'Australian uranium should be used only for peaceful purposes'

“Australian uranium to be used only for peaceful purposes”

When a string of attacks on Indian students in Australia strained the relation between the two countries in 2009, Canberra sent Peter Noozhumurry Varghese as its High Commissioner to New Delhi.

Born in Kenya to Malyali parents, who had migrated from Kerala to the East African country in 1942 and then to Australia in 1964, Varghese not only fervently fended off allegations that the attacks were racist in nature, but also eloquently articulated his country’s firm faith in multiculturalism. He has been instrumental in redefining Australia’s strategic environment as Indo-Pacific, shifting from the traditional Asia-Pacific construct. With just a few weeks left before he returns to Canberra to take over as the Director General of the Australian Government’s Department of Foreign Affairs and Trade, he insists that his journey to the top has not been exceptional, but rather a typical one that reflects the contemporary multicultural society Down Under.

As Australian Prime Minister Julia Gillard begins her three-day visit to India on Monday, Varghese shares with Anirban Bhaumik of Deccan Herald his thoughts about the prospects of bilateral relation Canberra and New Delhi.

Can you please tell us about the specific areas of bilateral relation that would be focused upon during Australian Prime Minister Julia Gillard’s visit to India?

This is going to be her first visit to India as Prime Minister. It is expected to take our strategic partnership further across a number of fronts. It was in 2009 that our two Prime Ministers agreed that we should designate the relationship as strategic partnership. This reflects the fact that our interests are now converging in a way that benefits both the countries. I think discussions between the two Prime Ministers will be quite broad-ranging. They would review progress in bilateral trade and economic relations, which are rapidly expanding. We will also focus on giving a boost to Indian investments in Australia to strengthen links between the two economies. I think energy will get quite a bit of attention, given its high priority for India and Australia’s potential as a long-term supplier. They would also focus on geo-political issues, both in terms of Indo-Pacific and Indian Ocean, particularly how the two countries can work together in the East Asia Summit, which we in Australia see as a potentially very significant new regional institution. The challenge is to create an institution that is able to address the strategic and economic challenges in the region. I think they would probably also talk about multilateral issues, particularly the G-20, where again Australia and India have a fairly common view. We want to work closely with India in the lead up to 2014, when Australia will chair the G-20. We want to discuss with India what priority should be driving the G-20 and how we ensure that it has a post-crisis role. They will discuss people-to-people relation which is growing extremely fast. Indian origin people are the fastest growing migrant community in Australia. India has been ranked first as the source of skilled migrants to Australia this year. The Prime Minister will also be launching a big cultural festival Oz Fest, which is going to be the biggest cultural festival we have ever done in India. We are planning about 100 events in 18 cities in India.

There have been several incidents of attacks on Indian students in Australia in 2009 and 2010. How did it impact the flow of students from India to Australia?

What we saw was a very dramatic drop in number followed by a slow rebuild. The drop in number was triggered by a number of factors of which the student safety issue was not the most important. I think the most important reason for the drop in number was the change in our policy and clear separation of the education pathway from the migration route. We earlier saw a large number of Indian students going for admission into private vocational courses and the motivation was to secure permanent residency. When we de-linked the two, it had an immediate impact on the level of interests. That is perfectly understandable. There are some other factors as well. I think the global financial crisis generally has brought down the number of international students seeking admissions into educational institutions in Australia. When we saw a big drop in Indian numbers, we also saw an across the board drop in number of international students going to Australia. I am not dismissing completely the perception about the issue of safety having an impact. I think it probably did have an impact. But I do not think it is the main reason. If you compare last financial year with the previous, we have seen a 58 per cent rise in number of application from India, and encouragingly a 90 per cent increase in applications for admissions into universities in Australia. Our broad strategy has been to encourage international students to take admission to our universities, five of which have been ranked among the top 100 in the world.

As you are now set to head the Department of Foreign Affairs and Trade in Canberra, what do you feel about your journey as an Indian-origin migrant in Australia?

Well. I am not unusual. That is the more important point. Something like over 40 per cent of Australians have at least one of their parents born out of Australia and quarter of Australians were born outside Australia. So this is a very multicultural society now. Mine is really more of a typical journey, rather than an exceptional one. The Department of Foreign Affairs and Trade is much more diverse organization now. If you look at the background of people joining as graduate trainees, you will find a reflection of broader community. That reflects contemporary Australia.

When do you think Australia can start supplying uranium to India?

As you know, the Prime Minister led the push to change the ruling party’s policy on the issue of exporting uranium to India and she succeeded in that. And the logical consequence of that is that the Government too puts in place a policy that respects that change. She will update Indian Prime Minister about where it stands now. In order for us to actually export uranium to India, we have to have a bilateral civil nuclear cooperation agreement in place. That is the case with all of our customers. We have a fairly clear template for bilateral agreements both with nuclear weapon states and non-nuclear weapon states. We will need such an agreement before we start supplying uranium to India. We have got the world’s largest reserve of uranium, but the value of our uranium export is much lower than that of our coal, gas or iron ore exports. But, in the long term, India is going to be a significant customer. India’s plan to augment its nuclear power generation capacity offers Australia an opportunity to be a long-term exporter of uranium.

Will Australia ask for additional safeguard commitment from India, since the latter has not signed the Nuclear Non-Proliferation Treaty?

India is unique as it is not a party to the NPT and we have so far not exported our uranium to any non-NPT country. But India has entered into an agreement with the International Atomic Energy Agreement for application of safeguards to its 14 civilian nuclear facilities. We will work within the framework of the IAEA safeguards for India. The level of assurance that we expect from the customers of our uranium is very clearly spelt out in our template for the bilateral agreement and we will expect the equivalent level of assurance from India to ensure that Australian uranium would be used only for peaceful purposes.

How soon you expect the India-Australia Comprehensive Economic Cooperation Agreement to be signed and how do you expect it to help boost bilateral trade?

We would like to do it as quickly as possible. Till now, we have been holding preliminary rounds, getting a better sense of each other’s approach to negotiations and how our respective systems work. The fourth round of negotiations will take place next month, when each side will likely to put offers on table. We are committed to trying to get a good and comprehensive agreement – one that covers not only goods, but also investment. We hope to double our two-way trade volume of US $ 20 billion in five years and the CECA will make it easier to achieve that. I think if we are ambitious about the scope of the agreement, then each side will be benefited from it.

How do you view the prospects of Australia-India cooperation in the LNG sector?

I think this is an area of the bilateral relation that has tremendous potential. We will expand our North West Shelf gas field and we are setting up a new coal seam gas industry on the east coast of Australia. By 2020, we expect Australia to be the largest exporter of gas. Now, India’s demand for gas is growing as your economy is growing. There is every reason to be optimistic that we will have more long-term supply arrangements between Australia and India. At the moment we have only one – the deal between Petronet and ExxonMobil. It is a good deal, a large deal. But given the size of your anticipated demand, we should be having more such arrangements.

How do you view the prospects of Australia-India strategic ties? What did make Australia term its strategic environment as Indo-Pacific, shifting from the traditional concept of Asia-Pacific?

We see India as a country that would play the most significant role, both in terms of regional security, but also as a global player. As Indian economy grows, India’s weight will also grow. India’s economic interests are already pulling it eastward. The level of India’s economic integration with East Asia has substantially gone up. And of course India is also emerging as a significant player in Indian Ocean. One of the key reason for which we have been using the term Indo-Pacific rather than the Asia Pacific that we have grown up with is that we do recognize that if you are looking at Australia’s strategic environment, you will have to factor India in. The East Asia and Asia Pacific constructs did not include India, and so we think that India’s growing economy and its strengthening link with the Asia Pacific, we need to think about our strategic environment in a way that stretches boundary to include India. Indo-Pacific returns India to Asia’s strategic matrix. I think the second reason why we are looking more closely at Indo-Pacific is that it reflects the fact that the major strategic theatre of the future is likely to be maritime and Indo-Pacific links Indian Ocean with Pacific Ocean. That is an important construct from the perspective of Australia, because it faces both the oceans. It reflects the direction in which economic and strategic weight is shifting. So I think Indo-Pacific is a better way of thinking of our strategic environment than some of the older concepts.

How do you view China’s desire to seek greater strategic influence in Asia vis-à-vis the security interests of Australia and India?

The rise of China is clearly a momentous development, both economically and strategically. There probably no precedence in history of an economy of that size to grow as long as it has. India is likely to go through a similar arc in time. So we are at a fairly important point in strategic outlook of the region. Power is beginning to move from West to East. The margin of US power is contracting, although I think it would remain over a considerable time a significant strategic power globally. We also see in our region rise of many other countries in the region. Not just China is growing strongly. India is growing strongly. Japan of course has always been a major economy in the post-war period. Korea is a very significant actor, both economically and strategically. Vietnam is on a growth path. Indonesia is also on a very significant growth path. So this is going to be a very different kind of environment from what we have been used to in post-war period. We all have to work hard in finding a framework that maximizes the economic opportunities and minimizes the strategic risks of the new growth stories across the Asian region. I think that is going to require quite imaginative approaches by the countries in the region. That is going to require much bigger effort in terms of creating regional institutions that would help us manage any potential difficulties. I don’t take the view that conflict is inevitable in our region. We need to be realistic about the adjustments that would have to be made. We have to find space for the countries that are growing in stature. We need to find a stable system which will ensure to the extent that we can that the countries that grow stronger economically are not tempted to overturn the strategic order. That’s an observation I am applying across the board, not on any particular country. China’s trajectory fits into that background, in that context. China is entirely entitled to play a bigger role, as its weight increases. China has been a beneficiary of the current international system. And we hope very much that China would continue to judge for itself that its best interest is in being a cooperative and stable member of the international regime. We should all be working toward that objective. I think it is in China’s best interest for it to continue to grow and to develop within an international environment, which has an underlying stability.

How does Australia view China’s maritime disputes with Japan, Vietnam and Philippines? Is it an issue that the two Prime Ministers are likely to discuss?

I think it probably will come up for discussion. It is an important issue, one that the region would need to discuss, because it can go in an undesirable direction. Australia does not take a position on the territorial claims and we are neutral on the merit of the claims. Neither does India or many other countries. What is needed is to find a way to go for peaceful negotiated resolution of the disputes. That’s what we want to see. Obviously, we would like to see the fundamental principles of international law to be upheld, in terms of freedom of navigation. I think the peaceful resolution of the disputes is very important.

India has entered into a trilateral mechanism with Japan and US. There is also a proposal for a similar trilateral mechanism involving India, Australia and US, if the quadrilateral cannot be revived. Do you think this is possible in near future?

Australia would be very open to a trilateral (with India and US). Triangle is the new architecture of strategic discussions. We have entered into several trilateral with various permutation and combination.

Finally, how would you remember the three-and-a-half years you spent in India as Australia’s High Commissioner?

Well, for me, it has been an enormously stimulating three-and-a-half years that I would always look back very fondly. There have been some challenges in the job. There are always challenges in a good job. India is one of those countries that stay with you, get into your skin and become a part of your life’s memory and ideas. It is such a large and interesting place with such an enormous potential. I have thoroughly enjoyed my time here. I have met some wonderful people, very stimulating and bright people. I wouldn’t sever my connection with India and would take a close interest in the bilateral relation and would look for as many excuses as possible to come back.