modi election win could open up business oppor

http://www.abc.net.au/news/2014-05-19/modi-election-win-could-open-up-business/5462318

Modi election win could open up business opportunities for Australia


Professor Amitabh Mattoo says Narendra Modi's election win in India could open up enormous business opportunities for Australia, but the personal relationship between the leaders of the two nations will be critical. Professor Mattoo is the director of the Australia India Institute and a close watcher of the India-Australia relationship.

Eleanor Hall
Source: The World Today | Duration: 6min 8sec

Topics: elections, foreign-affairs, world-politics, india

Transcript

ELEANOR HALL: One close watcher of the India-Australia relationship says Mr Modi's election victory could open up enormous business opportunities for Australia, but that the personal relationship between the leaders of the two nations will be critical.

Professor Amitabh Mattoo is the director of the Australia India Institute and he joined me earlier.

Professor Mattoo, how do you expect this landslide election win to change the Australia-India relationship?

AMITABH MATTOO: I think what you will witness is a much more robust economic relationship. And given that there are few countries in this region which have so much in common by way of both values and interests, I can only see this relationship scaling new heights.

Moreover, prime minister designate Modi has visited Australia before he became chief minister and from what I hear he has very fond memories, including of a visit to a sheep farm, and he recognises the great potential of the economic relationship.

So I'm very optimistic about the future of the Australia-India economic relationship.

ELEANOR HALL: Specifically, what sort of opportunities are there?

AMITABH MATTOO: I think if you begin with the most important sector, it's the mining sector.

Now, India's mining sector has been heavily regulated and badly governed. Prime minister designate Modi has emphasised during the campaign and even before that that he wants to de-regulate and reform the mining sector.

If that happens and if that happens early, what you'll see is a huge surge of opportunities for the mining service industry in Australia, which has been facing a recession. There is a clear win-win opportunity there.

But there's also win-win opportunities in a number of other sectors including education, including the food industry: processing as well as raw foods. So I think there are a large number of areas where you can see the relationship grow.

ELEANOR HALL: You say that you expect this relationship could reach new heights. Why have these opportunities not been taken up previously? Why will this election change things so significantly?

AMITABH MATTOO: One: because you have had a coalition government which has been dysfunctional in India for the last five years. There's been a policy paralysis and there's been massive corruption. So the last five years have been five years of missed opportunities.

But Modi comes with a landslide majority. He has a stable government, no opposition to really, in some ways, moderate him but also to limit his ability to reform the economy. And he comes with a very strong economic track record.

He's transformed the state of Gujarat the last 13 years that he's been chief minister of Gujarat. If you look at the infrastructure today in Gujarat and if you look at the growth rate, it's much, much higher than the case in other states of the Indian Republic.

ELEANOR HALL: He's certainly made some bold promises about ending corruption and supercharging economic growth. Do you think that he will deliver on them?

AMITABH MATTOO: I hope that he does because that's the expectation of all those Indians and many of those young, impatient Indians who voted for him. He comes with a strong record and I think that Australia is uniquely positioned to make use of these opportunities.

ELEANOR HALL: Why "uniquely"?

AMITABH MATTOO: Because unfortunately there's a shadow of the past which will loom on India's relationships with the United States and the United Kingdom, both of whom denied prime minister Modi a visa because of what they saw was his human rights record, especially in the wake of the riots in Gujarat in 2002.

It's only recently that the US and Britain have tried to reach out to him. But Australia fortunately made in retrospect no such mistake and it's been reaching out to Mr Modi over the last three years.

Now, obviously as prime minister of India he can't let personal issues of the past impact on national interest but I think there will be that initial shadow. And if he does want a soft landing in the West, Australia could be the place that he could begin with.

Also because there are sections of the Indian diaspora, both in the US and the UK, which are of course still fiercely opposed to him and who would oppose a state visit to London or Washington.

ELEANOR HALL: Mr Modi was cleared by the courts of direct responsibility for those deadly Hindu-Muslim riots in his home state, but to what extent are you concerned about the Hindu nationalist agenda of his party?

AMITABH MATTOO: I think Mr Modi should focus on the economic part of his agenda. He should not touch the divisive social issues because that is really an issue on which he can invite a huge amount of opposition. So I just hope that he focuses on the agenda of providing good governance, really providing economic opportunities.

ELEANOR HALL: Now, you suggest that there may be a particular opportunity here for Australia because of this "shadow," as you call it, on the relationship with the US and with Britain.

There have been recent tensions in the India-Australia relationship. To what extent are the uranium and the Indian student issues still a problem?

AMITABH MATTOO: I don't think they're a problem at all no. Frankly, I often do this, I try hard to think of a single issue on which there is a zero-sum relationship between Canberra and New Delhi. There's not a single issue on which India and Australia think differently, completely differently.

You might have tactical differences about negotiating positions on climate change or other not so significant issues but there isn't a single issue on which India and Australia have different strategic pictures.

ELEANOR HALL: And, Professor Mattoo, how critical do you think is the personal relationship between Australia's Prime Minister and the new prime minister-elect in India?

AMITABH MATTOO: You know, us academics you tend to believe that individuals don't matter, but in reality there is a personal chemistry which has to work and which, if it works, will obviously help the two countries.

I suspect that both Mr Abbott and Mr Modi come from completely different backgrounds but are similar in some ways. Mr Modi spent a long time in a kind of Hindu monastic organisation while Mr Abbott wanted to become a priest. Both come from socially conservative backgrounds but are free marketeers. So I think there are those similarities that could bring them together.

ELEANOR HALL: Professor Mattoo, thanks so much for joining us.

AMITABH MATTOO: Thank you.

ELEANOR HALL: That's Professor Amitabh Mattoo from the University of Melbourne's Australia India