World

China syndrome; Economic Modi-fication; Abbott brigade By Hamish McDonald.

Anti-foreign sentiment simmering in Australia

Venezuela’s freefalling economy will likely cause it to default on debts to China. The protester’s sign reads: “Hungry.”
Credit: Reuters / Carlos Garcia Rawlins

The anti-foreign tide sweeping the United States and Britain in the Trump and Brexit campaigns – the latter ending with a leave vote at time of press – is curiously lacking in Australia as we trudge to the election debating the finer points of fiscal management. Pauline Hanson may well get elected to the senate, but that’s a personal vote for a now-familiar stayer. She’s not setting disgruntled old (Anglo-Celt) Australians on fire.

It’s sad to say, but Canberra’s 1500 hostages on Manus Island and Nauru act as a lightning rod for our xenophobia. This week, the Lowy Institute’s annual opinion poll on a range of policies found 73 per cent of adult Australians agreeing that “overall, immigration has a positive impact on the economy of Australia” and 72 per cent that “accepting immigrants from many different countries makes Australia stronger” and that “immigrants strengthen our country because of their hard work and talents”. Only 35 per cent think “immigrants take away jobs from other Australians”.

A lot of the same people approving immigration also support the policy of “stopping the boats”, as 63 per cent agree this policy “means that Australia can take in more refugees through UN processes”. A similar majority supports the government’s resettlement here of 12,000 Syrians, and doesn’t think the refugee intake should favour non-Muslims. Support for “offshore processing” is slipping.

But there is a strong feeling that enough is enough. A 53 per cent majority disagree that “Australia is a wealthy country which should accept more refugees than it does today”. There is more truculence lurking. About one-third think Christians and other religions should be preferenced over Muslim refugees, and 40 per cent think “overall, there is too much immigration to Australia” and “immigrants are a burden on our social welfare system”.

Another area where Australians feel free to be anti is foreign investment. The Lowy poll found 87 per cent of Australians against “allowing foreign companies to buy Australian farmland”, which is a rise of six points since it was previously asked in 2012. Scott Morrison and Joe Hockey before him have vented some of this steam with symbolic actions, forcing a rich Chinese buyer to sell a harbourside mansion in Sydney acquired outside investment rules and blocking the sale of the Kidman cattle empire on unexplained “national interest” grounds.

But the major parties are dominated by believers in a “big Australia” (as is Lowy director Michael Fullilove), and by tacit mutual consent the immigration taps are open. As migration expert Henry Sherrell points out in correspondence to the latest Quarterly Essay, the traditional immigration quota, raised or lowered according to the economic cycle, is now overshadowed by streams coming in as international students, 457 visa holders and backpackers. All these categories started as “temporary” stayers, but processes were inserted to allow conversion to residency.

“Governments have been somewhat disingenuous about this,” Sherrell says. “Tight border protection is trumpeted, yet it affects only a tiny majority of those seeking to come to Australia.” He worries the potential is there for an American- or British-style backlash if governments don’t match the population growth (fuelled largely by immigration) with better infrastructure, public services and urban planning. Xenophobic groups such as Reclaim Australia and Australia First lurk on the fringes.

China syndrome

It’s not turning out to be a good month for China’s power projection, what with the Indonesian navy firing on Chinese fishing boats and capturing one in the South China Sea last Friday. Then there was one of the abducted and detained Hong Kong publishers reneging on the deal that allowed him to go home. Instead he went public about being coerced into confessing to subversive deeds and agreeing to provide Chinese police with lists of his customers.

The breakdown of the “Bolivarian Revolution” in Venezuela, three years after the death of Hugo Chávez, is also rebounding on China. Beijing had pumped $US65 billion in loans to Chávez and successor Nicolás Maduro since 2005, repayable in oil, to build the country into a strategic counterweight to the US.

With nearly 90 per cent of the population short of food, looters breaking into shops (Chinese-owned stores being a particular target), and inflation at 480 per cent, Venezuela is in economic freefall. The political system is deadlocked between Maduro and opposition leader Henrique Capriles, who is trying to get a referendum on transferring power.

About $US25 billion is still owing to China, which has had some bad experiences with clients such as Zimbabwe’s Robert Mugabe and Myanmar’s generals but nothing like the national debt default looming in Venezuela. It might be the first of many.

Economic Modi-fication

Raghuram Rajan, the central bank governor who wrangled India’s inflation rate despite two poor annual monsoon seasons, and started bringing down interest rates and cleaning up bad debt in the state-owned banks, announced last weekend he’d had enough and will be withdrawing to academia.

This seems to have been the final prod for Prime Minister Narendra Modi to take decisions to galvanise investment in an economy that’s been growing strongly at 7-plus per cent, but not enough in high-employment sectors to soak up the one million joining the workforce every month. When the Jats of Haryana, a well-off farming caste, and the Patels of Gujarat, an enterprising trading caste, agitate for quotas in government recruitment like those set for the lowest castes, as they’ve done since Modi took power two years back, something is wrong.

So Modi announced on Monday that Delhi would henceforth allow 100 per cent foreign ownership of companies in defence, civil aviation and processed food, and up to 74 per cent of Indian pharmaceutical companies. Local product requirements have been greatly relaxed for companies wanting to open single-brand stores such as Apple and Ikea. Modi is also expected to get a uniform goods and services tax enacted by parliament next month, replacing state sales taxes that effectively break India up into multiple internal markets and addressing his budget deficit.

But giving in to the business claque whingeing about Rajan’s tight monetary policy and inflation-targeting, and replacing him with a softer figure at the Reserve Bank of India, could undo all of this.

Abbott brigade

Two US carrier groups are in the eastern Mediterranean, a petition by 50 middle-ranking state department diplomats has urged intervention against Syria’s Assad regime over its ceasefire violations, and Michèle Flournoy, Hillary Clinton’s rumoured pick for defence secretary, said this week she’s open to use of military force to topple Assad.

What better time to put Tony Abbott back in cabinet as defence minister? That’s the reported push from his crowd of supporters, who could be a bigger proportion of depleted Coalition ranks after the election. But read first the new Quarterly Essay, entitled Firing Line, in which Sydney University military analyst James Brown gives us more detail about Abbott’s attempts as prime minister to deploy Australian troops in Nigeria (against Boko Haram to rescue the abducted schoolgirls), in Ukraine (to secure the MH17 crash site), and Mosul (to roll back Daesh).

Brown reports military planners were set to work on deploying a brigade, 3000 troops, into eastern Ukraine, and various other military options. “The National Security Committee of Cabinet met every day for more than three weeks, and staff and agencies produced a frenzied stream of briefings on Ukraine, Russia and the intentions of Vladimir Putin,” he wrote. In the end, sanity prevailed, and the 100 special-forces troops who went were suitably disguised. But not to be discouraged, Abbott later canvassed sending a brigade into Mosul. As Brown happens to be Malcolm Turnbull’s son-in-law, this will no doubt be noticed.

 

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This article was first published in the print edition of The Saturday Paper on Jun 25, 2016 as "Anti-foreign sentiment simmering in Australia". Subscribe here.

Hamish McDonald
is The Saturday Paper’s world editor.  

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