indian economy. India's economic interests are pulling it eastward and as it so shifts it will inevitably play a larger role in the strategic affairs of the region.

The Indo Pacific returns India to Asia's strategic matrix, while also embracing great powers like China and key powers like Japan, Indonesia and South Korea. It also includes the individual ASEAN countries and the collective economic and strategic weight of an evolving ASEAN community. Importantly, it also recognises the strategically crucial role that the US plays in the stability of the region.

Globally, countries like China, India, Brazil, Indonesia and other emerging powers are moving from the periphery to the centre of global political and economic affairs. The old lines of developed versus developing countries are much less real than they were even a couple of decades ago. And now, these countries have emerged as influential participants in a new push to reform the international order.

The broad contours of the 21st Century international system are now apparent, even if the detail is not: a system populated by several power centres and competing conceptions of domestic and international order. A world in which no country or region, or political or economic model, will enjoy uncontested dominance.

In such a world we are likely to see a variety of shifting coalitions built around shared interests on specific issues. These groupings will sometimes appear to be more cohesive than they are. The idea of the BRICS, for example, has held currency for more than a decade. But in truth there are big differences between the countries included in that grouping. Some are strategic rivals and even their economic interests are not always aligned.

Increasingly, we see the relevance of the IBSA grouping – that is, India, Brazil and South Africa – in some ways a more coherent notion that brings together the democracies from among the major emerging powers. And there are commonalities of worldview that unite the major emerging powers whether or not they are democracies.

For those states that are emerging as major powers out of a history of colonial domination and a sense of relative strategic powerlessness, there is something shared in a worldview that looks at the established international order – settled by the dominant powers in the ashes of the Second World War – and asks how it might be reformed to reflect modern power relativities and their greater economic prosperity.

For some of these states, human rights and democracy are lesser matters – questions left to one side while the broader challenge of social cohesion and economic growth is pursued.

In this environment, will India's economic weight translate into strategic influence? Does India have the strategic culture and institutions to support a more active foreign and strategic policy?

Indian leadership in the 21st Century

As India addresses these questions, there are four factors which are likely to influence its choices.

First, I think there is a domestic desire for India to play a greater role.

The recent Lowy–Australia India Institute poll – which I'll refer to again in talking about the Australia-India relationship – had some interesting data on Indian views about security, particularly in the Indian Ocean.

94 per cent of Indian respondents either agreed or strongly agreed with the statement that India should have the most powerful navy in the Indian Ocean.

88 per cent of respondents thought India should do more to lead regional cooperation with Indian Ocean countries.

72 per cent thought the United States could be a good partner for Indian in the Indian Ocean region.

And 56 per cent thought Australia could be a good partner.

I think that points to a domestic desire for India to play a leadership role, in the region if not globally. It also points to an Indian interest in working with other democracies.

Second, if values were to play a more prominent role in Indian foreign policy, India's domestic democratic achievement would add considerable international credibility to such a choice.

As the emerging powers take on greater ownership of the international order, we can go one of two ways. We can have a deepening of transparent, open, free market internationalism – the direction in which Australia has sought to move.

Or we can have an increase in closed systems, nations working only for their own benefit in a zero sum world.

Open rules, the rule of law, the free market – all are conducive to greater global growth and freedom. That has been Australia's clear experience and our region as a whole will only benefit from more liberalisation. India has seen the benefits of reform too – the leadership of Prime Minister Singh, both in his current role, and in that crucial time when he was Finance Minister, has made a significant difference to where India is today in its development and the prosperity of its people.

Globalisation – the reduction of protectionism, the expansion of trade, the greater movement of people, goods and capital – has been an immense benefit for our world. Further movement down that path would provide space for India to grow into a global power, while a pursuit of closed systems would stymie growth and hold India back. Writers like Gurcharan Das admire Nehru for his commitment to democracy, but rue the loss of two or more decades to statist assumptions and low growth.

Thirdly, whatever the shape of the international order we craft this century, we need India's participation.

The problems we face – climate change, resource depletion, development, and so on – are not ones that can be resolved by any one country, or even any one region. They require us to work together, as international partners. Democracies are messy, but they produce resilient outcomes, and a regional and global order that did not include an active and engaged India – a quarter of the world's population – would struggle to achieve meaningful results.

Our multilateral system is under intense strains: look at the Doha Round or the struggle to find an international consensus on climate change.

It is hard to drive reform in our world. We are too integrated and dependent on each other for any of us to take a beggar-thy-neighbour approach.

India's choices will help shape the global outlook. If India takes on a more active role, Indian leadership could be an invaluable international public good in the 21st Century.

And fourthly, the degree to which India chooses to be a positive, constructive player on the international stage will affect the extent to which its strategic power comes to match its growing economic weight.

Indian institutional capacity

But – in the end – will India actually play a more active international role?

Some writers and thinkers are critical of Indian institutions, like its bureaucracy, its foreign service, and education systems.

India's bureaucracy was not built to support the demands of a great power – today, it is under enormous strain.

We need to calibrate our expectations of India. Its political culture is incrementalist. Its institutional capacity to respond to ambitious foreign policy agendas is limited. Its world view is still anchored in its neighbourhood, although its sense of status is justifiably in a global league.

And no-one pretends that India's challenges are not vast, that there are not still hundreds of million living in poverty or without the benefits of education, literacy and health.

Our multipolar world is placing new demands on India. But what India's history shows, ultimately, is an overwhelming ability to embrace its contradictions, its flaws, and its diversity.

The outlook for Australia India relations

Let me now return to the future of the Australia India relationship.

The key to building the Australia-India relationship is patience and realistic expectations. India punishes impatience.

If we get the economic relationship right, the strategic partnership will follow, although there will be a long lag between when India arrives as an economic power and when it arrives as a strategic power.

In my view, the Australia-India story will be broadly similar to the Australia-Japan story: trade led, commodities dominated, values influenced and then broadening into a strategic partnership.

India's changing sense of its strategic interests will bring it closer to Australia. But there will be limits to how far and how fast India will want to go in this direction.

The concept of non-alignment still has a powerful hold on the Indian imagination. This is not to say that we will see a return to the foreign policy of the NAM days. But we are likely to see strategic autonomy as the anchor of Indian foreign and strategic policy. And India will likely remain not much inclined to the business of promoting democracy abroad.

Indeed, I suspect Indian foreign policy will be essentially comfortable with the John Quincy Adams view of its place in the world: not to go abroad in search of monsters to destroy; be the well-wisher to freedom and independence of all but the champion and vindicator only of her own.

None of this means that India's standing as a democracy is irrelevant. Indeed I would argue that the liberal democratic character of India opens up more common strategic space between us.

A rising democratic India is not generally seen as a strategic threat. And even as India's military capability increases, as inevitably it will, India's strategic behaviour is unlikely to cause much anxiety.

There is nothing in India's current strategic trajectory, or in its strategic doctrine, which runs against core Australian strategic interests. So the idea of a strategic partnership between us is quite well anchored.

This strategic partnership will of course be less than an alliance. But it will be much more than a line in a communiqué. At its core will be a broadly shared view of the drivers of stability in Asia, including an inclusive and outward-looking regionalism.

Building a strategic partnership is not just the task of governments. It asks a lot of business and civil society in both our countries.

Of business, it asks that the private sector across our two economies work to expand the complementarities between a growing Indian economy and Australia's capacity to provide resources, goods and services.

Of civil society, it asks that we continue to find and build links between our two cultures, and our national communities.

Of government, it asks that we take on many challenges: negotiating a Free Trade Agreement, expanding our defence dialogue, working together in the G20, the World Trade Organisation, on climate change negotiations, and on building Asian regional institutions which will help us manage the strategic challenges we face.

We're already taking on that challenge, of course – through evolving regional institutions like the East Asia Summit and the awkwardly named IOR-ARC – the Indian Ocean regional organisation.

But on a more fundamental level, if we are to make our strategic partnership meaningful, we have to do more to understand each other better.

The truth is – that at a community level – neither of us know much about the other.

The Indian elite has traditionally not looked to Australia. That is beginning to change, but only slowly. And for the broader Indian community, images of Australia tend to be sketchy, shaped by cricket, historical connections and sporadic coverage in the Indian media.

Similarly, in Australia, there is very little understanding of contemporary India in the wider community. Australians, for the most part, have only a partial glimpse of India's diversity and of the scale of its prospects.

Both of our communities are, I suspect, caught in a time warp in terms of our perceptions of each other.

I saw this vividly during the Indian students issue in 2010.

When the Indian student issue was at its peak, Australians were puzzled at the Indian media coverage.

We could not recognise the country which was being portrayed in sections of the Indian media. I am not, here, being critical of India's media. Some of its media is reflective of the broader global media culture of sensationalism and trivialisation. It is not unique to India – Australia has its fair share of it. But the portrayal of Australia in India in 2010 reflected something deeper – a willingness by some – I hope not most – Indians to believe the worst about Australia on the question of race.

In the last half century Australia has made a remarkable transition – from the days of the White Australia policy to becoming one of the world's most multicultural societies. This is not a transition that could have been made if the DNA of Australia was racist.

If there was ever an example of the image of our nation being caught in a time warp – then this was it. Forty years on, and still explaining that Australia is a multicultural and multiracial society.

The recent Lowy-AII poll that I mentioned earlier shows we still have some ground to make up in terms of building a better understanding of each other.

Yes, the poll found 61 per cent of Indians thought the crimes against Indian students were mostly caused by racism but half of those surveyed also thought most Australians were welcoming to Indian students.

And overall, it found Indians were almost as well disposed to Australians as to almost any other country. Indian feelings were only warmer to the United States, Singapore and Japan than Australia.

Indians still think we have one of the best education systems in the world – only that in the United States is more prized.

What that episode suggested to me was how important it is for both India and Australia that we modernise our perceptions of each other.

Both our countries will benefit from greater collaboration – so it is in our interests to do away with misconceived notions of what the other stands for.

What we achieve together in coming decades will have little to do with a shared imperial past. It will have not much to do with the English language, although that will help. And it will have to be a tighter bond than anything forged on a cricket field. Rather, it will have to do with gaining a real understanding of each other, of where we differ but also what brings us together, including our converging strategic and economic interests and the strength of our diversity.

Conclusion

Let me conclude with these observations.

I am a long term optimist about the Australia-India relationship. But building this strategic partnership will not happen quickly, not because its underlying logic is weak, but because we are starting from a relatively low base and there are real capacity constraints. And also because there is currently an inevitable asymmetry of ambition in the relationship which will take time to narrow.

In this Australia finds itself in the company of many others: eager to flesh out a stronger relationship but held back by an Indian system which is not built to support the demands on a great power. Indian leaders are well aware of these challenges. And its political system is in the midst of a transition to a new politics of aspiration to replace the politics of welfare. As these changes kick in — and in the end democratic systems have a genius for self correction — and when India finds the institutional horsepower of a great power, then the prospects for a substantial Australia-India strategic partnership will be bright indeed.