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COMMONWEALTH OF AUSTRALIA

SENATE

Official Committee HansardFOREIGN AFFAIRS, DEFENCE AND TRADE REFERENCES

COMMITTEE

Reference: India’s and Pakistan’s nuclear tests

FRIDAY, 7 AUGUST 1998

MELBOURNE

BY AUTHORITY OF THE SENATECANBERRA 1997

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SENATE

FOREIGN AFFAIRS, DEFENCE AND TRADE REFERENCESCOMMITTEE

Friday, 7 August 1998

Members: Senator Hogg(Chair), Senator Sandy Macdonald(Deputy Chair), Senators Cook,Eggleston, Lightfoot, Quirke, West and Woodley

Participating members: Senators Abetz, Bolkus, Brown, Brownhill, Calvert, Chapman,Colston, Faulkner, Forshaw, Harradine, Margetts and Schacht

Senators in attendance:Senators Cook, Eggleston, Hogg, Lightfoot and Quirke

Terms of reference for the inquiry:

(i) the implications of India’s nuclear tests, and the nuclear weapon and ballisticmissile programs of both India and Pakistan, for regional and internationalsecurity; and

(ii) the Australian Government’s role in international efforts to constrain nuclearweapon and ballistic missile proliferation in South Asia.

WITNESSES

COPLAND, Associate Professor Ian, Director, Centre of South Asian Studies,Monash University, Clayton, Victoria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

FRIEDLANDER, Dr Peter Gerard, Open Learning Hindi Coordinator, La TrobeUniversity, Bundoora, Victoria 3083 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336

KENNAN, Hon. James Harley, QC, Level 19, 459 Collins Street, Melbourne,Victoria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308

MAITLAND, Mr Alister Thirlestane, Chairman, Australia-India Business Council,c/- ACCI, Barton, Canberra, Australian Capital Territory . . . . . . . . . . . . . . . . 363

OXLEY, Mr Alan Robert, Director, International Trade Strategies, Level 2, 60Collins Street, Melbourne 3000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348

SNEDDEN, Mr Christopher John, 49 Heidelberg Road, Clifton Hill, Victoria 3068 297

VICZIANY, Associate Professor Antonia Marika, 1 Featherston Street, Armidale,Victoria 3143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277

Friday, 7 August 1998 SENATE—References FAD&T 277

Committee met at 9.08 a.m.

VICZIANY, Associate Professor Antonia Marika, 1 Featherston Street, Armidale,Victoria 3143

CHAIR —I declare open this public meeting of the Senate Foreign Affairs, Defence andTrade References Committee which is inquiring into the matter of India and Pakistan’snuclear tests. I welcome Professor Antonia Vicziany to this hearing. In what capacity are youappearing before the committee?

Prof. Vicziany—I am employed by the National Centre for South Asian Studies as thedirector. The centre is currently located in the Monash Asia Institute, Monash University,Clayton campus. I am appearing before this committee in a private capacity because thenational centre is, in fact, a consortium of universities. We are a large network dedicated toSouth Asia. There are about 120 scholars involved in that. I do not claim to represent theviews of all of them, or possibly any of them.

CHAIR —The committee prefers all evidence to be given in public, but should you atany stage wish to give any part of your evidence in private you may ask to do so and thecommittee will consider your request. The committee has before it a written submission fromyou. Are there any alterations or additions that you would like to make to your submission atthis stage?

Prof. Vicziany—I have prepared a couple of short statements to update what I said inmy submission and, if I have an opportunity to do that this morning, I would like to simplytalk to those four points I wanted to make, rather than go over the things that I have alreadysaid.

CHAIR —Yes, that is fine. I now invite you to make an opening statement, and then wewill proceed to questions.

Prof. Vicziany—As I said, I have made a written submission and, rather than going overfamiliar territory, I thought I would take this opportunity to give you an update as to how Isee the situation evolving, bearing in mind that many of us are still trying to understand thesituation and are actively involved in doing research on it. I have four short statementswhich I would like to make, and I have given the secretary of the committee a copy of them.I apologise that, for lack of time, I did not have a chance to make copies for all members ofthe committee. At this stage, I am trying to really focus on the question of where mightAustralia go next, what can we now do in response to the situation in South Asia as it isevolving.

Statement No. 1 deals with the reports I have had from some Australian companies aboutthe impact on bilateral commerce of the Australian reaction to the nuclear tests in SouthAsia. I will try to be brief. I have talked in detail to and also had correspondence via faxwith five Australian companies, some very big, a couple of them small to medium and acouple of them representing non-resident Indians. My conclusion is that the things I said inmy previous submission appear, with the passage of time, to be substantiated.

FOREIGN AFFAIRS, DEFENCE AND TRADE

FAD&T 278 SENATE—References Friday, 7 August 1998

The first company I interviewed reported that the nuclear tests in the region, in theirview, have not made the region more secure in terms of politics or defence, that Pakistanwas already rated as very insecure and high risk. There is a bit of debate about the rating forIndia, but basically this company reported that the nuclear tests really confirmed their riskassessment of the region as a whole. There was belief that the Australian governmentresponse to the Indian nuclear tests was possibly too fast. This company said, ‘We wish wehad known about it,’ and ‘We wish we had some idea of what was coming.’ They areclearly concerned about the Indian interpretation of our responses.

The economic impact of our position on the nuclear tests was perceived by company No.1 to be detrimental, but no direct evidence or specific evidence has yet emerged to proveexactly how detrimental that is going to be, with one exception, and that is in the area ofproject financing. This company and some of the others I have talked to have been veryconcerned about project funding, especially where multilateral funding institutions areinvolved.

Finally this company noted—and I agree with it—that there are, paradoxically, a coupleof positive developments coming out of this. It seems as if the current Indian government,the BJP, is now especially keen to demonstrate its commitment to economic reform andongoing liberalisation and privatisation. We have seen in the Indian press all sorts ofstatements and promises to accelerate the easy access of foreign firms to the Indian market.So company No. 1 thought that, although things are very bad at the moment for Australiaand Australian companies, maybe this general positive attitude to economic reform is goingto benefit us.

The second company I talked to was involved in the export of high-tech agriculture,high-tech gene shearing and that sort of thing. It is a company that has strong competitors—Israel, the Netherlands and France—and it currently finds itself in a disadvantageousposition. One principal reason for that is that in the projects that this particular Australiancompany undertakes, a significant amount of multilateral funding is important.

I pointed out to this informant that the World Bank, which was in fact the funding bodyto which the company referred, has actually given the okay to a surprising number ofprojects in India, especially in the power sector. The World Bank has clarified its position onfunding and has said that, in instances where it believes that the withholding of money isgoing to have a detrimental impact on poverty and further prevent India dealing with themass poverty it is confronted with, the World Bank will continue to fund.

This particular Australian company pointed out that, in their case, with high agriculturaltechnology, the case was not clear cut; it was a grey area and the position of the World Bankwas uncertain. They are in the Indian market competing hard against competitors. So thisuncertainty has actually increased the difficulty of their business. I was also told that theCEO is absolutely exhausted. He has been running backwards and forwards to India—he isgoing to India today. He has been on the phone more than ever before trying to tell peopleabout how positive and upbeat Australia is, trying to overcome the difficulties that we areaware of in our bilateral dialogue.



Finally, I asked company No. 2, ‘What do you think we can do about it?’ He had aninteresting idea. He said it was terribly important for us, in so far as we can, to try to re-establish dialogue, especially with the key ministries. Okay, perhaps not at this stage at thepolitical level, but some kind of ongoing dialogue with the secretaries, under secretaries andjoint secretaries of coal, steel and agriculture, because these people are important players inthe success of Australian projects getting up.

Company No. 3 pointed out that Australia had a great deal to lose. This company wasinvolved in the mining area. Again, it is an area in which we have strong competitors: SouthAfrica, Indonesia and China. This company was very concerned about the suspension ofAusAID assistance. In reporting what the company said I have not had the time to turnaround and verify what they are telling me about AusAID doing this or DIFF doing that; Ihave had to take them on their word.

Senator COOK—There is no DIFF.

Prof. Vicziany—There is no DIFF? I was aware of the debate about DIFF but I have notchecked it out. This company was very concerned about AusAID. Apparently there wassome statement about a $10 million grant being given to India to give to Coal India forenvironmental, social mitigation, mine improvement programs, and he claimed that this hadbeen stalled and was detrimental. This person also referred to DIFF. The correspondence Ihad with this company was by phone and fax through to India, so it was a very difficultthing to establish. But he made a point of noting DIFF funding, which had now been closed.He thought that re-opening DIFF funding would be a good thing to do as a way of gettingthe government again involved in the Indian market. He had a few things to say aboutsanctions, pointing out that the British and the French had not been very tough in imposingany sanctions at all.

Company No. 4 reported that business and government in India were well aware ofAustralia’s reactions to the nuclear tests, and the prevailing attitude was that most people inIndia at most levels were pretty much unperturbed by the Australian response, reflecting thefull nature of our involvement in the Indian market. This company reported that bilateraltrade does not appear to have been affected either. However, they expressed concern forfuture approvals to, again, projects in industries such as communication, power, aviation andso on, and noted that some large European companies were getting the green light to goahead. The implication was that the Europeans, being somewhat softer on the nuclear tests,have been accelerating European requests to get projects through quickly, and Americanprojects and Australian projects are disadvantaged.

In general, this company was a bit more positive and not that concerned. Bilateral trade,educational and cultural exchanges, they said, were unaffected. I should point out that this isin fact an NRI company and they agreed that because it is an NRI company, their personalconnections, family connections, cultural familiarity, are a real plus for them. They hadnetworks and connections that made it possible for them to overcome some of the bottle-necks that others have to deal with.

The fifth and final company that I talked to had a mixed view, but pointed out that therewas an awareness in India of Australia’s reactions to the nuclear tests, especially at the



political level. The business sector was also aware of Australia’s position but was being verypolite and seldom brought it up. They said, ‘However, it is very apparent that knowledgeableIndians are quite upset at the "fierceness" of the language used by the Prime Minister in hisdenunciation.’ Fortunately, this particular business had not been directly affected, or at leastthe person who gave me the information could not detect any way in which the business hadbeen affected—mainly, again, because we are relatively small players and America is takingmost of the criticism.

This person was not prepared to comment on the bilateral impact of the lack of dialoguebetween Australia and India but noted that there were newspaper reports coming out on aregular basis of politicians and bureaucrats from India being urged not to visit Australiawhen travelling in the region. I should like to add that I spoke a few days ago to MrFuhrman, the adviser to Mr Fischer’s office. He was very strong on this. He said, ‘Well, no-one has actually said that officials and civil servants and so on are not allowed to come toAustralia.’

I must confess that my own view was in agreement with that of company No. 5: Ithought that we were not encouraging official visits. But from Mr Fischer’s office, thereseems to be a different interpretation. So perhaps it would be useful to find out exactlywhere we stand on this question.

In summary, this final company said, ‘I think our relations have been adversely affectedmainly in reaction to the language of our criticism.’ I think that is important because in myfirst submission I talked about the language, possibly not the substance because we have notimposed draconian economic sanctions. Yes, the language of our criticism has been aproblem but not to the extent that it has had an impact on business in this particularcompany’s case. But clearly they were very, very nervous about it all. The final sentence inthis report to me was, ‘Frankly, we would just like to see all of this pass into history.’

At the end of the statement which I have given Mr Barsdell, I have also included a listof questions which I developed when approaching these companies to try to get a bit ofsystematic information together. In conclusion, on the question of the impact on bilateralcommerce, I think Australian companies are really worried. They feel that they are hard upagainst it. We have always had difficulties in competing. We are not major players in theIndian market. But in the current climate, we are looking much more strident than some ofour European competitors in particular. We are appearing to be very close to the US line butwithout having the advantage of US funding and the importance of US trade and investmentto make our position, as it were, more acceptable.

At the same time, I have to report to the committee that I cannot give you a single casewhere someone has said, ‘Well, this particular project was coming up and it was set asidebecause of our reactions to the nuclear tests.’ I am trained as a historian. My job is to getevidence. I always ask, ‘Give me evidence.’ There was one person to whom I talked whosaid, ‘Well, yes, I know of a case where we were up for a project, we were put at thebottom of the list and a Canadian company got the job.’ But until I actually have the nameof this Canadian company and until I know the sector and what it pertains to, I do not thinkthere is much I can do about it.



Senator EGGLESTON—Thank you very much for what you have said, Professor. Ithink it is quite interesting. I would like to ask you a couple of questions about yoursubmission. First of all, on page 7 you say:

There is a tone in the Australian position on testing in India and Pakistan which smacks of ‘orientalism’—namely theview that India and Pakistan can’t be trusted to handle nuclear technology responsibly . . .

That, in effect, is you saying that we are being very patronising to these countries.

However, I wonder whether you heard the remarks made last week by the United StatesSecretary of Defense, who expressed great concern about the control systems which exist inthe military forces of both of those countries relating to the use of nuclear weapons. In theUnited States, of course, the control system is very tight, as it is in the United Kingdom andFrance and was in the Soviet Union. But there is a great deal of concern about it beingpossible for an unauthorised use of nuclear weapons to occur in India and Pakistan. That isnot a question of being patronising; it is a question of a genuine security threat, would younot agree?

Prof. Vicziany—I think I should say that, probably like everyone in this room, I dodeplore nuclearisation and nuclear weapons in any context. To that degree, what hashappened in South Asia is most unfortunate. Equally, I do not pretend to be an expert onnuclear weapons and what the state of alert is, and so on. My comment about orientalismwas to do not with the substance of the situation in the region of South Asia but ratherIndian and Pakistani perceptions of how we are handling it.

As I say, I think nuclear weapons are a terrible evil. Precisely because of that, I wish itwere possible for us to come up with an approach that was more understanding, moresympathetic, one that articulated a greater friendliness to India and Pakistan, despite thenuclear problem, in order that we might have an influence on the region.

What really worries me is that the language we have used and our very willing identifi-cation with the US position on some of these things have prevented us from taking a moreeffective position to do precisely the sorts of things that you, Senator Eggleston, areconcerned with. So that is the context of my comment about orientalism. I am veryconcerned that, because we are talking in this way, no-one is listening to us.

I have a second statement, which I will not go into. But statement No. 3, in front of MrPaul Barsdell, again addresses my ongoing concern about Australia’s image in South Asiaand the language that we are using. For example, last week in Manila at the ASEANmeeting there was a most unfortunate incident involving an Australian representative and anexchange of views at some bar in Manila. Three Indian journalists were involved.

Jyoti Malhotra, one of those journalists, went back to India and, in theIndian Express, ahighly regarded Indian newspaper, has written this article. The article links up the sorts ofthings the Australian representative was saying with the problem that I have broadlydescribed as orientalism, this patronising attitude. Apparently, we had lectured these Indiansabout their mass poverty and their nukes, and there was some accusation that the Australianrepresentative had parodied the Sanskritic language in doing this.



Again, I cannot verify the accuracy of the report. I am simply saying that, if we are notmore careful with our language in expressing our very genuine concern and our right to havean independent foreign policy, and all these other things, no-one is going to listen to us. Thatis what worries me.

Senator EGGLESTON—You say that you do not support nuclear weapons. I find itdifficult to understand that you do not understand that nuclear weapons are a particularcategory of issue; that our relations with South-East Asia, in a general sense culturally and interms of trade, can be conducted, I am sure, on a more sensitive basis, but the issue ofnuclear weapons is a very different matter. On page 15 you state:

There is no evidence to show that the explosion of nuclear devices by India and Pakistan has added to regionalinsecurity in South Asia or the Asia-Pacific. Our realisation that we now have two South Asian states which have anuclear weapons capability should not panic us into dismal scenarios of gloom and foreboding.

I think most people would feel deeply concerned about the possibility of a nuclear exchangeon the Indian subcontinent and the fact that nuclear fallout could come across the Bay ofBengal, across Indonesia into Australia. It really does change the security balance in thisregion, I would have thought. I wonder how you justify that comment. It seems, if I mightsay so, with the greatest of respect, to be an extremely naive view of the security situation inSouth Asia.

Prof. Vicziany—I would reply briefly to that. Whilst I am not an authority on nuclearweapons, I have made it my responsibility to learn as much as possible about the situation asit pertains to nuclear weapons in South Asia.

It is not only my conclusion but also a number of other experts are coming to the viewthat, first of all, India and Pakistan have now merely publicly declared what most of us knewto be the case. We all knew that they were nuclear weapons capable, but now it is up front.That by itself does not necessarily automatically make the situation less secure. You couldargue that in the past the tension, say, between India and Pakistan has been worse than it iseven today. If in the past it had not pushed India and Pakistan to anywhere near the nuclearconflict—in fact, it has never been on the agenda—I do not see why the situation suddenlybecomes more insecure simply because it is now publicly acknowledged that these twocountries actually have what we knew they already had.

The other thing that is very important is to distinguish between capability and the extentto which they are actually ready to go and have a nuclear fray. It is not as if they all havelarge nuclear arsenals mounted on missiles ready to shoot off. They are not on full alert.Reports of these so-called full alert positions have been discounted by a number of authori-ties. I believe that fundamentally nothing significant has changed other than all of this nowcoming out into the public arena. Perhaps that in itself might indeed have some positives. Itmight require India and Pakistan to develop policies and programs that now factor nuclearweapons into their equations. Reports in the last week in all the international newspapers andthe South Asia newspapers have been about the possibility of India and Pakistan now signingthis CTBT, or some version of the CTBT. So I remain optimistic rather than gloomy.



Senator EGGLESTON—My view remains that you are very naive about the securitysituation in South-East Asia with the addition of nuclear weapons. As we all know, Israel,for example, has had nuclear weapons for a very long time. It turns out that, although theyhave never publicly admitted it, they have a missile carrying capability. While you have saida lot about the state of readiness of the Indian and Pakistan armed forces, I am sure youhave no better knowledge than anyone here of what they really are and you are simplyspeculating. I remain firmly convinced that this is a very real change in the security equationof our region.

Prof. Vicziany—As you say, we are all speculating, but the American Senate chap incharge of looking at this question of the nuclear weapons in South Asia is actually on hisway to inspect the sites and other things and I believe that this has not happened before.That is another example of something positive coming out: the fact that we have a UnitedStates review of the situation of nuclear weapons.

Senator EGGLESTON—Were Indonesia to develop nuclear weapons, do you thinkAustralia should as well?

Prof. Vicziany—It is an interesting question to ask because in fact the Department ofDefence, as you may know, is currently looking at the question of nuclear weapons andforward defence and various defence positions. I do not know. I am not in the position tocomment on that because I have been so focused on the South Asian situation. WereIndonesian to develop nuclear weapons, I would hope that we could develop a language ofdiscourse and engagement that would make the region more secure, whereby they would takeus as serious dialogue partners and we could have an input into that process of dealing withthe situation once it has arisen. If we could not prevent the situation from developing, thenext best option is to position ourselves so we can have some influence on what happensnext.

Senator EGGLESTON—Thank you.

Senator COOK—I just read through your submission, Professor. I comprehend it asbeing essentially reportage about actions and reactions against a background of the conten-tion that we do not adequately understand what the motivations or cultural differences are inthe subcontinent, but it is not an analysis of strategic security or economic relationship. Isthat a fair way of understanding what you are putting to us?

Prof. Vicziany—Yes, definitely.

Senator COOK—And it concerns India, rather than India and Pakistan in that sense?

Prof. Vicziany—Yes. We are much more focused on India. It is a much biggerrelationship, a much more important relationship at the moment.

Senator COOK—I would like to approach this in two parts. Firstly, while I do notintend to dwell on it very much, there is the question of India’s and Pakistan’s testing andthe reaction that brought from the world, including Australia. We seem to be in thebackwash of that—that is, how the Indian reaction to the Australian reaction is tabulated.



Secondly, what do you do about the situation to bring greater stability to the area? This iswhere I think your points about the adequacy of our understanding of the situation in thesubcontinent must play a fairly critical role. If we do not understand it well enough, whatparticular things should we be looking for in order to bring greater stability to now openlydeclared nuclear states? What role can Australia play in that? I think there is an internationalrole, but we have an independent role. The first point that I want to ask you about is whetherI am right in interpreting, from what you have said of the five Australian companies that youspoke to, that there is generally a sense that the Indian government is penalising Australianbusiness because it disapproved of the Australian reaction to its initiative to test nuclearweapons.

Prof. Vicziany—I think it is broader than that. The general impression I get is that thereis a consensus in India on this. I think that is something the Australian public has againfailed to appreciate. The government of India, most of the opposition—with few exceptions,the papers, leading journalists and public opinion seem to be firmly behind what India hasdone. When we have taken the position that is strongly critical of India and in a languagethat has, on occasion, been offensive, the impact on Australian companies, as I understand it,is coming from a whole range of sources.

A lot of it is probably not even being articulated, but it might be the language ofavoidance. It is not what people are saying or doing; it is what they are not saying and notdoing. They are avoiding us. Certainly government is a factor. It has been suggested that thegovernment of India is penalising Australia, but I have no evidence to suggest that there isanything systematic like that happening at all. I think it is just an extraordinary situationwhich ordinary people in ordinary jobs in universities and bureaucracy and so on agree on.We are getting it at every level in every kind of interaction.

Senator COOK—I think it is fair to say that the Australian reaction was certainlybipartisan, that the Australian media supported it and that there was widespread support forwhat Australia said in the community. What you are saying is that support in India for theactions it took is, by mirror image, true of Australia in the reaction we framed after the eventof the nuclear testing. I think that is fair. I am not party to the Australian government. I ama frequent critic of it, and I wish it would shift out of office so we could take over. But allthose things considered, the Australian government does have general community support forits position. It is a bit immature, is it not, to say that someone does something here, we areoffended by it but we should sit on our hands and not say anything?

Prof. Vicziany—No, I do not think it is immature at all. I think our reaction would bemuch more mature if we were also more realistic. The basic facts come down to this: whatdoes the Australian public think of nuclear bombs in South Asia?

Senator COOK—Not very highly.

Prof. Vicziany—It probably never enters their minds.

Senator COOK—No, I mean to the extent that the issue is in your face when nucleartesting occurs.



Prof. Vicziany—Exactly. I think you are right. I think the Australian public does not, byand large, support nuclear weapons. Equally, the Australian public knows very little aboutIndia or Pakistan. As you and the committee would know, it has been 10 years since manyof us started actively re-educating the Australian public about the region. I do not think theAustralian public necessarily has any particular views at all about South Asia, but we areconcerned about nuclear weapons. Equally, it was not France testing in the Pacific—it wasnot right next to us; it was over there in Rajasthan.

It is also important to realise that the Indian perception is, ‘Who are these Australians?’This comes up in a number of different contexts. It comes up in the context of my culturalbriefings for Australian companies. It is very important for us, as academics, to remindourselves and our Australian friends and colleagues that when we go to India, given thatIndia has had a colonial past and heritage, we cannot be strident and adamant in assertingourselves and expressing our views. The Indian reaction to that is, ‘Who are these Austral-ians? There are only 20 million of them.’

Senator COOK—But we have had a colonial past too.

Prof. Vicziany—But it is a different situation, as you know. There is also the view that,‘After all, India is the second biggest economy in the world, one of the biggest markets, sowho needs Australia?’ Australia has a large balance of trade surplus. I am trying to reach amethodology for estimating our economic interests in India, which are very considerable. Itis inconceivable that the ANZ Bank could be an international bank without having 56branches in India, and they are planning another three branches. If I estimated the economicvalue of India to Australian business and the Australian market, it would be very big indeed.On the other side, Indians think, ‘What is Australia doing for us?’

There is also the problem that I referred to in my submission that last year there was anexchange of views about whether we should or should not have sent our aircraft across thisIndian naval vessel and taken sonar images, or whatever we did. The Indian view is, ‘Wehave had such a good relationship, you need our trade, we are so friendly, we share so manythings in common, so why are you being so unfriendly?’

Senator COOK—You do not dispute that testing nuclear weapons is intrinsically anunfriendly act, do you?

Prof. Vicziany—No. But it certainly was not directed at Australia or the Western world.I accept the Indian view that India tested nuclear weapons because it was the Indian securityperception that they needed to. What is particularly instructive in this is that Mr GeorgeFernandes came out early in the period of the BJP’s government and, amongst other things,identified their concern about China. All of us noted that Mr George Fernandes was possiblythe least likely person to have said this, given his political background as a trade unionist, aMarxist, and a committed socialist—this is a man who has young Burmese refugees living inhis house in New Delhi. Why would George Fernandes go public and make those statementsabout China?

Senator COOK—Because he is pro-Soviet.



Prof. Vicziany—I think it is much more complicated than that. He is a professional.When he got the job, he went out to find out what he was supposed to do as defenceminister. He visited the sites, talked to the military, and talked to defence. I think he was justdoing his job, with one exception—he was then very public and frank about it. There aresome things he should probably have kept to himself. He made this assessment, and I mustsay that I have to take that assessment seriously because, after all, I am not living in theregion, I am not dealing with their problems or their perceptions. We are over here inAustralia.

All I want to say is that we have to try and understand why India has come to this pointand what we can do now to make those nuclear weapons safer. I think you said in youropening remarks, Senator Cook, that is really, is it not, the crucial issue. Now that it hashappened and it cannot be undone, what can we do to make the Asia-Pacific region, wherewe live, safer and securer? How can we minimise the risk of all the things that we areworried about?

Senator COOK—I do think there is this threshold point, though, that it appears from allyou say that it has not penetrated India. Irrespective of what they might think of Australia—whether they think we are inconsequential or whether they think we are transplanted Pomsand not really a former colony of Britain—or what they might think of us in the sense thatour trade relationship is small, it has not penetrated in India that their act and Pakistan’s actof crossing of the threshold and demonstrating a nuclear capability was fundamentallyoffensive to Australia and fundamentally jeopardises the security of the region and that weare bound, on behalf of our community, to say so forthrightly and directly and to back whatwe say in protest about that with some sign that we really do mean it.

I feel somewhat strongly about why we, as Australians, should hide our light under abushel when we find ourselves in a situation where proliferation is going on and where—letme just say as a subset—on the eastern seaboard of Australia everyone is concerned, as theyshould be, about French nuclear testing in the Pacific. I actually come from the westernseaboard and I am concerned about nuclear testing in the Indian Ocean area as well.

Having said what is our position and made our case, the constructive next step is: howdo you minimise it? Would you care to take a minute or two and tell the committee whatyou think might be some constructive things that Australia could do: if you think there arethings that would cause a greater degree of stability in the region and maybe, if thenormalisation of the trade relationship would do that, that is an argument to normalise thetrade relationship; if normalising the trade relationship would encourage India and Pakistanto believe they had got away with it and that they could go further, maybe it is a reason notto normalise the trade relationship; and what access to international organisations orinternational overtures there should be—things of that nature. Perhaps you would care toaddress us on that.

Prof. Vicziany—Let me just say, in preface to what I am about to say, that—like you—Iam also Western Australian. My family lives there so I have great reasons to be as con-cerned for the security of Perth and that of my family in Broome, Halls Creek and FitzroyCrossing as I am with my own personal security and that of my nuclear family in Mel-bourne. I do not think that makes a difference at all to any of the arguments.



Senator COOK—I was not directing any of that at you.

Prof. Vicziany—You did not know that I was a West Australian.

Senator COOK—There is a sense in some of this debate which I am collaterallydismissing that it is in India, so it is not close to Australia. That is an eastern states’ view inAustralia.

Prof. Vicziany—It is a view that I do not hold.

Senator EGGLESTON—I have to say I endorse that view.

Prof. Vicziany—It is a view that I do not hold at all. It is not because I am alsointellectually engaged with India. The interrelationship, both politically and economically,between India and the Asia-Pacific region is far bigger than anyone can actually imagine.

Korea, in particular, has huge investments. We have Japanese joint ventures in India. Wehave Indian joint ventures in Malaysia and Malaysian joint ventures in India. In the way thatwe all know, all this globalisation has involved India. To my way of thinking, India is notsome far away, distant place but is, in fact, very close to us. Perhaps we can adopt a modusof operation that is more sensitive. I am not saying that we are not entitled to have our owndefence policy. We are entitled to have any policy we want that our government wishes todevelop. This is the right of all nations.

I am merely saying that it is most unfortunate that we have articulated this policy in suchstrident language. Maybe we were too hasty in responding. We could have had exactly thesame policy and positions we have had with more moderated language and put in a way thatwas more palatable, thereby perhaps giving us a bit of influence on what is happening in theregion.

Turning to your question: what can we do? I have typed up a few things in statement No.2 of the papers I have given to Mr Barsdell. It is titled, ‘Looking forward: steps whichAustralia might take to re-engage with India and Pakistan’. It is limitless, we can do somany things. It is in the hands of government to think now in a constructive way: ‘What canwe do in a way that does not make us look silly?’ Obviously we do not want to make themost dramatic gestures that suggest there is a 180 degree sweep from one policy to theother, or that we are lost or being buffeted about the place. I take seriously your concernswith us. We need to be consistent and genuine and we need to demonstrate that we are notconfused. Indeed we can do all these things in precisely the same way as the World Bankhas been doing them and the United States is actively engaged in. I have been reading verycarefully the Indian and American press on sanctions and other things and it is veryinteresting to see how, in the last two months, there has been a gradual shift in tone anddirection. We can do all of that also, provided we believe that we should be doing it and thatit is important.

On that sheet of paper I have made a list of things we could do. As I say, we couldstudy the US position on sanctions and see what room that gives us, what flexibility wehave. We could study closely the US language and how it is shifting. Look at Mr Talbott’s



activities, and those of Jaswant Singh. Look at all the cross-Atlantic running around—everyone visiting each other and talking to each other. But nobody is talking to us and weare not talking to anyone in South Asia. This cannot be good; this cannot be healthy.

Yes, I think we should maybe reactivate trade. Half the Indian population lives below thepoverty line. There we have as much opportunity as the World Bank to say that many ofthese agricultural, technology, energy, et cetera projects must have an immediate impact onpoverty. We could use a broader definition as to what constitutes humanitarian aid, giventhat particular fact. We should encourage meetings and visits by high ranking Indian civilservants. We could work our way up: we could start doing the simpler, easier things andwork our way up towards it. And I think it is a good time to do it. I came here this morningfeeling very positive. India is actively considering signing the CTBT or some version of theCTBT. This is a great time for us to start thinking constructively about how we can getthrough the bottleneck.

I will not bore you with all the other things. I have made a list of them here. Incidental-ly, thank you for clarifying the point on DIFF. I was not sure. I have not followed it. IsDIFF on or off, or is there some new version?

Senator COOK—The government has cancelled it. The opposition has announced thatwe will bring it back.

Prof. Vicziany—I see. Talking to companies, the message I am getting is that they arequite confused. They do not know what is on and what is off.

Senator COOK—There were no DIFF programs with India at the time.

Prof. Vicziany—No. Basically my view is that there is a great deal we could do. Finally,let me point out that the National Centre for South Asian Studies with the Monash AsiaInstitute is holding a dialogue in Melbourne at the end of the month. Here is a splendidopportunity: we invite the committee to come. It is a great chance to meet people. Two ofthe four Indian delegates are leading journalists. Wouldn’t it be nice if some kind of thawingcould take place, some demonstration of goodwill? It would be wonderful if someone likeRaja Mohan, who, incidentally, was one of the journalists insulted in Manila last week, couldcome to Melbourne—it will be his first visit to Australia, I believe—and see that we are nota bunch of ex-colonialists, we are civilised and we do understand.

Senator COOK—You have to say there is a great deal of immaturity on his part to havea bar conversation in Manila and then have a patronising Australian criticise India and go offand say, ‘That is typical.’ Had he run into Pauline Hanson in that bar in Manila, he wouldhave written an even more lurid article. To imagine that is typical of the Australian view isreally a bit of magazine journalism, isn’t it?

Prof. Vicziany—Indians are used to, shall we say, the good, the bad and the ugly in ademocracy. They understand better than anyone else in Asia that democracy allows all kindsof alternatives to flourish. They were not saying that this is typical, but rightly they aresaying, ‘Look, it is a bit worrying. We do have the Pauline Hanson thing. We have the re-emergence of racism on the national political agendas.’ Are they entirely mistaken in



thinking that this current unfortunate atmosphere allows things to be said in a much morecavalier and casual way than might otherwise be the case? They have not said this is typical.They have rightly taken offence. After all, when we send a delegation overseas, they arerepresenting all of us. So I do not think their reaction was unreasonable.

Senator LIGHTFOOT —Professor, just taking you up on your last point about theperception of racism in Australia by India, without being too undiplomatic with respect toIndia’s own problems with its racism, sectarianism and social divide, Australia could neverpossibly sink to that level of conflict between race, religion and the social divide. Would youlike to comment on that again?

Prof. Vicziany—I am not quite sure, Senator Lightfoot, what your question is.

Senator LIGHTFOOT —You mentioned just a few moments ago that the perception ofracism in Australia by India does not augur well for Australia. I am of the view that peoplein glasshouses should not throw stones, to use an old and very understandable maxim. Theracial divide in India is part of the problem. If it is not racial, it is sectarian. If it is notsectarian, it is social. We do not have that potential for conflict like the subcontinent does.We could never, if only for population, plumb the depths of the problems that the subconti-nent has with that. I fail to see that racism in Australia—spoken about by Pauline Hanson or,as my colleague from Western Australia said, by someone in a bar in Manila—really hasanything to do with it. I am really wasting the time of the committee, because I am arguingagainst what I am asking you, but you might care to comment on what I am saying.

Prof. Vicziany—I get the drift of it. I guess I would disagree with the basic assumptionsyou are making about South Asia.

Senator LIGHTFOOT —It was really the subcontinent; it was not South Asia.

Prof. Vicziany—The subcontinent—South Asia.

Senator LIGHTFOOT —It is dominated by the subcontinent.

Prof. Vicziany—It is a society that is always ripped apart and divisive and there ishatred boiling over.

Senator LIGHTFOOT —I did not actually say that. I just said that it was manifest everyday.

Prof. Vicziany—I am begging to disagree with that. The other view I have of India,which I know best—Pakistan I know less well—is the one I gained doing field work. I haveworked in small villages. I have travelled vast distances on my own and with my family andmy child. I have worked in small towns and large towns. Given the nature of India’sdifficulties and the frustration of making ends meet, I am always amazed that people are socivilised. Certainly at the end of my summer field work I am very grateful to come back toMelbourne. After three months I have had it. I really often do not know how I am going tocontinue. It is such a struggle.



My perception is: isn’t it extraordinary that India is so democratic, that it is so peacefuland that people get on? You can go into a small factory or into a village or into a govern-ment organisation and typically you will find the most extraordinary mixture of people whohave to work together and live together, despite whatever differences occasionally flare up.

Senator LIGHTFOOT —That is not the way that the international press see India at themoment. We want to get on, but there has been slaughter by Muslims against the Hindus inKashmir, which someone described—I guess not originally—as being a powder keg betweenPakistan and India. All I am trying to say is that I cannot accept that one person in Australia,who I trust will become irrelevant one day, can have such an impact on India as you appearto be wanting the committee to believe—and I am talking about Pauline Hanson.

Prof. Vicziany—Yes, of course. I actually do not know what impact Pauline Hanson ishaving on the whole in India, but I can say what the effect is amongst influential Indians,Indians who travel abroad for things like ASEAN meetings and APEC meetings and the elitewith whom we have discourses at the political and business level. After all, it has only been10 years since we told them that we did not have a White Australia policy. The difficultthing in our relationship here is that for years we have been saying, ‘Oh, we are not like thatat all. We do not have a White Australia policy any more. We have a good immigrationpolicy. Did you know that Indians are coming now to Australia in significant numbers?’ Weare talking about not the whole of India but a very influential group of people who, as inAustralia, make an impact on public opinion and government and business, and that is veryimportant.

Senator LIGHTFOOT —I see that manifest with witnesses who come here before thiscommittee. I see every time I travel to universities that there are Indian academics who havepermanent or visiting positions at those universities. If that is not apparent among the Indianacademe, I think they must wander around with their eyes shut.

Let me get on to the subject matter before us this morning. I understand the first nuclearexplosion took place on the subcontinent in 1974, exploded by India. That makes thetechnology to explode a nuclear device some 20-odd years old. I would not have expectedthat India has sat on its technological hands during the past quarter of a century. Would youagree?

Prof. Vicziany—Absolutely. The Indians are indeed immensely proud. Having theWestern press, as you yourself pointed out, constantly throwing in their face, ‘You are sopoor, you are this, you are that,’ the fact that India has exploded weapons—and arguably atleast one of those devices is a miniaturised nuclear device—for Indians is a symbol of thesuccess of their relatively independent science and technology. I should point out that one ofthe people coming to our dialogue in Melbourne is Mr N.N. Vohra, who currently is thedirector of the Indian International Centre but who last year was the principal privatesecretary for the Prime Minister, Mr Gujral. He has been one of the most important civilservants in India for many years. I am hoping that in that dialogue we will be able toaddress these sorts of things. We are applying Chatham House rules. It will be veryinteresting to hear his chronology and his version. But there can be no doubt that the Indiangovernment, at least in the last five or maybe even 10 years, has not abandoned its nuclearprogram.



Senator LIGHTFOOT —Is the impetus behind that China and the conflict, or at leaststand-off, with China, if that is not a contradiction? There is at least the potential for conflicton the border with China in the Himalayas which has been described by some historians—probably by you, Professor—as the highest war ever fought in the world. Is that because ofChina’s apparent affinity and relationship with Pakistan? Here you have the world’s mostpopulous nation, a nuclear power, a power that has a delivery method of a nuclear devicethat perhaps India and Pakistan do not have, and yet it seems to be that China has thispredisposition with respect to Pakistan that it does not have with the former non-alignednation of India. Is that the real conflict? Is the real reason that India felt a compulsion to testa nuclear device to demonstrate clearly that it had that capability because of the relationshipof the Chinese nuclear power with Pakistan? That was evidenced within a couple of weeksor less than that when Pakistan ‘exploded’ its own nuclear device. Perhaps I should have putin inverted commas ‘its own nuclear device’ rather than ‘exploded’.

Prof. Vicziany—I think all the things you say are relevant—the whole range ofhypotheses—but my own feeling, my own view of this, is that a number of things havecome together. There is a genuine concern for China and, yes, Pakistan, as you have put it.Equally, the government is concerned about its eastern border regions and Burma. It has theongoing concern that it has one of the largest borders in the world to protect. I forget howlong all of its land and sea borders are, but you may recall that in 1989 there was a Senateinquiry chaired by Mr Graham McGuire. If you go back and read those reports and theHansard, you will see that we have been through all of that in the sense that we knew then,as a result of all those inquiries, that India has a genuine concern for the length of its border,which, unlike our border, goes through some of the most difficult cultural and politicalterritory in the Asian region.

Then add to that the legitimate concerns that we have. How are we going to protect thisborder? There are questions to do with funding and so on. There is one hypothesis that Ihave come across suggesting that in some ways the nuclear option is the cheapest option. Inthe submission I gave the committee earlier I quoted the words of Brahma Challaney, whopredicted that India would end its nuclear ambiguity. This was more than a year ago.

Senator LIGHTFOOT —Ambiguity with respect to being able to explode at will?

Prof. Vicziany—Yes. Would or would it not? That was the only question before the BJPcame to power. The BJP decided to have a political platform and said, ‘We’re going to havethe guts to do it.’ So they did it. Obviously there had been all this preparation.

Senator LIGHTFOOT —Are you saying that India has a nuclear stockpile?

Prof. Vicziany—No. There is no evidence at all that India has any nuclear stockpiles.What I am saying is that India is in the process of inventing a nuclear policy. Again, thepapers in the last few days talk about the Vajpayeee doctrine or the Vajpayeee policy.

Senator LIGHTFOOT —I am sorry to interrupt you, but why would India want toinvent a nuclear policy when it can plagiarise or borrow? Why does India want to reinventthe wheel when so many countries have a nuclear policy?



Prof. Vicziany—India has to indigenise it, if you like. Obviously they are going toborrow ideas from all over the place. Part of this emerging Vajpayeee doctrine is addressingthe question of the CTBT and is addressing the whole issue of whether it is meaningful ornot meaningful to express no-first-strike use capacity and so on. When I said that India isevolving its own nuclear policy, I think that is really important. India is, in other words,actively engaged in addressing these issues.

The point I was trying to make earlier by quoting Brahma Challaney is that it is not justall these things that are happening in the region; it is also the simple fact of these complexborder issues and then the cost of defending them and the debate that we are having inAustralia and the United States. If you hop on to the web sites of the Council for ForeignRelations, now that the Cold War is over we are all engaged in a debate about how can wehave an adequate defence that minimises risk and minimises cost.

Senator LIGHTFOOT —There is no doubt that there will be an ongoing—and in theforeseeable future it will not be negated—problem between India and Pakistan. It seems atthis stage unresolvable. You have painted a very good word picture of and hypothesisedabout China and India and to some degree Pakistan, although the facts there are more wellknown. Given the conflict, if there were a limited nuclear war between India and Pakistan—God forbid but, let us face it, it is possible—what do you see the position with China and itsobligations to Pakistan? What is China’s position in that hypothesis?

Prof. Vicziany—I do not know. I do not think anyone in Australia knows. I do not thinkwe have many experts who are even close to understanding what the Chinese view is on this.Again, hopefully we will have dialogue at the end of the month where we are inviting somefriends from China and also Chinese specialists in Australia, including Chinese ex-patriots, tocome along and talk about it.

I am actually more concerned about your prefacing question which was: what if therewere a limited nuclear exchange between India and China? I think that is really worrying. Ido not even want to ask the question ‘What if?’ I think we should be putting all of ourenergies—intellectually, emotionally, economically and politically—into preventing the whatif. I would prefer not to say, ‘What if?’ Indeed, why should we raise the question?

Senator LIGHTFOOT —That is the core of our fear. That is why we are raising it.

Prof. Vicziany—Yes, but we need to examine what our fear is based on. As I havesuggested earlier on, India and Pakistan have been in a far worse situation of conflict andargument before now. They always had the capability to develop these weapons. It has nowemerged. If you are looking for things that are going to suddenly destabilise the region, I donot think there is any evidence to show that what is happening even in Kashmir today andlast week is the worst case scenario that has existed since 1947. As my colleague Dr DevinHagerty has argued—he has done a very good analysis, and I have given those documents toyour committee—at various previous times when it looked as if India and Pakistan wereclose they were not close.

The point is that we have to begin with the assumption that the politicians of India andPakistan are as mature as our Western politicians. If we begin with that assumption, then we



can be optimistic and move forward into a more meaningful dialogue. As I say, I wouldprefer not to raise the question of what if and fear. I think our job is to contain that fear andbe pragmatic, realistic, engage India and Pakistan in dialogue and get rid of the fear factor.

Senator LIGHTFOOT —I would call that the ostrich view, with respect, Professor.

Senator QUIRKE—You said a minute ago that one of the things we need to be puttingour intellectual property into is in ensuring that there is not an interchange between Chinaand India. I presume you also would want us to put our considered diplomatic relations intomaking sure there was no nuclear interchange between Pakistan and India or, for that matter,between anyone else. I would put to you that India has blown an enormous opportunity forits own security in the subcontinent by going down the path of testing nuclear weapons. Isay that simply because it had an overwhelming conventional superiority over Pakistan.

The thought that China would do any kind of pre-emptive nuclear strike on India is atthis stage unthinkable, particularly if India were not a nuclear power. India has managed topull two raspberries in one go. It is now going to be treated with China as an equal—theyare both nuclear powers—and by encouraging the Pakistanis to go further and faster downthe nuclear road India has probably taken away that enormous conventional superioritywhich has meant 27 years of general peace in that area. I wonder what your reaction to thatis. It seems to me that India has backed itself into a corner largely of its own making.

Prof. Vicziany—I would not agree with that interpretation. Again, I take seriously theIndian view that its conventional weapons have become obsolete. They felt that the time hadcome to update—much the same as debates also in Australia. Expenditure on conventionalweapons and what have you has been a subject of debate in India in the last couple of years.There have been criticisms that the government has not done enough to keep up to date andthat they have not done enough to train people. There has been a concern with the use ofmilitary equipment, hardware and funding to deal with internal security issues, and there isthat nebulous relationship with the paramilitary and so on.

I am not an Indian. If they feel that their conventional weapons arsenal is inadequate totheir defence as they perceive it, I accept that view. I am in no position to argue with whattheir legitimate perceptions are. Indeed, I can understand where that is coming from. As Isaid, there is this hypothesis that has been put forward that the nuclear option in many waysis the cheaper option, that the deterrence option is a cheaper option.

Senator QUIRKE—Are you serious? Are you telling me that a nuclear weapon of anytype or description is going to help them with any of their internal problems? They are a bitlike the Victorian cops, if I can say that. The impression I am getting here is that you arestruggling to defend what India has done. It seems to me that, at the end of the day, whatthe Indians have done is to have backed themselves into a corner and thrown away thisenormous conventional superiority over Pakistan. I am sure the Pakistani government is nottoo happy about rust on its tanks either, but there happens to be 10 times as many of themon the Indian side of the equation. A nuclear weapon into that equation is just another typeof weapon. It is not going to supplant any other kind of weapon and, in many conflicts, itwill not be able to be used. It will do as much damage to friendly forces as anything else. Iregret the comment about the Victorian cops, but anyway.



CHAIR —It is on the record.

Senator QUIRKE—Traffic police only, not the rest of the them.

CHAIR —Are you seeking to withdraw that comment?

Senator QUIRKE—No, leave it there. They can handle it.

Prof. Vicziany—All I can say is that I am neither naive nor ostrich-like.

Senator QUIRKE—No, he called you that.

Senator LIGHTFOOT —I didn’t call you ostrich-like.

Prof. Vicziany—I am summarising the general feeling here. My profession, of which Iam enormously proud, requires me to analyse and understand where India is coming from.What worries me is that in Australia we do not understand where India is coming from.Indeed, in the conversation we have had just now, and others can take it up later, thediscussion about why India went nuclear is just too limited. There are a lot of other thingshere at stake. There is India’s feeling that it is actually entitled to be recognised as a worldpower—maybe not a super power, but it definitely feels that it has legitimate claims to beinga middle ranking power.

Senator EGGLESTON—I suppose nuclear weapons add to that.

CHAIR —But Germany and Japan have that recognition without nuclear weapons, sowhy India?

Prof. Vicziany—It is a coming together of all these other complex factors. I do not wantto engage in a discussion as to why India did it and other powers have not done it. It is justthat in the Indian case we have the coming together of genuine border things, a genuinedebate about Indian defence and the cost of it, genuine concern for China, genuine concernfor Pakistan, a genuine feeling it has been left out because it did not get into APEC, agenuine feeling that it has been left out of the region, and a legitimate concern with what itperceives to be the patronising attitude not only of the west but also of the five nuclearhaves.

India felt that it was also under enormous pressure to sign the CTBT which it nowclaims has international legitimacy, although India has not yet signed. So India thinks it doesnot have international legitimacy. I think it is the coming together of all these things thatexplain it and not any one factor by itself is adequate. The BJP was very astute in makingthe decision to run those tests. It understood the complex scenarios that we have beendiscussing. It demonstrated that it had the determination to go ahead and do this. Somepeople say, ‘Well, it was only a matter of time anyway that someone would come along anddo it in any case.’

So I think the Indian situation is very complicated, and my job is to understand wherethey are coming from. I am not justifying the government of India—I am not an Indian; why



would I want to justify it?—but I am trying to understand it. I am also trying to be sympa-thetic, because if we are not sympathetic—if we are antagonistic, if we are fearful—how onearth can we have a positive influence? They are not going to listen to us. Frankly, the realquestion at the moment is whether they are ever going to listen to us now. Can we retrievesomething of the goodwill we have had in the past? Australia does actually have a goodreputation internationally in taking important initiatives in a whole range of things, includingthe disarmament debate and our position on Indonesia. In many of these areas we have beenin the forefront, but on South Asia we have done badly. We could have done much betterand still maintained our legitimate policy concerns.

Senator QUIRKE—That is your view, and I suspect that of the Indian government. Ithink the reality is that it is India that is isolating itself. It may well be that a few of theseWestern governments are actually around the side door talking with India more than we are,but at the end of the day it is the Indians who have isolated themselves and I suspectprobably brought even more security problems on their own doorstep. But how reasonable doyou think the Indians would be if we exploded a bomb underneath the Nullarbor? India hasbeen prancing around for the last 30 years telling the rest of the world to disarm and secretlyhas been building its own program. It has been saying quite unrealistically—and it knewthat—that if the rest of the world did not disarm it was going to have to go down the roadhere. What we are dealing with here is a lot of hypocrisy and humbug.

Prof. Vicziany—All I can say in response to that is that India has exploded five nucleardevices. Pakistan has exploded six. What are we going to do about it? How can we moveforward? In the dialogue we are going to have in Melbourne at the end of the month, wehave actually laid down some ground rules. We don’t want to go over all that historical stuffbecause it does not help. If we had Indian representatives here, they would have a responseto that and then we could go on, unravelling the history. I am not a historian of the evolutionof India’s nuclear weapons. Indeed, is it fruitful? I think the real advantage of this committeeis to go forward. What do we do now? How can we re-engage with India and Pakistan? Canwe play a useful role in South Asia? Can we use our goodwill in the other parts of the Asia-Pacific—within APEC and within ASEAN—to have a meaningful dialogue and a usefulimpact? That is why I feel that that bar incident in Manila is so unfortunate. There we had amarvellous opportunity to start engaging.

There is an APEC meeting coming up next week in Malaysia. I just hope we can startengaging in a useful dialogue—how are we going to go forward?—rather than worryingabout the relative consistency or the relative morality of what we have done, what they havedone and what all the other partners have done.

CHAIR —I have a number of questions, but we really are out of time, so I will just putthis one question. Leaving aside all other factors for the conduct of the tests, has anythingchanged in the security environment in India in recent times that contributed to the decision?

Prof. Vicziany—To test for the nuclear—

CHAIR —What has changed in the security environment? I have heard all the otherfactors that you have mentioned, but what about the security environment?



Prof. Vicziany—I think the main thing that has changed is, again, the Indian perceptionthat China is very interested in South-East Asia and South Asia. They have been monitoringChina’s interests in Burma and China’s interests in Pakistan. I am not—and I do not thinkany Australian academic or any other Australian is—privy to what China has actually beendoing in the region. Can we verify how much and what China has given Burma, Pakistanand so on? But the Indian perception was that all this was happening, and there was thatongoing international scenario, the debates about the CTBT and so on. As I have said before,I really have nothing to add.

I think the security environment is, as we described it earlier on, the coming together ofall these concerns and all these things. I think it is significant that it was GeorgeFernandes—I do not know George Fernandes, but maybe when he became defence ministerhe himself could not believe what his defence people were telling him, and so he went offon a field excursion, like academics do, to find out what was really going on—who visitedall the sites, visited the borders and so on. I think that is what has changed. It is a sort ofthreshold—a coming together of Indian concerns.

CHAIR —Thank you, Professor. We will have to stop there. Thank you for the evidencethat you have given us this morning in a full and frank manner. We will now pass over toMr Christopher Snedden.



[10.27 a.m.]

SNEDDEN, Mr Christopher John, 49 Heidelberg Road, Clifton Hill, Victoria 3068

CHAIR —Welcome. In what capacity are you appearing before the committee?

Mr Snedden—I am appearing here as an individual, although I would like to add that Ido have a professional background as a politico-strategic analyst working on South Asia. Iam currently doing research at La Trobe University towards a PhD, looking at both theKashmir Valley and Azad Kashmir. I edit a newsletter calledAustralia India Focus, which isa joint publication of the Australia/India Business Council, the Australia-India Council andAustrade. But the views I am going to give you today are mine and mine alone.

CHAIR —The committee has before it a written submission from you. Are there anyalterations or additions you would like to make to your submission at this stage?

Mr Snedden—No.

CHAIR —For the purpose of obtaining an accurate record, could you remain behind atthe end of the proceedings so that theHansardofficer can verify information that you haveprovided to the hearing. I now invite you to make an opening statement and then we willproceed to questions.

Mr Snedden—Thank you. I want to talk to you today about two issues as a result ofIndia’s and Pakistan’s nuclear tests. One is to do with Kashmir, which is what my submis-sion is about, and the other is something that I believe Australia can do in response toIndia’s and Pakistan’s nuclear tests.

I am going to talk to you about Kashmiri perceptions, because that is part of what I amdoing my research on. As a result of India’s and Pakistan’s nuclear tests, one of theKashmiri perceptions is that they have now become a nuclear target. I am not saying theyhave or they have not, but this is their perception. It was reaffirmed to me last night when Ispoke to some Kashmiris. The word they used to describe the situation was ‘ominous’. Theyfeel that if there is another war between India and Pakistan, which is a distinct possibility,they will suffer, possibly through the dropping of a nuclear bomb on the valley.

Their reasons are actually quite valid. For 50 years now this dispute has been going onbetween India and Pakistan. As you are probably well aware, there have been three wars,two of which have been fought directly over Kashmir. One also involved fighting inKashmir. Along the line of control which divides Kashmir, both sides have got what I callmammoth armies—mammoth in the sense that the mammoth came from Siberia, which is avery cold area. The area where these forces are fighting is incredibly cold and inhospitablefor most of the year. It is very mountainous. Both armies are fighting on a glacier calledSiachen Glacier which, at 22,000 feet above sea level, is the highest battlefield in the world.The battle apparently costs India between $US1 million and $US3 million a day. The costfor Pakistan would be similar, although slightly less because their supply lines are shorter.Since 1989, there has been an uprising/proxy war in the Kashmir Valley.



Senator LIGHTFOOT —How far is it above sea level?

Mr Snedden—It is 22,000 feet. The uprising since 1989 has caused a serious deteriora-tion in India-Pakistan relations. India calls it a proxy war: it blames Pakistan for supportingand encouraging the militants and giving them sanctuary, training, arms and those sorts ofthings. Since the arrival of the BJP government, the Minister for Home Affairs, Mr Advani,who is also responsible for Kashmir affairs, has talked about hot pursuit across the line ofcontrol to chase militants into the area that Pakistan administers.

The other thing that has happened, partly because India is getting on top of the militancy,is that the militants are now looking at soft targets—civilians and Hindus. Just a couple ofdays ago, they actually killed about 35 road workers in Himachal Pradesh, next door toKashmir. So they are trying to spread the conflict.

In terms of being a nuclear target, while it may seem a little bit unusual, or perhaps evennaive, ostrich-like, whatever you want to call it, the perception amongst some Kashmiris—and the only ones I spoke to speak English, so they tend to have a degree of education—isthat India and Pakistan could use a nuclear weapon in Kashmir as a tactical device to get ridof a large number of opposition forces. This would also, of course, cause detriment to theirown forces and also to water supplies—many rivers run through Kashmir and go on to bothPunjabs. Another reason would be that it would deny the territory to the opposition, to theopponent, to the enemy. Kashmir is a very emotional issue between India and Pakistan. It isalmost like, ‘It is mine, you can’t have it. If I can’t have it, you are not going to have iteither.’ So there is a degree of denial there.

The Kashmiris also believe that because most of them are now favouring independence—they do not want to join India or Pakistan—there is a degree of ingratitude there and thatperhaps they are expendable for that reason. If they do not want to be part of either Pakistanor India, then perhaps they may think, ‘Why don’t we get rid of them?’

Also, it is not significant in terms of agriculture and population the way Punjab is.Punjab is the breadbasket of India. It is probably the same on the Pakistan side as well.Another reason is that the valley is totally surrounded by mountains. Less fallout wouldescape from the valley than, for example, if you dropped a bomb on Lahore or Amritsar. Forall of those reasons, Kashmiris are very worried about the possibility of a nuclear battle inKashmir. I stress these are their perceptions.

In 1962, India and China fought a war, mainly in the north-east of India in ArunachalPradesh. But there was also fighting in Ladakh. This is still an ongoing issue. There is anarea of Greater Kashmir, which is what I call the area of the maharaja’s former princelystate, which China controls and claims. Their entire border is still in dispute. There is also athing that I call a ‘revenge factor’. Certain people in the Indian establishment, particularlythe military, still remember 1962, because they suffered a significant defeat, and are lookingto try to even the score with China.

Probably the main reason the Kashmiris would be worried is that the easiest road to getsupplies—military equipment and men—from India to Ladakh, to this potential battlefieldwith China, is through the Kashmir Valley. There is a very strategic road that goes through



Srinagar, Kargil and on to Leh. There are other routes, but they are far more difficult. Ofcourse there is flying, but the weather comes into account there as well.

In terms of what Australia can do, I believe Australia needs to embrace, encourage andenlist our relationships with both India and Pakistan, and with other nations. By ‘embrace’ Imean—I am speaking fairly specifically now—that we need to try to engage India andPakistan and try to influence them consistently, unwaveringly. When they conduct things likenuclear tests, I personally do not believe it is very useful for us to withdraw ministerial andsenior officials’ visits. I think we should actually be encouraging those so we can try toinfluence the Indians. We should do the same with our military links. The people who areactually going to deliver this nuclear weapon will probably be in the military, and, while wedo not have a lot of connections with the Indian military, we do have significant connectionsboth ways. It is interesting to note that the current Chief of the Defence Force did actuallyserve in New Delhi as a defence adviser. There is a degree of influence both ways.

In encouraging India and Pakistan, as I said earlier, the whole nuclear issue has putKashmir onto the international agenda again. Nations are looking at India and Pakistan andsaying, ‘You have developed this nuclear capability. You have now proven that you havethis capability, yet 30 to 40 per cent of your population is still living in poverty. They stilldo not have running water. Their health is terrible. They do not have education. Isn’t this amisuse of resources?’ That, plus the fact that the dispute is now 50 years old, is creating asituation where perhaps the time has come that this dispute can now be solved.

What I suggest is that it is an opportune time for Australia to take the lead and tosuggest to India and Pakistan—to positively encourage India and Pakistan—that they shouldresolve the Kashmir issue. That is as far as it goes. As far as India is concerned, it is abilateral issue. By encouraging them to solve that, we are saying, ‘We don’t want to getinvolved. It is up to you people to work out what the solution is. We would suggest you doit in a way that is acceptable to the people of Kashmir because, if you don’t, that is reallynot a resolution to the problem.’

From the Pakistani point of view, they want to internationalise the whole issue. By ourencouraging India and Pakistan bilaterally and then through multilateral fora like the UnitedNations, ASEAN and various others, we are in a sense internationalising the issue as well. Ifwe can include with that particular encouragement some positive incentives—for example, aseat on the United Nations Security Council for India, some International Monetary Fundfinance or some concessionary finance for Pakistan—then perhaps that would also encouragethem.

But I think there is an opportunity for Australia to take the lead. In a sense, the world islooking for leadership on this issue. The Americans cannot provide it. They are too big, theyare too involved, et cetera. There are too many negatives in India about the US and so onand so forth—and, for that matter, in Pakistan as well.

The other reason is that Australia has a history of being involved in the Kashmirdispute. In every year from 1948 to 1985, we had six military personnel who were part ofthe United Nations Military Observer Group in India and Pakistan. An Australian gentlemancalled General Nimmo was actually in charge of UNMOGIP for about 13 years until about



1960. From 1975 to 1978 we sent a Caribou with 14 aircrew to help as part of our commit-ment to UNMOGIP. A very famous Australian jurist, Sir Owen Dixon, was sent as theUnited Nations mediator in 1951. He came up with some solutions which at the time werequite radical. He was also involved in this dispute. So we do have a history and an involve-ment in this dispute.

My suggestion is that this is an opportunity for Australia to diplomatically take the leadand to encourage both India and Pakistan bilaterally and through multilateral fora to try toresolve this Kashmir issue. If they do not, then it could go on for another 50 years and therecould be more war. But there are very positive reasons for it to be solved. It would allow anormalisation of India-Pakistan relations. It would allow a reduction in forces of theirstanding armies—India’s is 1.2 million; Pakistan’s is 450,000, and that is not to mentionBorder Security Forces and Pakistan Rangers who control the actual border. These resourcescould then be redeployed. It would allow a solving of the Kashmir dispute. There are manyother reasons why it would be a good idea. I just wanted to give you those ideas thismorning. As you can see, my submission is fairly narrowly focused. Thank you.

Senator QUIRKE—I think the submission probably speaks for itself.

Senator LIGHTFOOT —Mr Snedden, we have had some evidence—if I could para-phrase what has been given—that Australia is really insignificant in some terms. It is nottotally insignificant. We trade with them. We have a surplus with India. There is anexchange of academics between India and Australia and we have many students here,including yourself, that have an inordinate interest in the subcontinent. But, specifically, whatis the part that Australia could play at the diplomatic and government levels—I guess theyare up the sharp end that you are speaking about—and what could the commercial followersdo?

Mr Snedden—Specifically, I think we could immediately re-establish ministerial andsenior officials’ visits. We could positively encourage our politicians and our senior officialsto go over there and engage with India and to put our point of view.

Senator LIGHTFOOT —How would we be received if we did that, do you think?

Mr Snedden—That is a very interesting question. I think there is a degree of negativityin India now about Australia because of that stance that we have taken. But I think theywould still open the doors to us and be prepared to talk to us and listen to our point of view.

Senator LIGHTFOOT —And would you ascribe the same to Pakistan?

Mr Snedden—Even more so in Pakistan. India is in the fortunate position that it isaspiring to great power status. It always looks at itself as a great nation and, to some extent,it can support itself on its own. Pakistan is in a different situation. Pakistan needs as manyfriends as it can find and is always very welcoming. It is always much easier to getinformation out of Pakistanis and to meet Pakistanis at a high level than it is in India.

Senator LIGHTFOOT —You mentioned that India—I assume as a reward for joiningthe nuclear club—should be invited onto the United Nations Security Council. I guess it



could be seen as a vested interest for Australia to nominate the world’s biggest democracy tothe Security Council. Mr Snedden, forHansard, you are nodding your head: you concur withme.

Mr Snedden—No, I am saying that is an incentive that could be used to encourage Indiato resolve the Kashmir issue. We could say to India, ‘You resolve Kashmir and, as a trade-off, we will see if we can get you a seat on the United Nations Security Council as apermanent member.’

CHAIR —But won’t we have all the renegades then trying to use that sort of tactic?

Senator LIGHTFOOT —I was just about to ask that question.

CHAIR —Whether it be nuclear tests or no matter what it might be, ‘We will promiseyou a seat on the security council’?

Mr Snedden—That is a possibility, yes, but I am talking specifically about a problemhere that has been going on for 50 years that is one of the world’s major flash points. It isdifferent from some of the other nations—

CHAIR —So what do we do in Northern Ireland where it has been going a bit longerthan 50 years?

Mr Snedden—Britain is already on the Security Council, so we cannot offer them a seat.

CHAIR —What about the Irish, though?

Senator EGGLESTON—If the IRA had tactical nuclear weapons, could we put them onthe Security Council?

CHAIR —That is right. That has been going on a bit longer than 50 years. Whatbecomes the test by which we decide that this is the thing which will push us down the pathof supporting them to be a member of the Security Council?

Mr Snedden—It was only an example of a incentive. There are various other incentives,and I take your point that there is no one hard and fast rule. One of the reasons I believeIndia has exploded this nuclear device is that it desires more recognition throughout theworld. Another reason they are never going to resolve the Kashmir dispute is that there isnot enough positive encouragement throughout the world to encourage them to do that. Weneed to positively encourage them, which we can do by talking to them, but perhaps we alsoneed to provide some incentives. That was the only incentive that came into my head. Theremay be other incentives such as a financial incentive, military assistance or various otherthings that could be offered. But I take your point that it is very difficult to just offer thecarrot of a Security Council seat.

Senator LIGHTFOOT —India is a country approaching one billion people and will havethe largest population in the world perhaps in an early part of the next century and the nextmillennium on one-third the size of China. But it seems to me that India should have been



invited onto the Security Council prior to the detonation of that device. I think the detonationof that device means that it would be very difficult to invite India onto the Security Council.However, I do think there is a place there for it in the United Nations Security Council.

I might say I think the United Nations has become more of a forum for the Third Worldcountries, for underdeveloped countries, than it has been. We can see the burgeoning of theOECD countries, which seems to me to be a kind of developed United Nations, and we seemto be growing apart. That concerns me somewhat. But that aside, I want to get back to thepart that Australia can play. I agree with what the witnesses said before—and I think youinferred it—that perhaps Australia should not have imposed those sanctions that it did,remembering that some of our close allies have not done that, Britain and France to mentiontwo. But, with respect to the nuclear umbrella that Australia shares with the largesse of theUnited States, do you think that the United States should have offered that same protectionunder its umbrella to the subcontinent—or to India and/or Pakistan?

Mr Snedden—That is a very difficult question to answer.

Senator LIGHTFOOT —Would that then have obviated or negated the nuclearexplosion?

Mr Snedden—Not necessarily. Even if the US had offered it, it is not certain that Indiawould have taken it up. The American-Indian relationship has not always been friendly. TheIndians are very proud and they are very independent. They have wanted to do thingsindependently—swadeshi. Self-development and self-reliance have been part of their policysince Mahatma Gandhi and Jawaharlal Nehru. So, even if the Americans had offered, it isnot certain that the Indians would have accepted anyway.

One of the problems with India and Pakistan, and one of the reasons why their wars donot go for terribly long periods, is that they usually run out of ammunition. The second thingis that the UN says, ‘You have to stop this fighting.’ And the third thing is that theirsuppliers cut off supplies. In 1965, for example, one of the reasons why that war ground to ahalt very quickly was that both sides ran out of ammunition and the Americans said, ‘We arenot going to supply you any more.’ Pakistan was the main loser in terms of the cut-off.America, to some extent, is not regarded as a reliable ally, and that is part of the problem inPakistan.

Senator LIGHTFOOT —Who do you imagine would be the suppliers if a conflict didarise again between Pakistan and India?

Mr Snedden—In terms of Pakistan, the US and China. In terms of India, a lot of it isnow done domestically. They have taken things like MiG29s and developed the techniquesdomestically, as well as the infrastructure and the manufacturing, to manufacture those thingsdomestically. But they still look to other countries for some of their weaponry. They stillhave Mirage fighters from France, they still have MiGs from Russia and so on.

Senator LIGHTFOOT —India is still one of the biggest purchasers of ordnances fromRussia, I understand. Is that correct?



Mr Snedden—Yes, they still have a very close relationship with Russia.

Senator LIGHTFOOT —That was by the by. What do you do with Kashmir, given thefacts, given the historical conflict and given the divisions that exist—religious divisions andthe age old divisions—in Kashmir? What is the resolution? I know it is not simple, and Iknow you cannot say it in one line, but if you could put it in several lines what do you as astudent and an expert on Kashmir see as the solution there?

Mr Snedden—I think it is very important that we do not say to India or Pakistan, ‘Thisis a possible solution,’ because it will never work. Firstly, the two nations need to gettogether and seriously talk about Kashmir. Secondly, while they are doing that—

Senator LIGHTFOOT —Where would that forum be? What is an appropriate forum forthat?

Mr Snedden—Foreign ministers or committees under the jurisdiction of the foreignministers, prime ministers—

Senator LIGHTFOOT —Which country do you see as hosting something like that?

Mr Snedden—It has to be either India or Pakistan.

Senator LIGHTFOOT —But do you think Pakistan has to go to India or India has to goto Pakistan? That seems unlikely to me.

Mr Snedden—They have to get together, and they have talked about getting together.

Senator LIGHTFOOT —What about a neutral country?

Mr Snedden—India has said publicly that it is not prepared to have a third partymediation. It does not want anybody else involved in it. Its stance is that all of GreaterKashmir belongs to India and that Pakistan should vacate that. After that, it is the Simlaaccord of 1972 that provides the framework for them to discuss anything. In terms ofKashmir, it is a bilateral issue to be sorted out between India and Pakistan. All a thirdcountry can do is to encourage, and that is what I am suggesting we do—encourage Indiaand Pakistan and encourage other nations to encourage India and Pakistan to resolve theKashmir issue.

They can talk about it if they want to, but India seems to be reluctant to do so. When-ever they do, various other things happen. For example, the two Prime Ministers talkedrecently in Colombo just in the last week or so.

Senator LIGHTFOOT —That is a third party.

Mr Snedden—It is a third country; there was no third party involved. They justhappened to meet in Colombo because there was a SAARC meeting. They do, from time totime, visit each other. It is not very often, but when Rajiv Gandhi was around he did go to



Pakistan and General Zia did come to India. They do have relationships, but India is notreally interested in any third party involvement whatsoever, including the United Nations.

It is up to them, and we should encourage them to get together and talk about it. But,while they are talking about it, they also need to certainly involve the people in the KashmirValley who are very disgruntled and most of whom now, according to my belief after havingbeen there this year and a couple of years ago, want independence from India and Pakistan.They have to include those people in the discussion.

Various solutions are possible. People are now talking about making the line of controlinto an international border. That has been around for quite a while. In fact, there was aperiod after Simla when they almost agreed to that. The unwritten agreement between MrBhutto and Mrs Gandhi was, ‘We’re going to move towards making that an internationalborder,’ but it did not happen for various reasons. There are other things. You could makethe valley independent; you could make it autonomous; you could make the whole areaautonomous. The Jammu and Kashmir Liberation Front wants the whole of the formermaharaja’s territory to be independent. So there are various solutions, but I do believe it isup to them to find the solution. It is not going to work otherwise.

Senator EGGLESTON—Mr Snedden, I was quite concerned by your comment thatKashmir now believes it could become a nuclear target. You also said that it is possible thatnuclear weapons could be used in a war with China. Given your other comments about theGilbert and Sullivanesque nature of conflicts between India and Pakistan in the past, whichyou said had been limited when they ran out of ammunition or supplies, what confidence doyou have that, in a future conflict, the military commands of either India or Pakistan woulduse adequate responsibility and safeguards before going to a nuclear option?

Given the background which you have described to us, would you agree that it is morelikely that a rather ill-considered decision might be made to use a tactical nuclear weapon,because that is the quickest way of making a military point, before the supply of parts forthe Mysteres run out from France? Are we saying that there is a lower threshold? But,because of the background, because of the limited military resources of these countries,would you consider there would be a lower threshold for the use of nuclear weapons? Thatis the serious question I am asking.

Mr Snedden—That is a hard one, Senator Eggleston.

Senator EGGLESTON—It is, but I am interested in your opinion.

Mr Snedden—One of the interesting things about these nuclear tests is that, in a sense,they have only confirmed what most analysts have either known or believed.

Senator EGGLESTON—Yes, I agree with that.

Mr Snedden—I think Australia has known or believed that India has had a nuclearcapability and a number of nuclear weapons—we do not know how many—certainly since1974 and Pakistan since the late 1980s. Whether or not they are actually going to use theseremains to be seen. It depends how conflicts develop, but I would think that there are



enough rational people—military people who are involved in the fighting are usually theones who understand the scenarios—who would be very reluctant to use nuclear weapons.

It is a very different situation from the USSR and America. Those two nations did notreally have a common border. They did not have a hot war or an area where large forceswere eyeballing each other so that things could escalate very quickly. Whether or not theywill use a nuclear weapon, I do not know. One would hope not. The difficulty is trying tofind targets. One possible target would be Kashmir for the reasons I have outlined. They arenot going to drop it on Lahore or Amritsar; the damage would be too extraordinary.

Senator EGGLESTON—Nevertheless, as you said, there is this background. The othertheme that keeps on coming through is that part of the reason India and also perhapsPakistan have actually demonstrated that they can develop and explode a nuclear weapon isstatus, which is a very important thing to Indians. I know a few Indians and I have knownthem over 20 years or so. One of the previous witnesses said that the decision to explode thenuclear device was having the guts to do it when the BJP came in. Do you think it would bepossible for a scenario to develop in one of these conflicts between India and Pakistan wherethe same kind of political forces which goaded the BJP into being brave enough to explode anuclear weapon—to show the world that they can do it and that they are legitimately part ofthe nuclear club—could perhaps demand that a nuclear weapon be thrown at the opposition?

Mr Snedden—Yes, they could. One of the problems is that I think there is a degree ofnaivety within both India and Pakistan about what nuclear weapons mean.

Senator EGGLESTON—Yes.

Mr Snedden—Part of it is the fact that a lot of people, unfortunately, are illiterate. Alarge percentage of both Indians and Pakistanis are not able to read newspapers. So they areonly ever getting what is presented on the television, which tends to be pretty gung-ho.

When I talk to Indians and Pakistanis about Kashmir, they get very emotional. Thatemotion is then reflected by the people when you are talking about Kashmir or India orPakistan. The response is almost automatic. When I talk to them about Kashmir, the Indianssay, ‘Pakistan is the problem,’ and vice versa. It is then very difficult to say, ‘What aboutthis? What about that?’ There is a lot of emotion. Some of those people are educated aswell. There are some very hawkish people in both nations who would be quite happy to seethe other one obliterated by a nuclear weapon.

Senator EGGLESTON—That brings me back to the question of whether or not youwould agree that there is a lower threshold for the use of nuclear weapons in the Indiansubcontinent against Pakistan or China or India—or India against those two countries—thanexisted between the United States and the Soviet Union, where there seemed to be a greatdeal of discipline about the use of nuclear weapons?

Mr Snedden—I think there is a lower threshold between India and Pakistan. They do nothave the command and control systems in place. Although I do not think they have yetdeployed the weapons, if they do, that is going to create problems. At the moment, in asense, while they have got the nuclear warheads in one place and their delivery systems in



another, it may stabilise the situation, but if they decide to deploy—and I do not think theyhave any choice but to deploy if India is serious about China—then that does lower thethreshold.

In terms of India and China, I think it is a different equation. Although Fernandes andvarious other people have said that India is doing this because of China, it is about 20 yearstoo late. China has had nuclear weapons since the 1960s, and has certainly been able todeliver them on India since the 1970s—and India probably had the test in 1974 because itwas then genuinely worried about China—but I think now that is partly a justification.

Senator EGGLESTON—The Chinese also have a different view of their borderconflicts in that the Chinese feel that they sought, by negotiation initially, to come to arational agreement about the borders. The Indians, in their view, became quite paranoid,there was a war, and then the Chinese imposed what they had originally sought to achieveby negotiation. Perhaps India’s concerns about China far outweigh China’s concerns aboutIndia.

Mr Snedden—I agree. If you look at the Chinese security situation, China has variousother nations to worry about—Russia, Japan, Taiwan, Vietnam, all of which they have nothad terribly good relationships with at various times—and then there is the uncertainsituation in Central Asia. They also have a very small border with Afghanistan. Pakistan isokay, and then they have this big long border with India. In a sense, Pakistan is very muchfocused on India, and India is becoming more focused on China in terms of competition, andstrategically, economically, politically, status-wise, et cetera.

Senator EGGLESTON—Would you agree that, in terms of the use of nuclear weapons,the government of China would be a much more responsible body than the government ofIndia, in the sense that the Chinese would have a much higher threshold before theyconsidered the use of nuclear weapons because they are less concerned about status, and allthese other rather emotional factors which seem to influence the Indian government, than isthe case in the government of India?

Mr Snedden—Responsibility is a very subjective thing, but I would say that China hasfar more exposure to and experience with nuclear weapons and has far better command andcontrol systems in place. Who knows whether they are more or less responsible.

CHAIR —You referred to the cost of the battle that is taking place between India andPakistan on the Siachen Glacier—some $3 million a day to India. Is there anything tosubstantiate that? That is a lot of money.

Mr Snedden—Press reports have talked about $US1 million to $US2 million a day. Mysource for that comment was an American journalist whom I met in Islamabad, who wasactually on the Siachen Glacier on the Pakistani side. They claim that the Indian costs are$US3 million a day. I have seen reports—and this goes back quite a long time—of its beingat least $US1 million a day for India.

CHAIR —What are the costs to Pakistan?



Mr Snedden—They would be similar, but less, because the Pakistani lines of supply aremuch shorter and it is much easier for Pakistan to access Siachen Glacier.

CHAIR —What does the $3 million expense represent?

Mr Snedden—Because it is mountain warfare, your troops have to be kitted out withspecial equipment. You then have to get them there. You have to be able to remove themvery quickly. Because it is high altitude warfare, people have to be acclimatised and they canonly stay on the battlefield for short periods of time, so you are constantly rotating peoplethrough that particular area. You need certain types of weaponry. You have to develop highlift, high altitude helicopters. There is a whole raft of reasons, because it is such a particularspot. There is also the regular supply of food, ammunition, hospital and medical and that sortof thing. It is very difficult for India to get them there as it has to fly most of them in.

CHAIR —The other question I want to ask involves the response of the people withinKashmir to both the Indian and the Pakistan nuclear tests. Can that be typified as beingdifferent from the response to people in either India or Pakistan?

Mr Snedden—When this gentleman who is a professor said to me last night, ‘It isominous,’ I think it is different because they know that, in a sense, they are the ham in thesandwich. They are the ones who are being fought over. It is not even Jammu or Ladakh orthe northern areas or Azad Kashmir; it is the Kashmir Valley. The centre of the KashmirValley is Srinagar. If there is going to be another war, history says that it is going to be inthe Kashmir Valley or that the Kashmir Valley is going to be involved in one way oranother. If there is another war, there is now the distinct possibility that it could go nuclear.If it goes nuclear, there is also a distinct possibility that they will target the Kashmir Valley.That is different from India and Pakistan, because the Indians and the Pakistanis, particularlythose away from the border, such as people in Calcutta, do not really feel threatened by aPakistani nuclear bomb. It is the same in the south. To some extent it is the same inBaluchistan and places like that.

I think that if those who are in the actual border areas thought about it they would berather worried. Kashmiris have this experience. For example, at the moment in the valley,press reports say that there are 400,000 Indian army personnel. It is not all Indian army; it isIndian army and paramilitary forces who are either patrolling the line of control or who aretrying to suppress this uprising, this militancy. It is all pervasive: wherever you go you seemilitary. You see military patrols in vehicles or on foot, and they are very powerful people.They can take you away and that is the end of your life. That is the worst case scenario. Thebest is that you will get off with a beating and have to resurrect your life thereafter. ButKashmiris are aware of what has happened, what the presence of those people means, whatthey can do and what the likely scenario is if there is going to be a war. That is whatconcerns them. So I think their response is different.

CHAIR —As there are no further questions, thank you very much for your time, MrSnedden.

Proceedings suspended from 11.03 a.m. to 11.21 a.m.



KENNAN, Hon. James Harley, QC, Level 19, 459 Collins Street, Melbourne, Victoria

CHAIR —Welcome. In what capacity are you appearing before the committee?

Mr Kennan —I am appearing in a private capacity.

CHAIR —The committee prefers all evidence to be given in public, but should you atany stage wish any part of your evidence to be given in private you may ask to do so andthe committee will consider your request. The committee has before it a written submissionfrom you. Are there any alterations or additions you would like to make to your submissionat this stage?

Mr Kennan —No.

CHAIR —For the purpose of obtaining an accurate record, could you remain behind atthe end of the proceedings so that theHansardofficer can verify information that you haveprovided to the hearing. I now invite you to make an opening statement and then we willproceed to questions.

Mr Kennan —Thank you. My concern is not that Australia expressed concern about thenuclear testing in India—and I should say at the outset that my submission is limited to Indiaand does not deal with Pakistan—but rather the nature of the response and what should bedone now to rebuild the relationship between Australia and India which has been damaged asa result of that response.

The disengagement from India was exceptional in terms of the response of othercountries towards these nuclear tests. We withdrew our high commissioner for some weeksand there has been a ban on ministerial and official visits. I refer in my submission to thefact that Soli Sorabjee, the Indian Attorney-General—who is not a member of parliament; itis an appointed position—a member of the UN Human Rights Subcommittee, was to havecome to Australia with a judicial delegation but his visit was put off as a result of this.Hopefully, his visit has only been put off. But that is an instance of damage to relationships.There is, in my view, nothing to be achieved by telling a person of such internationaleminence as Mr Sorabjee that he is not welcome in Australia. This is a man who has anappointed position in India and is not a member of any political party.

The pity about it is, in my view, that Australia, by its actions of disengagement, tookitself out of the loop and has not been in a position to influence India. If the purpose ofexpressing concern, rightly expressed, about the nuclear testing in India, and the way thatconcern was expressed was to try to have some influence over what India may do in thefuture, it would not, in my view, be achieved by disengagement but rather by engagement.

My experience on this was highlighted because I visited New York in early June. I metthere Shashi Tharoor, who is the executive assistant and senior adviser to Kofi Annan;Marshall Bouton, the Executive Vice-President of the Asia Society; and Kamalesh Sharma,the permanent Indian representative at the United Nations. At that stage, which was earlyJune, it was rapidly apparent that whilst other nations, particularly the United States, wereimposing sanctions on India there was active engagement between those countries and India.



Indeed, at the time I was in New York, the representative of the Indian Prime Minister,Jaswant Singh, was in New York and moving on to Washington to have discussions with themembers of the United States cabinet and government.

It was apparent to me that what was happening at the United Nations level and betweenthe United States and India and the European countries and India was that, whilst these othercountries were expressing the deepest concern about the tests and, in the case of the UnitedStates, imposing sanctions, there was no disengagement from dialogue with the Indiangovernment. It struck me then that Australia was taking itself out of the loop by not talking,and there was surprise expressed by Indian diplomats that Australia had done this.

In mid-June I then went to Delhi. I think the high commissioner at that time had thenreturned to Delhi but was isolated because of the ban on exchange and official visits. It wasapparent that the relationship between the Ministry of External Affairs and the AustralianHigh Commission—which, in my view, has never been as strong as it might have been—wasdistant and, for the first time in a number of visits to India over recent years, I found beingan Australian a little uncomfortable because of this stance that was taken. There was also aconcern expressed—a concern which I also have—that Australia was seeking to take auniquely high moral ground on this at a time when our ethical standing in world affairs isnot strong.

I have appended to my submission an article from theLos Angeles Timesof August lastyear by a UCLA teacher and writer for theLA Times, Tom Plate. He referred apropos of theHanson issue to Australia being ‘an ethically hobbled ally of the United States, destined tobecome the dead-end capital of the South Pacific’. I was in LA doing a course at UCLA atthat time. That comment seemed to strike a chord amongst some of my American colleaguesthere at that time, and not much has happened in the last 12 months that has elevatedAustralia’s moral or ethical standing in the world.

In talking about what our framework should be and what our role should be, I think thatwe need to understand how we are perceived in relation to India and the rest of the world. Inmy view, in the medium and longer term, Australia probably needs India more than Indianeeds Australia. In disengaging and—as a foreign affairs official in Australia said about itsresponse—seeking to punish India, Australia has to be careful that it is not punishing itself.Australia is fairly small and insignificant in relation to India, and we need to understandthose dimensions.

In any case, those events have now occurred and the question arises as to what weshould do about it. There are a number of specific suggestions that I have mentioned inparagraph 21 of my submission in terms of rebuilding the relationship. I put these not interms of, if you like, rewarding India or seeking to be a major power player because I thinkthe issue over the nuclear test ban treaty and so on will be resolved in discussions between,substantially, the United States and India. I do not suggest that Australia can have asignificant role in that, but I do suggest that there are a number of practical ways in whichwe can rebuild a relationship with India—which has, I think, been set back some years—thatgo across the spectrum of trade and commerce, which are important, and also some otherimportant areas.



I give an example of the India Interest Group, which is a group convened by Mr MikeGadbaw, the Vice-President of GE and Senior Counsel based in Washington. He convenes agroup of some 25 CEOs of American corporates with substantial business interests in India.They have a telephone conference about once a fortnight with Dick Celeste, the AmericanAmbassador in Delhi. They work through an agenda and papers are prepared by theAmerican Embassy of all the issues affecting American business interests in India and all theissues in the United States and Washington affecting the relationships between the twocountries. The Indian Embassy is thereby turned into a very practical source of interactionfor American commercial interests operating in India.

I see a need for the Australian High Commission in India to play a similar role forAustralian business. It would be more of an interactive and a more active role than theexisting role. Austrade does a good job, but things like a regular, direct telephone hook-upwould be very helpful as a source of information.

In addition to those areas of trade and commerce, there is a number of areas where wecan build on links between the two countries and where we are welcome and where, despitesome damage that has been done to the relationship, we continue to be welcome. In publichealth promotion, a lot of work has been done in Australia on anti-smoking campaigns,AIDS campaigns, health and safety in the workplace and so on. There is a lot of interactionfrom the Australian experience that can be translated into India and that would be welcome.There is environmental protection and clean-up where Australian expertise is strong andthere is a great need in India. Cultural heritage protection and biomedical technologies are allareas where we can build, where our expertise is relevant to India and where there can be aninterchange and a building of a second track of diplomacy.

There are other areas of intellectual and political interest where we can learn from India.India, of course, is a multicultural society in a sense that Australia is not. There is mediadiversity and constitutional law where the Australian High Court has been having anincreasing reference to decisions of the Indian Supreme Court because, like us, they have afederal structure and a written constitution and there is significant overlap. Those are allareas where we can build a relationship and strengthen a relationship where there is fertileground.

Educational ties is the other area where Australia has done well in other countries but hasonly started to look at India in more recent years. The work of a number of universities—Ithink there have been people here today from Monash, for instance—in countries likeMalaysia has had in my view a tremendous benefit, which probably is not even fullyappreciated, although it is often spoken about, in developing ties between the two countries.This has a strong, ongoing economic impact. That might appear to be intangible, but thelinks with individuals who have been to a university here from Malaysia, for instance, helpto create and facilitate business links when those people return to Malaysia.

In India, if Indians want to go overseas to do postgraduate work, the trend has been tolook first at the United States and secondly at the UK. There has been a greater effortrecently by Australian universities to appeal to students on behalf of Australian campuses. Ithink there is scope for Australian universities to invest in India in particular areas where



they are strong—it might be in the area of health; it might be in the area of environment—and build up those ties.

Finally, I also believe that the Australian High Commission could benefit by building upstronger ties, ironically, with both the Ministry of External Affairs in India and the AmericanEmbassy. The Americans are nothing if not pragmatic about these issues. They are aggres-sive in terms of trade and commerce where, I think, they account for something like 45 percent of direct foreign investment. A company like GE, which has about nine major divisions,see India as relevant in each one of its divisions. I think there is a lot to be learnt fromcloser ties with the American Embassy in how they perceive some of these foreign policyissues and their reaction to them. They are at the centre of it in both foreign policy termsand economic terms with India as well as building up closer ties with the MEA.

Mr Chairman, I might have been a bit like the five-minute coffee break. I might have gonelonger than the five- or 10-minute introduction, but I will stop at this point.

CHAIR —That is fine. Thank you very much.

Senator LIGHTFOOT —Thank you, Mr Kennan. I start with your last statement of note.What should Australia do—we know what it can do—to re-engage with India particularly interms of business and commerce? What has the United States done—vis-a-vis your visit tothe United States recently—that is ahead of Australia in its re-engagement with India?

Mr Kennan —I think the most striking thing would be a ministerial visit leading acommercial delegation. Other countries have been—

Senator LIGHTFOOT —What level of ministerial visit?

Mr Kennan —The appropriate minister for trade or industry. That would be verysignificant. Other countries have approached this in a very disciplined way. Australia did theNew Horizons, which was very successful in 1996. A bit earlier than that, Canada took theirPrime Minister and the Premier of every province to India for about a week. It was a verystrong hit indeed.

Senator LIGHTFOOT —When was that?

Mr Kennan —It was in early 1996.

Senator LIGHTFOOT —Prior to the nuclear explosion.

Mr Kennan —Yes, certainly. And the English did so too. I remember that Mr Heseltine,when he was secretary of the Board of Trade, came out on a jet with about 100 leadingBritish businessmen and targeted a number of cities. That makes a significant impact, but itmust be said that India in the last four or five years, since economic liberalisation, has beentargeted in that way. If Australia is to make an impact, as we did in New Horizons, it has tobe fairly major, because India is being seen as a large emerging market and has beentargeted very seriously.



As far as the Americans are concerned, I think they do two things. Firstly, they see astronger commercial relationship with the politics of this than Australia does. It wasapparent, even when I was there in New York in early June, that the business lobby wasgoing to see those sanctions watered down, and six weeks later the sanctions have beenwatered down—to the effect, I think, that the President has now been given power to lift anysanction that adversely affects America’s economic interests.

Senator LIGHTFOOT —So is Australia isolated in respect of the fact that it still hascomparatively significant sanctions against India?

Mr Kennan —I think the cutback in the aid is not seen as all that significant, but the banon official visits, I think, is just hurting us. Yes, we are isolated in that sense. It is bizarre. Ihave not spoken to anyone around the world who thinks that generally you can influencesomeone else by not talking to them. It is a novel proposition in human affairs, isn’t it, tosay, ‘We are going to influence you, so we are not going to talk to you’? If you are very bigand the smaller person wants something from you, possibly you can stand them off untilthey come to heel, as it were. But the relationship between India and Australia is the reverse.

The second thing that the United States does better is in relation to its embassies. Thereis a web site run by the Department of Commerce that you get access to for a smallsubscription of about $50 a year. All the commercial attaches’ reports on various industriesfrom Madras, Mumbai and Delhi that go back to the Department of Commerce are there onthe web site. They might run up to 40 pages on particular industries—the motor car industry,medical instrumentation industry and so on. That is generally available. So my feeling is thatthey are more organised and disciplined—and no doubt have more resources—in workingwith their commercial interests than Australia. That also says something about relative size. Iam not suggesting that we would have the capacity or that there is the same level ofeconomic power in Australia to produce that result. But I think we can learn from it.

Senator LIGHTFOOT —Wouldn’t it be a bit blatant if commercial interests were thefirst to be established, to re-engage? Wouldn’t it be better if there were a re-engagement atsame high diplomatic level, then followed by commercial interests?

Mr Kennan —I do not quite understand how Australia now proposes to deal with this,having disengaged, because the conversations are going to be resolved between the UnitedStates and India in the next few months, and how this was resolved was being discussed inearly June. There will be some arrangement along the lines of either signing the treaty oragreeing to abide by it without signing it. There will be a bit of toing-and-froing in the nextfew months, and that will be resolved. Australia has removed itself from that process and isnot talking, so I do not quite understand how Australia can easily reinsert itself withoutlosing face. Maybe it is better for Australia, having withdrawn on that aspect, to let themajor powers go ahead and resolve that but work on these other things.

Senator LIGHTFOOT —When you say ‘major powers’ you mean—

Mr Kennan —The United States and India.



Senator LIGHTFOOT —Are you saying that Australia’s disengagement was precipitateor premature or both?

Mr Kennan —Inappropriate. I think we were the only country to do this, in terms of theban on official visits and so on, and I do not understand how it could achieve anything.

Senator LIGHTFOOT —And yet it would be almost certain that Australia would havesought some advice from the State Department before taking the action?

Mr Kennan —That is what I find bizarre. It is not as if on this occasion Australia wasfollowing an American lead. That is why I said in my submission that it would be better ifthe Australian High Commission had a stronger relationship than I suspect it has with theAmerican Embassy in Delhi. Had Australian Foreign Affairs officials been closer in touchwith what the international reaction was and what was really happening—and my perceptionafter having been in New York very shortly after that was that the Australian Foreign Affairsofficials were, frankly, in Canberra working in a vacuum—then they might not have takenaction which has taken them out of the loop.

Senator LIGHTFOOT —The foreign affairs minister got some bad advice.

Mr Kennan —I suspect so. This business of disengaging is bizarre. It might have beenappropriate in a former time and in a former circumstance but, on this occasion, I think itwas just inappropriate. This much can be said: it has not achieved anything. Australia oughtto be deeply concerned about nuclear proliferation anywhere, particularly in the region. Theresult of that concern should be to take action to try and influence so that there will be norepetition of it. Disengaging has not advanced that cause.

Senator LIGHTFOOT —Mr Kennan, you mentioned the Australian High Court. Itrecognises its own omnipotence, which is reflected in some recent decisions that have comedown in the 1990s, particularly with respect to the constitution and with new land laws thathave been imposed upon us. I am therefore puzzled as to what reference it could possiblymake to its counterpart in India. I assume it is the Indian High Court?

Mr Kennan —Yes. India has a written constitution like Australia, and it is interpreted bythe Supreme Court in India. It would appeal to your sensitivities because it is also fairlyactivist.

Senator LIGHTFOOT —And it is the last appellate court?

Mr Kennan —Yes, and it is regarded—

Senator LIGHTFOOT —It does not go to the London Privy Council?

Mr Kennan —No. Unlike us, they decolonised and became a republic.

Senator LIGHTFOOT —Malaysia still has some residual ties to the London Privy withrespect to constitutional matters, and certain other countries do, too.



Mr Kennan —Yes.

Senator LIGHTFOOT —It is not as if some of the former colonies do not have ties withthe London Privy Council.

Mr Kennan —No. There is a division of powers between the union government—thefederal government in India—and the states, the same as here. In questions of constitutionalinterpretation the American structure, the Indian structure and the Australian structure in theEnglish speaking world, with not dissimilar legal systems, are of relevance to each other.Whereas England, for instance, does not have a written constitution. It does not haveconstitutional law that is of much relevance to Australia.

Senator LIGHTFOOT —We have dwelt this morning on India and there has been verylittle said about Pakistan. What was the disengagement, if any, with Pakistan, and should thatbe treated the same as India with respect to re-establishing full ties? If not, why not?

Mr Kennan —I do not know anything about Pakistan and I have not been there, but myfeeling would be that there was the same level of disengagement. A visiting Pakistanidelegation was actually invited to go home. That experience was repeated to me when I wasin Delhi as being a deterrent to the visit of one or two senior Indian non-official people,because they were a little bit worried about coming out here and being sent home or askedto leave the country. Certainly I think the policy was clearly applied both to India andPakistan. I do not have any particular knowledge of Pakistan, but I see no reason why weshould not be re-engaging both.

Senator LIGHTFOOT —What jeopardy, if any, do you see for the subcontinent nowthat both have demonstrably declared themselves as nuclear powers?

Mr Kennan —I think it is a worrying step and we are right to be concerned about thefurther proliferation and development. I think it is a matter of concern and we ought to haveour voice heard. I am not suggesting we pretend we are more important than we are, quitethe contrary, but we ought to be in the appropriate forums talking to those governments anddoing our best to see that they observe, if not sign, the test ban treaty from now on.

Senator LIGHTFOOT —France and Germany seem to live together; Britain and Irelandseem to live together; Canada, which is not a nuclear power, is only to willing too live injuxtaposition with the United States. What makes Pakistan and India different from thosethat I have mentioned?

Mr Kennan —It is the historical division between the two countries. There have beenongoing tensions and concern. As I refer in my submission, India has for 30 years or morebeen concerned about America supplying arms—not nuclear arms but conventional arms—toPakistan. Those tensions are endemic there, which is one of the areas for concern aboutheightening nuclear tensions.

Senator COOK—On that France-Germany relationship, it used to be said during theCold War that the reason France acquired nuclear weapons was not its fear of Russia butrather to lure Russian tanks into Germany and then bomb the crap out of them. Be that as it



may, I think there is a misunderstanding. Australia did not impose any commercial sanctionson India at the time of the testing; it imposed sanctions of a diplomatic, defence cooperationand aid type. The parallel here, if there is a modern-day one, is our reaction as a nation tothe events of Tiananmen Square in China, in which we imposed similar sanctions, and ourreaction to the nuclear testing in India and Pakistan. We were revolted by the events ofTiananmen Square and we were revolted by the in-your-face demonstrations of nuclearcapacity in our region. We have a widespread public view about that and we reacted toexpress our views. In the case of the Tiananmen Square incident, however, we put ourselvesreasonably quickly on a footing in which we could constructively engage with China on thehuman rights front. Without arguing party political matters, there is now a dialogue onhuman rights with China at the highest level between our two nations and so forth. But atthe time we did distinguish within the Chinese hierarchy between what we may have calledthe old Marxist conservatives and the new entrepreneurs, whatever socialism with a Chineseaccent means, within the structure. We argued strongly for opening up the Chinese economyto economic reconstruction and economic development as a way in which democracy mightflourish.

I am sorry to make such a long introduction to it all, but is there a parallel here in termsof how we should react to India and Pakistan? You have talked about the commercialrelationships at a business to business level. I think that governments do not conduct trade,business trades; governments create the framework for that commercial relationship to beeffective. Do you have any suggestions about how, without rewarding India for its behaviour,the face of constructive engagement might influence them—in a way in which there isgreater regional security, despite the weapons testing?

Mr Kennan —Repeating what I said earlier, I think we ought to engage at a number ofthose other levels. Certainly, ministerial or official visits that facilitate both a commercialrelationship and some of these other relationships, be they education or otherwise, areinfluential and important.

One of the problems that India sees itself having is that it has been excluded frominternational forums it thinks it should have been part of—the UN Security Council, and Iknow it was discussed this morning, and APEC. I know that India had seen Australia in thelast few years as a possible bridge for it to come into APEC. I think that one of the areas ofconstructive engagement, apart from the areas that I have mentioned, may be to think aboutIndia coming into APEC and maybe, again without a reward, and it would not necessarily beseen as a reward, the encouragement of India to be given what it might see as its properplace in some of these forums. But I am not suggesting that that happen as a reward becauseI think that would be inappropriate.

Senator COOK—If I interpret you correctly, you also seem to be saying—and this ismy description of your words; I don’t want to put them in your mouth—that the UnitedStates talks tough when it comes to sanctions but acts opportunistically when it comes totrade. Is that roughly what you are telling us?

Mr Kennan —It seeks to get leverage. I agree that we were not imposing commercialsanctions, but they were imposing sanctions on the one hand and immediately talking. Theywere saying, ‘Unless we can get some resolution of this, these sanctions are going to be



ongoing.’ That is a dialogue or engagement which, whether you agree with it or not, makessense in terms of ordinary human negotiations. In the end, in a sense, it has been effectivebecause they have been able to maintain a dialogue that I think will see some resolution ofthis problem between India and the United States and will get some commitment from Indiaabout future nuclear testing, but at the same time they have been able to maintain what iseffectively a pre-eminent commercial position in India. That has been a relationship, if youlike, that one can understand. What I can’t understand in terms of the Australian position isthat we have simply taken ourselves out of the loop. We really have to try to get back in theloop.

Senator COOK—I refer to your extensive political experience, which may even be inthe veteran class, despite your apparent youth, Mr Kennan. You, as well as any of us, wouldhave a good idea about Australian sentiment on nuclear testing. As a country that feelsstrongly about nuclear weapons, how do we conduct our foreign relationship to give propervent to that so that Australians feel as if their views have been represented on the worldstage fully and adequately? How do we do that, given our size and influence in the worldand our relationship, as you have pointed to, with a country such as India?

Mr Kennan —I think it is quite correct to protest—to withdraw the High Commissionerfor a short time or take other significant steps that bring home to the Australian electoratethat you are concerned about it. But an ongoing and indefinite disengagement is not the wayto do it.

If I can make a political observation, I do not believe that the Australian electorate sawthese tests in the same light that they saw the tests in the South Pacific, and I do not believethat the Australian electorate was seeking disengagement. I know you have to be very carefulwith political views because people tend to tell you what you want to hear, but whilsteverybody I have spoken to was concerned, they saw it in a different light because this wasa country that was conducting nuclear tests fairly and squarely on its home turf, and it was acountry that seemed to have legitimate foreign policy and security concerns about itsneighbours.

For instance, had there been an Indian colony somewhere in the South Pacific and theyhad come across and detonated a bomb there, it would have been different. I think people inAustralia saw this as warranting protest and concern, and that the escalations of thesetensions in South Asia are an ongoing matter of concern, but it was different from whatFrance did.

Senator COOK—Do you think Australians thought that the French testings were closerto Australia than the Indian ones?

Mr Kennan —I think so. Had the French done that in the Loire Valley, the Australianreaction would have been different.

Senator COOK—If they had done it in the Loire Valley, I think the Australian reactionwould have been horror because of the damage to the grape crop and the French culture thatwould have occurred.



Mr Kennan —But as Australians they might not have felt as personally affronted aswhen the French came across to the South Pacific to do it.

Senator COOK—As a Western Australian I have to say that the testing in India wasprobably as close to us as the French testing in the Pacific was.

Mr Kennan —That may be so, and it may be a very different thing in Melbourne andSydney from Perth; I agree.

Senator EGGLESTON—I have a general question about Australia’s relationship withIndia and how the government handles it. In another context, I have heard of people havingdifficulties getting business visas to come to Australia from India. There seems to be greatconcern about the difficulties therein. Would you like to make some general comments abouthow the Australian government has conducted its relationship with India so that it might setthe scene a little for us to consider the reaction to the nuclear explosions?

Mr Kennan —Since this decade, right through the 1990s, it has been improving. I thinkthe history of it was patchy, but there was a concerted effort from both the Hawke andKeating governments, and I think in the early days of the Howard government, to buildingup the relationship. There is a history of ministerial visits throughout the 1990s, until thisepisode, which had been positive. I think our high commissioners had been very active andconcerned to build up the commercial relationship, and I think Austrade is generallyperceived as having done a good job in Delhi. The New Horizons program was alsosuccessful.

Visas have been a problem and, frankly, if you are an Indian, it is hard getting a visa togo to a lot of places because there is always that perception that there are a lot of Indians. Ithas been improving, and I think it is capable of being resurrected, but I must say that it hasbeen damaged. Kamalesh Sharma, a permanent representative of India in New York, said tome that he had had Indian business people through who had raised the Australian responsewith him. They had said, ‘We thought Australia was a friendly country towards us. We haveheard some fairly zealous comments about it and we are a bit surprised.’

I think we need to be very careful that, if this present disengagement continues, we arenot in a position—all other things being equal, particularly if there are contracts with semi-government or government authorities in India—where we have decisions go against us as aresult of letting this present position continue for too long. I would be worried about that. Ithink the relationship is capable of being rebuilt, but I think it needs some very active work.

I do think that a closer tie, possibly between the Australia/India Business Council and theHigh Commission, and the sort of dialogue that takes place between the American businessrepresentatives and the High Commission could be good, because information is important interms of elections, which are very frequent in India, changes of policy and the budgets.Indeed, in relation to the last Indian budget, the budget was, I think, varied a day or twoafter it was brought down. A simple, direct and timely information flow could be veryhelpful. Austrade and other bodies put out newsletters and so on, but often they are sixweeks or two months after the event.



Senator EGGLESTON—There is another matter that I would like you to comment on.We have read in a couple of submissions that, on the one hand, Australia is perceived asbeing too much involved with the United States’ point of view on this issue. On the otherhand, we have heard that one of the reasons the Indians have gone through with nucleartesting is ‘status’, because it gets them brownie points in their rating as a world power. Isuppose you could say, though, that rather than necessarily being drawn into the UnitedStates orbit in a specific policy sense Australia is just part of the rest of the world andconcerned about the spread of nuclear weapons and the implications for the wellbeing ofhumanity and regional security by the actions of these two countries. An earlier witnesssuggested that these two countries would have a lower threshold for the use of nuclearweapons than perhaps other countries do.

How much do you think there is a consciousness in government circles in India andPakistan of the real dangers of the spread of nuclear weapons and what nuclear conflictcould involve? Are they really aware, would you say? Was that a factor in their consider-ation that they dismissed?

Mr Kennan —Whilst there are frequent elections and in some senses the parliament is ata stalemate and likely to be at a stalemate for some time, I regard the political structure inIndia as stable. I think it is a remarkable performance, as I referred to in a footnote in mysubmission, that India has created a democracy in the last 50 years in a situation wheredemocracy was not part of the culture. I do regard it as stable and I do regard them as beingthoughtful and deliberative about these things

I do not know enough about Pakistan, but I do not want to downplay the danger ofescalation—I think that is a problem. I think India is independent of the United States. Ithink it has had ongoing policy tensions with the United States, but it wants to be treated asan independent power. It does not want to be under the orbit of any particular power anymore. Ironically, on this occasion, whatever other people’s perceptions may be, I do notthink we did have just a knee-jerk reaction, according to the United States, I think we hadour own reaction, but I am suggesting that the United States’ reaction was, in some senses, alittle more sophisticated. We might have done better had we been a bit more in tune withwhat the United States was likely to do in this circumstance and what they actually did do. Iam not suggesting we should just follow the United States; I am suggesting that the UnitedStates’ response in this case and their policy of very active engagement are things that,ironically, we could possibly have had a greater regard to.

Senator EGGLESTON—I was really referring to the pursuit of status as a nuclearpower. Do you think the Indian government paid a lot of heed to the implications of thespread of nuclear weapons?

Mr Kennan —I think their primary concern was themselves—their own position andtheir position in terms of security. They have, of course, a history of conflict with Pakistan,border conflict with China and a concern about a Chinese military presence in Myanmar, sothey saw themselves as having problems all around.



Senator EGGLESTON—But they were all pretty trivial conflicts, weren’t they? Theywere nothing like the great ideological conflict of the Cold War where nuclear weapons werean option.

Mr Kennan —Certainly not, but in some senses hotter—more likely almost to have aflashpoint. The Cold War went on for a very long time with very little actual violence. Herethere has been a history of skirmishes, terrorism and actual border conflicts on threeoccasions—or three wars—with Pakistan of some scale or other in the last 30 years or so. Sothere is an actual history of flashpoints there.

Senator EGGLESTON—I endorse Senator Cook’s view that there is a more livelyinterest in India on the west coast than there is in the south-east of the country.

Mr Kennan —I appreciate that. I also appreciate that Western Australia, on the otherhand, has been the most active of the states in trade and commerce and other ties with India.

Senator COOK—We are also in the majority here.

CHAIR —They do not have the chairmanship.

Senator COOK—You can have the chair; we will have the numbers.

CHAIR —In speaking about the role that Australia may well play, we did play asignificant role with the initiative of the Canberra Commission. That initiative has been fairlymuch overlooked by at least the witnesses this morning. Whilst the report of the CanberraCommission was presented to the United Nations, it was never formally adopted, and therein,as one of my colleagues would concede, is part of the problem. Is there something we cando now by way of the report of the Canberra Commission, as an initiative of Australia onceagain, to open up dialogue again and further the agenda that was outlined in the CanberraCommission?

Mr Kennan —There may be. I am not sufficiently familiar with the history of it. Leavingthe rights and wrongs of it to one side—

CHAIR —That is what I am trying to leave to one side.

Mr Kennan —A lot of Indian officials feel insulted and upset by some of the languageused by Australia in this debate. It is not just a matter of the disengagement in terms ofactions but also the adjectives used—I think one of the Indian papers that I read recentlyreferred to adjectives being used in Manila—did not help if we were then seeking to build aninfluential relationship. That has to be recognised. They feel sensitive about some of theissues as well as actions. In us trying to be influential with India, I am not suggesting weshould be—

CHAIR —I am looking also at the broader scheme of things as well, because theCanberra Commission report goes beyond India. There is a specific comment under ‘Actionto Prevent Further Horizontal Proliferation’:



The emergence of any new nuclear weapon state during the elimination process would seriously jeopardise the processof eliminating nuclear weapons.

One might say I have read that out of context, but we have, since this report was broughtdown, two potential new nuclear weapon states. It would seem to me that the initiative thatwas being pursued through the Canberra Commission was a worthwhile initiative indeed. Itcalled upon the existing nuclear weapon states to disarm. Australia did play a significant andleading role there through the former government. It is arguable whether the currentgovernment has done sufficient in that area. But, without getting into playing the politics ofit, what is your view? Is this one avenue that Australia might consider adopting as not beingseen as being hypocritical in this area of nuclear non-proliferation?

Mr Kennan —It may be. I cannot really comment on the wider areas apart from India.

CHAIR —Would India perceive it that way?

Mr Kennan —They do perceive it that way a little bit. They perceive us as living underthe American nuclear umbrella—this was put to me very bluntly in New York—taking littleaction against the United States, taking one extreme view, to get them to get rid of theirnuclear weapons, but being very vocal about India. I am not commenting on the rights andwrongs of that view; that was a view that was put. It was also put to me that New Zealandwas in a slightly different position because it had broken off its defence arrangement withthe United States. It was seen to be a little more even handed in its concern about nuclearissues than Australia was because it was no longer under the nuclear umbrella in the sameway as Australia was.

So there is a problem with that argument about hypocrisy. It is an issue that has, in myview, tended to be dismissed by foreign affairs officials, who say, ‘That’s a red herring; theyalways bring this up but it is a red herring.’ They do always bring this up, and it is a fact:we do live under the American nuclear umbrella, and I am not aware of great action byAustralia to get America to disarm. As long as that is the position it makes it a little difficultfor us in terms of India’s perception. There is a difference, I agree, between disarmamentand continued proliferation, but there is that perception problem. That is why I would be alittle more optimistic about pursuing some of these other avenues, as far as India isconcerned anyway, to rebuild the engagement rather than take the nuclear issue head on.

Senator COOK—We took an initiative for nuclear disarmament worldwide, through theCanberra Commission. That was the whole purpose of it—to get a consensus to re-addressthe problem. We have been very active in promoting the comprehensive test ban treaty and anumber of other international treaties, including chemical weapons. It is not as if we sit hereas a country without form. We have form on doing positive things on that front which, in theargument, cannot be dismissed.

I have no difficulty with the level of response Australia made. The question for me is:what now and how do you bring greater security? The argument that states, ‘On one handthey detonate a bomb; on the other hand we use hurtful adjectives. In the balance of this,isn’t it reprehensible what Australia is doing?’ is an argument which from an objective pointof view you could laugh at, but it is how people feel and react that you have to take note of



when you are trying to influence them and lead the debate or create the circumstances forgreater international security, a reduction in nuclear tension, better ties and so forth.

The other point is that Australians overseas may say a lot of things to Indians or anyoneelse for that matter. It just depends on which Australians. As I said to an earlier witness, ifan Indian reporter had met Pauline Hanson in a bar in Manila he would come away with adifferent view of Australia than if he had met you or me or anyone else in this room in a barin Manila.

On the other hand, transposing that, the complexion of the government in India is nowmore fundamentalist. We could be looking at having a more fundamentalist balance of powerin the House of Representatives after our next election. There would be many Australianswho would say that that is a quirk of the electoral system rather than a reflection of publicsentiment, if, for example, One Nation had the balance of power and sought to influence ourrelationships.

The point I am coming to is that it is hard to generalise. You have to respect andrecognise the government in office—and it is a coalition government in India. To thennecessarily assume that that is the view of everyone is too general. In this case, all of ourevidence is that on the nuclear front there is a pretty comprehensive view in India. The viewon what the government has done is shared fairly widely in India. When the peacenikorganisations were before us in Perth the other day they could not point to any strongrelationship they had with a peace movement or a ‘ban the bomb’ movement in India of anygreat standing. No one seemed to be able to produce an opposition party that had a platformon reducing nuclear tensions or that was running against the issue of nuclear weapons. If thatis case, in educating our response we have to look at how to engage them by other means.

Mr Kennan —That is generally right. To come back to the Chairman’s point about theCanberra Commission, an Indian diplomat did say to me that Australia was not talking butNew Zealand was putting forward various alternatives on how to move forward on this. So itmay be worth pursuing some of those ideas. When I was in India, which was after thebudget was handed down, which was not all that well received or well handled by thegovernment, there was certainly some greater diversity of opinion about the nuclear issue.What you say, Senator, about the main political parties is generally correct. The mainpolitical parties were not prepared to come out and attack the decision, but there werecertainly other opinions and anti-nuclear groups there in the community. But your lastobservation is correct: we need to look at engaging with other institutions and groups inIndia through the links we have been discussing, apart from the political parties.

CHAIR —Thank you, Mr Kennan, for your appearance here this morning.



[12.18 p.m.]

COPLAND, Associate Professor Ian, Director, Centre of South Asian Studies, MonashUniversity, Clayton, Victoria

CHAIR —Welcome. The committee prefers all evidence to be given in public but shouldyou at any stage wish to give any part of your evidence in private you may ask to do so andthe committee will consider your request. The committee has before it a written submissionfrom you. Are there any alterations or additions you would like to make to your submissionat this stage?

Prof. Copland—No, not at this stage.

CHAIR —I invite you to make an opening statement and then we will proceed toquestions.

Prof. Copland—Thank you. In my written submission I made five main points. Firstly,the recent round of nuclear tests conducted by India and Pakistan, especially Pakistan,represent a significant rebuff to the West. The fact that they went ahead regardless of knownWestern opinion must be accounted a significant failure for Western diplomacy, includingAustralian diplomacy.

Secondly, the failure of Australia to make any diplomatic impression in this matterstemmed partly from what I would call its extreme reaction—perhaps even overreaction—tothe tests. To use words like ‘disgust’ and ‘outrage’, as the Prime Minister did, was simplycounterproductive, not to say undiplomatic. When have we heard such language used aboutChina, which has tested more often and poses a much bigger threat in terms of the size of itsnuclear arsenal than either India or Pakistan?

This is my third point. We should not really be surprised at our lack of clout in NewDelhi and Islamabad, given how low the subcontinent has ranked in our foreign policy overthe years. It is rarely visited by our political leaders, little discussed in our debates—until ofcourse something like the tests happens—and, let us be frank, not taken very seriously. Ishould add here that India and Pakistan did not take us as seriously as we would like orshould be the case, but at least in India’s case they have the excuse that they are a muchbigger power, a genuine big power; we are just a medium one, which to them suggestssomething like an unequal courtship.

Fourthly, India’s and Pakistan’s desire to own nuclear weapons, if not in the least bitlaudable, is nevertheless explicable and not, as was presented here at the time in somequarters, a whim of power crazy politicians. In both cases, there were scientific andtechnological pressures for testing and, in Pakistan’s case at least, there were genuinesecurity reasons. She will always, after all, be out-gunned by India in a conventional war—this was one way perhaps of redressing the balance. There were also diplomatic reasons—toforce India to compromise on Kashmir, which has always been the sticking point forPakistan.



India too had diplomatic objectives, I think, of demonstrating that she was indeed a bigpower to be taken seriously in international tribunals and councils and of sending a signal toBeijing, which has been steadily extending its influence in the South Asian region through itsproxies, Pakistan and more latterly Burma.

The final point I made in my submission is that there is a fair degree of hypocrisy in thestance adopted by Western countries, including Australia, towards India and Pakistan on thisissue. Where are 95 per cent of the world’s nuclear weapons? They are not in the Indiansubcontinent; they are in the United States, in Russia, in France, in Britain and in China. Allthe above except China could be counted our friends, and we are a military ally of theUnited States. As the Indian High Commissioner pointed out, it is easy for us to adopt thehigh moral ground, sheltered as we are by the American nuclear deterrent, also a point thatwas made earlier today.

Moreover, apart from China, these are all Western nations. To put it bluntly, what we aresaying in Australia is that it is okay for us whites to have nuclear weapons; after all, we areresponsible people. As for Indians and Pakistanis, the assumption is that brown men, thecitizens of the Third World, cannot be trusted to exercise the same care and restraint as wedo.

Broadly speaking, I do not think anything has happened since I wrote the submission tomake me want to change any of its essentials. There has been obviously no pre-emptivenuclear strike in South Asia, rather a flaring up of the conventional war that has beenfestering in Kashmir on and off since 1947. India and Pakistan continue to talk fitfully andpretty unproductively, and neither side has changed its stance on the Kashmir question.Meanwhile, the United States has withdrawn its economic sanctions against India andPakistan, evidently in the realisation that they were having no useful effect. South Asiatherefore remains a region of great risk and instability. I do not doubt that, but I do notbelieve that the dangers there have been increased substantially by the nuclear tests.Australia’s own security, I think, as before, remains essentially unaffected by these develop-ments.

CHAIR —Thank you.

Senator EGGLESTON—Thank you, Professor. You have made what sounds to me tobe a rather simplistic statement that the West thinks it is okay for white people to havenuclear weapons but not for brown people to have them. Isn’t that rather devaluing thefactors which underlie the great factors of the Cold War and ignoring the fact that incountries like India and Pakistan, as the United States Secretary of Defense said only lastweek in Sydney, there is a far less well-defined system of control and the possibility of anuclear accident in terms of use of weapons is far more likely with those countries andperhaps some of their northern middle eastern neighbours, if they also get nuclear weapons,than was the case in the conflict between the West and the Soviet Union? Isn’t there justimplicitly in the spread of nuclear weapons to other countries like India, Pakistan and whoknows which others—Iran and Iraq and so on—an inherent danger to the general security ofthe world, so thereby is there not a danger to Australia’s security? Would you not agree?



Prof. Copland—There is no doubt that the proliferation of nuclear weapons anywhereand to any degree increases absolutely in global terms the danger to everyone’s security. I donot think that point can be contested at all. The language I was using was highly coloured,but I was trying in that sense to reflect what I think is the perception that people in SouthAsia have about the way the issue is considered outside. It is not the way we think of theworld. We do not think of it in terms of white and black or brown. We have in a sensetranscended that or perhaps it has never been an important issue for us. But it is in SouthAsia.

There is a deep sense, a carryover from the colonial era, of having to make up for thoseyears of humiliation and inferiority, of being second class and of having to justify them-selves often in terms of a modernity that has been invented in the West and so on. We areseeing a sort of echo of that in the current reactions in India and Pakistan to the way theirtests have been perceived. Even though the language might be highly coloured, the essenceis true. Most of the risk in the world, if we want to count up the nuclear warheads, residesnot there but elsewhere.

It is also true that the world has lived, as it were, on the brink or edge of a nuclearholocaust for half a century and has not taken that step. Ever since Hiroshima and Nagasaki,no country has deemed it sensible or worth the risk or worth the consequences to use nuclearweapons. A couple of times perhaps we have come close, for example over Cuba, but eachtime people have very sensibly looked at the likely outcome and realised that this is not theway to go.

CHAIR —On that logic, why would you proceed down the path that India and Pakistandid?

Prof. Copland—In some ways because of the same logic.

CHAIR —The logic must apply to everyone. I agree with your logic, the way you weregoing through it, but if it applies it must apply to them as well. What they have done doesnot bear any real logic in the real world. It does, in their frame of mind and in their ownsphere of influence, but in the real world it is without logic.

Prof. Copland—I agree. If we lived in a logical world and in an absolutely utopianworld there would be no nuclear weapons. There would be no weapons of any sort. Peoplewould not fight wars. But the fact is that these things exist and people do. One could makean argument—it is a contentious one—that the existence of nuclear weapons during the ColdWar period did prevent what might have otherwise been a bloody confrontation in easternEurope; that the thought of the consequences if one of those two super powers at that pointin time had made that pre-emptive strike caused both the United States and the Soviet Unionto step back from the brink.

Perhaps one could make the same argument about South Asia, that both India andPakistan now know that a fourth war in the subcontinent is potentially that much moredangerous because of the risk that Senator Eggleston mentioned. There is always a risk thatsomething might go wrong or that somebody might put their finger on the button.



There are several things which make that unlikely. One of them is that there is noevidence yet that either the Indians or Pakistanis have weapons delivery systems whichwould enable them to target each other’s cities with tactical nuclear weapons. The second isthat, although the tests were about trying to develop more tactically useful and miniaturisednuclear weapons, they do not seem to have got to the stage yet where they could foreseeusing nuclear weapons in a way which would have anything but terrible consequences forboth parties. One of the problems with South Asia as a tactical environment for this kind ofwarfare is that, depending upon which way the wind is blowing or depending on whether itis summer or winter, you are going to cop it just as much as the supposed enemy only 500kilometres away.

The other point I am really trying to make by that sort of rather bald and simplisticstatement is that it may be true, as the American State Department seems to think, that thereare higher risks, as it were, or less control in the military defence environments in India thanthere are in North America or the Soviet Union. I find it hard to believe that they are lessthan in the former Soviet Union. But, if we take that point as true, it still leaves the moreimportant factor that it takes a decision by somebody to commit a nuclear weapon in a war,and of course first it takes a war. I do not see any evidence that the politicians in power—even the one might think rather rabid people in the Bharatiya Janata Party in India—are thatstupid and that illogical and irrational that they are going to launch pre-emptive strikes foreither electoral purposes or some final solution to the problems of the subcontinent.

CHAIR —But people look back in hindsight now and cannot believe that Hitler gainedthe ascendancy and the power that he did and was able to do what he did to both theGerman people and other nations throughout Europe. So that is always the difficulty that wedeal with. We just cannot give an ironclad guarantee that nothing will happen.

Prof. Copland—I do not think Mr Nawaz Sharif or Mr Atal Behari Vaypayee bear anyresemblance to Adolf Hitler.

CHAIR —No, I am sorry, I was not trying to draw that analogy. But one cannot predictthe personalities or the type of people that may be in control in the future or the circum-stances that they may well be confronted with. It seems to me that the tests have been partof a wave of nationalism within India. That is quite understandable. Whether that is apositive nationalism or a negative nationalism one cannot really judge.

Prof. Copland—I am not a great fan of nationalism. I personally look forward to a timewhen the world is in a sense rather more free of it than it is today.

CHAIR —But nationalism is the driving force in so many parts of the world thesedays—whether you look at the old Yugoslavia or the old Russia—and it is frightening.

Senator EGGLESTON—The only other question I would ask is a repeat of one that Iasked the previous witness. How would you in a general way characterise Australia’srelations with India? How in a general sense have we handled our relationship with India?

Prof. Copland—I would say, in a word, minimalist. I would say that on the whole theserelations have been good. They have certainly not been in any sense difficult relations. There



have been minor irritants from here. Before the tests, for example, the Indian navy was veryirritated by some overflying by the Australian air force. So there have been things like thatfrom time to time, but generally speaking we have had good relations with both India andPakistan, and everyone says on public occasions how much we have in common and that weought to get on well together.

They have at the same time not been relations which have moved on or moved into thekind of intimacy that one could perhaps foresee on the part of countries which do have somuch in common compared with other countries in the region with which we have perhapsmore dialogue. We certainly put much more effort, as it were, into relations with China, withwhich we have much less in common. The case would be the same of Indonesia, althoughthere are obviously special reasons for that.

Senator EGGLESTON—Has it been the case that we have sought closer relationshipswith Japan, China and Indonesia over India because of economic factors? In a general way,have we in your view handled our relationships with India sensitively? We have heard a lottoday that we have handled this issue insensitively. Is that atypical or typical of our relationswith India?

Prof. Copland—Just on the trade issue, it is undoubtedly an important element. Bilateraltrade between India and Australia runs at about $2½ billion altogether in both directions. Itis not big and it is not a big proportion of our trade. It is a very small percentage. I think thebilateral trade relations with Pakistan are even more minuscule. There are some importantinvestment opportunities now opening up. So there is a kind of growth curve we are enteringinto. In such areas as attracting tertiary students from overseas we are now increasinglyseeing South Asia as an alternative market to markets that are beginning to decline inMalaysia and other places.

So in so far as relationships are always influenced to a large extent by the bottom line—what is it worth to us and them—then that does explain to some extent why we have notbeen as close as we could be. But it is also an argument to say that, as Australian business-men begin to see the opportunities that are awaiting in South Asia, our relationship ought toget closer and this is an impediment to that. I do not see it as a permanent impediment; I seeit as something that will blow over—it is already blowing over—but I think we need tomake an effort to mend some bridges.


CHAIR —You mention on page 2 of your submission:

Possibly the trigger, though, was Pakistan’s testing of its new ‘Gauri’ missile in March.

Do India and Pakistan not already have aircraft that could deliver nuclear weapons, whetherthey be F16s, MIGs or Jaguars? So is that a fair assessment?

Prof. Copland—Yes. I have to say that I am not an expert in the defence analysis area. Ipresume what you say is correct. Certainly both India and Pakistan possess modern jetaircraft capable of carrying bombs. I imagine that the difference with missiles is that they



can hit targets more quickly and they can be launched from sites that are less easy to detectthan airfields and so forth. It is not a black and white issue, but I certainly think the missilearea is one which has, as it were, increased the sense of military preparedness on both sides.

CHAIR —Having gone down the path now of testing, what is the real likelihood that theIndians and the Pakistanis will go down the path of developing actual warheads and systemswhich can deliver the warheads?

Prof. Copland—I suppose there is an inherent logic in that. As I said in the submis-sion—

CHAIR —If this has been going on in secret in the past, what is to stop those samescientists saying now, ‘We are at the brink; let us go all the way’?

Prof. Copland—Part of the argument for the tests was to develop tactical weapons of akind which could potentially be delivered with existing missile technology, targeting places,military targets, that might not trigger huge devastation and massive loss of life. They areboth a long way from that, but there is an inherent logic that they will continue in theirlaboratories to move in that direction.

CHAIR —What initiatives should we take to stop that?

Prof. Copland—We have to engage at the diplomatic level, but certainly not in a waywhich degenerates into public name calling. Quiet diplomacy is the way to go. The Indiansand the Pakistanis are all very well aware of the potentially calamitous consequences of thispath. They are going to move down it very cautiously. There are huge economic costs. Thereare scientific and technological obstacles. All this will slow development. We have to pointout to them the potential consequences that might flow from this, urge them to slow downtheir programs and try to bring them together. Bringing together Indians and Pakistanis in adialogue is something which third countries can do, not only at a government to governmentlevel but at other levels as well. That will be an important contribution.

CHAIR —One thing that has been put to us that you touched on in your response to mewas that there is a general lack of understanding in the populace at large in both India andPakistan of the effects of these weapons of mass destruction, that really they see them asnothing more than at the large end of the conventional weapons scale. What is yourcomment on that?

Prof. Copland—Only that there is a section of the Australian population which wouldprobably be just as ignorant. There is a very large intelligentsia in India which is able todiscuss these matters in a very sophisticated way. If you look at the Indian media, you willsee that these things are discussed. There are no illusions about it. I was looking at some-thing in Dawn, one of the Pakistani newspapers, and there a journalist was in fact quotingAmerican studies from the 1980s about what might happen if there was even a limitednuclear engagement between India and Pakistan and only military targets were targeted withquite small devices of, say, 20 kilotonnes. The American study suggested there would be atleast one million casualties—half a million on each side—and, of course, it would be verymuch greater if there was any targeting of cities. All of this is well understood in the Indian



middle class, in the intelligentsia. It is probably not widely understood amongst the mass ofthe population.

CHAIR —Who so warmly embrace the tests.

Prof. Copland—Yes. There was also a bit of rent-a-crowd about it. We saw them on thevideo jumping up and down and shouting ‘Jai Hind’ and that sort of thing, but I suspect thatmost Indians or Pakistanis were not as excited as that. We were looking at the politicalcadres that were being touted for the occasion. The thinking Indians—the ones that I know,people of my acquaintance—would tend to be much more ambiguous in their response. I amsure most Indians agreed with the Prime Minister when he said that this was a momentwhere India had made its presence felt in the world, that there was something about thiswhich added to India’s stature. That is an unfortunate thing, and I think that was why—

Senator COOK—Saddam Hussein made his presence felt in the world as well. I amsorry, I interrupted your flow. People can make their presence felt in the world. It is whatpresence they make felt and how the rest of the world feels about that presence that is reallythe subject of the debate.

Prof. Copland—I think the Indians gravely miscalculated. I am sure they consideredwhat the likely international fallout might be. I am sure the Ministry of External Affairs wasconsulted and I am sure there were discussion papers prepared about this. I do not think theyjust went ahead without considering this, but I think they genuinely underestimated it. Thissort of naivety was revealed in a more recent comment from Vajpayee—and some Indianshave told me that this is actually an invention of the Western media; that he did not say it atall. He is apparently quoted as saying, ‘Our testing and our possession now of the potentialto be a nuclear front-line state will vastly increase the argument for having us as a perma-nent member of the Security Council.’ The outcome has been the reverse of what Vajpayeeintended—if that was indeed his intention. So there is a certain naivety in all of this.

CHAIR —The only other thing I want to raise is the statement in your submission aboutthe real threat to peace and wellbeing in light of the tests being the local extremist groups,and you list the Islamic fundamentalists in Karachi with links to Libya, the PalestineHezebollah and ethnic insurgents such as the Liberation Tigers of Tamil Eelam. Is that a realthreat?

Prof. Copland—That is a potential threat. These groups are there. Pakistan is on theAmerican State Department’s list as a terrorist state or a state that harbours terrorists. Thereare groups with links to other Islamic fundamentalist groups in the Middle East operating outof Karachi. The LTTE in Sri Lanka has already shown it is prepared to go to desperatelengths to further its cause for a separate Tamil state in that country. I do not think that thereis any likely prospect that nuclear technology is going to fall into these hands, but it is a riskat some future time. That, to me, is the more worrying aspect of the scenario. The point Iwas trying to stress is that the threat to world peace comes not from the governments ofIndia and Pakistan, who I think are responsible people, advised by responsible bureaucracies,but that if there is going to be a nuclear calamity in this region it is more likely to comefrom the leakage of that technology into other hands.



Senator LIGHTFOOT —Professor Copland, after sitting through several days of someintensive evidence from people like you, who have not just an affinity but some expertisewith respect to the subcontinent, it is my view that India is not the problem, and yet we heara lot of evidence today particularly about India, very little about China and very little aboutPakistan. I think that India, having watched it for some decades, has a policy of containmentwith respect to its extremists, and they run, as you said, from the Tamils to the Kashmiris, tothe Hindus, to the Moslems and others.

With respect to Pakistan, to all intents and purposes it is impecunious. When a country, afamily or a person does not have any money, they are more inclined to do things that maybe viewed as extreme in order to survive. Yet we have heard nothing about China exceptspeculation about China supplying the technical aspects of the nuclear explosion, if not thefissile material that made the Pakistani bomb possible. In your view, given the impecuniosityof the Pakistanis and the relationship with the Iranian government, what is to stop a nationlike Pakistan—and you have to view this with respect to the Taliban being on its doorstep—transferring to Iran the technology to explode a nuclear device? That is blunt, but I cannotput it any other way.

Prof. Copland—Obviously, I have no inside knowledge on this matter. I can onlyspeculate, and my moderately educated guess is that there is not much likelihood of that atall. The Pakistan government is in a kind of delicate situation with regard to the MiddleEast. We tend to lump Muslims in with each other in a way which underestimates the deepdivisions between them. We know all about Iraq and Iran.

Senator LIGHTFOOT —The Sunnis and Shiites—

Prof. Copland—For example, the former Soviet central Asia is now an area of deepcompetition between Iran, Turkey and Pakistan for supremacy—and they are all Muslimcountries. The support that Pakistan has offered to the Taliban actually runs counter toIranian interests. The Iranians do not like the Taliban at all very much, partly because theTaliban are largely from the Pashtun population, so there is an ethnic division.

Senator LIGHTFOOT —I do not think anyone likes the Taliban very much.

Prof. Copland—And for all sorts of good reasons, although one would have thought thatnothing could be too extreme for the Iranians, but maybe the Taliban have gone one stepfurther. While relations are correct, and Pakistan obviously puts a great deal of store in itsrole as a player in the Muslim world, one of the things that Nawaz Sharif or perhaps theforeign minister said after the Pakistani tests was, ‘We are now the first Islamic nuclearstate.’ In saying that, the assumption is that Libya is not in the position that Pakistan is. Thatwas the perception. It was obviously seen to have a special kudos because it emphasisedPakistan’s position in the Muslim world. So there is an arena of competitiveness, and thatcompetitiveness inhibits the likelihood of technological transfer on a cooperative govern-ment-to-government basis.

Senator LIGHTFOOT —But is there not a dichotomy between what you are sayingabout there being a competitive nature with these nations—as there is with all nationsthroughout the world, and particularly ones that have similar cultural and sectarian back-



grounds like those in the Middle East and South Asia—which says that it will not betransferred? You say that there is a competitive nature, but it does not have to be transferred,it can be acquired, which puts a different inference on what you are saying.

Prof. Copland—I am not ruling out that it could happen—I think that would be foolish.But I do not see this as an obvious next step—unless one of the implications of yourquestion is that Pakistan would be so impecunious as to sell its technology or something.Aid to Pakistan has been resumed, so the immediate threat of bankruptcy has been put aside.There are actually some aspects of the Pakistani economy which are relatively healthy. Thereare areas which are doing quite well. There is also enormous corruption and waste and so—

Senator LIGHTFOOT —The drug trade is doing fairly well, I understand.

Prof. Copland—Yes. But I do not see this as a very likely scenario in the short term.

Senator LIGHTFOOT —You said in your opening contribution something about the‘whites nuclear club’—maybe they were not your exact words? Is that a synonym for theAnglo-Saxon Gauls? Is that what you were saying?

Prof. Copland—As I was saying to Senator Eggleston, the terminology is not, in asense, expressed in the way I would categorise it, but it tends to be the way people in southAsia look at the outside world. They do see it very much in terms of a world dominated byAnglo-Saxon powers—Western powers who happen to be white skinned. They do notusually put a particularly racist gloss on it, but some do. In the media you do occasionallyread accusations which talk about the way in which the West treats brown-skinned peopleand so forth. I was trying there to highlight the sense of how in south Asia they have beenmarginalised and, to some extent, put down, in their view.

Senator LIGHTFOOT —Who is ‘they’?

Prof. Copland—The Indians and Pakistanis. I am speaking of their governments. But Ithink this is a perception widely shared amongst the population. Even well educated people Ihave talked to do tell me—as part of that club, by extension—what ‘they’ are doing to us.‘They’ are the ones throwing their weight around in the world. The word ‘hegemony’ isoften used by media writers. Hegemony is a classic sort of given in the way they constructtheir world. An academic from Delhi who talked to my centre at Monash only a fortnightago began her presentation with that kind of statement—‘The world is dominated byAmerican hegemony.’ There wasn’t really any argument about that; we were not expected tocontest the point. That was something we accepted, and then we went on from there. And ofcourse we do not see the world in those terms. Somebody said earlier that diplomacy isabout trying to see things the way the other bloke, as it were, does.

Senator COOK—I am just worried about the broad analysis that we have before us atthe moment. I am a great one for looking at the detail of relationships, but you have to lookat that from the framework in which they operate. I just want to comment and see if youwould want to modify my view. The way I see it is that all international relationshipsbasically were defined during the Cold War period by which side of the divide you stood on.While national liberation and anti-imperialist movements grew—for very sound and good



reasons, in my view, in a number of countries—and there was a whole range of other things,essentially the world played out its relationships according to the Cold War norms. In thatstructure, India was closely associated with the Soviet Union, Pakistan was closely associat-ed—as a consequence or maybe as the first cause—with China, the relationship between theWest and Russia was the dominant defining relationship, and the China relationship was onein which America was courting China because of its anti-Russian position and trying toexploit that situation.

When we talk about the pressures on India post the Cold War period, aren’t we reallysaying that India made a wrong choice? It backed a system which lost in Russia, went out ofbeing, and, as a former associate, was, to some extent, understandably overlooked byeveryone else as the new relationships were being built up. So India’s sense of isolation, notexclusively but partly, derives from that position in the constellation of the globe. Secondly,aren’t we saying that India as one of the world’s largest economies is also one of the world’ssmallest trading nations?

Prof. Copland—Like China?

Senator COOK—Yes, the difference though being that, contemporaneously, China hasdecided to go on a path of opening up its economy and engaging in the global marketwhereas, while India has more recently decided to do the same, India’s pace of change andits government authority for change is less. Its democracy, unlike China, can command thesethings, and the speed by which they have decided to move is a lot less. To some extent,India’s isolation from the economic world—I am not talking now about the global politicalworld—is self-imposed. It is essentially a country of, up until recently, economic nationalismand economic self-sufficiency with high protection. It traded where it saw an advantage toitself, but, by God, you could not get into their market if they did not want you in there.

It is deregulated a little; it is not deregulated a lot. This may be the direction in whichthey are going. The pace at which they are going is certainly slower than China. From aneconomic sense, their isolation is derived from their choice that this is their economicstructure. What is seeping through the Indian consciousness is, ‘We want to get more intothe global economy. We want to be more vigorous about it,’ but still that is a slow thing. Isthat a fair depiction in rough layman’s terms? I am not a foreign affairs specialist by anymeans. If I have any interest in this, it is more on the economic and trade side. But is that afair depiction of the background against which we talk about India’s isolation?

Prof. Copland—In broad outline, I would not disagree with what you are saying. Iwould perhaps only make a couple of points. One of the things which conditions the Indianrelationship with Moscow was that, for a while, India tried to pursue a policy of what itcalled non-alignment, which may always have been a bit of a fiction, even in its heyday.

Senator COOK—And it was a leading spokesperson of the world for anti-nuclearmatters.

Prof. Copland—Indeed it was.



Senator COOK—It was also the most pre-eminent nation in the world to argue againstweapons testing and nuclear weapons.

Prof. Copland—It has to be said that they have maintained this position consistently upto the present time. Again, this might seem to us of them wanting to, in a sense, have theircake and eat it, but the Indian position is that they will be the first country to sign a treatywhich is a genuine treaty of disarmament in which Russia and the United States are alsoinvolved in that process.

There was always an element of idealism in Indian foreign policy, particularly underNehru, but this was then undermined by the realities of the Cold War that you referred toand the fact that, in the 1950s, particularly under Ayub Khan, Pakistan became a closemilitary ally of the United States and bought huge amounts of military hardware from it.Many of the problems of Pakistan stem from the enormous diversion of money into thepurchase of American arms, which, of course, was great for the Americans. They sawPakistan very much as an island of, as it were, Western friendship and stability in the region.

To some extent the Indian relationship with Moscow was shaped by that other relation-ship, as of course it was shaped by the experience of the 1962 war with China, which was atraumatic experience for India and which shattered their sense of military security.

Senator COOK—Which would have the encouraged the Soviets to get closer to India,given the tensions between India and China.

Prof. Copland—Given the then relationship between India and China, it is quite acomplicated picture. On the economic front, when I was in India earlier this year—this wasbefore the tests—people in India were being a little bit smug, perhaps more smug than theyshould have been, about the fact that whereas all the tigers of South-East Asia were nowmewing, India had not suffered that meltdown. That, of course, was a consequence—

Senator COOK—The domestic economic debate in India now is about whether or notthey ought to open at all, because they are growing at about 4½ to five per cent at thepresent time, which is better than all the Asian tigers that were boasting about how goodthey were doing at eight and nine per cent, and about the same as what China is probablyreally doing as opposed to what it says it is doing. They are saying, ‘We are doing this andwe are able to defend ourselves from the Asian contagion because we are more self-sufficient and because we have been more economic nationalist and because we have beenmore self-reliant. So let us not get into the global economy.’

Prof. Copland—I agree.

Senator COOK—The economic debate is more likely to close India off than open it upin the immediate future.

Prof. Copland—I am afraid that is true. I do not think this is the way India should go.The experiment with liberalisation which was begun under Narasimha Rao’s government,particularly by the finance minister, Manmohan Singh, represented a very positive break withthe past. There were tremendous inefficiencies in the Indian command economy. This was



what is called ‘licensed Raj’, where you had to get everything in triplicate, as it were, toeven buy a new spare light globe or something. So there were some positive signs and thereis no doubt that the South-East Asian crisis has caused a rethink about that and, as you alsoindicated, there is an ideological aspect of it.

The BJP government very much wants India to be self-sufficient, not to be beholdenfinancially or in any other way to the rest of the world; this is very much part of theiragenda. Again, although there was a lot of discussion in the press and during the electioncampaign about what it might mean if the BJP came to power, the early period at least ofthe BJP government did not see the kind of sharp lurch, as it were, away from internationali-sation that people had been predicting. There has been some sort of movement but it has notbeen dramatic.

Senator COOK—My point in painting that broader picture is simply to say there is asense—I am not pointing to a particular phrase or sentence or paragraph—emanating from anumber of submissions we had about India’s isolation that it is a victim. My point is that thecircumstances have conspired. It backed the wrong horse in the Soviet stand-off and it isthere for a complex series of interactive reasons, but a series in which it had a considerableself choice about where it is at. Analytically, it is right to get that clear. That is not anargument for saying, ‘It backed the wrong horse. It is out of the race. Bugger it!’ It is a wayof saying, ‘How do you re-engage it and bring it into a more constructive course?’ GivenAustralia’s strength in the world and our comparative status, we ought to understand thatbackground lest we or this committee in its report think maybe India is subject to someinternational conspiracy, in which it has not played a part, and as a consequence it is aglobal victim, rather than an active global player whose choices have led it to this position.

The worrying thing in my mind is what you do to stabilise all this. My essential viewalways is that you do it by developing greater economic relations. People require weapons todefend their national interest, in their mind. They acquire them if they think there issomething there that ought to be defended from someone else coming and taking it off themor for other reasons. But if you develop your economy and integrate it with the globe—it isnot a popular sentiment in some quarters in Australia at the moment, but it is a view Ihold—then the tensions between nations fall away and the amount of economic effort putinto maintaining weapons systems, developing nuclear capacity in weapons and the sort ofCold War effort in which the Soviet Union collapsed because it could not maintain the pace,its own living standards fell and it could not deliver living standards is reduced. You removeall that misallocation of economic resources to a war effort and put it into a peace effort anddevelop economic growth.

I think the thing that Australia should be arguing to India is,‘ We will engage you ineconomic ways. We’ll talk to you about coming into economic fora. We’ll play a useful rolein having a fair go at trying to diminish your isolation in the world. But we won’t do any ofthat unless you are prepared to play along, because we are just wasting our time and makingourselves a laughing stock if we do.’ Is that the sort of thing that we should be thinkingabout in this committee?

Prof. Copland—Yes, I think there is a lot of sense in that approach you are outlining. Ithink this has to be done very much at a diplomatic level. We have to do this not by



posturing and making statements. I think we first of all have to give India the credibility thatit demands. We have to say to the Indians, ‘We agree that you’re important. We agree thatyou have a significant role to play not only in the South Asian region but also in the widerinternational domain. Yes, we think that you have been excluded for too long.’ I would haveAustralia supporting India’s membership of the Security Council. That is a position which Ithink has been an anomaly all the way along, just as I think there are other countries thatprobably should have permanent membership of that organisation too.

As I said earlier, India has, in a sense, taken another bad choice, to use your terminology.I think it reckoned on using the nuclear testing as leverage. In that sense, it very muchbackfired, so obviously that has to be put on hold for a long time. Nevertheless, we shouldcertainly be facing up to the reality of the importance that India has in demographic,economic and military terms. It is a great power—we cannot avoid that. To us it is a friendlypower. There is no insuperable reason we cannot have close relations. There is no bilateralobstacle to that. Australia is well positioned in that sense. I think there is a lot of residualgoodwill towards Australia in South Asia.

Senator COOK—It takes two to tango. We can do all these things and make ourselvesfeel good, but will they be effective? It requires India to want to be engaged in that processtoo.

Prof. Copland—I think they are prepared to be part of a dialogue. But if this is going tobe successful it probably will not be up to Australia alone. Other countries, and obviouslymore powerful countries than us, have to be making the same kinds of signals. Perhaps, in asense, we ought also be talking to the Americans and sitting down and saying, ‘How do webest go about bringing India and Pakistan together?’ and so forth—acting as another sort ofbroker in that way. We should certainly be offering our good offices on Kashmir. Again, it isnot something that is likely to be welcomed with open arms by India, certainly if we put itin terms of, ‘We’ve got a solution ready for you. Here it is.’ But we could say, ‘Look, weunderstand that there are problems here. We understand this has been the great obstacle togood relations between India and Pakistan. We think that good relations between India andPakistan are vitally important to the security of the Indian Ocean region. We want to doanything we can to bring that about.’

I have just one small observation. As I said to, I think, the incoming Pakistan HighCommissioner last year, when we talk about the role of trade in all of this, we really needthe Indians and Pakistanis to start buying and selling from each other in a much bigger wayso that their economies become interdependent, which would not only have all sorts ofeconomic benefits in terms of rationalisation within the region but also vastly diminish anychance of hostile conflict.

Senator QUIRKE—Professor, how stable is the BJP government? Is it going to bearound for a while? Obviously the tests have been well received, bipartisanly; is that right?

Prof. Copland—I think I would agree with Mr Kennan. It is a government with a smallmajority. It is a coalition government. There are something like 14 constituents, of which theBJP is by far the largest. Of the several constituents, the AIADMK Party, led by Jayalalitha,



is a very unstable element and has, right from the start, been fairly coy about its involvementin the government.

The Congress is not in a position to challenge. I think they learnt from the last timewhen they pulled the plug on the United Front government, which was also running alongreasonably competently, particularly in the international arena—they brought on an electionwhich India did not need and which resolved nothing. I think there is now a sense inCongress that the efforts of party members should be directed at building up the party at thegrassroots level, not provoking a spill in the Lok Sabha. Short of any sort of absolutecalamity, the BJP is going to be there for a while. So far, I would say that it has proved tobe perhaps not the best government India has ever had but certainly not as bad as manypeople feared.

Senator QUIRKE—The Congress candidate the last time was the late Rajiv Gandhi’swife, or former wife, as I understand.

Prof. Copland—Sonia.

Senator QUIRKE—Is she still running the show?

Prof. Copland—She is President of the Congress and, yes, I would think that is a fairway of putting it. She is very much the powerbroker now within the Congress organisation,yes.

CHAIR —Thank you, Professor. We appreciate the time you have given to us today.

Proceedings suspended from 1.19 p.m. to 2.27 p.m.



FRIEDLANDER, Dr Peter Gerard, Open Learning Hindi Coordinator, La TrobeUniversity, Bundoora, Victoria 3083

CHAIR —Welcome. The committee prefers all evidence to be given in public, but shouldyou at any stage wish to give any part of your evidence in private you may ask to do so andthe committee will consider your request. The committee has before it a written submissionfrom you. Are there any alterations or additions that you would like to make to yoursubmission at this stage?

Dr Friedlander —No, the submission is fine.

CHAIR —For the purpose of obtaining an accurate record, could you remain behind atthe end of the proceedings so that the Hansard officer can verify information that you haveprovided to the hearing. I now invite you to make an opening statement and then we willproceed to questions.

Dr Friedlander —Thank you very much. It is a great pleasure to be able to make asubmission to this committee. What I have written in my submission basically stands, butwhat I would like to add to that is one sentence out of it which is an amplification of theHindi press response to Australian reactions.

I will briefly give you a few points. On the day after the first Indian nuclear tests,remembering that we were covering the two leading Hindi newspapers, the more serious ofthose two papers had a headline ‘American sanctions imminent’, which had a subhead aboutAmerica and New Zealand recalling their ambassadors. After about 15 centimetres ofcoverage about American responses, there was a small mention of what Australia had done.That is interesting because it grouped together Australia and New Zealand and said thatAustralia and New Zealand called the nuclear tests carried out by India yesterday at Pokhrana ‘dreadful contravention’ of the wishes of the international community and Australia hadrecalled to Sydney its High Commissioner for further talks. It went on to specificallyattribute this statement to Alexander Downer.

The other newspaper which we have been investigating, thePunjab Kesari, which is amore popularist newspaper, said basically the same things. However, the report aboutAustralia had moved to page 12 after about 25 centimetres of coverage of other nations’responses and it phrased slightly differently the statement made by Alexander Downer. Inthis case—this is the Hindi version of it and I am not referring to the English—they decidedto call it an ‘open contravention’ of the wishes of the international community.

On 15 May, which presumably was after Australia had announced its sanctions, theDainik Jagranresponded by saying that Australia had acted harshly towards India. It quotesJohn Howard as saying that Australia, while suspending all cooperation with India apart fromhumanitarian aid and all other forms of aid, cancelled all official visits and that he said thathe had done this as a response to the Indian nuclear tests.

In my submission I gave you a copy of a cartoon which appeared on 15 May. It has arather strange little caption underneath it. I should point out that, with these satirical cartoons



in Indian newspapers, the phrases underneath them are normally based on pieces of classicalpoetry which have been adopted to modern purposes. This one says, ‘100 Ghauris’—

which is the name of the Pakistani missile—‘cannot harms us, let alone one. India’s nuclearcapability has astonished everyone, my friend.’ Mr Vajpayee says, ‘Friends, we have given asign to our enemies. For us, India is the most important thing of all.’

The newspaper’s actual coverage of Australia’s response and its imposing of sanctionswas again relegated to a very minor position on page 12, on what you would call the ‘slops’of the newspaper—coverage left over from other pages. These are the only principalmentions made in the popular Hindi press of Australian responses to the Indian nuclear tests.The only following mentions were on the 19th and 20th when Mr Fischer was spoken of, butonly in the context of what Rama Krishna Hegde, the Indian trade minister, had said to himat the World Trade Organisation in Geneva.

Similarly, following the Pakistani nuclear tests, there was very little mention of whatAustralia said in regard to it. There was mention in both papers of the fact that it causedAustralia to withdraw an offer of doubling aid to Pakistan and also a mention of a commentmade by John Howard—who, oddly, is listed as being the agriculture minister of Australia—in which he said that it was very dangerous for India and Pakistan to be involved in anapparent game of ‘I can do better than you’. That was the total of Hindi press coverage ofAustralian responses.

One thing that is quite interesting is this phrase about the open or dreadful contraventionof the wishes of the international community. It was reported differently in both papers. Themore serious paper decided to use a word which is more appropriately translated as‘dreadful’ and the other one said it was in ‘open’ contravention. To be frank, I cannotremember what John Howard actually said so I cannot compare it at this instant.

I would like to finish up my brief starting submission by saying that the importance ofmaking the committee and Australians aware of what the Hindi language press says is that itreflects a much larger section of Indian public opinion that that which is represented by theEnglish language press. Although it may be the case—and I am sure it is in many ways—that the elite Indian figures who take part in the actual governance of the country are mainlyconcerned with what is said in the English press, they must also be concerned with what issaid in the Hindi press, which is read by the general voters of northern India. It representsperhaps a set of opinions which Australian people should be aware of because it will alsoinfluence Indian politicians.

Senator QUIRKE—We have received a lot of evidence that our relationship with Indiahas been damaged. It seems that most of our witnesses talk about India rather than Pakistan.Obviously what you are saying is that that is not so, that they really do not know where weare and they do not very much care. Is that the message I am getting?

Dr Friedlander —To some extent that is correct. Apart from these minor mentions ofAustralia in the popular press, there are no mentions of Australia. I am not sure whether itwould be possible to say on this basis that it was harmed or not harmed, but what does seem



to come out of the study of the Hindi press is that Australian protests were ineffective on apopular level.

I do not think that the statements which were reported would necessarily be regarded asvery beneficial to Australian influences either. For instance, in one of these articles,immediately after Alexander Downer’s statement about the grave contravention of the wishesof the international community, the Prime Minister of New Zealand is quoted as sayingsimply that it is a matter of grave concern, which might be of a less inflammatory nature.But, again, he is relegated to a very low status on the whole thing.

Senator QUIRKE—Do you think that is true further up? Do you think that damage hasbeen done to the relationship between Australia and India within diplomatic or governmentcircles? You are talking primarily amongst the voters.

Dr Friedlander —There is no way that you can say that on the basis of our studies ofthe popular press in India. I could give you a personal opinion, and that would be that I donot think it could have done any good. But I cannot see either that it has greatly affected iton the evidence of what that might influence people to think about their electorate.

Senator QUIRKE—Did the Hindi press have much comment from other countries aboutthese particular episodes?

Dr Friedlander —It did. It is quite striking that, despite the fact that there is so littlecoverage of Australian responses to the nuclear tests, there was very extensive coverage ofresponses from other countries. In particular, there is a very large amount of coverage in theHindi press of American responses to the nuclear tests. It is not an unusual situation to have,say, 15 or 25 centimetres of coverage of American responses and then one centimetre ofAustralia.

Often what you find is that the concentration is on responses and reactions to American,Japanese and European statements about the Indian tests. As an observation—which is notimplicit in the material—it seems to me that often they talk about the amount of moneywhich may be stopped coming to India due to these responses. So the Americans, as theymanipulate the large amount of aid towards India, receive a very large amount of coverage.The Japanese, also, are often mentioned as being major donors to India. The Europeans arementioned partly because of the German response, which was not favourable towardssanctions. The British are also mentioned in that way. There is very little mention ofAustralia.

Senator LIGHTFOOT —Dr Friedlander, you mentioned inter alia that Australia was notmentioned to any large degree in the Hindi press. I imagine there would probably be a littlemore in the English-speaking press, but even then not to a large degree. Would that becorrect?

Dr Friedlander —My perception is that. Australia is mentioned to some degree in theEnglish press, but nothing like that in the Hindi press.



Senator LIGHTFOOT —I recall reading a submission from a witness this morning thatmentioned that Pauline Hanson, for instance, may have been a detracting factor—philosophically at least—in students coming to Australia. If the Australian nation is notmentioned in the Hindi press to any degree and is not mentioned in the English speakingpress much more than that, how is it that one person could possibly have an influence on anation of nearly a billion people, even to minuscule degree?

Dr Friedlander —I think that the answer to that would revolve around the notion that,despite the fact that there is a large English speaking community in India, it is still onlyaround three or four per cent of the people. The number of people who speak Englishfluently is not large, whereas the number of people who speak Hindi is estimated atsomething like 280 million. The number of people out of the community of three million orso who are English speakers who would travel abroad to come here to become students, forinstance, would be disproportionately large. Any coverage in the English press of an issuesuch as Pauline Hanson would impact directly on those groups who might be coming here.

Senator LIGHTFOOT —So that has a magnifying effect on those people because oftheir language and because of their travel orientation?

Dr Friedlander —Yes.

Senator LIGHTFOOT —That was only just by the by. By the by the by, you said thatHindi is the largest language by far spoken in India. What do the other 700 million peoplespeak, if only 280 million of those speak Hindi?

Dr Friedlander —It is broken up between different regional languages, none of whichare individually as large as Hindi.

Senator LIGHTFOOT —Are all or the majority of them Sanscritic?

Dr Friedlander —The four languages in the south of India are derived from a differentlanguage group, called the Dravidian languages. Tamil, which is a big language, Malyalam,Kannadu and Telegu are the majority languages in the south of India. I have not broughtfigures with me for the total population.

Senator LIGHTFOOT —Are they all Dravidian?

Dr Friedlander —They are the four Dravidian languages. In the north of India, you alsohave Punjabi, Gujarati and Bengali.

Senator LIGHTFOOT —Punjabi would be a Sanscritic language?

Dr Friedlander —Yes. All of the northern languages are related in one way or another toIndo-European and Sanskrit languages.

Senator LIGHTFOOT —I understand it is the oldest written language in the world.

Dr Friedlander —Some people would like to say that.



Senator LIGHTFOOT —At least cursively speaking.

Dr Friedlander —Many protagonists of northern Indian and Indian culture will tell youthat it is the oldest language in the world. The fact is that it is a very old language, but wecould also say that English is a very old language because it is derived from Indo-Europeanroots as well. It is not an unchanging phenomenon.

Senator LIGHTFOOT —As are about 99 per cent of the other languages in Europe.

Dr Friedlander —Exactly.

Senator LIGHTFOOT —With respect to the problem on which we are trying to extractevidence today, what threat, if any, is China to India, as we speak? I noticed that there is amaintenance on India’s north-east frontier of a significant armed force, but it is nothingcompared to what India could mount. Does the reduction in that area of potential conflictmean that that is a diminishing possibility?

Dr Friedlander —Again, I would like to try to answer that by talking about theperceptions in the Hindi press, rather than giving my own personal opinions. It seems to bethe case that the Hindi press gives a certain amount of coverage to the threat from China,which it perceives in two major ways—one of which is indeed north-eastern Tibet, and theother of which is Chinese aid to Pakistan. Chinese aid to Pakistan feeds into the majorconcern of the popular press in India in the Hindi language, which is that Pakistan is themain threat to India’s security. In the Hindi press, there has been, since the BJP came topower, a certain number of reports of speeches made by George Fernandes, the defenceminister, who has on a number of occasions made statements about the Chinese threat toIndia. Those reports were picked up and widely circulated in the Hindi press, but theyapparently did not generate as much fervour as the material which related to the old enmitywith Pakistan. It seemed that the only times when they did stir up a lot of interest andinfluence—for instance, in creating editorials in the newspapers—was when they remindedpeople of the Indo-Chinese war in 1962 and when there was a great deal of talk about ‘theneed to maintain awareness on all fronts for defence purposes’.

Senator LIGHTFOOT —With ‘all fronts’ being?

Dr Friedlander —With ‘all fronts’ being ‘all around India’, both the Chinese threat—

Senator LIGHTFOOT —But not at that stage Ceylon, or Sri Lanka as it is now called.

Dr Friedlander —Sri Lanka is not perceived in the Hindi press to be in any way a threat.The Hindi press is primarily, after all, reflecting the interests of northern Indians, which isthe area that it works from. Sri Lanka features very low in its priorities. Its interests are inthe north of India. There is also a substantial difference to be noticed between newspaperswhich come out of UP—the main state of India, with a population of 140 million, which isproportionately nearer to Tibet and China and which has perhaps a little bit more coverageof those issues—and the other major newspaper we looked at, thePunjab Kesari, which isbased in the Punjab, which featured many more articles about the Pakistani threat to the



security of the area and the Kashmiri issue as a possible cause of problems for Indiansecurity.

Senator LIGHTFOOT —Within the national boundaries of India is the second largestMoslem population in the world, after the 200 million people of Indonesia. Is there aperception of a threat from those people, based on some affinity or empathy with Pakistan?

Dr Friedlander —A series of articles by people from the Muslim community in India hasappeared inPunjab Kesari, talking about how the Indian Muslim community is an integralpart of Indian society.

Senator LIGHTFOOT —Do you believe that?

Dr Friedlander —Yes, I do. This is not something that comes out of the newspapers butfrom what I can see from having lived in India for many years, which is that most IndianMuslims do not necessarily identify very strongly with Pakistan. They identify more withbeing Indian Muslims, and that is also a line which has been pushed in the Indian Hindipopular press.

Senator LIGHTFOOT —Is nationalism stronger than sectarianism in this case—not inall cases, but significantly so?

Dr Friedlander —Yes. In some senses it would be possible to say that nationalism isstronger than sectarianism because, although there have been attempts in the press to talkabout the differences between the two communities meaning that they are entirely separate,there has been no attempt in anything other than the most extreme pieces of reporting toindicate that the Muslims of India are not Indians; rather, there is a desire that they shouldbecome more Indian. One report was relevant to your question. It was a report on astatement by the VHP—one of the ultra right-wing Hindu organisations—claiming that, afterthe Pakistani tests, it would be necessary to search all the mosques in India for weapons. Butthis is very much a minority viewpoint and it is not reflected in general press coverage ofthe Indian Muslim community.

Senator LIGHTFOOT —So the short answer is that there does not appear to be anythreat to India from within its national boundaries from the Muslim Indians.

Dr Friedlander —I would qualify that only by saying that there is considerable disquietabout Kashmiri separatists who are within the bounds of India.

Senator LIGHTFOOT —Yes—but that aside.

Dr Friedlander —Yes, but the Muslims of UP, Bihar, Madhya Pradesh and Rajasthanwho are written about in the Hindi press are not spoken of as being a threat to nationalsecurity generally.

Senator LIGHTFOOT —What is the land route, if there is one, from India to Pakistan?One assumes that it is not appropriate to send some of the hardware that is supplied byChina by airmail. Is there an established land route?



Dr Friedlander —The Indian newspapers in Hindi speak widely of the smuggling ofthings across the border in between India and Pakistan, not simply in terms of armaments,but also narcotics and other prohibited items. Obviously, a certain amount of legitimate tradegoes on through the various border posts between India and Pakistan. I know of one betweenAmritsar and Lahore which is a route which trade comes through. I believe there are alsoroutes for trade between Gujarat and Sind province, but that does not get much attention inthe Hindi press. What gets attention in the Hindi press is the threat posed by smuggling.

Senator LIGHTFOOT —That is an economic threat.

Dr Friedlander —No, it is often a threat to law and order because the threat is that,through the importation of narcotics, society is being destabilised. This is not seen as beingparticularly a Pakistani threat, but more a threat to the very fabric of society. The other thingwhich is being complained about in the press is the importation of armaments, not so muchto terrorists but mostly to gangsters in India from Pakistan and, ultimately, they always say,supplied by the Americans to the Afghanistani freedom fighters, but then dispersed through-out Pakistan and then sold on into India.

Senator LIGHTFOOT —With what appears to be a mopping up operation by theTaliban in northern Afghanistan, where will the Taliban direct their not inconsiderableenergy and zealotry next? Is it going to be into Pakistan?

Dr Friedlander —It is not a factor here. The Hindi press has had very little interest inthis particular issue. What it has regarded it as is a problem that the Pakistanis have createdfor themselves, but it is not addressed in the Indian press in terms of whether that will thencreate problems further down the line for India. I am not doing direct work on the Pakistaninewspapers at the moment, so I cannot tell you what the Pakistani press might be reportingabout that.

Senator LIGHTFOOT —Logically, it seems that, if the Taliban are true about theirambition to Muslimise to their particular sect, their energies could be directed towards whatis a weakened Pakistan. The secondary reason for that would be the establishment of a portthat would serve a greater Afghanistan, if I could put it that way. You have no evidence ofthat?

Dr Friedlander —There is no evidence from the Hindi press at all of any great interestin what might happen as a result of the Taliban takeover of Afghanistan leading to greaterpressure on Pakistan.

Senator LIGHTFOOT —I have one more question. With respect to the nuclear devicesexploded on the subcontinent, in the short, medium and long term—please deal with eachone—do you think the mere possession of those weapons will emulate, partially at least, andhopefully superimpose, the lack of a war of any great nature—the Korean War and theVietnam War aside, and the Malaysian emergency to a degree—between the formersuperpower of Russia and the United States? In other words, are we looking at a microcosmto some degree of what happened between the United States and Russia?

Dr Friedlander —Mutually assured destruction, leading to a lack of conflict.



Senator LIGHTFOOT —Yes.

Dr Friedlander —There was considerable coverage in the Hindi press that if wepossessed the nuclear bomb we would not then be in a position to be attacked by Pakistan.Interestingly enough, the Hindi press also reported statements out of Pakistani newspapers inUrdu which were saying the same, that the defence of the nation would be ensured by thepossession of nuclear weapons. On the other hand, this has not fitted in at all with the factthat since the nuclear tests they have continued to have considerable conflicts in Kashmir.Inconsistency is the last refuge, the saying goes. The fact is that the newspapers have notconcerned themselves about this apparent conflict between the fact that at one pointpoliticians have been saying that we will now be secure because we have these weapons andyet we continue to have this problem. Immediately after the nuclear tests there werenumerous reports saying things like, ‘The exploding of the nuclear devices has wiped thesmiles from the faces of the terrorists in Kashmir because they now no longer feel empow-ered, as they once were.’

You must bear in mind that the Hindi press also presented the entire series of Indiannuclear tests as a response to the Pakistani program of rocket tests, which were seen ashighly provocative. The naming of the first rocket tested as Ghauri after a famous conquerorof northern India who was a Muslim and a projected second rocket called Ghaznvi, namedafter a second famous attacker of northern India, were seen as being directly provocative ofIndian interests. So there was a certain amount of reporting saying, ‘Now we have got thenuclear bombs, things will calm down.’ There has been no real addressing of the issue ofhow come this actually has not happened at all.

Senator LIGHTFOOT —Another time in another place I would like your opinion onwhether you think there is a nexus between the Dravidians of southern India, the Ainu ofJapan and the Australian Aborigines, in an anthropological sense. I thank you for answeringthose questions.

Senator EGGLESTON—I know your interest is in the Hindi press but I presume, beingthe academic gentleman you are with wide interests, you might have read some of the moreintellectual press and magazines. Is there comment in that kind of magazine, if there is aBulletin or New Statesmanequivalent in India, about the nuclear tests? Is there an internaldebate about the wisdom of India taking the pathway that it has? Is there criticism of thegovernment for doing it?

Dr Friedlander —There has been, both in the Hindi press and in the English press. Ihave seen debate about the wisdom of doing it at this precise time—not necessarily thewisdom of doing it, but of doing it at this moment—and the wisdom of claiming that Indiais a first world power in terms of nuclear capability while not being able to deliver aneconomic first world status to the country.

Senator EGGLESTON—That is very interesting.

Dr Friedlander —So there seems to have been a number of occasions when those twoissues have been raised. There was also a third issue raised which was that, at a time likethis, it is necessary for a national consensus. In other words, there was a degree of dissen-



sion about how one should regard dissension over the nuclear issue. There were a number ofreports in the Hindi papers, and some things I saw reflected that in the English press, whichsaid, ‘At this time, having made this move, we must have national consensus on this issue.’So there was an attempt, basically, to say that we should not allow protests to be vocalised.

Senator EGGLESTON—So that was close to the event, that they now had to get behindthe government and support what they had done?

Dr Friedlander —Yes, as a fait accompli.

Senator EGGLESTON—Another thing that you mentioned, which has come from a fewwitnesses, is the equating of the ability to explode a nuclear weapon with world powerstatus. Was that questioned in these more intellectual press articles in the sense that theargument was put that, really, the criteria should have been economic performance, feedingthe country, providing jobs, et cetera—all the conventional markers—rather than thissymbolic gesture of creating a nuclear weapon? I am fishing for the degree of dissent.

Dr Friedlander —I would not limit that only to the intellectual press, though. There wereseveral interesting columns which appeared in the Hindi press. An interesting factor I shouldpoint out is that the works of many of the columnists who write in Indian newspapers appearsimultaneously in English and translated into one or more regional languages, so that in theHindi press you are getting a kind of mixed impression out of the columns. They commentedon the fact that economic status is something of great importance and that one of the twopromises made by the BJP, many people said, was that when they came to power they wouldensure the defence of the country but also ensure the economic growth of the country, andnow that the government has delivered on one of those promises, shouldn’t it set aboutdelivering on the other of those promises.

So there has been considerable linkage of economic factors and the nuclear tests. Therewere also several quite telling articles saying, ‘We are celebrating our nuclear defenceachievements in total darkness due to the lack of electricity,’ and, ‘About the same time asthey were doing this, we were also experiencing unprecedented shortages of electricity, waterand basic amenities.’ So although the creation of jobs, which might in many Westerncountries be one of the major criteria, is in there as a factor, the provision of basic utilitiesand facilities was much more a thing which was spoken of.

Senator EGGLESTON—How deep does that go? Is there a sense that the governmenthas its priorities wrong?

Dr Friedlander —There seemed to be considerable disquiet in the Hindi press aboutwhether the government did in fact have its priorities right. It seemed to be a reflection of aview that there was a degree of political—it was mentioned that the BJP government is acoalition of many diverse elements and that it seemed to be very hard for them to actuallyfind an economic policy that they all concurred with. It seemed that the Hindi press was ableto point out that there was no dissension on the matter of defence. It was one common issueon which a platform could be created whereby all the coalition members were able to sticktogether. But there was great disquiet in the Hindi press about the budget which wasintroduced after the nuclear tests, about its impositions of higher levies and taxes.



Senator EGGLESTON—That leads me to a last, but related, question: to what extent isthere political opposition in India to the nuclear tests?

Dr Friedlander —One of the advantages of reading the Hindi press as opposed to theEnglish press is that it does give you a degree of fine detail which is then lost when youread the English language press in northern India. It was apparent in the period after thenuclear tests that some political parties did have objections to the nuclear tests. There werementions that the Akali Dal, one of the Sikh parties, was not in favour of the nuclear testsand had not directly voiced that but had failed to make the right supporting statements at thecorrect time.

There were also discussions in the Hindi press of whether the government was reallyunited on this action. There were mentions of the fact that it seemed that George Fernandesmight have been acting in ignorance of the fact that nuclear tests were about to occur andthat there was a degree of disunity between his political views about the defence of Indiaand those of the Prime Minister, Atal Bihari Vajpayee. These were particularly mentioned inrelation to debates about Indo-Chinese policy where it was said that Atal Bihari Vajpayeewas putting forward a view which in some senses was seeking to be very tough on theTibetans in other issues which were of dispute between them, whereas, George Fernandeshas a view which was obviously much different because it was based on the idea that oneshould support the Tibetans and other groups who were opposed to the Chinese regime inpower.

So there was no clear statement of what exactly was happening, but there was consider-able discussion in the political comment columns about whether the government was unitedand had the government done all of these actions with sufficient forethought. Certainly therewere a number of columnists who would say yes, the government has done this with greatforethought and consideration, but it was not a unanimous view of the Hindi press.

Senator EGGLESTON—That is quite interesting. You are saying there was a differ-ence, that maybe the Minister for Defence—that was Fernandes, was it?

Dr Friedlander —Yes.

Senator EGGLESTON—Did not necessarily know the test was about to happen.

Dr Friedlander —That was a speculation in the Hindi press after the nuclear tests.

Senator EGGLESTON—Just to round it off: from our point of view in this committee,how would you categorise the level of support for the test and the level of dissent in India?Is that possible to do?

Dr Friedlander —Yes. One way that you could make a measure of that, as opposed tome just giving my opinion, would be to say, all right, so we had these nuclear tests andwhile they were going on there was a considerable amount of coverage of them, but to whatextent was the majority press coverage still maintained on the main themes which dominatedthe newspaper throughout the last 20 years or so? The answer is in fact that most of thenewspaper content before the nuclear tests and after the nuclear tests still focuses not on the



nuclear issue but on issues of economic difficulties in India due to the corruption, thebreakdown of law and order in some areas of India and the dangers of terrorism in someareas. There is a difference between the two newspapers that we studied.Punjab Kesarimight devote at least 25 per cent of each issue, in one way or another, of news content toterrorism, whereas theDainik Jagran, which is focused on the state of UP, would devote anequal amount of coverage to corruption. So it reflects, I think, the overall interests of thepopulations of each of those states as perceived by those newspaper proprietors.

The other point is: how do the newspapers articulate the relationship between the greatnational achievement of exploding a bomb with the every day affair of the policeman whoasks for a bribe, or the bridge which is not built with the correct materials, or the employ-ment scheme which is not actually put into effect? The newspapers clearly, in a way, choosenot to comment on that, but they continue to report that basically all these things arecontinuing to go on, and it has not been affected by those nuclear issues.

Senator EGGLESTON—So could you perhaps suggest that most of the readers of thesenewspapers might actually be indifferent to the nuclear explosion? It might not really mattertoo much to them at all: ‘So what? I’ve got to fix this bridge.’

Dr Friedlander —There is a great sense in which that does appear to be the case. I thinkthere is an element of people perceiving this as a matter of honour, and that might be morewidespread. That is a kind of superstructure level of people’s thinking, in comparison withthe basic difficulties of everyday life, which is apparently much more what the Hindi pressreflects. In my opinion, based on what we have looked at, the answer is that most people areactually not that concerned about the nuclear tests.

Senator EGGLESTON—Out of indifference.

Dr Friedlander —Out of indifference, yes; or out of sheer inability to devote that muchtime to thinking about them. That is what the press seems to depict, anyway.

Senator EGGLESTON—Thank you very much, Dr Friedlander.

CHAIR —There was one thing that struck me with what you said: is there any differencebetween what we would consider to be the editorial as opposed to the popular reportingwhich may be done by journalists in the Hindi press on the testing?

Dr Friedlander —Yes. With the editorials, I think it is inevitable that the content of thenewspaper will to some extent reflect the views of the editors of the paper, otherwise theyare not going to allow it to be in there. On the other hand, in the editorials they seem toallow themselves to speak more freely of matters than they would when they let theirreporters write about things. There has been, and remains, a tendency for the two newspapersthat we studied to reflect somewhat different views of what is going on. The newspaper fromUP, theDainik Jagran, is more conservative and right-wing, and it is more strident in itsexclamations of national pride, whereas thePunjab Kesarihas two different editorial writerswho both sign their editorials so you can tell who is who when they write about things. Ihave been in correspondence with them, and they divide the editorials up and it is theyounger one who writes about foreign affairs. His views on it have been a mixture of



somewhat jingoistic utterances combined with a personal axe which that newspaper has togrind. It so happened that the day on which the Indian nuclear tests took place was theanniversary of the assassination of the founding editor by Sikh terrorists—this happened 20years before—so that newspaper was unable to disentangle the two issues and regarded thenuclear issue as intimately related with terrorism and with that newspaper’s own right toexist.

The editorials are a strange and marvellous bunch of things. They do not necessarilyreflect the full coverage of the news which appears in them. I should also point out thatmany of the columns which appear in the newspapers are syndicated columns that runthrough all different Indian newspapers, and there is an extent to which they are edited whenthey come into each newspaper to fit in with the views of that newspaper. So you do findthings being expunged from one version and then edited back into another version. It is not aclear issue. Perhaps I should just leave it at that.



[3.09 p.m.]

OXLEY, Mr Alan Robert, Director, International Trade Strategies, Level 2, 60 CollinsStreet, Melbourne 3000

CHAIR —I welcome Mr Alan Oxley to this hearing. The committee prefers all evidenceto be given in public, but should you at any stage wish any part of your evidence to be givenin private then you may ask to do so and the committee will consider your request. Thecommittee has before it a written submission from you. Are there any alterations or additionsyou would like to make to your submission at this stage?

Mr Oxley —No.

CHAIR —I now invite you to make an opening statement and then we will proceed toquestions.

Mr Oxley —Thank you very much. We have focused a great deal on the strategicimplications of the resurgent nuclear arms race in the Indian subcontinent. I find the parallelin the relationships between India and Pakistan and between Brazil and Argentina striking.Ten years ago Brazil and Argentina would have been regarded as comparable potentialnuclear powers like India and Pakistan are.

About five years ago I remember opening the daily issue of theFinancial Times—at thattime I was working for the government in Geneva—and on the front page it showed thePresident of Brazil shovelling a sod of earth into a hole in the ground which was in fact theBrazilian underground nuclear test site, which until that time had been known by westernintelligence but had never been owned up to by the Brazilians. I thought this at the time wasquite a startling public demonstration of disavowal of nuclear weapons intentions by Brazil.

Until that time, the Argentine navy—and in both cases the armies and the military forcesin those countries—had been running nuclear programs. The Argentines also changed theirposition. Both, I think, signed the Treaty of Tlatelolco, which is a South American treaty toprevent proliferation of nuclear weapons. I think since then both have joined the NuclearNon-proliferation Treaty—I am not sure. Until that point neither would accept restrictions ontheir right to create nuclear weapons. Both had covert nuclear weapons programs. Both hadactive civilian nuclear programs to give themselves a nuclear fuel cycle.

Around about the same time, both countries agreed to form a free trade area or acommon market. Today we find Brazil and Argentina have never had a higher level of trustin each other, have never had a higher level of economic integration and are buildingsecurity through economic integration, as opposed to 10 years ago when they had high tradebarriers against each other and both engaged in a nuclear arms race against each other. Ithink it is a very interesting reflection in today’s world on the significance of the use ofeconomic integration as a means of achieving security.

The resurgence of the arms race between India and Pakistan shows you the absolutereverse. If you look at the public policy pronouncement between the two countries, claiming



to build some sort of regional free trade agreement, claiming to increase trade with eachother, you find that actions do not match the words. Here we find, I think, a sharp contrast.This is the main reason why I was interested in putting a position before this committee. Ithink in today’s world we have not paid enough attention to the reality of globalisation as aninstrument for securing international security. That was really the reason I put the submissionin.

Senator COOK—You have a reference in your paper to France and Germany. Is thatanother example of where economic cooperation has eased military tensions?

Mr Oxley —It is an earlier example. That is right. I did use that in the paper. I think it isinteresting today that we would not contemplate the idea of France and Germany going towar. Yet until 1945 they went to war three times in the previous 70 to 80 years. The reasonthe European Community was formed in the aftermath of the Second World War was tobuild economic interdependence and interreliance between the two great continental rivals.Today we see economic integration proceeding at a very significant pace. The EuropeanCommunity is something that cannot be reversed. It used the building of economic relation-ships to achieve security in Europe, and there is no doubt that it is a success. We no longertalk about continental war among the western powers in Europe. We probably never willagain. Again, I think it illustrates the point.

Senator COOK—There are some who, in looking at post-war economic history, wouldargue that one of the reasons behind the economic resurgence of Germany and Japan—and,to a lesser extent, but nonetheless also true, at a lower order of priority, Italy—is the factthat they have no diversion of economic resources in building up nuclear weapons capability.Juxtapose that to the case of the former Soviet Union which had a massive diversion ofeconomic resources ultimately, so the argument would go, leading to lower economicoutcomes for their citizens and, as a consequence, collapse of their system of government. Ithink the colourful military analogy is that the so-called knight died within the armour of thenuclear shield. That is the reference to Russia. Firstly, is that a reasonable sort of thesis? Ifyou in some qualified way think it is, is there anything you could add about the liberation ofeconomic resources by moving off a weapons development or ‘war agenda’ onto aneconomic development ‘peace agenda’?

Mr Oxley —I think it is less to do with the diversion of the resources than the distractionof attention. Again, if I could go back to Latin America, if we think back, something elsehappened in South America at the same time. We have seen the end of military coups. Wehave seen for the first time now more countries in Latin America that are democracies thanare not. In the case of Latin America—and I think we have seen the same thing in Asia—where governments have felt secure about what they are doing then they can devote time andenergy into getting the economy right. So it is not so much a matter of military diversion ofresources in more open market economies which inhibits economic development; it is thefact that if there is a sense of insecurity in the state then time and energy is devoted tobuilding security, one consequence of which is to build nuclear weapons capabilities.

The reality is that nuclear weapons are relatively cheap compared with building vastconventional armies. But I do think another factor comes into it. I think there is a certainparallel between the old Soviet Union and India in which you have had relatively closed



economies and in which a state apparatus is given higher importance to security than to otherissues. That has meant that certain resources and the management instruments of the statehave supported the security objective rather than economic development. So I think that is abigger parallel between India and the Soviet Union.

Senator COOK—Some of the evidence before this committee goes to the point ofnational pride by demonstrating to the world nuclear weapons capability both by India andPakistan. I cannot think of putting this question in a harder way. It sounds a bit too soft formy normal form, I have to tell you. In terms of global economic respect, influence and,indeed, global raw power, you could not say that the non-nuclear weapons economic powerslike Germany and Japan, for example, lacked anything in national respect or internationalregard. Is there a lesson here for countries that want to take their standard of internationalimportance by virtue of the weapons they possess or the strength of their economies?

Mr Oxley —Absolutely. The nuclear weapons option was not available to Japan andGermany. Even if it was, the degree of influence they have found in the world has been aconsequence of their economic strength. One of the other marked features of this world welive in now, which has been shaped and emerged in the last 50 years—and I think will runfor another 100 years or so—is that basic economic strength is now the instrument throughwhich nations have a role and exert some influence.

You might actually look at the United States and Soviet Union and ask: why has onegrown to greater strength and why has the other collapsed? In fact, the one that collapsedarguably may have had a bigger nuclear potential. The other had the greater economicstrength. If you compare Vietnam and Thailand in 1950 with today—one is now in a lot oftrouble, but until the currency crisis—why was one able to lift the level of the standard ofliving in its community so high and enjoy a degree of influence larger than it had everenjoyed in regional affairs and the other struggled with low standards of living and is stillstruggling to build? I think we would have to say that it is because of the type of economicstructure that it created.

The lesson for India is that it has chosen the wrong path to try to achieve a global status.Despite all the things that are said about India, and despite India’s special claim to be adeveloping country and what have you, if you look at the performance of India as a globalpower it has attempted to behave since the day it became a national state as a subglobalregional power. It is the same with China. I see no difference in the behaviour of India,Russia, the United States, China and France in how they have comported themselves ininternational relations. India has sought to achieve its position in the world by achieving acertain military position and strength and has neglected its economic strength. That isprobably why it exerts a far smaller role in global affairs than it would aspire to.

Senator COOK—One of the things we have to turn our minds to in this reference is ajudgment about what Australia should do, bearing in mind our status and influence in theworld and our relationship with India, to the extent that we have special relationships withIndia. Do you have any suggestions to offer as to what we might do, given what you havesaid, now that the tests have occurred, the capability has been blatantly established and wehave made our protests? The dust is settling on that round. What steps should now follow tobe constructive about containing this issue?



Mr Oxley —I contend that there is really no significant change in the environment. Eversince 1974 it has been known that India has had a nuclear capability. Whether they explodedfive bombs last week, the week before or five years ago does not really make a great deal ofdifference. They were a near nuclear player. It is the acquisition of capability, not theholding of weapons, that creates the global influence, so everybody has treated India as aneo-nuclear power ever since 1974. The fact that they popped the five weapons so quicklydemonstrates that they always had that capacity.

We have taken a range of positions. We tried to increase the global pressure to containIndia’s nuclear proliferation. The threats apply at two levels for us. Any country which has anuclear capability and which is capable of delivering to Australia, and this is the case withIndia, is something that we should be concerned about and bring maximum pressure to bearto reduce that threat. Secondly, the emergence of a nuclear state which does not want to playby the rules is a threat to the global arrangement and diminishes the global structure whichwe currently have, and in which most countries are discouraged from having nuclearweapons. So we should continue our efforts through the United Nations to push for theimplementation of various non-proliferation nuclear arrangements such as the CanberraCommission, which is the latest step in a series of programs in that area. We should be vocalabout that. To the extent that we have some influence in India in our range of relations weshould exert it. Basically the set of responses that we have followed through as a nation fitthose interests and are about right.

Senator COOK—One of the themes of the evidence given to this inquiry thus far hasbeen that India felt internationally shunned, or isolated, to some extent because its perceivedcredentials for membership of the Security Council were not encouraged by the otherpowers, and it was excluded, in this case by Australia, from being considered for member-ship of APEC. There has been a range of international snubbings or events that led to itsbelief that it was being isolated. India was excluded from the ASEAN talks as well. It hasbeen put to us that those incidents bred in India a sense that they had been rejected by therest of the world, leading to, you might say, an assertion of its importance symbolicallythrough the testing of nuclear weapons. That has been put to us as one part of a complexseries of motives for doing so. I do not want to put too much weight on this. From aneconomic point of view, are there any initiatives that we might take that are appropriategiven our influence and ability to bring about outcomes that might ameliorate the situation?

Mr Oxley —First of all, I do not think in any way it is true that any sense of globalsnubbing by India contributed to this action. There is no doubt that it was done for domesticpolitics. India has always behaved as a subglobal power—its whole style and demeanour isof that. Frankly, while its diplomats may claim to be snubbed, they never felt snubbed. It isa country with a wonderful sense of self-confidence about these things.

In terms of what we should do economically, evidently it is in our interests to encourageIndia to continue down its path of market reform and to encourage it to try to take actionswhich will result in it playing a bigger role in the world economy. In the long run, that is thesolution to its achieving growth. It is the solution to its getting high levels of prosperity and,in the long term, it is the solution to its dealing with its security problems. I do not think weshould argue that it should join APEC because it is not a part of whatever seems to representthat APEC community. They may argue that they feel they are not in it—



Senator COOK—But some would say that is true of Russia, which was a member.

Mr Oxley —I would agree with that, as a matter of fact. I do not think we shouldactually have put Russia in either. But sometimes great power politics gets in the way ofcommonsense. There are other things, but indirect. We have not got a role to play inencouraging India in that. But in all the things that we do we should try to encourage Indiato continue this process of market liberalisation. They are the things that we should be doing.

Senator EGGLESTON—I do not have any questions for you. You have confirmed a lotof my views in what you have said.

Senator LIGHTFOOT —Mr Oxley, India seems to be lumbering towards becoming aneconomic behemoth within its own region. Does that present a problem to Pakistan,Bangladesh and Sri Lanka?

Mr Oxley —I think it would be less of a problem than its trying to be a militarybehemoth.

Senator LIGHTFOOT —Perhaps it is both.

Mr Oxley —If you look at India’s relationships with its neighbours, it had a war withChina, it engaged in invasions of Sri Lanka, it has had three wars with Pakistan and it hasintruded in relationships with Pakistan. No neighbour of India has had a nice time in itsrelationship with India. That is what I mean by saying that this is a state which has behavedlike a subregional global power. It has behaved like a classical great power. Life is uncom-fortable for any state which lives around the edges of the United States, China, pre-WorldWar II, the Europeans. The Indians have behaved in a classical way: a nation seeking todictate and control its region.

Senator LIGHTFOOT —But they are not acolytes of India, as yet, like the smallerstates of Bhutan and Nepal are. Do you mean they are economic prisoners?

Mr Oxley —Some of them are prisoners. If you speak to Sri Lankans, Bhutanese,Nepalese or people in the Maldives, you will find there is a very uneasy relationship withthe Indians. You may remember the Indian invasion of Sri Lanka a few years ago. It helpedthe Sri Lankan government deal with the Tamil Tigers, but it was a bit like having the Mafiahelp you out—it was a very uncomfortable thing. That is what it is like having a relationshipwith a great power and getting entangled with them militarily. I do not think we should beglossy-eyed about India; it behaves in a very classical way.

Senator LIGHTFOOT —But its behaviour is almost predictable, isn’t it?

Mr Oxley —As any great power trying to throw its weight around in a region, yes.

Senator LIGHTFOOT —If you could look through India’s eyes, what sort of threat doesIndia see China being? Does it see it as competition? Does it still see it as a military threat?



Mr Oxley —Presumably they would see each other as rivals, and they are prettyuncomfortable rivals.

Senator LIGHTFOOT —Commercial rivals?

Mr Oxley —No, not anything like it yet. The Indians exert nothing like the influence inworld economic affairs that they should for the size of their economy and the amount theytrade. It is a very interesting window into how closed their economy has been. I think thatthe percentage of natural products of India which are traded is minuscule compared withmost other countries, which is a reason it really does not qualify to be an APEC member.

Senator LIGHTFOOT —But there is a certain glasnost with India now compared withwhat it was a decade go, even when it was non-aligned but nonetheless aligned with Russia.

Mr Oxley —I hope so. I am no expert on Indian politics, but I must say that I find thisrise of Hindu nationalism in India disturbing. We are seeing a redrawing of the politicalsystem in India and, if it is like any other country, it will take a while for this nation tocome to terms with its national instincts. Looking at many other countries, you tend to findthat they do not get relaxed about their sense of national persona until they have got it out oftheir system, and then they can be prepared to cooperate and collaborate with other people.

It is almost as though the Hindus in India have never felt they have actually controlledthis state in the way they should—and in some ways, it is true. A Hindu state does not existanywhere; this might be the first one. The consensus which the Congress Party put in placein the post-colonial period in India we may actually find is only being worked through; wemight yet be seeing a new national persona for India taking shape. If I could draw a parallel,it is a bit like the influence that Dr Mahathir has wrought on Malaysian politics. Dr Mahathirhas brought a sense of Malay nationalism to dominate Malaysia in a way which was neverpresent among his predecessors because it was suppressed and contained.

If this is true, it is rather worrying because governments which need to achieve their wayby concentrating on nationalism will always put a whole series of other considerations asidefor that. I hope that the nuclear explosions were not simply, as they appear to have been, anexercise of populist nationalism by emerging Hindu governments.

Senator LIGHTFOOT —Hindu nationalism: is that the same as Muslim fundamentalism,or is there a difference?

Mr Oxley —None of them are nice. They are all a problem.

Senator LIGHTFOOT —What is the least nice?

Mr Oxley —It is a form of populism. This is really what they come down to. In a way, Ithink we feel that in Western politics we have reached the point where we would hope thatnationalism is no longer the source of things which cause states to take one action againstanother.



In the Balkans, we have seen that break out again with the break-up of Yugoslavia; it isthat old nationalism where people will put an irrational nationalist impulse ahead of thehealth, prosperity and security of their people. If you look through the history of theemergence of nations, all have done this at some point until they have achieved a degree ofcomfort. It may be that, in the case of Germany, finally the emergence of a state whichcovers something like the location of the German people in Europe will mean that we mightget some peace from them after 100 years or so of war.

Senator LIGHTFOOT —Just going back to Hindu nationalism, I guess what I am sayingis that we think Muslim fundamentalism is abhorrent. There are many expressions of that: inNorth Africa and in other parts of the world, such as the Taliban in Afghanistan. Is Hindunationalism heading towards that sort of zealotry?

Mr Oxley —I cannot answer that. All I would say is that, if it has never had politicalexpression before, often you find, before the systems get their full political expression, themore extreme forms of political nationalism—maybe. I think that is the thing we have toworry about.

Senator LIGHTFOOT —Did Australia overreact to the nuclear explosions on thesubcontinent?

Mr Oxley —I do not think so.

Senator LIGHTFOOT —Did Australia do the right thing in the reaction that it took?

Mr Oxley —I do not think we could have done much else.

Senator LIGHTFOOT —You are quite happy, you are quite comfortable with the actionthat the Australian government took?

Mr Oxley —Yes.

Senator LIGHTFOOT —From your point of view, is Australia paying the price to somedegree for neglecting South Asia? We have had the opportunity, it seems, in that we do havea reasonable amount in common. Why didn’t we take advantage of that commonality that wehad to establish better relationships with India in particular?

Mr Oxley —I guess you could come to the question: why do you establish relationshipswith any country? You can have cordial relationships. You can remove points of conflict, ifthere are any. Then it is the question of what benefits are available for a state for buildingclose relationships.

Relationships with states usually fall into protection of national security or enhancementof economic interest. In the case of protection of national security, India is significant for usbecause for a long time it was the only state in that region which had a bluewater navalcapacity, and in some indirect way we and India were countries which both had bluewaternaval capacity into the Indian Ocean, apart from the United States and Soviet Union.



Senator LIGHTFOOT —But our bilateral trade is really minuscule compared with itspotential.

Mr Oxley —I am coming to the economic side. You trade with countries that are in aposition to buy your products. India is relatively insignificant as a global trading partner foranyone.

Senator LIGHTFOOT —But it makes more than tea and sandalwood sticks these days;it has quite an enormous second industry.

Mr Oxley —What?

Senator LIGHTFOOT —It has a large stationary engine manufacture. It has a largeautomobile and motorbike manufacturing industry that should appeal to Australia.

Mr Oxley —There are the second rate cars which cannot be sold at an unsubsidised pricein a global market; they cannot be exported. Also, the Indian economy is so heavily closedthat it is very difficult for foreign investors to get in there and make a profit. India is, infact, more difficult to do business in than China—and that is saying something.

Senator LIGHTFOOT —Let us talk about something perhaps less technical thanmotorcars and motorbikes. It has a steel industry that Australia could lock into. I know thatIndia uses practically all the steel it produces, but I am speaking of basic steel, railway irons,u-forms, RSJs and so on that Australia could use. Why aren’t we doing that?

Mr Oxley —Ask the companies. In my experience, companies do business where theycan do business. It is simply a truth that it is still difficult to do business in India.

Senator LIGHTFOOT —Where is the bottleneck? Is it a pricing bottleneck? Is itbureaucracy that prevents it?

Mr Oxley —From what I have read—and I will put in the qualifier that I do not know alot about the Indian economy—most areas of business are controlled; it is quite common inIndia for businesses to be regarded as ‘a natural monopolist’. They have the misfortune thento be given a partner in the state. In fact, for some of the businesses, it is like being asked torun a public service department, pay for half the costs and get no profits. So in many areasthe Indian economy, even in its so-called private sector, has this peculiar hobbling wherebyit is tied by this form of government regulation.

There is a stream of Indian economic thinking which says that it is much more efficientto have a single monopolist operating in a market. Now all our economics tell us that it israre when that works. But that is symptomatic of the sort of problem. It is extremelyhidebound with regulations. It is difficult, I think, for companies to get their money out.Alistair can tell you about the banking system. It is a difficult environment for foreigners inwhich to do business.

For our business people I think Indonesia, for all its problems, is a far more hospitableenvironment in which to do business than, say, India. I suspect that is the reason why you do



not see as much economic business between the two. As it opens up its economy, it willcertainly provide significant advantages. Compared with where it was, it is better, but it stillhas an awfully long way to go.

Senator LIGHTFOOT —But the Indonesian economy is about one-tenth that ofAustralia or even less today as a result of its downturn, and the Indian economy is fargreater than Indonesia’s.

Mr Oxley —Yes, but India is probably the biggest closed economy in the world. Most ofIndia’s economic activity is reserved for Indian companies and businesses.

Senator LIGHTFOOT —We said that there was the beginning of a glasnost in Indiaanyway. But, apart from that, should we be supporting India? India seems to be miffed, fromthe evidence we have taken. I have not spoken to any Indian national who has said, ‘We aremiffed because you did not support us in joining APEC.’ You might as well have Portugaljoin APEC; the acronym would have no meaning. If India is to be able to join APEC, let usmake it something other than the Asia-Pacific Economic Cooperation.

Mr Oxley —I will have to pass on the subject of Russia because it does put a big hole inthe argument.

Senator LIGHTFOOT —It does; that is another one, of course.

Mr Oxley —But one hole in the argument does not turn the whole thing over. APECdoes reflect a certain reality, and the reality is a pattern of trade and investment in the AsianPacific region. It is no accident that in East Asia we have seen higher growth rates amongthose economies than in any other region of the developing world in the last 25 years. Thereason for that is that these economies have followed a certain sort of open economic policy.

The other thing that happens to bind APEC is that there are other certain sorts ofcharacteristics. The biggest trading partner of most of these countries is the United States;the biggest investor is Japan. There is a very significant interest of foreign offshore Chineseentrepreneurs operating with linkages.

Senator LIGHTFOOT —But they are on the Pacific Rim.

Mr Oxley —APEC is an entity which encompasses the Pacific Rim economy. India hasnever been part of that. India’s major trading partners are not the United States. India doesnot have an open economy. There is not very significant Japanese investment there. If theeconomic criteria are the things which pull all of these APEC countries together in thisfunny way—and Russia is a terrible exception—then India is not part of that. Even theIndians understand that.

Senator LIGHTFOOT —But should it be part of it?

Mr Oxley —They have to create the conditions.

Senator LIGHTFOOT —Would it be in Australia’s interest to support India?



Mr Oxley —Sure, but we support every country in being open. It is not up to us to tellthe Indians to open up their economy.

Senator LIGHTFOOT —I was not suggesting that we tell them, I was just saying weshould support them.

Mr Oxley —We can but there is not much we can do about it.

Senator LIGHTFOOT —Should we support them?

Mr Oxley —Yes.

Senator LIGHTFOOT —With regard to security, has there been a detrimental effect inrespect of the Australian community because of the explosions by the subcontinent?

Mr Oxley —Yes because any pressure on China for it to cease acquiring a new standardof nuclear power is significantly weakened by the emergence of a nuclear challenge to itfrom India. It is not in Australia’s interests that China seek to crank up its nuclear capacityto match the Soviet Union and the United States. That has been India’s long-term strategy. Ifyou look at who is who in the nuclear line-up, you can basically discount the French and theBritish because they acquired their handful of weapons as a matter of national pride. Theywere an irritant in terms of the Soviet nuclear strategy, but the real game was the UnitedStates and Russia. China was the third party in that.

The Chinese have been spending a lot of money in recent years on trying to re-equip thenuclear arsenal. If China acquires a state-of-the-art nuclear capability, this is a nation aboutwhose long-term influence in the region we do not have any sense of. China, for the firsttime in 500 years, is starting to become a country which is exerting a global influence. It isthe old story that the Chinese emperors sunk the fleet in 1450 or 1460 or whatever it was. Itis actually true. The interesting thing is that China exerted very little influence on a globalscale outside the countries around its borders until the last 50 years.

As China starts to acquire significant global nuclear capability, we do not need people tostimulate it to acquire a bigger and greater capacity. We need China to consider that it canbuild its security by economic and trade relationships. It is not in our interests that Chinaemerge as a nuclear superpower in the region. India’s actions have a significant impact onencouraging China to go down that route.

Senator LIGHTFOOT —But China, at the rate of its economic growth, will be anothersuperpower in the world.

Mr Oxley —It is a superpower now but what we are talking about is how they choose toexpress that power.

Senator LIGHTFOOT —They are expressing it pretty well in terms of commerce. Weseem to be culpable—‘we’ as in America, Australia and Europe—in helping it attain thatposition. I guess we ought to be talking at some stage—we will not do it today because theChairman will not let me—about the burgeoning power of China.



Mr Oxley —I agree. It will be the enormous question in the region for the next 50 to 100years. What is it that has led China to be in the position it is in? Its own actions. It isChina’s opening up of its economy that has created this economic power, not what othershave done.

Senator LIGHTFOOT —If we did not buy they would not produce, with respect MrOxley.

Mr Oxley —It is not what we buy. It is the fact that the United States market is sittingacross the Pacific, which is where they are selling to.

Senator LIGHTFOOT —I meant ‘we’ as a developed world.

Mr Oxley —We are well past that point. It is not an option for people to close theirborders in any wholesale manner to other people’s products.

Senator LIGHTFOOT —There may be some people, other than economic rationalists,who would have a different opinion.

Mr Oxley —It is not rationalism, it is just the way the world is.

CHAIR —It has been put to us in this inquiry that the reaction by Australia to the Indianand Pakistan tests was fairly hypocritical because we live under the umbrella of the UnitedStates. What is your view on that?

Mr Oxley —That does not explain to me the logic of the contention that it is hypocriti-cal. In fact India de facto lived under the umbrella of the Soviet Union for a long time, so Ido not understand the line. If one takes that point, India consciously put itself in the Russianorbit for a very long time.

CHAIR —The line basically has been that we have been hypocritical in criticising thosenations when really we are not putting pressure on the United States or the other nuclearweapon states to reduce their arsenals.

Mr Oxley —I see. That is not true.

CHAIR —And that really, because we live under the umbrella of the United States forour nuclear protection in effect, we would have been better off keeping our mouths shut.

Mr Oxley —Whoever argues that would benefit from understanding our own nuclearhistory a little better. In 1970 Australia had an indigenous reprocessing capability and wehad an indigenous enrichment capability. You will now find in the records that we had acontingent war capability of producing a battlefield nuclear weapon, we had a history ofnuclear testing with British nuclear weapons at Woomera, and we were involved in thedevelopment of the British long-range nuclear strike. If you put all that on paper and look atit, you say, ‘This was a country which was positioning for a nuclear capacity.’ We had plansto build a nuclear reactor—when we had no need, because we have power coming out of ourears with coal. If you look back at that time, we were setting up, and we were seen as



setting up. When we gave that up and joined the nuclear non-proliferation treaty, weremoved the reason for the Indonesians building a nuclear capability. So I think we havevery strong grounds for saying to other countries, ‘We know what course of action to take totry to build security in a nuclear world,’ because we had the option, we were working to theoption, and we actually gave it up. There was not much of a public debate about it, but youwill find it all in the records.

If you then look at the way in which successive governments have pursued our nuclearinterests through the United Nations, the last expression was the Canberra Commission butthere is a whole history before that. The position we took on nuclear testing, the position wehave taken on the nuclear test ban treaty, the position we have taken on the nuclear non-proliferation treaty—where we have been one of its strongest advocates—indicates that wehave been a very responsible activist for a nuclear order which recognises the reality. So Ido not think there is any question of hypocrisy; I think you could argue that Australia’sposition over a period of 20 years has been very consistent.

CHAIR —It has been said that that is the reaction out of India, in particular, on theevidence that we have heard—that they are saying that our stance is fairly hypocritical.

Mr Oxley —You have a state which is seeking any justification for getting its hands on acourse of action which most other countries do not approve of. So they will pick any oldargument they can to ping anybody who has been critical of them.

CHAIR —The Canberra Commission you mentioned commenced under the previousLabor government and it was up to the current government to present the report of theCanberra Commission to the United Nations, but that report was not formally adopted by theUnited Nations, so it more or less sits in a land of limbo. Would it be in Australia’s interestnot to reinvent the wheel in terms of the Canberra Commission but to pick up where theCanberra Commission left off and now try to push, on a multilateral basis, the aims of theCanberra Commission? Is that one way for us to react now in an onward sense to what hashappened with the India and Pakistan tests?

Mr Oxley —Whichever particular route we choose, it is quite important just to continueto mount pressure. You have to be realistic about the degree of influence we have to bring tobear in these things. In some ways, our value in places like the UN is a nuisance value.Many of these things have constituted that—constant pressure to re-erect the framework andrebuild it. Many of the things in the Canberra Commission were not particularly new. If yougo back through the history of work on nuclear non-proliferation issues through the UN,there is a numbing sameness about it—running through almost from 1962 and 1963. That isbecause the strategic environment has not shifted all that much.

Really, what has happened in the last 10 years, I suppose, is that nuclear weapon states—you could almost be blunt about it—have found a way to develop their nuclear weaponswithout testing, and then have been prepared to sign a nuclear test ban treaty. But there hasbeen a degree of restraint exercised by all of them encouraging other countries to acquirenuclear weapons. That really is the core. So I am not close enough to the detail of just whichparticular route these days in the UN will be the right one to track, except to say that thefact that we have not seen a lot of progress in some of the things we have been doing in the



last few years is not a reason to stop doing it. We should basically keep going down thatpath.

Senator COOK—Mr Chairman, I would like to apologise because I have to go andcatch a plane. Unfortunately, I am not going home; it is not a plane to Perth, but I do haveto go. I apologise to Mr Oxley for withdrawing and to Mr Maitland, who will subsequentlyfollow him. I will look with interest at what is said in theHansardtranscript by both of you.

CHAIR —What specifically can Australia do if we are not seen as being a dominantplayer in the field? We did sponsor the Canberra Commission. Is there anything tangible thatwe can do?

Mr Oxley —More than what we have been doing, probably not. I do not think we face asignificantly new situation because we knew that India had the capability before. You stillhad the risk of India, and they have now stimulated Pakistan to advance a point. I supposethat is unwelcome news. It is marginal to say where you think we are influential or not. Instrategic terms others see us as having a bigger strategic influence in this region than wetend to see ourselves. If you look at us in a military sense, we are not insignificant.Therefore, what we have to say on these things and the pressure we can bring to bear interms of trying to give weight to a global view about what is a sensible security orderremain in place. In terms of anything further that we should be doing, I do not think there isa lot, frankly. We can exert moral pressure, we can continue to push in the directions inwhich we have been in the UN, but in terms of the position and influence we have in theglobal order I do not think there is anything particularly special we can do.

CHAIR —My last question, which you partially answered before, concerns the actuallanguage in which we couched our objections to the nuclear tests by India and Pakistan.Some said that it was over the top; that it was too harsh and too aggressive. How would youportray the language that we used?

Mr Oxley —I thought it was fitting. In these things you need to be careful about takingthe diplomats at face value. Diplomacy is a process in which frequently the form is moreimportant than the substance. When there is not much going on often the import of what isbeing done is measured by the degree of language used. Underneath it all politicians runthese systems, and they understand the reality and the truth. I think if someone takes offenceat the tone of the language then it is the old adage of shooting the messenger rather thangetting the message. I do not think there is anything inappropriate about the level oflanguage that was used. Frankly, in diplomatic terms it was quite ordinary. I do not thinkthat was an issue.

Senator EGGLESTON—Mr Oxley, you have introduced a new theme which doesinterest me a great deal, and that is the concept of Hindu nationalism. You said that perhapswhat we are seeing is a working through of Hindu nationalism in India and the explosion ofthis nuclear bomb or test as a symbol of that. This committee is largely concerned with theimplications of that test for Australian security. Do you think we are seeing the beginning ofa hegemonic India over the Indian Ocean Basin, and is that what India would strive toachieve? What are the long-term security implications for Australia of India seeking todominate the Indian Ocean Basin as a hegemonic power, if that is their long-term objective?



Mr Oxley —If I have left the impression that we are going to see Hindu nationalism assomething that is going to be like Pan-Islamic fundamentalism, then we are not going to getvery far because there are not very many Hindu populations outside India.

Senator EGGLESTON—Except in Bali, which is close enough to ask about.

Mr Oxley —Yes.

Senator EGGLESTON—I did not mean Hindu nationalism in that sense but Indiaseeking to be the superpower of the Indian Ocean Basin in a general way.

Mr Oxley —The Indians have always perceived themselves as being that. Much of thehistory of their relationship with Pakistan is about who has the dominant position.

Senator EGGLESTON—That sphere of influence has been fairly localised, as you haveset out today. Do you see them as seeking to expand that sphere of influence? That wouldactually begin to impinge on Australia’s security, would it not?

Mr Oxley —It is a major strategic issue for Australia, yes. I do not see them seeking toextend it, and I think the major reason is that they do not have anything like the economicstrength. Let us draw a parallel with China. If we saw them starting to acquire the degree ofeconomic strength that China has, which is a platform for building a greater degree ofinfluence, then we might see them seeking to do that. But you would hope that in theprocess of that, in this day and age, that what tends to come with that form of economicstrength is a degree of economic interdependence, which has the virtue of its own constraint.I think that is what is quite new, unique and frankly hopeful about the global order which isstarting to emerge around us. I do not see that we are seeing anything qualitatively newabout an effort by India to exert a bigger influence over the Indian Ocean region than what ithas always sought to presume is its area of influence.

Senator EGGLESTON—That is interesting. I guess China’s economic power ispotential; India, as we have repeatedly heard through these hearings, does have a very bigeconomy at this stage, but it is not very well engaged with the countries around it and it is avery closed economy. But your answer is an interesting one. The other question I would liketo ask you relates to Japan. As you would know, a few years ago the Japanese imported a lotof high grade plutonium. What do you think the implications of that are in terms of theJapanese going down the same path at some point? You have already talked about the factthat countries with sophisticated technology can develop nuclear weapons without actuallytesting them in this day and age. Do you see any matters that should concern Australia aboutthe importation of high grade plutonium by the Japanese in the last five years?

Mr Oxley —No, I do not because we have created a set of controls which give youample warning. It is possible that there is a group of Japanese scientists somewhere whohave secretly created some form of basic technology or capacity which could be quicklyconverted into a nuclear weapon. But, even if they had not, they would not really need to doso because their technical base is so deep and so strong that it could be very quicklyassembled, if that is what they needed to do. The security for us lies in the requirement ofcountries which have signed a nuclear non-proliferation treaty to allow safeguards and



inspections, to not have any nuclear facilities where there is fissionable material which canbe detected which is not controlled and supervised. These days if we saw Japan acquiring acapacity somewhere which raised warning flags we would see it. I do not think there are anygrounds for concern in terms of what they are doing.

CHAIR —I have one final question. What has been the public reaction by India’s neigh-bours to India’s nuclear tests?

Mr Oxley —India’s neighbours?

CHAIR —Yes. Has there been any public reaction of any note?

Mr Oxley —I do not know; I have not been monitoring that.

Senator EGGLESTON—Our closest neighbour is Indonesia, which is Muslim. I believethere is a dispute over some islands between India and Indonesia. They must be a long wayout somewhere—

Mr Oxley —In the Indian Ocean.

Senator EGGLESTON—Yes. Has there been any reaction in Indonesia to the nucleartests in India?

Mr Oxley —All I have read about are the reactions from the ASEAN countries at theirlast summit, which are quite predictable. All these countries have signed the nuclear non-proliferation treaty. For years Malaysia has been talking about a zone of peace, freedom andneutrality. They have all had a history of anti-nuclear positions. I would assume that there isa series of fixed positions of opposition which people will reiterate when something happenswhich is outside the frame of that policy. I would be very surprised if you did not findstatements of criticism or opposition from all the countries in the region.

Senator EGGLESTON—You would expect it as a matter of course, I guess. But does itchange their policy towards India? Do they regard India in a different light? This is comingback to the idea of Indian hegemony over the Indian Ocean Basin.

Mr Oxley —If they had an interest which they thought altered the strategic equation withIndia, it would alter, yes. If there is an area of dispute with the Indonesians where there aresome islands involved—the Indonesian military is very significant in the way in which itsthinking goes on in that country; they think in military terms—I think you would assumethat they would have a different view now as a result of those tests.

CHAIR —Thank you very much, Mr Oxley.

Proceedings suspended from 4.00 p.m. to 4.17 p.m.



MAITLAND, Mr Alister Thirlestane, Chairman, Australia-India Business Council, c/-ACCI, Barton, Canberra, Australian Capital Territory

CHAIR —Welcome. The committee prefers all evidence to be given in public, but shouldyou at any stage wish to give any part of your evidence in private you may ask to do so andthe committee will consider your request. I invite you to make an opening statement andthen we will proceed to questions.

Mr Maitland —In recognition of what was taking place, the council decided to contactits major members—some 18 to 20—to see whether there had been any commercial impactfrom the reaction to Australia’s treatment of the subcontinent, particularly India in this case,following the nuclear testing. Of the 18 major companies contacted, the common responsewas ‘not conscious of any impact’ or ‘no effect at this stage’. One company in the miningsector said that they thought they had lost a prime position to achieve a major contract in thecoal industry in a joint venture in India. That was the only one. In terms of the veracity ofthat statement, it may be that they were not going to get the contract anyway, but theycertainly felt that the response from Australia was detrimental to their position.

One needs to go back a short time in history in India. It is only since the early 1990sthat India has liberalised both its domestic and trade policies. It was the early 1990s when itnearly collapsed in terms of being able to pay its way in the world. In fact, it did so. It hadforeign exchange reserves at a perilous level. Latin-American countries at roughly the similarstage had sought debt rescheduling; India did not, and commercially that has been a strongstance that the investing and trading community has noted.

In the process, the reforms have been quite significant, but in a fairly short space of time,starting in 1992 till today. We are inclined to judge India as having been a freer and moreopen economy for a longer period, not recognising that it is really only in the last eightyears, and particularly the last six of those, that there has been significant ability to invest inthe Indian economy and to increase trade.

In response to the nuclear testing, I think the attitude Australia took was absolutelycorrect. We had to express our abhorrence at the activity that took place in both India andPakistan. We have certainly done that and the language used was probably the right languagein diplomatic terms for our displeasure to be understood. It is not possible to go further andhave any concrete evidence, but in India we are increasingly running into the proposition:‘We thought you were a friend.’ They all understood the need and why Australia would reactthe way we did, it is just a little feeling that we are continuing a little longer in persistingwith pointing out the faults of their ways. I cannot give any concrete evidence on that exceptthat our Indian counterparts who initially responded to our request about the Australianreaction that they understood it and could accommodate it now are commenting a little, ‘Wethought you were a friend. Friends are able to disagree without having to be virulent in thatdisagreement.’

I think now we need to be thinking more of the future than of the past. The best way ofhaving people understand your point of view is to have active engagement. One of thestrengths that has taken place for our council and the government is that we have coincided



our meetings in the last 18 months so the joint ministerial meetings coincide with meetingsof the business councils of both countries. So after having our own meetings we can meetconjointly to talk about the ways of improving our prospects and trade.

For those who understand Australia in India, their knowledge is particularly good.Similarly, those companies and government areas which have responsibility, trade or investin India have a good understanding of the make-up of the Indian economy and investmentprocess, but we need to keep things in perspective. Our New Horizons program did make amajor effort to get Australia noticed amongst the 950 million people. It cost a reasonableamount of money and we had a reasonable amount of success. But keeping yourselves in thefront of that nation is difficult.

I remember at one stage there had been 18 trade missions from Germany to India. Youhave heard today of missions from America and Canada. You have had very senior missionsfrom Great Britain. In fact, if I remember correctly, the British Prime Minister at the time,John Major, cancelled an invitation to go to Japan that he had previously accepted when hereceived an invitation to go to the Independence Day celebrations in India, again demonstrat-ing a lot of the world is starting to recognise the improved opportunities for trading andinvesting in India.

Three to four years ago the foreign minister for India, Salman Khursheed, visitedAustralia. He spent, I think, three or three and a half days here. I remember asking him atthe final lunch that I hosted on behalf of the government just what had he known aboutAustralia before he came and what had he had found since he had been here. He said, ‘Iknew nothing about Australia until my Prime Minister said I was coming here. No, not true,’he said, ‘I knew you played cricket.’ In all the surveys that have been done that I have seen,the one constant factor of the understanding between the two countries is the state of cricketfor both Pakistan and India.

But the foreign minister said, ‘Before I got here, I was advised that there were 18 millionpeople. I said to myself, "That’s a pretty big city." I got here and I found that this big citywas spread over a huge country. It has got ports, airports, bridges, buildings, infrastructureand roads, but there is no-one in them.’ There is a little bit of a perception that he brought tous that it is difficult for a country the size of Australia to get recognition. We get respect bybeing reasonably neutral and we are not a big power.

I demonstrate this by saying we called on the finance minister in company with somecommercial interests who were interested to start operations in India and at one stage weasked the finance minister—at that stage Manmohan Singh—‘Is the Australian corporationjust a little too small to be really a player in the Indian market?’ He responded immediately,‘Not at all. In fact you are an ideal sized player. You are not so big that you will try to pushus around to your point of view, but you have got the technical competences and abilities tobring the skills that India may be needing in your particular commercial enterprise.’

While the nuclear testing has been something that no-one in the commercial sector wouldwish to have seen taking place—we have recognised that it has taken place; we haveexpressed our disapproval—we now have to get back to talking, to get our point of view



understood and to hopefully enable the trade and commerce to take place. We probably havemore to gain from trading with India than India has to gain from trading with Australia.

At a time of downturn in most of Asia, it is interesting that the Indian economy has nothad the same fallout at this stage. In fact, for the last three to four years, it has had growthrates around 5½ to 6½ per cent. If you run at a seven per cent growth rate for 10 years, youwill double your economy. Therefore, you can see tremendous change being made in theIndian economy. The opportunity for Australia to be part of that is quite significant. I havealready said that we do not endorse the nuclear testing that was done in both India andPakistan—and you heard much more expert witnesses about the impact of that—but, at theend of the day, as a trading nation, the opportunities for Australia to expand our influence inboth Pakistan and India remain considerable. I leave my opening statement there.

Senator EGGLESTON—I am interested in a general way in the level of Indianperception about Australia. My experience of talking to Indians is just what you said: theyknow we play cricket, but they know very little else about this country. How do theyperceive Australia’s political influence? We like to describe ourselves as a ‘middle gradepower’, but do they really see us in that regard? Or do they see us as a not very signifantplayer—and, therefore, our expressions of disapproval at their nuclear tests might not bematters which they consider to be of great importance?

Mr Maitland —To start off, India itself is extremely confident of its own position. It isnot a nation that is looking to have friends just for friends’ sake. When those who under-stand our relationship and our role look at Australia, they do see us as a pretty neutralplayer. We are certainly seen in India as being aligned more with America these days, whichsurprises me at times, given our common British heritage. They are not unduly concerned,but they would rather that Australia was with them than against them.

They could readily say to themselves, ‘You are less important, Australia, therefore we donot mind’, but those who do have connections with Australia work very hard at trying tounderstand the Australian position and at representing Australian interests in India. I comeback to the proposition that the influence of Australia would be: if we were agin them, it issomething they would not expect greatly, because they believe that we are probably more forthem than agin them. Having expressed our displeasure on the nuclear issue is one aspect,but for most normal trade and investment we would still be positively perceived.

Senator EGGLESTON—Earlier today, when we heard about the articles in the Hindipress, we were told that the Indian population was more interested in local issues. Could yousay that the business community is more interested in business issues? Perhaps you couldcomment on whether it is true that, when it comes to this issue of the nuclear explosion,business people like yourself are more interested in getting on with the business of businessthan worrying about the politics of nuclear testing?

Mr Maitland —In general, it is probably a fair statement for business people that, havingrecognised the realities of life, we are interested in getting on with the business of tradingand investing within the confines of our own government and country’s basic requirements.We have to meet both criteria.



I do not think that India is any different from most countries. They certainly areinterested in things for India. A huge proportion of their population would not think outsidetheir regional area, let alone outside India itself but, increasingly, India is joining the world’strading requirements. I have already indicated the number of economic and trade missionsthat are going to India. You cannot be not influenced by the rest of the world in that regard.People make comments about the standard of Indian industry. There is a watchmaker justoutside Bangalore, and you can now get their copy watches in Hong Kong. Maybe that is aworld standard and it is a little bit of a compliment that their standards are right up there.

There are certain big parts of industry in India that benchmark themselves to world’s bestpractice, notwithstanding that they do not actually trade in the international market for thatindustry. There is a major Japanese company that has a production plant in India, and theyused to have Japanese executives there but today it is run entirely by Indians. They take theproduct off the line at an irregular interval, take it to Japan, strip it down and, if there is afault, they retrain to correct the production fault. But, apart from that, it is run entirely withinIndia.

It is very hard for us to recognise at times that what you knew of India 20 years ago istotally different from what it is today. Even six years of progress in India quite significantlychanges your understanding of what was possible in the early 1990s as opposed to what ispossible towards the end of the 1990s. The rate of change is quite exponential.

To go back to banking for a moment, before I retired from that industry we saw massivechange but we also recognised that at no stage had we or, to my knowledge, a majorcustomer, had a remittance of funds out of India stopped. In doing business in India, onceyou got your approvals you were able to remit your profits. Sometimes they were delayedbecause India’s foreign exchange over the last eight years has not always been strong. Todayit is reasonably strong and no remittances have been stopped. That is a pretty fundamentalposition for foreign investors seeking to enter a country.


CHAIR —I just have a couple of questions. What do you see is the role of the Australiangovernment in particular in creating an environment to enhance trade with India—as thegroup you represent—given the strained relationships that currently exist? What will be theeffect on business if these strained relationships are maintained in the short term or even inthe longer term?

Mr Maitland —I think the Australian government role was partly spelt out in the waythey handled the issue of India and Pakistan. There was no constraint or inhibition on basictrade and investment. It was at the military level, the diplomatic level and in terms ofproviding aid. Those responses specifically excluded the commercial reality of day-to-daytrading and investing. Our council pointed out at the time both to the government and toIndia that this had been excluded, and that was a welcome step.

It is very difficult for the commercial sector to conduct trade if there is not implicitgovernment support. At the end of the day, you need ministers with their respectiveportfolios talking with their counterparts in other countries. Sometimes that is done through



forums, like APEC, or directly one on one. In India’s case, one could notice the improve-ment in trade, inquiries and the two-way flow of people after the New Horizons promotion.Since India has done their nuclear testing and since we have protested, I suspect India hasshown a greater willingness to contemplate how they actually join the test ban treaty. ForAustralian business, I would be keen to see ministerial and official high level visitsrecommence at the earliest opportunity.

CHAIR —That was going to be my next question. When should they recommence, giventhat that is a decision of government anyway? Obviously your council would be urging thegovernment to recommence these—immediately or within three six months?

Mr Maitland —We think from now on is about the right timing. There is no magic aboutthe particular time you select partly because our own ministers have pretty full agendas, andyou have to recognise that at the other end the Indian government ministers are equally busy.So it takes a lot of time to get a visit organised. The council itself is hoping that its jointmeetings will take place early in the next calendar year. But, once it is noted that Australiais resuming high level official and ministerial visits, I think the business sector will be alittle bit more comfortable about the ability to keep more normal relations going.

CHAIR —You mentioned that there are a number of countries putting substantialnumbers of trade missions into India and you mentioned our New Horizons project. Arethere any plans for future Australian trade missions to go into India?

Mr Maitland —At the moment I am not aware of anything specifically on the books.After New Horizons, we had another government initiative called the Year of South Asia,and that helped build on the goodwill that New Horizons had generated. Certainly, when theministerial visits recommence—and we would expect either a trade minister or foreignminister to be part of the ministerial meeting which I think is scheduled next time forIndia—there could well be a trade mission joining them at that time.

CHAIR —Are we doing sufficient in that area anyway, given you have told us that anumber of other nations are putting such large numbers of trade missions in there? Are wejust tinkering at the edges by sending one every 12 months; should we be putting more effortinto it; and is that part of the reason why we are not seen as being a major player in theIndian area?

Mr Maitland —Part of it comes back to the sheer size of Australia and its economy.Before the financial crisis struck about 12 months ago, Asia was really consuming a largeportion of the resources of our companies in the export sector—just meeting their demandsand the opportunities they provided. Apart from the largest of our corporations, most of ourcompanies do not have the capacity to be a player in every potential market in the world.When you had Asia constantly growing seven to eight per cent and you had the southernpart of China growing at 10, 12 or 14 per cent, then the opportunities in those fast growingeconomies which had become more open to foreign trade and investment really consumedthe ability of our companies to meet their requirements.

I can recall talking to a number of companies who would say, ‘Look, there may beopportunities in India, but we just do not have any capacity left to pursue them.’ At the



current time with the downturn in Asia, our capacity to look elsewhere is somewhat better—not because we would want it that way but because it has turned out to be a fact of life. Soone would assume in the current environment that some of the capacity that we hadpreviously directed towards expanding trade and services in the rest of Asia is now availableto go to other markets of the world.

I think a quick reading of the latest export statistics would show that we have alreadyhad quite a switch away from some of the markets in Asia that have basically stopped on usbecause of their inability to absorb any further inputs. India comes into that category. So at atime when we need the export markets, India is one that is gradually continually opening up.If you are not there when it starts opening and you get in on the low ground, it is muchharder to come in 10 years later when others have become established and you have to starttaking some of their market away. So I think the council would argue that it is quite apropitious time for Australia to be seen to be able to expand its opportunities into India—andthe subcontinent in general.

CHAIR —What specific initiatives is the Australia-India Business Council taking toincrease our trade with India, and has this been hampered by the reaction of our govern-ment?

Mr Maitland —We are not aware of anything that has hampered the initiatives. We havescholarships available for a two-way interchange of people in organisations to get to knoweach other’s country. We have fairly limited funds but at the end of the day that scholarshipexchange has been beneficial. We have a young man out here at the moment. He is withKinhill Engineering. He has had three months on the scholarship. I saw him last week andthere is just a whole understanding by him of what is possible for a like firm in India. Henow sees opportunities to do more in Australia that he had just not understood before he hadgone out of the country.

We think that in a very small way that understanding can lead to more business. He isquite confident of that. Alternatively, we have sent young Australians to India, they havecome back and they are now doing business with a country that they had not done businesswith before.

CHAIR —Is that a reason why we should have more government intervention in that areaas a means of promoting closer relationships—not just leaving it up to the Australia-IndiaBusiness Council?

Mr Maitland —We get some funding in government support through the Australia-IndiaCouncil and its chairman Mr Kennan, who was here today. There is a limit to how muchgovernment can do and how much the private sector should pick up. If you look at a majorcompany like the ANZ bank, it would have a dozen or more interchanges per annum. That isjust within one group and one company but it is indicative of the same type of thing. Thecouncil is trying to take it outside the companies that are so big that they can afford to do itto those which normally cannot afford that type of interchange.

There would be an infinite demand. If you go to the gradate school here at the Mel-bourne Business School, there is a significant number of Indian students. What I find



interesting is that, whereas previously they looked only to America and England, Australia isnow on the horizon as a desirable place to get the education that they all feel they need toprogress in their home market. That is a real step in the right direction.

Earlier today I heard people talk, in effect, about the Colombo Plan and the position thatgave us with countries like Malaysia. I always think that if you can have people educated insomeone else’s country, then their understanding, their links and the friendships they form,are going to stand you in good stead. The more that we can have their students here andhave our students going to India, the more those strengths and ties will build up in thefuture. It is small, but there is a potential to grow.

The council, with its counterparts in India, monitors inhibitions to trade, whether they betariffs, non-tariff barriers, excessive bureaucracy or complicated laws that do not seem to addmuch value to the business sector. We note those and we meet the respective governmentson an annual basis and discuss them with each government to see what can be done toimprove the flow of goods and services and investment. Those are the things which thegovernments of both countries, in the last two years, have been far more accommodatingtowards, particularly in India’s case where it has gone from virtually banning all that type ofactivity to at least opening up the markets and being much more understanding about tryingto streamline its procedures.

They have a foreign investment promotion board. That board has a charter in India ofenhancing the ability of foreigners to invest in their economy. There is an irony about allthis because that works pretty well until you get down to talk and get your approvals,department by department, in India. The concept is that you should be able to get one overallapproval and that, once you have obtained it in that area, it should flow right through theothers.

That is the policy. In practice, each bureaucratic department tends to want to go back anddo its own. Partly that is because the bureaucracy is a huge employer. I remember talking toManmohan Singh when he was making quite fundamental changes in 1993. I asked himwhat was the biggest issue he faced in getting reform into India when it had had 40 yearswithout it. Metaphorically speaking, he threw up his hands and said, ‘Outside my door, thereare 5,000 civil servants administering a regulation I abolished six months ago.’ That is partof the frustration. It is not unknown at the senior Indian level. Therefore, things like theforeign investment promotion board are designed to try and remove some of that bureaucrat-ic backlog.

Senator LIGHTFOOT —In retrospect, were the British a bit smarter than the ANZdirectors when they sold Grindlays in Asia, particularly in India, to the ANZ?

Mr Maitland —ANZ purchased Grindlays from Citibank, in effect.

Senator LIGHTFOOT —They bought it from the Brits.

Mr Maitland —I will give you a little history. Grindlays was a British bank. It wasstarted in Calcutta, under Captain Grindlay, which is how it got its name. From there it grewto be a subcontinent and Middle Eastern bank. It was still British based but is largely an



expatriate British based operation. ANZ acquired that bank about 12 years ago. Today thesubcontinent, particularly India but also Bangladesh, is a significant contributor to thatbank’s bottom line, as reported in their annual accounts.

Senator LIGHTFOOT —The reason I asked that is that, of the major banks of Austral-ia—that is, the ones we could call indigenous banks—the one with the most exposure inAsia was ANZ. They were subjected more to the so-called meltdown than some of the othermajor banks. I thought Grindlays may have contributed to that.

Mr Maitland —No. Most of Grindlays was, as I mentioned, in the subcontinent and theMiddle East. It has been largely immune from the Asian meltdown. ANZ would have beenthe strongest player in an Asian context. Notwithstanding that, given the impact of not beingover-significant and having 30 years of strong growth in Asia, having a correction that mightlast two or three or four years is not the end of the world. Players that are well entrenchedon the ground and that see countries through their difficult times generally come out in astronger position at the end of the difficulty. You could make a local analogy: companiesthat get into trouble generally come out the stronger for their difficulties when properlyrestructured.

Senator LIGHTFOOT —Talking about fiscal strength, what about the rupee? How isthat looking?

Mr Maitland —If you look at the early to middle part of the 1990s, the rupee wascomparatively stable. In the last four years it has been steadily depreciating.

Senator LIGHTFOOT —Against what currencies?

Mr Maitland —Against the US dollar and pound stirling.

Senator LIGHTFOOT —It is a fixed currency, is it not?

Mr Maitland —No, it is—

Senator LIGHTFOOT —It floats.

Mr Maitland —It partly floats. It is not entirely—

Senator LIGHTFOOT —It is a hybrid.

Mr Maitland —It is a hybrid. The capital side is fixed but the current account isprobably nearer to floating. It is not a freely floating currency.

Senator LIGHTFOOT —Sometimes I think, after some days of these hearings, that theexplosions there might be described as a nuclear explosion in a teacup. Could that sort ofanalogy be formed?

Mr Maitland —I suspect not on the grounds that humanity worldwide, by and large, doesnot want to see nuclear proliferation. Having said that, the Western world did not stop



France. We protested like mad but, at the end of the day, a much more developed nationcontinued its testing. I have heard a lot of reasons today from greater experts on security asto what might have been the thinking of India and Pakistan. I really believe that, if you aretrading with nations and if you have greater interchange at the commercial level, investmentsin other people’s countries is probably, in the long term, the best way of influencing them inrelation to your point of view. There is nothing sacrosanct in one country’s absolute point ofview. It is an issue you have to discuss with different people, having different starting points,so that you can better understand where they come from to better influence them in relationto your way of thinking.

Senator LIGHTFOOT —But understanding, by definition, means talking.

Mr Maitland —It means talking.

Senator LIGHTFOOT —Did Australia overreact, in retrospect?

Mr Maitland —At this stage I think the business community would say no. But there is alimit to how long one has to lock the child away in the cupboard before saying, ‘In growingup, it is all about communication and talking,’ and not saying, ‘I ignore you.’

Senator LIGHTFOOT —When should we start to talk and how should we re-establishproper contacts with India?

Mr Maitland —I think the time is fast approaching. Even if we were to start planning forit, it would take some months for ministerial visits to start.

Senator LIGHTFOOT —At what level?

Mr Maitland —It needs a great exchange of senior officials and then the resumption ofnormal ministerial talks. That is not to say that we should not continue to be concernedabout nuclear proliferation. You can have discussions that recognise an area you disagree onand perhaps have as many other areas that you are in agreement on to go forward with.

Senator LIGHTFOOT —You mentioned watches as being something that perhapsexemplified the top end of the street with respect to the abilities that India has. What aboutsecondary and tertiary industrial and commercial products? How do you see those? Have wefully exploited those? Is there a niche market? Is there a market for those in Australia,remembering that in percentage terms there was a fairly significant—although small in dollarterms—trade surplus in Australia’s favour?

Mr Maitland —As you said, Australia already has the trade surplus in its favour. India isa big economy. If you use the World Bank definition of parity purchasing power, about theAustralian population joins the middle class of India each year. So in five years you addroughly 100 million people to India’s middle class.

Senator LIGHTFOOT —Are you saying that India is something like the United Statesin that it consumes almost all of what it produces?



Mr Maitland —Yes, I think that is true. In fact, we have a lot we can offer in ourhorticultural and agricultural sectors. A lot of Indian produce dies on the way to markets ifthey do not have refrigeration.

Senator LIGHTFOOT —What about secondary and tertiary products? Is there a marketfor those in Australia or are they perceived to be of an inferior grade or quality and, if theyare, is that a myth?

Mr Maitland —I think the inferior grade and quality is changing. Certainly so manythings would have been seen like that. I gave you the example of a watch. That companystarted out assembling parts made in France and built a bulky watch. Today, the watches areas thin as you and I wear on our wrists. It is done with technology developed now in India.They no longer import the bits. They no longer import the technology know-how. They havedeveloped their own to the stage where that watch now has copies of it being made in someEastern markets. India produces more coal than Australia, but if you ask most people inAustralia we would be seen as the bigger coal producers because we are a much biggerexporter.

Senator LIGHTFOOT —We are the biggest exporter in the world.

Mr Maitland —Yes, but we are the exporter. In terms of total production, India is amuch bigger producer. That is the difference with India: they have most of everything, butnot always at the standard that we think we need at this stage. But it does not take long for acountry that is modernising to suddenly get to the stage where more becomes tradeable. Theproposition I would put to the committee is: if you wait for that to happen absolutely, youwill find all your other competitor countries have got there first. You actually have to getthere while this process is going on so that you are a part of it when it matures to the stagewhere your country becomes a big beneficiary as well as the country which you have donethe—

Senator LIGHTFOOT —We are relying on you to do that, Mr Maitland. You are at thesharp end at the moment. I thank you very much for your contribution this afternoon.

Mr Maitland —Thank you, Senator.

CHAIR —I have one final question. Is there a counterpart Pakistan business council thatmirrors the India Business Council?

Mr Maitland —I do not think there is, but I may be incorrect. We have tried, but there isnot the same level of business interest in Pakistan from Australia. The single biggest onewould be the ANZ Grindlays investment in Pakistan where that bank would be the largestforeign bank. In terms of staff, people and profits, that bank is also the largest foreign bankin India. The big difference in India is that it is perceived as an Indian bank that happens tobe foreign owned rather than an absolute foreign bank, and that has been a real strength inthat investment operation.

Pakistan is a whole different economy. It is economically much more precariouslyplaced. It is far more dependent upon a narrow range of production, particularly in the crops.



A huge portion of its government budget goes to the military. It is out of all proportion to itsreal ability to afford it. In general wealth terms, there is somewhat less than the potential inIndia. Having said that, there are prospects in Pakistan that are very good. But, if you arelooking at a risk factor, most analysts would have Pakistan as a riskier investment than India.

The one that always surprises me—and I am not sure whether Bangladesh comes intoyour calculations—is the rapid progress that is being made in Bangladesh. It is reallyprogressing extremely strongly, and the opportunities there for countries like Australia, whichseemed to be very little 10 years ago, have improved quite significantly.

CHAIR —Thank you, Mr Maitland. We appreciate the evidence that you have presentedto the committee this afternoon. I thank the Hansard officers for their work today. Thecommittee now stands adjourned.

Committee adjourned at 4.55 p.m.


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