“Within only a few years, Asia will not only be the world’s largest producer of goods and services, it will also be the world’s largest consumer of them. It is already the most populous region in the world. In the future, it will also be home to the majority of the world’s middle class.
“The Asian century is an Australian opportunity. As the global centre of gravity shifts to our region, the tyranny of distance is being replaced by the prospects of proximity. Australia is located in the right place at the right time – in the Asian region in the Asian century.”
This is the rationale behind the Australian Government’s Australia in the Asian Century White Paper, released in October 2012, as expressed in its executive summary.
The paper has taken on board the substance of extensive submissions by stakeholders including the Australia India Business Council (AIBC), notably with the broad inclusion of Hindi language teaching in Australian schools as one of four core Asian along with Mandarin, Japanese and Indonesian.
AIBC national chairman Dipen Rughani welcomed the white paper:
“The enriching capacity of our relationships will be enhanced through education, including language programmes and cultural sensitivity – we expect this will lead to opening up of opportunities for considerable growth in trade and investment in the years to come,” he said.
“The AIBC congratulates the Australian Government and looks forward to working through our networks to help build increasingly stronger ties between Australia and India.”
Skills and education are front-and-centre in the white paper. Listing Australia’s existing strengths, it states:
“We need to build on areas where we already perform well, in order to extend our comparative advantage. Critical to this will be ongoing reform and investment across the five pillars of productivity – skills and education, innovation, infrastructure, tax reform and regulatory reform.”
The paper explicitly takes a long view:
“Some actions can be taken immediately, but others require further conversation among communities across the nation, detailed planning and careful implementation over a generation.”
This goes some way to answer critics who ask: “Where is the money coming from”, amid claims that the schools language program alone would cost billions of dollars.
Prime Minister Julia Gillard explained that the white paper proposals would not exist in isolation, linking education reforms to other government plans such as its coming response to the Gonski Review of education funding and its roll-out of the National Broadband Network which would enable efficiencies through distance learning.
“The inclusion of Hindi as a priority Asian language is new,” said Kathe Kirby, executive director of Asia Education Foundation. “Currently only a handful of Australian schools teach Hindi and scaling this up will be a challenge. But the decision to include Hindi is welcome and consistent with the growing importance of India globally and to Australia. The fact that only 12 percent of Indians speak English has been too little understood and we have been complacent about the need to know India better.”
The paper proposes that all Australian children will be able to choose a new Asian studies curriculum, including languages, throughout the whole of their school life. Importantly, their progress would be tracked. All schools will be linked to a partner Asian school, building “people-to-people” links via a video-conferencing platform already installed in many Australian schools.
Global investment shifts
The global business and investment axis is also shifting. Says the white paper:
“Asia is growing as a capital exporter and financial centre. The region holds more than half the world’s foreign exchange reserves and accounts for nearly a quarter of global financial assets…The share of total savings in China, India and other emerging economies is likely to increase over coming decades, while the United States’ share, and those of other advanced economies, will decline.”
India’s share of global savings is predicted to exceed that of the United States before 2025.
To date, much of this Eastern foreign exchange reserve has been invested in advanced economies, the money pulled by the West’s relatively mature and regulated financial systems.
However this is set to change, says the white paper, as Asian financial markets mature and deepen. This will shift investment away from Western nations towards Asia, leading to “greater market opportunities for services such as risk management tools and financial market products, including the provision of such services from Australia”.
Food and water
The paper flags food security as a major issue in the medium term:
“Asia’s demand for food commodities is set to grow. In order to feed a larger, more urban and richer population, food production in 2050 needs to be around 70 percent higher than today.”
While this is said to be possible, Asia faces significant challenges in meeting this demand including: water shortages; severe existing water pollution – the waters of the Ganges and Yellow rivers are already unusable for agriculture along more than half their lengths; expanding deserts; sea-level rise and salination caused by climate change; and growing environmental constraints and regulation on farming.
Given that food exports have been described as the export of ‘virtual water’, many observers tout Australia as a possible future food bowl for the region.
“Already, in countries such as India, frequent water shortages have contributed to conflicts among households, communities and states’” says the white paper, and: “In a survey of over 5,000 rural households in India’s southern states of Andhra Pradesh, Karnataka and Tamil Nadu, about 90 percent of respondents listed water and infrastructure as among their top three priorities.”
About 48 percent of India’s current farm produce is currently wasted, much of it before it reaches market, largely through inadequate cold-storage and transport infrastructure. Improving this infrastructure is a priority in India’s current five-year plan.
Given that food exports have been described as the export of ‘virtual water’, many observers tout Australia as a possible future food bowl for the region. But given Australia’s own lack of water, this would require an investment in hard infrastructure beyond Australia’s capabilities. The suggestion is that inward investment from Asian counties would both enable the increased food output and guarantee markets for the produce.
The white paper covers a lot more territory than space allows coverage here, including the rising strategic influence of the Indian Ocean in the East-West balance. But a core theme of many submissions, and the White Paper itself, is the fundamental importance of people-to-people connections in bridging the very different cultures of Australia and its Asian partners. These connections can be strengthened through greater crossflows in education, in diplomatic effort and through bilateral and international business ventures.
Connecting people is the real basis of abstract terms like ‘opening and integrating economies’, and in that sense the fundamental message of this white paper is one of encouraging optimism.
Michael Gormly Australia India Partners