Introduction
Distinguished guests, ladies and gentlemen.
I’m very pleased to have the opportunity to be here once again
at the Confederation of Indian Industry to speak to you about Australia
and India.
I know the Confederation of Indian Industry has a long and distinguished
history as India’s peak industry body. One of my former jobs –
immediately before I entered Parliament, in fact – was as Executive
Director of the Australian Chamber of Commerce, a similar body to
the Confederation. So, I feel today that I am once again among
friends and colleagues with whom I can have a very beneficial discussion.
I’m also aware that one of the Confederation’s nine overseas offices
is in Australia. Former Australian High Commissioner to India,
Darren Gribble, heads this office. Mr Gribble is also a current
board member of the Australia-India Council. I welcome the fact
that the Confederation has chosen to establish an office in our
country. It is a wonderful testimony to our growing trade and investment
links.
Australia and India are old friends. Our two countries have certainly
had a long diplomatic relationship, stretching over fifty years.
And our commercial relationship goes back much further. Trade between
the ports of Calcutta and Sydney began only a few years after the
British founded a colony in Australia in the late eighteenth century.
We have connections through the Commonwealth, and our cultural
affinity, not least for cricket. But we are new friends as well
– young and energetic democracies, working hard to make our place
in the competitive global economy of the twenty-first century.
Today, I want to focus on the future of our relationship. My firm
conviction is that Australia and India can look forward to a strong
and mutually beneficial partnership.
In my address, I want to focus on four areas: first, to say something
about Australia’s experience of economic reform; second, to look
at India’s own experience of economic reform; third, to examine
some of the commercial synergies that exist between us; and finally,
to look with confidence to our future.
Australia’s experience of reform
From the business point of view, Australia and India have much
in common: our economies are roughly the same size; and we are both
meeting the challenge of doing business in the new global economic
environment. For Australia, this has ensured that we can compete
in the globalised world economy.
Australia itself has become a great place to do business.
Over the past twenty years, but particularly in the last six years,
the Australian economy has become more integrated into the world
economy than ever before. Our merchandise exports have increased
by a staggering 54% since 1996, from $A99 billion to $A154 billion
in 2001.
Australia’s trading success is based on a very strong domestic
economy. As a result of our reform agenda, Australia has one of
the most competitive economies in the world.
The Government has undertaken economic reform across the entire
spectrum of policy, including tax, industrial relations and fiscal
policy. This has not only contributed to our export success - it
has also strengthened the broader economy, making it much more competitive
and productive, and resulted in stronger gains in living standards
for our people.
In macroeconomic policy, Australia has restrained government spending
and retired public sector debt. In fact, we’ve paid off almost
A$60 billion worth of government debt, which sees us with one of
the lowest debt to GDP ratios in the OECD. Retiring debt has created
A$4 billion in annual savings that can be invested in the future
of our nation, not spent on interest payments.
In all, Australia has become a much more favourable environment
for business.
Globalisation and India’s experience of reform
Australia and India share the challenge of ensuring globalisation
works to the benefit of our respective communities.
As you know, globalisation is not new. I would argue that its
pace has quickened since around 1950, driven by the development
of the Bretton Woods system following the Second World War and,
more recently, by rapid and far-reaching technological innovation,
ranging from computerisation to containerised shipping.
Over the past half century, those countries that have been the
most active participants in the world economy have had the most
success in increasing prosperity and improving social standards.
And during the past 20 years or so, many developing countries –
including many in Asia – have joined early trailblazers like Korea
and Taiwan and become the ‘new globalisers’. These countries have
embraced trade liberalisation and opened up to foreign investment.
They have gained access to foreign savings, technology and the global
economy.
All of us have learnt that globalisation makes demands on domestic
institutions and regulation. Traders and investors are concerned
about issues such as corporate governance and prudential controls,
and they will move capital in accordance with their perceptions.
The growing integration of the world economy means that countries
must be creative and identify wealth-creating opportunities at the
global level.
We all know that none of this is easy, but the rewards are real.
Like Australia, India has undergone a globalising decade of its
own. As India has looked outwards since the early 1990s, and particularly
since 1993, the Indian economy has grown more strongly than during
any previous period. India is now a large, diverse economy with
a near-term growth outlook that overshadows much of the rest of
Asia. The Indian economy is now far more integrated into the international
trading system. But, as you all appreciate better than anyone,
maintaining India’s rapid growth will depend largely on the speed
and extent of ongoing reform.
The last decade’s structural reforms have helped India become one
of the world’s fastest growing economies. And there have been real
benefits to the Indian people; higher growth rates and lower inflation
have propelled stronger increases in per capita income, leading
to sharp rises in the standard of living for citizens of the world’s
most populous democracy.
This stronger real income growth was in no small part due to enhanced
trade, greater foreign investment, and industrial reforms. As a
result, the bundle of goods the Indian consumer can afford to buy
is now greater than ever before.
By meeting and embracing globalisation, both our countries have
achieved real gains for our communities. This presents our two
countries with genuine opportunities, both for engagement in the
global economy, and for our bilateral relations.
I propose now to focus on some of those bilateral opportunities.
Australia in India, India in Australia – Commercial Synergies
The year 2000 was a landmark year for Australia and India.
The visit here by Australia’s Prime Minister, John Howard, in July
2000, opened a new phase in our relations. There were further visits
in 2000 by Australia’s ministers for Trade, Immigration, Information
Technology, Communications, and the Arts. I also made a visit as
Foreign Minister in the same year. All of these visits fostered
momentum in our bilateral relations which continues today.
Other initiatives have added support to this momentum. They include
the commencement of a series of high level dialogues between our
governments, including the Foreign Ministers’ Framework Dialogue,
which is an important part of my visit this time. Also, the Australia-India
Council’s Disaster Management symposium was held here in Delhi,
and last year saw the launch of the Australian Government’s India
New Economy, Old Economy report. I am particularly gratified
by the high level of interest the India report has attracted from
business in India, and of course in Australia.
The last ten years have witnessed steady trade growth between our
two countries. In this period, India’s exports to Australia have
more than doubled and Australia’s exports to India nearly trebled.
I am particularly pleased with the 30 per cent increase in our
exports to India over the past year. These exports now total A$2.43
billion – a record result for our trade with India. India’s exports
to Australia have also continued to grow steadily - from a little
over A$321 million in 1992 to over A$800 million in 2001, a steady
increase over the decade. Your exports to Australia during the
past year have also grown by over 10 per cent. India’s good trade
results point to a growing perception of Australia as a worthwhile
market and a valued trading partner, and we hope that Indian companies
will continue to look seriously at Australia as an investment destination
as well.
Despite India’s sometimes challenging business environment, foreign
direct investment has grown. According to Australia’s trade promotion
authority, Austrade, foreign direct investment from Australia into
India has grown tenfold over the past decade, from A$100 million
in the early 1990s to about A$1 billion today.
And Australian business has had some marked success in the Indian
environment. A few examples include:
