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POLITICS-AUSTRALIA: Uranium for India – Business or Strategy?

Stephen de Tarczynski

MELBOURNE, Aug 23 2007 (IPS) - Leading Australian academics say that while the United States’ nuclear deal with India may be part of the Bush administration’s "contain China" policy, Australia’s own agreement to provide uranium to the South Asian giant is based more on economic gain.

"The Howard Government is trying to maximise its economic leverage throughout the region, to use Australia’s abundant uranium to increase its economic profile," says James Leibold, lecturer in Politics and Asian Studies at La Trobe University.

Australia, estimated to hold 40 percent of the world’s known uranium reserves, reversed its policy of selling nuclear fuel only to countries that are signatories to the nuclear Non-Proliferation Treaty (NPT) to conclude an in-principle agreement with India, which has not signed up to the NPT, earlier this month.

The Australia-India agreement – subject to certain conditions being met – follows in the footsteps of a deal made in July between the United States and India. Under that arrangement, the U.S. plans to provide India with nuclear fuel and technology.

Robert Ayson, from the Strategic and Defence Studies Centre at the Australian National University in Canberra, says that the U.S.-India deal is two-fold.

"The U.S. decision to have a civilian nuclear cooperation agreement with India is one way of the Bush administration welcoming India as a great power and consolidating the bilateral relationship that the US has with India," says Ayson.

"And potentially it fits in with the Bush administration’s idea that it does want to check China’s power and that therefore closer relations with India are part of that," Ayson told IPS.

Prof. Joseph Camilleri, Director of the Centre for Dialogue and a colleague of Leibold’s at La Trobe, argues that while the U.S. deal is based on reasons of geo-politics, Australia’s motivation stems mostly from economic factors.

"In the case of Australia, I think it’s first and foremost economic motivation, pure and simple, and a reaction to the pressures that are being applied to the Australian government by those who stand to gain from an expansion of the uranium industry," says Camilleri.

He adds that a secondary factor in Australia’s willingness to supply India with uranium is "to once again support the United States."

Australia has been building closer economic ties to China. Its deal with India comes less than a year after Australia reached an agreement to export uranium to China.

Ayson says that Australia views China differently to the U.S. "I think it’s partly (as a result of) the economic ties with China, which are massive," he says.

Figures from the Australian Bureau of Statistics show that in the twelve months to March of this year China became Australia’s biggest trading partner. Worth around 42 billion US dollars, trade with China overtook that of both Japan and the U.S., traditionally Australia’s key partners.

Australia, says Ayson, &#39&#39doesn’t see China’s growth as necessarily a challenge to itself in the way that the U.S. clearly does." "I think Australia sees, generally, China as an opportunity rather than a threat.’’

China’s growth in recent years has forced other countries in the Asian region to readjust, says Leibold. "Certainly it’s rearranging the deck of chairs of sorts because you’ve got a new economic and political superpower so all its neighbours, I think, are trying to come to terms with that," says Leibold.

But while Australia is cautious not to give China the impression that its policies are part of any containment plan, it has recently become more integrated with other regional powers.

Australia signed a joint security declaration with Japan in March – a move criticised by China – with the two nations holding talks on a missile defence system in June.

Ayson says that this declaration could be perceived by some as a potential step in a possible tri-lateral alliance between the U.S., Japan and Australia. But, he says, the text of the declaration focuses on cooperation between the two countries in areas such as counter-terrorism. "The text of the declaration is actually quite non-threatening. But it’s more the atmospherics of it and the political symbolism that’s important," says Ayson.

Australia’s Defence Minister, Brendan Nelson, has also been at pains to assure China that it will not be forming a quadrilateral defence pact with the U.S., Japan and India.

Ayson says that neither Australia nor India see their uranium deal as part of a policy to contain China. "Basically, Australia is more sensitive to China’s perspective on this than, say, Washington is. And India is also quite sensitive about the China factor," he says.

But, cautions Ayson, China may regard Australia’s closer ties with Japan and India – as well as the overarching presence of the U.S. – as evidence of a budding containment policy. "I think Beijing’s probably already pretty much decided that that’s what this is maybe heading towards.’’

This week has seen a flurry of visits to India by top defence officials from the possible ‘quadrilateral’ pact, ahead of a major multi-nation naval exercise in Indian waters, early September. The visitors included Australian naval chief Admiral Russ E. Shalders, U.S. Pacific command chief Admiral Timothy J. Keating and Japan’s defence minister Yuriko Koike.

Ayson argues that if China believes it is being encircled, then there is a possibility of two "blocks" opposing each other in Asia.

China, along with Russia and four Central Asian states, is a member of the Shanghai Cooperation Organisation (SCO), the successor group to the Shanghai Five.

"Rather than a kind of great power collaboration in Asia…you actually get a division in the region," says Ayson, who rejects the notion that the two blocks would necessarily create a secure balance. "If you go back historically, Europe had a balance of sorts before 1914 with the Triple Entente and the Triple Alliance, and we know what happened there.’’

Leibold says that the business lobbies in both Japan and the U.S. have vested interests in their nations’ relationships with China. "People talk about a new cold war against China but the thing that’s fundamentally different now is the economic interdependency between these economies."

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