A new golden age built with Australian coal
Thanks to the British Raj, English has many words of Indian heritage. Avatar is not a highly grossing Hollywood movie, or something in your Twitter profile, it is a Hindi word that means descent. The word comes from Hindu teaching and describes the descent of Lord Vishnu to earth, which he performs on a regular basis, to re-establish the purity and happiness of the Golden Age.
The question for India is, are they on the cusp of a new Golden Age? The potential is there. You can feel it. Flash new shopping malls and modern, hip bars have popped up around the corner from crowded slums that seem to be waiting in expectation for progress to visit their lives soon.
In Kolkata, a city of 15 million that was built by the East India Company, I visit the world’s biggest coal company, Coal India Limited. The company sits at the intersection of India’s past and possible future.
Coal India is the legacy of the socialist tendencies of the Nehru era of India’s economic history. Coal India was established in the 1970s to consolidate the vast majority of coal mines that had just been nationalised. It has grown into a large, internal bureaucracy, with 300,000 employees, and has been plagued by inefficiency.
That’s its past. Its future is dictated by India’s desire to modernise and progress. Coal India had been set the task by the government of almost doubling production as India attempts to become self-sufficient in thermal coal. It is making progress, albeit more slowly than planned.
The night before, we had been in a Bangkok airport lounge, barely believing the Cricinfo updates as Ben Stokes took away the Ashes. So I thought the early small talk might, as it often does in India, turn to cricket.
I was surprised when Coal India’s President begins by discussing a portrait on his wall of Swami Vivekananda who is best known in the West for an eloquent speech he gave at the Parliament of Religions in Chicago in 1893. He compared how many rivers start in different locations yet all end up in the sea, to the journey of many faiths all leading towards God. He also recounted his pride in how India had become a refuge for Zoroastrians, and for Jews escaping Roman repression after the destruction of the Temple.
Later, we see this religious melting pot for ourselves. It is Mother Teresa’s 109th birthday and we visit her ‘house’ where the Missionaries of Charity continue to selflessly care for the most unfortunate. The house is down a narrow alley in a busy Kolkata street. Mother Teresa lived in a room smaller than most prison cells and slept on a mattress no thicker than than a couple of rolled up bedsheets.
I meet the Minister who had been, until recently, in charge of Coal India, Piyush Goyal, for lunch in Dehli. Piyush is a businessman who brought a whip-cracking zeal to his time as Power Minister. He was given the job of bringing electricity, for the first time, to hundreds of millions of Indians who live in rural villages.
The program is largely on track and, as a result, Piyush has been promoted to Commerce and Industry Minister after the recent election. He is responsible for trade policy and I make the case to Piyush that it is counter-productive for India to maintain tariffs on Australian resources like coal and copper. These are essential for India’s economic development and it makes no sense for India to penalise its own industries by increasing their costs.
There will be no trade deals signed today although we hope for progress in the future. India remains wary of free trade, especially what that might mean for its fledgling industries if they must compete against the world.
That is understandable yet greater trade, openness and economic liberty must be the recipe if India is to grow in a fashion similar to the Asian neighbours to its east.
In Mumbai we meet the large Indian conglomerates Tata, Reliance and JSW Steel. These corporates are on a growth trajectory which is only limited, almost, by their balance sheets and the strength of the Indian economy.
They have enormous need of resources. Over the next few decades, the World Bank predicts that almost 300 million Indians will move to cities. That will require more than 10 billion square metres of new housing. To build that, around 1 billion tonnes of steel will be required, and more than 500 million tonnes of coking coal will be needed to make that steel.
There are Australians marching in our streets, next to luxurious apartments, with posters saying ‘End Coal.’ Translated to an audience in a developing country, that really means, ‘Keep the poor homeless.’
India has barely any coking coal of its own and Australia has some of the best in the world. It is a natural partnership for Indian steelmakers to invest in Australian coal mines to secure these supplies.
That is exactly how the coal mines of Queensland and New South Wales were developed in the 1960s when Japanese steelmakers sought to secure reliable supplies. Now that the Adani mine saga has been resolved, there is hope that Australia can attract similar investment from India. The potential jobs for Australians are in the thousands. It makes the Labor party’s schizophrenia on Adani so revealing. A true ‘worker’s’ party would not have to think twice.
Gandhi often recounted the parable of the blind men and the elephant. One man grabbed the elephant’s tail and thought it was a snake, another the trunk and thought it a rope, a third thought it a tree as he touched its leg. The point was they were all right and wrong from their own perspective.
Predicting the future of India, given its complexity and diversity, is about as difficult a task as these blind men had. I could be right or I could be wrong but it certainly seems the Indian elephant is moving forward. If it is, we should move with it.