Australian backflip on Uranium sales

Rohit Revo examines the fallout of jettisoning the Uranium deal.

Great Expectations

Ignoring Japan, the spontaneous Kevin Rudd salute to Bush, cryptic silence to China’s crackdown in Tibet and backing out of uranium deal with India have been the highlights of Rudd government’s foreign policy gaffes. The career diplomat turned PM has used the old rule book and ignored changing ground realities while denying Uranium to India. The 18 year drought period of any Indian PM visiting Australia is going to continue for some time, unless there is a compromise.

The decision has also hosed water over the expectations of quasi government agencies, businesses and people on both sides, who had suddenly begin to warm up to each other. The relationship was on the cusp of a great revival as both nations toasted and roasted each other’s heros in cricket and bollywood. The acronym 3Cs defining Cricket, Curry and Commerce was used ad-nauseum to define the bilateral relationship. Indian cabinet ministers had started to pay increasing visits to Australian shores and Australian politicians made frequent trips to visit India. Australian politicians made frequent trips to visit India and South Australian Premier Neville Rann even acted in the Bollywood movie Love Story 2050.

Australian establishment and its political think tank have been in favour of supplying uranium supplies to India and India relied on Australia for guaranteeing supplies for India’s energy needs. URANIUM was the fulcrum on which the relationship was to be built. Past Prime Minister John Howard announced the plan to lift a ban on selling uranium to India on 16 August, 2007.

India is Australia’s fastest-growing merchandise export market. Merchandise exports increased by an unprecedented 37 per cent to $11 billion in 2006-07, making India Australia’s fourth-largest export market. Australian companies had started to capitalise on the growing commercial opportunities in India and the news comes as a setback.

If it survives all that, argues Rory Medcalf of the Lowy Institute, a Sydney think-tank, Australia should see the deal as an opportunity: to use its clout as a uranium supplier to build strong anti-proliferation safeguards outside the “imperfect instrument” of the NPT.

Lalit Mansingh presents India’s case for Nuclear Energy

The 2008 Australia-India Strategic Lecture was presented at the Lowy Institute on 25 March by ex Indian Ambassador to US, Lalit Mansingh when he gave a inspiring speech on ‘The promise and the limits of the India US relationship: What it means for Asia and the world’. Lalit Mansingh has spent 41 yeas in Indian Foreign Service and encapsulated in his speech was a message to the Australian establishment justifying the nuclear option adopted by India.

Making a case for expansion of the UN Security Council he said, “More Indian soldiers have died in global conflicts than any other country. Currently 3 continents, Asia, Latin America and Africa are being represented by 1 country, which is China and there is an urgent need to expand it.”

Talking about the India and Australia relationship, he said that they neglected each other during the cold war and mutual perception of each other was not right. “In 1980 Australia opposed Indian naval expansion vehemently, but this changed during Tsunami when it was discovered that there is no strategic conflict. One of the issues which has remained unresolved is the nuclear issue. I am puzzled by the approach of the new government in Canberra. The new administration has clarified it will not sell uranium to India unless it signs NPT. Look at the inconsistency of supplying uranium to China which has a bad record in nuclear proliferation.” Explaining the rationale of Indo US deal, he said it is based on a 3 basis theory which is NPT is not the reference of the deal, India should not be punished as when India was out of NPT it still adhered to nuclear restraint and that global non proliferation will benefit by India being in rather than out. He reiterated that Australia is out of step with major powers of the world who want to work with India. Making a case for nuclear India, he said, “India is the only nuclear state that wants total abolition of nuclear power.”

“India is the world’s second largest wind power producing nation in the world. Any benefits delivered by alternative green sources of energy will be incremental and limited in capacity. Sustainability of these initiatives is a big issue. In case of nuclear energy there is no atmospheric pollution and it is clean and affordable. We need 1 million megawatts of power by 2050 and nuclear energy is the only reliable and affordable way to achieve this. India is in a desperate position as its demand for energy is increasing at astronomical pace. Currently 70% of energy is produce from indigenous coal and if we burn more coal it will create global warming”, he alerted.

He was confident on the Indo US nuclear deal and said, “Healthy debate has been initiated and any democracy should be proud of it. Keep faith in India and I am sure a political consensus will be reached soon about the deal.”

Expressing optimism, he said, “Lets not get fixated on uranium issue. We are discussing the Free Trade Agreement with each other and have a great future with G8 countries including Australia. India is a benign force and we are neighbours across the sea.”

EXPERT SPEAK

Rory Medcalf directs the international security program at the prestigious Lowy Institute for International Policy and is a known Indophile with a deep understanding of India. He is Australia’s answer to Britain’s Mark Tully.

In an interview with THE INDIAN in July last year, Rory said, “I been arguing that in the long run we need something that will make us potentially indispensable to India, as the march of India begins and Uranium is one of the ways. It has to be done in a way consistent with the practical non proliferation and India has to appreciate how sensitive political debate in Australia is to uranium exports. There is nuclear allergy amongst Australian public which is not going to go away. We need patience on both sides.” Rory has always positioned the deal as an opportunity for Australia to use its clout as a uranium supplier to build strong anti-proliferation safeguards outside the “imperfect instrument” of the NPT.

On 12th March. Rory proposed a new type of arms control initiative for the Rudd Government, one focused primarily on Asia and its rising nuclear-armed powers China and India. Excerpts from his speech which had insightful references to nuclear India.

The US has retreated comprehensively from multilateral, treaty based arms control efforts. Without US leadership, global treaties against nuclear testing or the production of nuclear weapons materials have no chance.

And the world is experiencing a nuclear energy revival, spurred in part by concern about fossil fuel emissions. This itself is not a proliferation threat. But unless it can be managed in order to limit the spread of sensitive enrichment and reprocessing technology to more and more countries, it could mean the proliferation of important parts of the latent capacity for more states to move closer to a nuclear weapons option, and for more states to possess some of the ingredients terrorists would need for a nuclear device.

The ‘nuclear weapons states’ legally recognized under the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT) (the United States, Russia, China, the United Kingdom and France)  are a long way from eliminating their arsenals. Yes, US and Russian stockpiles are much smaller than at the height of the Cold War, there were 70,000 nuclear weapons in the world in the 1980s, today there are perhaps 27,000.

Yes, the US and Russia are continuing to dismantle old weapons; and yes they have made progress, including through bilateral treaties, in reducing their numbers of deployed nuclear weapons, down to 1700-2200 strategic weapons per country by 2012, and perhaps sooner, though it does not involve destruction of warheads or new verification measures.

But they possess numbers of weapons far in excess of any reasonable assessment of their security needs, and many, many times larger than all the other nuclear armed states put together. I lived uncomfortably through one India-Pakistan military confrontation, where there was genuine potential for nuclear use, during my time as a diplomat in New Delhi. But looking ahead I am at least equally as concerned about the possibility of a nuclear confrontation between the US and China as I am between India and Pakistan. At least we have had a test run or two about how an India-Rory Medcalf Pakistan nuclear-tinged crisis might evolve.

I think we will achieve little if we single out India as the target of our new flush of arms control enthusiasm. Even India has noticeably elevated its own disarmament rhetoric of late. Through a series of speeches and papers in the past two months by its foreign minister, senior officials, leading scholars and even its Vice President, India is trying to reclaim the legacy of Rajiv Gandhi, who proposed a nuclear weapons free world 20 years ago, and argue for global nuclear disarmament.

It is trying to present its restrained nuclear posture – a small deterrent, a degree of no first use, low levels of alert, civilian control over weapons as a model for all nuclear armed states. We should not dismiss this.

But these are all good reasons for Australia to look for ways to find common ground with India and to bring India into regional and global processes where it both makes commitments but also gains the kinds of assurances that will reduce its long-term incentives to shift to a more assertive nuclear posture. Part of this will involve encouraging nuclear confidence-building India and China.

There is a need to delegitimise the use of nuclear weapons. That is, to reduce reliance on them in national security, through changes in doctrines towards no-first-use and non-use against nuclear armed states (so-called negative security assurances: if you don’t have nukes, we won’t nuke you) and changes in the operational status of weapons, taking them off high level of alert. In other words, nuclear restraint. I propose that Australia should take a lead in building a dialogue and a process towards reducing the role of nuclear weapons in East Asian security.

This should involve a regional leaders’ dialogue. It might begin as a series of bilateral leadership-level conversations between Australia and various key countries.  I suggest China, India, Japan and Indonesia to start with – leading to a multilateral leaders discussion at the next East Asia Summit, which is due to be held in Thailand late this year.

One goal should be an agreed statement, from the 16 leaders of the East Asia Summit, China, Japan, India, South Korea, the ASEAN 10, Australia and New Zealand, declaring that the only acceptable role for nuclear weapons is to deter the use of other nuclear weapons while the international community moves towards disarmament.

Ultimately, the US and Russia will need to be brought into the conversation about new and restrained road rules for the nuclear order in Asia. Pakistan’s link with the region is more limited: its nuclear arsenal and posture is of a course a challenge for the whole international community.

Experts question jettisoning Uranium deal

This is one issue which is every person of Indian origin feels extremely strongly about and it is uranium which is a key to guaranteeing India’s energy demands in the future. When the Indian Finance Minister P Chidambaram had visited Australia last year, he jokingly said in the AIBC luncheon, “I am going to tell Mr Howard, give us uranium and we will let you win the Cricket.” Since then Indian has won the cricket and Australia has decided not to sell uranium to India.

India’s current uranium reserves are low. Obtaining enriched uranium for the two Tarapur reactors and VVER type reactors requires the consent of the Nuclear suppliers Groups countries. This is where the agreement with the US is expected to be beneficial to India. Nuclear energy contributes less than three per cent of the India’s installed generation capacity. India is reconsidering and expanding its nuclear power programs to reduce their reliance on fossil fuels and alleviate climate change. A nuclear renaissance is underway.  The main Australian concern relating to this issue is that it wants to trade only with countries that play by international nuclear rules and have signed NPT. As the repository of 40 per cent of the world’s known uranium reserves, Australia believes it is uniquely placed to contribute to what many consider will be the most effective response to combat global warming.

Mohan Monterio, President AIBC NSW Chapter spoke to THE INDIAN on this issue and said, “Australia’s stated desire is to be a global player in control of CO2 emissions and the refusal to sell uranium to Indian directly contradicts this stated position. The biggest challenge India faces is in meeting its energy requirements for 500 million people who want to be part of the booming Indian growth story. We (Australia) can’t on one side say that we are signatory to the Kyoto protocol and want to minimize green house gases and in the same breath not provide India its key resource to harness nuclear power, which has environmental implications for us. Option of using coal is disastrous and for India the most commercially viable alternative is nuclear energy.”

“We understand the risk of having India meet its energy need through the use of coal and are aware of impact of coal on the environment.  For India, making a difference to plight and the livelihood of its people is its priority over everything else. There is a need to recognize India is a democracy with focus on peaceful existence.” he added.

Cautioned Mohan, “We may be missing an opportunity to strengthen the relationship further. This in itself will not worsen the opportunity. We believe this decision will not make it worse for the bilateral relationship.”

Dr Raghabendra Jha is the Professor, Rajiv Gandhi Chair and Executive Director,Australia South Asia Research Centre, RSPAS at Australian National University, Canberra and is great mind who understands both countries well. Taking to THE INDIAN, Jha was explicit, “The kingpin of future relations between India and Australia has to be Uranium.  Without uranium relations won’t be as warm as they have the potential to be. It remains to be seen if a compromise can be worked out. This has been the Labour policy for some time now.  Currently Australian businesses in Queensland and Western Australia are doing good business selling coal to India and there is no enthusiasm to substitute this with uranium.  There is no particular hurry to sell uranium to India as there is no apparent economic incentive.”

Pointing out the complementaries in the relations, Jha said, “India’s is in a difficult position with respect to energy.  There is a dual problem. If they don’t get uranium, it will be running into all sorts of constraints with regards to carbon emissions. The relations could have really taken off had the uranium deal been permitted. Relations will remain warm but not as spectacular as with China.  China and Australia have a lot of complimentaries.  China is selling manufactured goods to Australia and Australia is selling uranium and other commodities. India and Australia are both service sector economies and there are not many complimentaries here. Australia doesn’t find enough rationale for selling uranium to India.” Jha added, “India will try to get Uranium from other countries.  Africa India summit is being organised in New Delhi currently and part of these discussions could be centered on uranium.”

In its global search for fuel to enhance nuclear power generation, India has asked Namibia to supply uranium from its vast reserves. India’s request for sourcing uranium from the south-west African nation was conveyed last week to Namibian Prime Minister Nahas Angula by Indian Minister of State for Commerce Jairam Ramesh. India and Namibia could explore a long-term relationship in uranium. Namibia, which is not a member of the Nuclear Suppliers Group (NSG), has 8-9 per cent of the world’s uranium resources.

If India seeks uranium sellers elsewhere Australian economy would be a loser.  Andrew Robb, Shadow Minister for Foreign Affairs and Liberal Party Leader has gone on record in saying, “The Rudd Government decision to overturn this agreement is wrong and unsustainable. This decision is also confused and inconsistent given that ‘enhancing relations with Asia’ is supposed to be one of the three pillars of Mr Rudd’s foreign policy. The decision, and the amateur way in which the decision was communicated to the Indian Government, has left a very bitter taste in Indian mouths.”

Well, at the moment Kangaroo has double minds courting the elephant and has decided to flirt with the dragon. Who knows what he may do next.

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