Abbott abroad; LNG fails PNG; Tamil abuse report. By Hamish McDonald.

New India posting big economic scores

Australians Myuran Sukumaran (left) and Andrew Chan have been held in Bali’s Kerobokan prison since their arrest for drug trafficking in 2005.
Australians Myuran Sukumaran (left) and Andrew Chan have been held in Bali’s Kerobokan prison since their arrest for drug trafficking in 2005.

What better way to start the new year than a day at the Sydney Cricket Ground to watch Australia play India? Mindful of his world-watching responsibilities, your columnist and three of his offspring embedded themselves in the stand set aside for Indian fans to gather.

And what a revelation this was about the confident mindset of the New India, or at least those able to pay the day tickets of $96 charged by Cricket Australia. As Virat Kohli’s men pursued a dogged chase of a huge Australian first innings score, the ebullience of their young supporters was something to behold. Aided by a large drum and huge quantities of beer, they matched the chants from the Australian pits next door, giving one outfielder a particularly hard time (“Warner’s a wanker”).

Another striking chant referred to the centrality of India in the cricket business and the power of the Board of Control for Cricket in India, which has almost as much status as the parliament or army: “We’re so rich, it’s unbelievable! We’re the BCCI, we can do what we like. We pay your wages, we can do what we like!” Indeed, for Australia’s star players Test cricket is a sideline or preamble to golden years under the new cricket raj – the Twenty20 IPL.

The 450 Australian business chiefs who went with Trade Minister Andrew Robb for a promotional week in India this month will also have found the same hubristic confidence. The change of mood follows the election of Prime Minister Narendra Modi’s government last year and the boost from slashed oil prices pointing to economic growth exceeding that of China in the next couple of years, or perhaps longer. It means our businessmen need to work harder to show they have something to offer, and then show much more staying power than they have in the Indian market so far.

1 . Abbott abroad

Despite his New Year’s resolution to focus on minding the shop at home, Tony Abbott can’t resist the lure of distant conflicts. Relations with Ukraine have been stepped up with a presidential visit here and the opening of an embassy in Kiev, and Abbott’s first foreign trip was to Baghdad, where he promised deeper involvement for Australian troops in the ground campaign against Islamic State, or Daesh as the locals call it. 

In February he’s off to the global summit on terrorism convened by Barack Obama after the Charlie Hebdo massacre in Paris. The war on terror looks like a straight-out fight against “barbarism” (favourite Abbott word), until you look at the 1000 lashes being administered to blogger Raif Badawi by our esteemed ally Saudi Arabia. 

But the immediate region is likely to present some challenges for Abbott this year. Last Sunday’s execution of six drug smugglers in Indonesia, including five foreigners, was a grim prelude to the likely execution of the two Australians of the Bali Nine on death row, Myuran Sukumaran and Andrew Chan. The two were clearly the ringleaders of the attempt to smuggle heroin from Bali to Australia. But is it just a coincidence they are the only ones among the nine of Asian origin? This could be a test of our multiculturalism, perhaps, to see if we make an equal fuss about all our citizens. 

In any case, the executions of mostly low- and mid-level couriers will do little to stop illegal drug use in Indonesia itself. If President Joko Widodo is serious, he could drive down Jalan Hayam Wuruk at the back of his Jakarta palace to visit the nightclubs that are notoriously hubs of the amphetamine business, and arrest the retired police and military figures running them.

2 . LNG fails PNG

Australia’s other northern neighbour, Papua New Guinea, is meanwhile running into trouble. This was supposed to be the year of a great leap forward, with gross domestic product jumping 15.5 per cent thanks to the first full year of production at the $US19 billion ExxonMobil liquefied national gas project. Instead LNG prices are expected to follow the global oil price downwards. 

According to Australian National University economist and former PNG Treasury adviser Paul Flanagan, GDP growth is likely to be 6.9 per cent, and the PNG government faces up to a decade with no tax revenue from LNG.

That’s highly embarrassing for Prime Minister Peter O’Neill, who has been spending big on lavish facilities in Port Moresby for this year’s Pacific Games and other prestige projects. In addition, he took out a $US1.1 billion loan from Swiss bank UBS last May to buy a 10.1 per cent shareholding for the PNG government in Oil Search, an Australian-listed partner in the LNG project and new gas discoveries. One move to help handle this loan was a 20 per cent revaluation of the kina last June, but this has hit coffee growers and tour operators hard. 

O’Neill’s 2015 budget managed to keep the deficit down to 2.275 billion kina, or 4.4 per cent of GDP. But this was only by including the receipts of a projected sale of the government’s equity in the LNG project to local landowners for 2.5 billion kina. Otherwise it would be more than double. The problem is, as Paul Barker of Port Moresby’s Institute of National Affairs puts it: “It’s equity that they [the landowners] think they already own, but anyway they are going to have to pay for it.” With whose money is the next question.

As well as fending off police questions about a payment he made while finance minister in the previous government, O’Neill is trying to head off a leadership tribunal to look into alleged irregularities in the UBS loan. Its three judges − who would have the power to dismiss, suspend or fine the prime minister − were to sit on Monday, January 26, but O’Neill has won a stay order to let his lawyers argue in the Supreme Court that he was wrongly referred to the tribunal.

On February 4 O’Neill emerges from the 30-month “grace period” since his election win in 2012, and it’s open season for votes of no confidence in the PNG parliament. The opposition leader, Don Polye, was O’Neill’s treasurer but resigned last March in disagreement with the then-imminent UBS loan. He is now flaying his former leader over the economy. Should Polye emerge on top from a leadership upset, however, Abbott and his new immigration minister Peter Dutton need not worry about their embarrassing Manus Island prison camp for refugees being closed. Polye has changed opposition policy to support the camp. 

3 . Tamil abuse report

Abbott was quick on the blower to congratulate Sri Lanka’s new president, Maithripala Sirisena, on his stunning election victory over the incumbent, Mahinda Rajapaksa, on January 8. 

No doubt he was hoping for reassurance this other distant bastion against boat people would not fall. It probably won’t. While he might be better at reconciling the Tamil minority (which gave him their vote in the hope he will), Sirisena has opposed opening Sri Lanka up to international scrutiny over its blood-soaked final campaign against the Tamil Tigers in 2009. 

With a report on the abuses coming up before the United Nations Human Rights Council in March, Sirisena will be looking to Australia to continue diplomatic efforts to divert censure or referral to a war crimes tribunal, offering help to block outgoing boats and acceptance of refoulements of those who make it out. Such is the moral price of our refugee policy.

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This article was first published in the print edition of The Saturday Paper on January 24, 2015 as "New India posting big economic scores".

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Hamish McDonald is a Walkley Award-winning foreign correspondent.

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