Friday, March 5, 2010

The accidental tourist

Stephen Smith is currently on his third Ministerial trip to India - no Australian Foreign Minister has visited that country so often in such a short time.

What a shame it has taken a crisis in Australia-India relations caused by the senseless assaults on Indian nationals living in Melbourne to spark this long-overdue interest. Our relationship with the world's largest democracy deserves better.

However, if nothing else it has demonstrated the importance of the country as an economic partner. Just one sector is threatened - overseas education, but it is of sufficient weight to have Smith and other Government Minister beating a trail to New Delhi.

Let's look at some of the facts - by 2030 India is expected to overtake China as the world's most populous nation. More importantly, there are predictions that India will be the world's third largest economy by 2025.

That's just 15 years off, but the importance we place on India, compared to the obsession with the Chinese market, is laughable.

China is a totalitarian country. For the moment its rigid authoritarian system coupled with an aggressive opposition to democratic movements both at home and in many of the countries it trades with, is suiting it well. The Chinese people split into two categories - the growing middle classes dazzled by their new spending powers and intent on acquiring all the material possessions which for so long were beyond their reach, and the rural and urban poor - by far the largest segment - for whom life is still a day-to-day struggle for survival.

How long will it be before the upper strata of Chinese society begins to think of all the other things their counterparts in Western nations enjoy - freedom of speech, human rights, the ability to change the government if enough of them disagree with it?

And when that happens they will find plenty of footsoldiers among the poor and downtrodden who might see this as a chance to grab a bit of the wealth for themselves, not to mention oppressed Tibetans and Muslims in the Western provinces.

India also has many of these problems, but the difference here is that governments, national, state and local, ignore them at their peril - because poor people in India have the vote and exercise it regularly and vigorously.

Add to that a turbulent media sector, always looking for a good sensation ,and you get the feeling that India's surge to economic greatness, if far from perfect, is going to be spread far more evenly among its population.

I am currently reading the Daniel Lak book India Express which illustrates this point with a simple story about Ram, the press wallah who for years conducted his trade ironing the clothes of his clients from a ramshackle shed in a suburban street in Chennai. So good was this low cast Hindu at his work that he built up a great following among the middle classes, too busy making money to do their own ironing and pressing.

One day he had a request of his clients. If they would lend him the equivalent of $50 each to put his two sons through computer school, he would repay the loans with interest at some future date. Some 19 clients agreed to this although none expected to see the money, with or without interest, again.

But they were wrong, Ram stepped up his work rate, his sons got computer diplomas and joined one of the IT companies that were fuelling the country's technological revolution. Eventually, some years later, the money was repaid, with full interest.

It is hard to imagine Ram's story being repeated in China, where suffocating bureaucracy stifles upward mobility and those who do leave the land find themselves consigned to hell holes working in unsafe mines or factories.

Australia's relations with India are strengthening with a 50 per cent increase in bilaterial trade in the past year, but it is off a relatively low base; more needs to be done.

It is good that Mr Smith has made three visits to India; not so good that he is there primarily because of a few unsavoury incidents among Melbourne's low life. He needs to be something more than an accidental tourist.

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