Beware of Chinese bearing gifts

The China-Australia Free Trade Agreement needs to be studied line-by-line.

It needs to be tested by academics, business, community leaders and politicians. There should be a national debate, led by Parliament certainly, over not just the headlines, but the fine print. Who wins and who loses; and whether the wins more than balance out the inevitable losses.

Unfortunately Australians are not going to get that opportunity until after the agreement is signed, sealed and delivered next year. That means the much-heralded announcement this week is little more than a statement of intent with a few headlines (dot points as one academic described them) put out mainly for publicity purposes in the wake of the G20 summit.

Certainly the initial sampling is positive – in fact the headlines suggest a better deal than most had reasonably hoped for. Meat, dairy and wine producers will benefit from reduced or eliminated tariffs; iron ore, gold and coking coal will have their tariffs removed; service industries – education, tourism, health and aged care – will have new or improved access to the Chinese market.

But there are other areas that need further investigation. Why, for instance, is China insisting on having the right to bring its own people into the country to work on projects in which it is investing?

Prime Minister, Tony Abbott says this will not happen if the right kind of Australian skilled labour is available, but who decides whether this is the case or not? Chinese investment in Africa has been accompanied by thousands of its own workers, with locals relegated to the most menial of tasks – if at all.

When all these factors are considered it should be remembered that Beijing never does anything that will not overwhelmingly bring benefits to its own interests – if not immediately then down the track. It makes no concessions that can’t be turned to its advantage at some point.

China seeks to dominate this region. It promotes its own brand of government as more suitable for developing nations than “chaotic and inefficient” democracy. The counterweight to this is, of course, the United States and the US’s major ally in the area – once famously called its ‘deputy sheriff” - is Australia.

But Australia has become increasingly dependent on its economic relationship with China to maintain its prosperity. The Free Trade Agreement will significantly increase that dependence.

Money talks – and could there be a time when Australia’s desire to maintain a reasonable standard of living for its people outweighs traditional ties with nations that have shared values and love of personal freedoms?

In short, could Australia’s dependence on trade with China eventually force it into Beijing’s orbit?  

Only time will answer that question but I was concerned when I heard Tony Abbott, in his eulogy of the deal, say that he now ‘trusted’ the Chinese leadership.

Trade by all means, but trust is another matter.

Beware of Chinese bearing gifts. 

 

    

Modi wins G20 statement on tax dodgers

Indian Prime Minister Narendra Modi has gained an important victory at the just-finished G20 meeting in Brisbane, Australia, winning an assurance from the summit of a formula for the exchange of tax information between countries.  

Modi made the repatriation of what he described as ‘black money’ his priority for the meeting of world leaders, saying that fast developing technologies for moving capital around the world had outstripped the ability of authorities to keep track of it.

As a result, super rich enterprises and individuals were getting out of their responsibilities to pay a fair share of tax, the Indian PM said.

He especially wants action against countries which set themselves up as tax havens at a time when multinational companies are increasingly seeking them out.

The G20’s final communique gave him what he wanted — promising that moves already under way with the OECD to reform international tax rules would be completed by next year.

Modi’s comments come in the wake of reports that India’s economy is now expanding at its fastest pace in more than two years as manufacturing begins to recover from its longest slump in more than a quarter of a century.  

Modi, the first Indian Prime Minister to visit Australia in 28 years, is staying on for a two-day State visit, the highlight of which will be an address to the Parliament in Canberra tomorrow

Let their minds fly free

I have just read yet another story about a program designed to ensure students are ‘job ready’ when they leave school or university.

The term is much-loved by the Minister for Industry, Ian Macfarlane, who is constantly promoting the idea that young people must be taught in such a way that they can step seamlessly from their education years into the workforce.

Last month, for instance, Macfarlane was planning reforms of training packages to deliver “what students need to get a job and what industry needs to enhance its productivity through access to the right skills”. A week or so earlier he was delivering “the next tranche of reforms to make the skills and training system more job-focused.”

Minister for Education, Christopher Pyne delivers much the same message, announcing a $12 million plan to encourage more school students to study science, technology, engineering and mathematics (STEM) “to ensure young Australians are equipped with the necessary skills for the economy of the future”.

Now, I have no intention of arguing that young Australians should receive the training that will enable them to have prosperous and happy lives; or that more students ought to be encouraged to consider the STEM subjects.

My concern is that the balance is tipping too far the other way and that subjects that do not have any obvious pathway into employment are steadily being neglected.

In a recent article, a research scholar with the Institute of Public Affairs, Stephanie Forrest, warned of the “fall of literature”.

"We now have a national curriculum for English, and from the Foundation Year to Year 10, it contains scant mention of any Western literature,” she writes.

“In general, the English curriculum — that is, a curriculum that should arguably be concerned with teaching students to read, write, speak fluent English, understand grammar, and read literature — is far more concerned that students should become ‘ethical, thoughtful, informed and active members of society’.

“The curriculum also frequently alludes to lessons relating to ‘ethics' — particularly relating to the notorious cross-curriculum priorities: ‘Sustainability', ‘Asia and Australia's Engagement with Asia', and ‘Aboriginal and Torres Strait Islander histories and cultures'.”

Once again, there is nothing wrong with children learning about ethics, sustainability or engagement with Asia, or in better understanding Indigenous culture, but in the past these were subjects that young people with a well-rounded education chose to pursue outside school or at tertiary level.

These are subjects which are far better ‘learned’ than force-fed in the classroom.

A nation needs scientists and researchers as well as it needs plumbers and electricians. It also needs philosophers, poets, novelists, playwrights and artists. It needs young people whose minds are attuned to range over the full gamut of thoughts and ideas and to accept or reject them as they mature into young adults.

One of Ms Forrest’s most telling comments comes when she quotes ‘a representative of a prominent teachers' organisation’, who said he could not ‘sell’ the study of classic literature to the majority of teenagers.

The trouble is, no one is even bothering to try.

By force-feeding a teacher’s view of ‘ethics’ and ‘sustainability’ rather than allowing young people to develop their own ideas on the subjects, we are pushing them into narrow corridors at a time when their minds should be expanding to embrace the full richness of knowledge that gives life meaning.

 

Soothing words and provocative actions

Less than two months ago it was all handshakes and smiles. Chinese President Xi Jinping, on a state visit to India, said he was committed to resolving the border dispute between the two countries “at an early date”.

“China has the determination to work with India through friendly consultation to settle the boundary question,” he told Indian Prime Minister Narendra Modi.

Seven weeks later it is now clear that on the border question at least Xi brought nothing to New Delhi except empty words. Chinese incursions and provocations have continued, both on the borders with Arunachal Pradesh and Jammu and Kashmir.

China has sent troops by boat and land well across the Line of Actual Control (LOC), which serves as an unofficial border, in the Pangong Lake area of Jammu and Kashmir and has reacted angrily to Indian plans to build border posts along the LOC in Arunachal Pradesh.

In response to the latter initiative Beijing once again mouthed the usual slogans. “China’s position on the China-India boundary question is consistent and clear. We are committed to finding a solution to the boundary question with the Indian side through friendly negotiation as soon as possible and working together to safeguard peace and tranquillity along the border,” Foreign Ministry Spokesperson Hua Chunying said.

China’s position is anything but consistent and clear: A mixture of soothing words and provocative actions. Modi obviously has little faith in any negotiated settlement over a dispute which has dragged on since the 1962 war between the two countries and indeed goes back to an agreement signed between the British Raj and the then Government of Tibet a century ago.

In announcing the new border posts, the Indian Prime Minister also called for a considerable strengthening of the Indo-Tibetan Border Police (ITBP) which guards the frontier.

Indeed it is believed that a beefed-up and more aggressive ITBP faced down the latest Chinese incursions on Pangong Lake.

It is quite clear that by an overwhelming majority the inhabitants of Arunachal Pradesh regard themselves as Indian and would prefer to be sending their elected representatives to the State capital in Itanagar and the Lok Sabha in New Delhi than having to obey diktats from far-off Beijing.

A settlement there and in Jammu and Kashmir can never be reached in the face of constant flare-ups and heightened tensions.

The thinking among some Indian observers is that Beijing wants nothing more than complete annexation of the disputed territories and is simply dragging things out until it can find an Indian Government it can bully into acceding to its demands.

With the Modi Government at least, that is a forlorn hope.  

Why democracy is always the best way

In Tunisia the ruling Islamic Ennahda Party has been defeated by its secularist Nidaa Tounes opponent in parliamentary elections.

 In Brazil, incumbent President Dilma Rouseff held on by the skin of her teeth against a right-of-centre opponent and in Ukraine a coalition of pro-European parties will hold a substantial parliamentary majority in an election in which separatists in the east of the country chose to play no part.

While the results will generally be considered good news in Western capitals, the most significant winner is democracy itself. The outcomes have not been challenged; the will of the people in three countries has been respected.

These elections were held when the concept of democracy itself is under more challenge than at any time since the end of the Cold War: Elected Governments in Iraq and Afghanistan battle Islamic insurgents who want nothing to do with one-person-one-vote; in Russia, democratic freedoms are being steadily undermined in what is fast becoming a State regressing into a mixture of Soviet/Tsarist authoritarianism.

China, which has never known democracy (except possibly of a very limited kind in the early years of the last century) aggressively advocates its style of Government as best for nations in the developing world.

It points to the legislative logjam caused by the United States’ admittedly complicated system of checks and balances, even to the recent disturbances in Hong Kong – which it authored by its refusal to allow true democracy there – as the ‘dangers’ of extending political power beyond a small ruling clique.

Even in Australia which as a nation has known no other form of government, democracy has its detractors. In a recent article Ian Marsh of the Australian National University’s College of Asia and the Pacific, bemoaned the country’s “failing democracy”.

“The recent record is of a system that is largely gridlocked. Short of crisis, political leaders are trapped in a short-term cage,” he writes.

It cannot be argued that Governments the world over are facing momentous change, largely brought about by a technical revolution that allows instant communication of ideas and philosophies that in the past might have taken decades to mature and develop.

But what system is best suited to adapt to these changes – in China where ideas that do not accord with the rulers are censored and their proponents persecuted and jailed? In North Korea where anyone who steps out of line simply ‘disappears’? In Russia where opposition journalists are harassed and murdered?

Or in democracies were differences, often fundamental and sometimes violent differences, are there for all to see and the people and their leaders strive to find answers in the full light of day?

Ballot boxes and voting booths do not solve problems in themselves, but they are the places where solutions can start to be found. The way forward may be slow and frustrating, but in the end it is always the best way.

They know that in Brasilia, in Kiev and in Tunis. They should be an example to us all.

 

 

 

    

 

 

 

Getting rid of the Raj

It sound like something from the days before independence in 1947, but India’s Inspector Raj system is widely considered to be a significant drag on the nation’s ability to do business in the 21^st century.

In addition, its critics charge it is a fertile breeding ground for corruption and a major example of the mind-boggling bureaucracy that has plagued the nation ever since its founders embraced a Soviet-style planned economy in the 1950s.

In those days, anyone who wanted to set up a manufacturing plant had to gain a licence from the Government. Once the licence was granted the business was subject to periodic checks by Labour Ministry inspectors to ensure it was fulfilling its terms.

The inspections were meant to cover areas such as workers’ conditions and whether factory owners were profiteering by selling their goods at a higher rate than stipulated, but over the years the system became mired in corruption.

Inspectors, who had total discretion over which premises to visit and how often, would accept bribes to overlook deficiencies in one company, or to harass a rival organisation; compliance paperwork involved filling in 16 different forms at regular intervals — an onerous task in a nation of small business owners where some 84 per cent of manufacturing workers are employed in workplaces of 50 or less.   

Under the new regime, inspectors will lose their right to choose which factories to visit. Instead a computer will select organisations — and the inspector who will visit — at random. Reports must be submitted within 72 hours and any significant changes recommended will be subject to review.

The form filling will be reduced from 16 to one online submission.

Successive Indian administrations have backed away from the task of addressing the nation’s rigid labour laws for fear of a trade union backlash, but the Bharatiya Janata Party Government of Prime Minister Narendra Modi, elected in May on a platform of industrial reform, is sweetening the pill with a number of pro-worker measures.

These include easier access to provident fund accounts and insurance schemes and a faster system for addressing employee grievances.

The reforms are a key component of Modi’s Make in India program, which aims to attract massive overseas investment and create 100 million jobs over the next decade.

 

    

 

   

Toilet talk and zombies in New Delhi

There’s been a great deal of toilet talk in New Delhi recently — and I don’t mean of the scatological kind.

To be more accurate, it’s talk about toilets, because in a departure from the usual political rhetoric, Indian Prime Minister Narendra Modi has been putting the subject high on his agenda.

Actually, it makes a great deal of sense because more than 600 million Indians – that’s about half the population – have to defecate in the open. There is no other place to go.

Last year the problem took a deadly turn when two village girls, who went out into fields to relieve themselves after dark, were set upon by a gang of youths, raped and murdered.       

Modi’s aim is to have toilet blocks built in every one of the tens of thousands of rural villages that do not have sewerage connections. To ease the burden on existing services in towns and cities, he is calling for more toilets to be installed in bus and rail stations.   

Recently IT billionaire and philanthropist Bill Gates was in the Indian capital and came away impressed with the Prime Minister’s passion to fight poverty and improve the health of his country’s poorest people.

“He’s setting aggressive goals and pushing people to get them done quickly,” Gates said afterwards.

“He is having a lot of intense meetings with various Ministers asking them what they can get done in 100 days; can they make their goals more concrete, more ambitious?”

Modi has repeatedly said he wants sanitation to be available to all Indians by 2019 — the same timeframe he has set for cleaning up the River Ganga, sacred to Hindus, but in places little more than an open sewer.

One issue on which he is taking some flack is his decision to pump more money into the nation’s ‘zombie industries’, inefficient State-owned businesses that have been kept afloat through generous subsidies from the previous Congress-led Government.

The companies were set up in the years following independence in 1947 when India was following the Soviet Union’s model for development. Most run at a loss and at least 20 have stopped production altogether yet still pay their staff full wages.

Modi led his Bharatiya Janata Party (BJP) to power in May campaigning on a policy of ‘minimum government, maximum governance’ and it was widely believed the zombies would be the first casualties.

While a number have been slated for closure, the Government believes around two-thirds could be revived with targeted injections of finance.

The move has drawn shock and ridicule from some critics who claim Modi is shrinking from the hard decisions.

However, the Prime Minister can point to his success in resuscitating zombie companies in his home State of Gujarat during his 13 years as Chief Minister there.

Some 20 publically-owned companies returned to profit through a measured injection of funds, the appointment of independent boards and a ban on political meddling.

Given that nationwide the zombies employ tens of thousands of workers, one final effort to turn them around may be worth the risk.