Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 2 - Evidence - March 25, 2010
OTTAWA, Thursday, March 25, 2010
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 10:33 a.m. to study the rise of China, India and Russia in the global economy and the implications for Canadian policy and to examine such issues as may arise from time to time relating to foreign relations generally.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: We are continuing our study on the rise of China, India and Russia in the global economy and the implications for Canadian foreign policy.
We have today the Honourable Kamal Nath, Minister of Road Transport and Highways. Some of his delegation accompanies Mr. Nath.
Minister, welcome to the Foreign Affairs Committee. We have had many witnesses on China and Russia, and we have had a good number of witnesses to this point on the topic of our relations with India. We will continue that study, and your visit here to Canada was very timely so that we could have the benefit of your experience in your previous portfolios as well as the very important one you hold now.
Canada has had many high-level visits between ministers and officials, both from Canada to India and from India to Canada. We know that you have been here before in recent years and that this is another opportunity to strengthen our bilateral ties between Canada and India. We welcome you to this table.
Hon. Kamal Nath, Minister of Road Transport and Highways, Government of India: Thank you for giving me this opportunity. I am delighted to be in Canada again. Three years ago, I was here in my previous capacity as the minister of commerce and industry.
India moves on. The story on the economic side is the same: We continue to grow. India has not only the largest but the loudest democracy.
You mentioned China. I was asked in Hong Kong — where I was before coming to Canada — what is the difference between India and China? Someone remarked — not me — that in the Chinese Parliament there is too much silence and in the Indian Parliament there is too much noise.
India has a very vibrant democracy. The rule of law, while it grows, has serious challenges: Challenges of managing growth and equitable growth. In managing growth, we hope to see 8 per cent growth this year, 9 per cent the following year and 10 per cent thereafter. While this growth continues, we have the momentum of growth. In managing growth, we must ensure that this growth touches all sections of society and all parts of the country. You cannot have growth which is local only to some areas.
India, despite its prowess in many areas — IT and skilled manpower — still has 300 million people earning less than $1 a day. We have 400 million people earning $2 a day. While there is one India that has manufacturing prowess and IT, as India unleashes its intellectual and entrepreneurial abilities there is the other India — a huge part — that is left behind in this growth process.
After our elections in May of last year, we returned to government and our priority became how to have equitable growth. In managing growth, the biggest deficit we have is our infrastructure deficit — a huge infrastructure deficit for those who have visited or heard about India. With this huge infrastructure deficit, it is very important to bridge this deficit in order to sustain our growth.
Infrastructure — particularly roads — impacts agriculture, industry and trade. For example, we are the second largest producer of fruits and vegetables in the world, and 40 per cent rots because of the lack of infrastructure to reach the marketplace.
India has 650 million people engaged in agriculture. It is subsistence agriculture. Eighty per cent of India's agriculture is cultivated on one or two hectares of land. Therefore, the challenges we have are enormous.
Then, India is in ``that neighbourhood.'' What is our neighbourhood? Our neighbourhood is Afghanistan, Pakistan, Nepal, Bangladesh, Myanmar, Sri Lanka and, of course, China. As an established democracy and a growing democracy, we have established to the world and to other developing countries, that democracy can be and must be the process of development. At one time, a decade or two decades ago, people taught that democracy was a contradiction to growth. India has demonstrated to the world that, within the confines of a democracy, you can not only grow, you can grow well.
We continue with the challenges of terrorism. India has been a victim of terrorism for a long time. At one time, the world saw terrorism as a local or bilateral issue and it took a long time before it began to realize it was a global issue. For many years, we said terrorism is a global issue, but our voice was not heard. Now, there is recognition that terrorism is a global issue and recognition that there cannot be two types of terrorism, good and bad. All terrorism is bad. No terrorism is acceptable to the global community.
This is a very important development where India is concerned. We continue to have attacks in Bombay. We continue to be subjected to terrorist attacks. Our internal security apparatus has a lot of stress because of terrorism. I think the world will need to address the realities of terrorism. As much as the world today is addressing economic stresses, the world also needs to address the issue of terrorism.
We had a very successful visit from the Prime Minister of Canada. Canada and India have perhaps the greatest people-to-people relationship. We have a large number of Canadians of Indian origins who established themselves in business, in government, in social services and in politics. Whenever I come to Canada, I feel a great sense of comfort because we share a common ethos; an ethos of a harmonious and pluralistic society; a society that is all inclusive and tolerant. There is no country in the world like Canada which is able to weave together different religions and different cultures.
India is the second largest Muslim country in the world, and a country that values harmony of society. Of course, there are assaults on the harmony of society from time to time, but the ethos of India — the bedrock of Indian society — is harmony. We are very proud of that and we see that in Canada.
I would think that India and Canada have a very natural partnership. Beside our democracy, shared values and principles, we have similar views on all social issues. We are committed to the economic development of our people. We have commonalities in our economic system, and we had to convert these into concrete cooperative activities.
The world has moved on and it has seen a major change. The last decade has seen globalization like never before. We have seen great changes in technology with the new us of broadband. On your phone screen and every single screen you can think of you can see not only news, but have the ability to acquire knowledge and information that helps towards a greater understanding.
With all of the changes taking place, Canada and India have an enormous opportunity. I urge that we build our people-to-people engagement into a greater economic engagement, an economic engagement that is a win-win situation for all.
India's growth does not threaten. India's growth beckons. We are a country whose economy is a free market economy, a transparent economy. We have rule of law and we have strong institutions. We have banking regulations, and it is not only law, it is enforcement of law. Intellectual property is respected. It is not only that we have the intellectual property laws, but we respect intellectual property.
As we move along into the second decade of this century, new opportunities exist for Canada and India to cooperate. We have to find these, grasp these and, as policy-makers of two countries, we owe it to the future to create a new momentum on these opportunities. Thank you.
The Chair: Thank you, minister. Your enthusiasm for increasing our relationships is noted in your remarks.
You are in charge of infrastructure. Where would Canadian businesses be able to enter into this infrastructure?
Mr. Nath: We have a huge deficit in every aspect of infrastructure. Sometimes comparisons are made with China. I do not want to do that. For the last 10 years to 15 years in India, we have focused on rural infrastructure. China is doing that now. China has a very great and commendable urban infrastructure. They are now moving to rural infrastructure.
We focused on rural infrastructure in the last decade and a half. In fact, having been in Parliament for 30 years, if I was offered $100 million, I would say I would build a road not to the airport — and I would not build an airport — but I would build the roads in my district to connect 2,000 villages. I need to connect them. I have had enough of walking to them.
We focused on rural infrastructure. We are not there yet; there is still a huge gap, even in rural infrastructure, but we have moved ahead. We moved ahead very much so on rural infrastructure.
We have the second largest road network in the world, with 3.4 million kilometres of village roads, district roads, state highways and national highways. Our national highways represent only 2 per cent of our roads. Our roads carry about 75 per cent of goods and passenger traffic. Two per cent of our national highway carries about 42 per cent of passenger and goods traffic. These gaps are huge.
We set a target in June of last year when I was appointed to this new job after five years as the commerce and industries minister. When I was the commerce and industries minister, I visited Canada and I had said we must have a trade agreement. I am very happy that we have started that process.
We set a target of 20 kilometres a day, which means 7,000 kilometres a year. In order to complete 7,000 kilometres a year, we must have 20,000 kilometres of work in progress. Work in progress of 20,000 kilometres means $50 billion. Over the next three or four years, to meet this target of 7,000 kilometres, we will need about $70 billion to $75 billion. Close to $45 billion will come from the private sector, and about 50 per cent of that will be from international financial institutions.
Over the course of the last two days, I have engaged with Canadian pension funds, banks and financial institutions. I have spoken to Canadian construction companies and Canadian consulting engineers, because we have a huge capacity for building as well as financing. I met with engineering people and construction companies. We have a huge capacity needed in order to reach these figures, and this is a major quantum leap.
We are on track, I hope, and we will be on target, or very close, by June. The enormity of this is large, and we have huge opportunities. I have met with companies that have said they are already there. I met someone who said he is a consulting engineer. I told him he needs to expand. It takes too long, and I do not have the time. He said he already has 1,100 people. It is a consulting engineering company. I said, ``I need you to have 2,000.''
When you tell a Canadian company you need 2,000 consulting engineers, they think 1,100 is huge. For someone who is in touring and highway management, it is not. I asked, ``Where is your office?'' He said he has four offices, and named all four cities. They are there, but we need many more.
I think the biggest success of this lies in government and policy-makers enabling them and catalyzing the process of them being there. Canada has been far too NAFTA-centric. I must be honest. Canada's horizon must go beyond NAFTA.
Three years ago everyone listened to me and heard me, but no one questioned me. This time they heard, listened and questioned. They asked me how and what models. I see a palpable change on this visit.
Senator Wallin: Minister, welcome. Thank you for your comments. I just want to follow up on your very last remarks. You talked about the great people-to-people relationship and the business that goes on. You were certainly considered the author of expanding foreign and freer trade out of your country. Canada sits at 28 in terms of recipients of Indian goods, so what are we doing wrong? You said we are pretty NAFTA-centric, but I am sure you have other views.
Mr. Nath: India is not merely an exporter. India is a big importer. We are not only looking for foreign investment. We also invest abroad. We have more investments in Canada, in value terms, than Canada has in India. We have more foreign investment in Australia. I must say, in the last two years we have created more jobs in the United States than the United States created in India through investments.
I think that Canada needs to look at India as a market, with Canada's economy being $3.5 trillion. We need to have a target of $15 billion of trade both ways. At the moment it is quite evenly balanced.
Looking at India as a market and a base, you find many companies now coming to India, setting up their manufacturing plants and using their own technology and innovation. Canada has great strengths in technology and innovation, but the juice of that only goes to the United States. That juice needs to go elsewhere in different forms.
Canada will get mileage out its technology and innovation if it is converted to a product. Which better country to convert it to a product than India? There are many companies from Germany and Japan using their technology and innovation and manufacturing in India, not only for the Indian market — which is a huge, captive market — but for global markets.
It is not just looking at the Indian market — which is huge — but using India for the East Asian markets. There must be an understanding of the centre of gravity for economic activity in moving to East Asia. India is a huge market. At some point China will also be a huge market, and potentially Indonesia, the Philippines and Bangladesh as well. Canada needs to look at India as a manufacturing base also.
Senator Jaffer: I welcome you to Canada. I come from British Columbia and I know that we got the Olympic Games thanks in part to India's support through Herb Dhaliwal. I want to thank the Indian government for helping us get those games.
Bearing in mind your previous position as minister of commerce and industry, how you envision us working together? You have said we were NAFTA-centric. What do we need to do to become an exporter to and importer of Indian goods? What are the hurdles? What should we be doing?
Mr. Nath: The first issue is a mind-set issue. Canada needs to look beyond. They are not looking beyond even if they have a competitive product. If they have a good product, there is no need. In good times, that is very good.
The economic crisis of 2008-09 has been a big wake-up call to all countries. This wake-up call means different things to each country. To India it meant something. We did feel the stress, but not that much. Some countries felt more, some countries felt less. It is a wake-up call for everyone, but different for each.
One thing I see is that structurally Canadian companies need to have the management strength to move outwards. One of Canada's great strengths is its medium and small businesses, but they do not look beyond. You do not look beyond a couple of states in the United States. Governments must strengthen — the small and medium sector also — to look beyond NAFTA. It is not just the large players.
Large players have presence but, from a management point of view, internal structural issues must be addressed by these countries to reach out.
Senator Jaffer: The other challenge we have is protectionism in India. How do you see that being removed as time goes on?
Mr. Nath: There is no protectionism in India. Where investment is concerned we have one of the most liberal foreign direct investment regimes. During my tenure I made sure that it was so. You can still invest in the telecom sector in India but I do not think you can do it in the U.S. You can invest in a port in India but I do not think you can do so in the U.S. We have liberalized our foreign direct investment regime. Where tariffs are concerned, we brought down our tariffs substantially.
We do not really have protectionism in India. We have some issues on wines and spirits. In that regard, I would say there is some protectionism. It is not protectionism for the Indian market, but traditionally these products had high tariffs. All other products have 7 per cent or 8 per cent tariffs. Those are our peak tariffs.
That is really the story of the past. Again, much of Canada knows India of the past. Canada has to come into real time because all of that has changed.
Senator Nolin: I am from the Province of Quebec. From my few words with you earlier, I am aware that you know well my Prime Minister, Mr. Charest. I am sure he sends his good wishes.
You spoke about growth and of course, we applaud the success of your country. Yes, growth comes with democracy and rule of law, but also with stability. You alluded to that in your remarks. You live in a region where stability has not always been a feature. Canadians are becoming more acquainted more and more with your region of the world because of Afghanistan and the important presence of our military in that country.
India is a strong player in the world economy and the security of this planet. As a leader in the region, what is your strategy to maintain stability in the region and how can Canada help you to achieve that stability?
Mr. Nath: In India, we have always believed that we should act by example within our neighbourhood. We have tried to engage with our neighbours. We have SAARC agreements on trade, culture and all kinds of things. SAARC, the South Asian Association for Regional Cooperation, includes Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. We have a SAARC agreement in place, to which Pakistan is also a signatory. It is another story that they do not honour what they sign onto.
We believe that the world needs to look at this region, which is the hub of terrorism. It is terrorism in Pakistan and Afghanistan. I do not think more research is required on that. Where do the nurseries of terrorism exist? You do not find terrorism that has a made-in-India stamp on it; you find terrorism with made-in-Pakistan or made-in-Afghanistan stamped on it.
Strong countries of the developed world really need to recognize these facts and understand these realities. Afghanistan and Pakistan need to be addressed together. You cannot address Afghanistan in isolation of Pakistan.
Senator Nolin: I totally agree with you. That is the policy of the Canadian government. However, if we want to be successful in Afghanistan and Pakistan, we will need India with us. Are you ready to take that challenge with us?
Mr. Nath: We are engaged in Afghanistan, although not militarily because Afghanistan is our neighbour. We have not gone anywhere militarily. We are engaged in Afghanistan in large nation-building activities although India is still a low-income country. We are assisting in building many important projects in Afghanistan.
Pakistan remains a major issue. It has not seen democracy. When Pakistan has experienced democracy, it has been democracy dictated by the military. It has had no sustainable or maintainable democracy for a long time.
India has said that the political process in Pakistan needs to be strengthened. We can do it by example in demonstrating that India is a successful democracy. There is no better example for Pakistan. The Kashmir bogeyman is only propaganda to ensure huge defence budgets and all that goes with defence expenditure. I will not elaborate more on that issue.
Senator Smith: I do not mean to get into the India-Pakistan issue, but I heard your comments. I was in India the month the bombings occurred in Mumbai a little over a year ago and so many were killed. In this situation and in trying to get some cooperation with Pakistan to identify the bad people and to move towards prosecution, a little bit of progress was made. Could you comment on whether that terrible incident triggered progress?
Mr. Nath: The perpetuators of that incident and their partners are roaming around freely in Pakistan; they have refuge in Pakistan. The trial process is really a subversion of justice.
I see no progress. There is more progress in propaganda by Pakistan. However, the world knows where this originated. We read more every day. I read or saw on the news yesterday about new statements made by the ISI chief of Osama bin Laden.
That is the real difference. India is the country of Mahatma Gandhi and we are dealing with the countries of bin Laden.
Senator Di Nino: Mr. Nath, you talked about Canada being too NAFTA-centric and you also said something about Canada's mindset. I think you will agree that in the last three years, with the opening of at least three new trade offices — particularly the one in Ahmedabad, Gujarat, that we believe will be an important component to the trade and investment relationship between our two countries — that Canada has finally awakened. This is my opinion; it may not be yours. Many of us here would agree with your sentiment that we have not moved as quickly as we should in recognizing the opportunities that exist between our two countries.
We are dealing with three issues now: the foreign investment protection agreement is still in the works; the nuclear cooperation agreement; and I think it was Minister Day who started the economic partnership agreement discussions when he visited.
Where are those agreements as far as the Indian government is concerned? At what stage are they?
Mr. Nath: As you say, Canada has awakened. Indeed, Canada has awakened but Canada must get out of bed.
Senator Di Nino: We can have this discussion privately.
Mr. Nath: I am trying to get my message across loud and clear.
I did applaud my former colleague, Stockwell Day, on the office in Gujarat. That was a good thing. You need many more and it must be followed up by many more visits of senators, people in public life, the business community and from ministers. One visit of the Prime Minister sets momentum, but there must be a post-prime minister's visit. Such a visit is very important.
We are in the final stages of the investment promotion agreement. There are a few things to be ironed out and I am sure that will be done quickly.
I personally value the economic cooperation agreement because I was the one who promoted it, started it and now it has been formalized. We set a study group of business communities. It is the right thing to do; it was a win-win situation. Now a study group has been formed. The business community would like and I would urge all senators to even persuade governments. Government departments have hundreds of things to do and they are immersed in so many things.
A timeline was set during Prime Minister Harper's visit, but I think it is falling back. This needs to be revved up. I urge my colleagues and the administration in India to rev this up and I would ask you to do the same.
The structure and administrative structure of the nuclear cooperation agreement has been worked out. It is strategically important for India to have this agreement. We demonstrated to the world that we had the nuclear ability and we have never used it. Canada recognized our self-discipline. Canada recognized that and supported us.
I think this cooperation agreement is the way forward. We have just had it a couple of months and I think both countries will work toward it. We are working towards it because we need it. We must see that Canada is there. We cannot be country dependent on Russia or France. We must have all technologies — the best technologies — and Canada has some of the finest technologies. It is more needs based for us.
Senator Di Nino: I want to acknowledge the incredible contribution that the Indo-Canadian community has made, not only through the High Commissioner's Office, but also through the Chamber of Commerce, the Canada-India Business Council and the Canada India Foundation. They pushed us very hard, particularly with respect to the nuclear agreement. We hope we can get that moving faster, sign it, and I believe it will create many opportunities. It is probably an issue where both sides need to move a little faster.
Mr. Nath: I completely agree with you. This was flagged in the morning and I will go back and take this up.
Senator Downe: You spoke about the importance of the Prime Minister's visit, the government officials who traveled to India, and the opening of the new offices.
What are other countries doing that is so much more than what Canada is doing in India — the Australians, Germans and Japanese? Can you give us an indication of what our shortfall is from the Indian perspective?
Mr. Nath: In the economic area?
Senator Downe: Yes.
Mr. Nath: Japan set up the JETRO, Japan External Trade Organization. One reason for this was because most the Japanese business communities cannot speak English, but that is not the problem with Canada. They do the handholding of the medium sized business sector of Japan to engage with India. JETRO has three or four offices all around the country.
The United Kingdom has always traded with India. Germany moved a large part of its manufacturing to India aware that they would have a shortage of skilled workers.
There is a very strong Indo-German Chamber of Commerce. It has been there for 50 years. This chamber of commerce that functions like a commercial office. Every German who lands in India goes to the German Chamber of Commerce and does all due diligence about people. The Germans lead it. All German companies become part of it.
Similarly, each company has its own model of operating. Those who are looking at services have a different strategy. Those who are looking at manufacturing have a different way of doing things.
I think the focus of the Canadian offices in India should be to attract the medium sector of Canada to India as a market and to look at what they can buy from India.
Senator Zimmer: Minister, thank you for your attendance today and your presentation. Your message was very clear and precise.
I come from Manitoba, where we have many successful business people in the community which contribute to our community and give back. However, in your presentation, you indicated you have two major problems involving poverty and terrorism.
I recognize you have a sense of humour from your comment about Canada getting out of bed. Let me phrase my question. There is a chemical equation between industry and terrorism. One feeds the other and I will take the reverse angle. I notice that you took your university at St. Xavier's College in Kolkata and took a degree in commerce, but maybe you took Chemistry 100. Industry and terrorism is becoming a balanced equation whereby people from your country immigrate to other countries around the world and become very successful contributors to the economies in the host country. However, they are developing cells in all countries whereby, by providing good business and becoming successful businesses, they send money back to your country. Unfortunately, in some cases, the money is put to bad purposes such as buying weapons and terrorist equipment.
How do you unbalance that equation or kill it to stop that from happening?
Second, do you have a drug-growing problem there, which becomes a third equation, which also then ties in and feeds the whole equation again?
How do you address and deal with those problems?
Mr. Nath: In India, we have not been afflicted by this like countries like Sri Lanka that have a lot of evidence abroad for those who are successful here. The only such instance we had was in the separatist movement of Khalistan. It is a non-issue which never worked, despite them sending their money. There is no such movement alive and that movement exists more in Canada than it is in India. There is no support, nothing and no mention of it. At one time, it was very strong and at that time, you are right that it did fuel it. However, that movement died out.
India has been very fortunate that we do not have our resources used for separatist or illegal movements; the same cannot be said for our neighbours. We are relatively fortunate not to have that problem.
Where drugs are concerned, India does not have drug cartels or a drug mafia. We have nothing of the kind. Drugs are grown; I come from a province that produces all of the narcotics.
No one is bothered. It is just not a way of life. Of course, you have a very small element in universities or colleges that experiment with drugs. Experimental usage has become very common in this part of the world, but not in India.
I see that drugs are not a problem in India. In relative terms, we have very negligible numbers and therefore, we do not consider it a huge, insurmountable problem.
Senator Smith: I wish to discuss this ``revving up.'' Where there is a will, there is a way. It is fair to say that, in both Canada and India, there is genuine, bona fide will to try to increase exchanges and identify problems.
Our committee has done visits to both Russia and China and we will hopefully go to India, as well. In Russia, we heard about visa problems nonstop and much of it concerned the business people coming back and forth.
In terms of things that can help us rev up — and you referred to a couple and I think of the Bombardier plant over there — university exchanges are a good idea. We would like to hear about any ideas that come to you. Maybe, with the high commission, we can get them. However, I am really trying to reinforce that there is a will here and hopefully we can find a way.
Maybe you could comment on that because, with the strong community and very successful Indo-Canadian business people in this country, there is a real desire.
Mr. Nath: There is a real desire and a will from India, also. I think there is a huge potential in education. Our cabinet has just approved a foreign universities bill, permitting foreign universities to engage with India. Never before has this happened. It will be a win-win situation. I was in Toronto and the director at the University of Western Ontario said they are looking at programs.
There are new synergies, and they said they were now looking at more students coming from Indian to the universities here, after some issues in Australia. You cannot compare Australia and Canada. Australia is a completely different kettle of fish. This comparison was made; that is why I mentioned it. Someone remarked we learned some lessons from Australia. I said you will learn more lessons from them because you are completely different.
I think that should be encouraged and engagements with universities should increase.
We must recognize that there is a study by PricewaterhouseCoopers, which says that, in 2020, the global skilled manpower shortage will be 56 million people and India will have a surplus of 47 million people. That is as close as 2020.
The point I am making is that the partnerships and opportunities that existed five years ago are changing and we have to look at today's opportunities.
Senator Stollery: I will be very brief. I want to thank the minister for taking the time to come to the committee. I think it is very timely because we are just starting this business.
Last night I heard the minister defending himself over the Doha business. Some of us in the committee are rather knowledgeable about Doha, and I sympathized with you on some of your arguments.
I never thought I would start reading books about Pakistan, but I have started — I read Ahmed Rashid — as well as that wonderful book, A Case of Exploding Mangoes. Everyone should read that book.
Mr. Nath: You must tell them which one.
The Chair: We have read it.
Senator Stollery: We know about the neighbourhood a little bit and it is very difficult. It will not end quickly. Kashmir, after all, has been going on since 1948, so it is not something that will end next week.
Senator Downe's question is the one that concerns me, and maybe you have answered it. What are the Germans, for example, doing right that we are not doing? After all, Canada has had a long relationship with India, longer than Germany, one might argue. I choose the Germans because they are very successful with their export and international trade policies. I think you may have answered it when you answered Senator Downe about Japan and the fact that they have these chambers of commerce. It seems incredible to me, and always has, that they have been so successful and we have not.
Mr. Nath: Germany does not have the United States as a neighbour. That is one reason. The United States is a huge market for Canadian businesses. Germany has Austria as its neighbour, a small country with a small market. The Germans were looking for a huge captive market and a manufacturing base. Germany manufactures in India and sells the products globally. They have very small neighbours, whereas Canada as very large neighbours. That is one reason.
As I said, it is a perception issue. Canada has been very secure from this point of view.
Senator Robichaud: You mentioned that agriculture is mostly subsistence agriculture and you said that we probably know old India rather than new India. How does agriculture fit into the new India picture that you are painting for us? Is it lagging or is it following the progress? What role can Canada play in India's agricultural sector?
Mr. Nath: First, how does it fit? We want to ensure that agriculture, as a part of our GDP, is reduced. We have a higher percentage of manufacturing as a part of our GDP than agriculture.
Second, we are cooperating with Canada now on various agricultural issues of productivity. We have one fourth or one fifth and, sometimes, one eighth of the productivity of Canada. Almost 80 per cent of our agriculture is rain fed, so it depends on the monsoons. Last year, we had a bad monsoon and the simple perception of a bad monsoon led to a rise in prices. We have huge buffer stocks.
Therefore, we are looking at providing skills to the newly educated new generation in rural India that does not want to go into agriculture. This group must have a set of skills. We have a very large skills development program so people may learn to operate cranes or obtain other useful skills.
However, we need to have a large number of people move away from agriculture. Thirty years ago, many people lived off one hectare of land. We now have many more people living off one hectare and the available land has not increased. The family has increased in size and productivity has not increased. There is not enough to go around. Some people are moving to other areas.
Senator Wallin: My last question comes down to energy. I want you to answer this question because you are very blunt and straightforward. Does India need Canadian energy? I am referring to non-renewable oil and gas. Does India need our non-renewables or our high-tech skills, information and equipment to extract your own?
Mr. Nath: We need both. We have limited resources to extract and therefore, we will remain a huge importer of oil and gas; approximately 85 per cent to 87 per cent of our needs are imported. We want to do what we can and to do it efficiently. We will want to buy at the best prices.
Senator Nolin: I have a brief question on nuclear issues. I am sure your country has heard President Obama's pledge for a global non-proliferation regime. What is your country's opinion of that regime?
Mr. Nath: Proliferation has to come with commonality; it cannot be selective. We have always maintained that India is willing to go along with complete nuclear disarmament, but we cannot have selective disarmament. We cannot have Pakistan clandestinely building something while India is disarming. We had nuclear ability long before Pakistan, but Pakistan has developed it. No one told Pakistan not to develop it, if fact, they received aid and were supported by many countries. It was not a secret. Pakistan started building up nuclear capability despite India telling many countries in the world that they were doing this and should be stopped.
There must be a common approach to this issue.
The Chair: Mr. Minister, we have run out of time. I thank you for staying a few extra minutes. I did not give a long biographical introduction because all senators had received it previously. As many senators knew of your previous capacities, they were well prepared to meet with you.
You more than exceeded the challenge we placed upon you with all of the questions. You might see some of your quotes in some form in our report. I think you have challenged us to pay closer attention to India and to look at our relationship, perhaps, in a new way. It is on the record that there has been a more aggressive government-to- government re-engagement in recent times, but this Senate committee thinks that it can add to the government's efforts and, perhaps, bring about some of the innovations that you discussed.
Thank you for your timely visit and the time you have spent with us today.
Mr. Nath: Thank you.
The Chair: Honourable senators, our time is limited, so we will be very efficient. I will indicate that our second witness today is His Excellency Antonio Guterres, UN High Commissioner for Refugees. Mr. Guterres became the tenth United Nations High Commissioner for Refugees on June 15, 2005. I know Mr. Guterres from his days as Prime Minister of Portugal. Portugal was on the United Nations General Assembly for a five-year term. Mr. Guterres became head subsequently, after serving his country in many capacities and in the European Parliament. You have his biography, so I will not go into detail.
I will simply welcome Mr. Guterres to the committee. We are the Foreign Affairs Committee. We are presently embarked on country-specific studies in trade, but Canada has a long association in supporting the UN High Commissioner for Refugees. Your presence in Canada is extremely important. The UNHCR's work has twice garnered Nobel Peace Prize recognition. Therefore, this committee is honoured to have you here today.
H.E. Antonio Guterres, UN High Commissioner for Refugees, Office of the United Nations High Commissioner for Refugees: Thank you very much. I feel very much at home. I have been 25 years in Parliament. Of course, we have no Senate — there is only one chamber — but I always feel among colleagues when I have the opportunity to address a parliamentary committee.
In today's world, we have about 60 million refugees, including Palestinian refugees, and 27 million people internally displaced. Two-thirds of the world's refugees come from what I would call an arc of crisis that starts in Pakistan, moves into Afghanistan, includes the Iraq situation and the Middle East. You may not be directly involved in the policy and refugee situation because another UN organization that was there before, UNDRA, the United Nations Disaster Relief Agency, deals with those situations. Then there is Sudan, Chad, Somalia and the countries around Somalia where Somali refugees are found and then Yemen. This arc of crisis represents two thirds of the world's refugees, but it is more than that.
This arc of crisis contains a group of situations that are becoming more and more interrelated. They are linked to concerns of global security. Some of these countries can be a breeding ground for terrorists that eventually might act outside the area. At the same time, to a certain extent, what is at stake is the relationship between the so-called Western world and the so-called Muslim world. Obviously, the solution to this crisis would be an extremely important contribution to world peace and world security, even if we know that, unfortunately, looking at this arc of crisis, globally things are not getting better.
Afghanistan is a very complex situation for us. The security in Afghanistan has been deteriorating and more displacement is taking place. The returns from Pakistan and Iran have almost disappeared because the situation is still very challenging. There is a slight improvement in Iraq. You all followed the difficult negotiations, how to start or restart an effective peace process in relation to the Palestinian-Israeli question. With respect to Sudan, there have been small improvements in Darfur but we have big concerns about the future of Southern Sudan. We are very much afraid about what might happen in 2011 in Southern Sudan. Somalia and Yemen are getting out of control in the dramatic political, security and humanitarian situation. This arc of crisis is a worrying concern for us as humanitarians but also for everyone involved in foreign policy in today's world because it is the very centre of many of the problems we face.
Then there are all the other crises, some of them dramatic in humanitarian dimensions. There is the Democratic Republic of Congo, for instance, or we can speak about Sri Lanka, Colombia or the Central African Republic. The other countries have a local or regional dimension. No one is afraid that a terrorist from the DRC will set off a bomb in Geneva. These other crises tend to be less in the centre of concern of the global media and of international communities' efforts. Indeed, some of them, as I said, have dramatic humanitarian impacts.
In this context, I would like to underline three major concerns. First, there is the shrinking of humanitarian space because of insecurity. There is no longer a typical civil war between an army and a rebel group, as we had in Sri Lanka. You go to eastern DRC and you have the national army, which is the worst. From the point of view of the violation of human rights, you have an international force and you have four or five different rebel groups or ethnic militias, some local and some from neighbouring countries, and widespread banditry, some people being a member of a militia in the morning and a banditry in the afternoon. This creates a dramatic shrinking of humanitarian space, with an excess of humanitarians to the people in need. We had, for instance, three colleagues killed last year in Pakistan. You can imagine the impact this has on any organization.
With respect to the second area of concern, the human rights agenda is losing ground to the national sovereignty agenda. In the 1990s when I was in office in Portugal, the international community had the capacity to intervene in Bosnia, Kosovo and East Timor. In relation to East Timor, I would say today this intervention would be impossible. One looks at the evolutionary side countries where governments use more and more of the national sovereignty to limit humanitarian action. With respect to this government mission to Darfur or even the Myanmar government in the past, we could quote an enormous number of examples. There is no access for us because governments do not allow human- rights minded international organizations to be there and to see what is happening.
It is more than that. It is the global correlation of forces that, in my opinion, is putting the human rights agenda into question and national sovereignty is again becoming the key factor in international relations, which, of course, for a foreign agency like ours, is an extremely worrying trend. It is a worrying trend for all people who believe in human rights.
The last concern is that we are witnessing more and more situations where we have peacekeeping in areas there is no peace to keep.
[Translation]
For example, when UN troops are operating in a country where there is no peace, they become part of the conflict. That means that the impartiality or neutrality of the international community is called into question. And if that is true of armed forces in specific circumstances, it is just as true of humanitarian agencies.
For someone living in a village in the Congo, the UN is the UN. Whether it is a military force, an agency like ours, or the World Food Program, that creates additional problems for humanitarian agencies because of the difficulties of maintaining the autonomy of humanitarian spaces, as well as the impartiality, neutrality and independence of humanitarian action.
I believe that Canada's role, first, as an exemplary partner of the Office of the High Commissioner for Refugees— We receive significant financial support from Canada, and because Canada is hosting the G-8 this year, it can play a significant role in ensuring that these issues are properly managed by the international community. That is a very important role. I am very pleased to have this opportunity to visit Canada, your government and your institutions at a time when you will be playing an essential leadership role at the international level.
Senator Nolin: Thank you, and welcome, High Commissioner. I would like to consider the refugee issue from the Canadian perspective. Your agency has a responsibility to monitor or, at the very least, review the way we act on our international commitments. I would just like to mention a few figures: more than 80 per cent of refugee claimants from Mexico make their claim in Canada, compared to a little less than 20 per cent in the United States. Almost all claimants from Hungary and the Czech Republic make their claim in Canada.
Do you think our current mechanisms are adequate? If not, what should we do to change them? You may be having those conversations with the Minister of Immigration.
Mr. Guterres: The Minister of Immigration discussed this at length. He has had many opportunities to present his reformed guidelines to Parliament. Naturally, we are available to Parliament to give an opinion in those areas that Parliament deems important.
First of all, I think it is important to state that the Canadian system is sound. We talked about a number of options for improving the system, but it is a sound one. That is important.
Second of all, our concern must always be to achieve compatibility between an adequate level of protection — which is exemplary in Canada's case — and the integrity of the system, in terms of its ability to discourage abuse.
In that context, I believe there are four extremely important dimensions and that must be viewed as a whole. They are: access, the quality of the decisions, the decision timeline and the ability of governments to send people back who are not in need of protection — in other words, a system that is honest and efficient that allows people to access it and receive fair decisions in an appropriate timeframe, and which allows the government to return individuals not deemed to require international protection.
I believe the very interesting debate that will follow will focus on how we can introduce reforms to the system with a view to guaranteeing the absolute compatibility of all these different components. We had a very interesting and useful discussion this morning, but of course, we need to see the actual wording. I do not know whether this expression exists in French, but the devil is in the details. Naturally, we are at the disposal of both the government and Parliament and prepared to offer our expertise and specific skills to advance the debate and ensure that any decisions that are made are balanced and effective.
But we have two concerns: maintaining a high level of protection, and guaranteeing the integrity of the system — in other words, we are not in the business of protecting individuals who don't need it, but rather those who do, and the critical factor is to guarantee that level of protection while still allowing individual governments to act based on their policies, while still respecting human rights, naturally, and human dignity, but at the same time exercising their sovereign right to develop their own immigration policy.
Senator Nolin: I assume that the minister mentioned, or that your briefing notes made you aware of the fact that the third of the four important features you referred to — namely, the timeline for the decisions — is the central problem here in Canada.
As they say in English, the backlog of applications awaiting a decision is terrible and I imagine that is one of your concerns.
Mr. Guterres: Providing a reasonable timeframe is critical. If the timeline is too short, that means the decisions are not properly made. If it is too long, it means that ultimately the system is not working, because ten years later, even if you decide the person does not need protection, it is probably too late to send him back because he is already fully integrated.
Recently in Austria, where the system is very slow, a situation arose where someone was told, five or six years after the fact, that he did not need protection and when the government tried to remove him, the city where he was living organized a demonstration.
Senator Nolin: The city was opposed.
Mr. Guterres: Yes. They organized a demonstration in Vienna, saying that now he has his own business, he is working and is a respected citizen, so why would we want to remove him?
However, the timeline for rendering a decision is very important. In my opinion, under the Canadian system, there is a need to develop a mechanism, in terms of how the different levels of authority coordinate their actions, that will ensure that decisions can be made on a timely basis.
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Senator Wallin: My colleague discussed some of the concerns we might have about our mechanisms, whether it is border control or the bigger issue, the Charter of Rights and Freedoms; namely, what happens when someone lands here in Canada.
Given the context of and motivation for your mandate, which was post-war settlement, which at the time seemed non-controversial, we are now dealing with the movement of terrorists. It is hard to see whether your mandate has actually responded to that movement.
Do you have changes that you think put any of the responsibility back on your organization in terms of assessment?
Mr. Guterres: As a matter of fact, terrorism is an exclusion ground. No terrorist can be recognized as a refugee because this is something that is very clear in the doctrine and the principles.
It is not very common to have people involved in terrorist organizations using asylum as a mechanism for a simple reason that asylum puts a spotlight on you. If you want to go some place to do something nasty, you do it in such a way that no one notices your presence.
In any case, we have engaged in a meaningful system of cooperation with the anti-terrorism commission of the United Nations that supports the anti-terrorism intergovernmental body. We have also had cooperation with INTERPOL in creating mechanisms for the exchange of information as well as establishing the ability to detect such situations.
On the other hand, we keep a meaningful dialogue with countries that have intelligence capacity on some of the most complex situations in order to ensure that we consider those in a very effective way. This is in the very centre of our concerns.
I think it is fair to say that we have not detected a meaningful attempt by members of terrorist organizations to use the asylum channel. The abuse of the asylum channel normally comes from migrants who want to use asylum as a way to be accepted in a country in ways they would not be as a migrant.
From the security point of view, until now, the number of situations in which we felt the system was under threat is very limited; however, we are establishing mechanisms of cooperation in order to allow for the necessary safeguards.
Senator Jaffer: High Commissioner, I was very intrigued in how you described the arc of crisis. I would appreciate if you would elaborate more on the specific challenges women face in the refugee process. We are studying India, and I know that quite a few refugees came to India during the Nepal crisis. Trafficking was a main challenge the women. Can you comment on that situation?
Mr. Guterres: That is an issue for a three-day conference.
I will briefly point out three areas of concern. First, in a conflict situation, women and children tend to be the most vulnerable targets of the worst violations of human rights. For the women in eastern Congo, the level of rape is absolutely appalling. It is sometimes difficult even to have contact with those situations because they are so horrible. I have had several experiences with people that have suffered things that are unimaginable. Women become the most obvious victims in this kind of situation in the most terrible way.
Second, trafficking is a form of slavery that, I would say, is becoming very common business in the world. Most are victims of sexual exploitation. It involves both women and children in very dramatic situations.
I am very frustrated with the fact that international community has done much less in relation to human trafficking than drug trafficking. I have my own opinion why it is the case. When I was in office, I never thought my children would be trafficked, but I always thought they could be victims of drugs. All politicians and members of international organizations in the world probably have the same idea. We tend to give much more attention to drug trafficking than to the trafficking in human beings. However, trafficking in human beings is the most heinous crime that exists and we need to do much more.
We discussed protecting victims today with the minister. He was very sensitive to measures being taken to increase the level of protection to victims of trafficking and to allow them to come forward and denounce the perpetrators of these crimes. We also discussed the need to crack down on traffickers and smugglers, but especially traffickers.
Third, we must say how important women are in the solution. I discussed this arc of crisis where women are victims of different forms of cultural and religious discrimination. The empowerment of women is the key instrument, not only for human rights protection, but for the political solution to this crisis. For example, microcredit distributed through women works very well. It is very problematic when distributed through men, namely, in its use and on its return.
The empowerment of women is, in my opinion, a key instrument in humanitarian and development action. There are two very big negative concerns, but we also have a signal of how important women can be as a factor in the solution to problems.
Senator Jaffer: Regarding the South Kivu women in the Congo, one feels impotent because of what is happening to them. Are you doing anything more for those women?
Mr. Guterres: We have a meaningful program of sexual- and gender-based violence prevention and response in the DRC. In the Kivu region, we have essentially been doing prevention and training of police and armies, and helping victims and things of the sort. However, we, together with the international community, have not been able to be an effective deterrent factor.
In Katanga, we have an interesting experience. We have paid for courts, judges and other things. We have managed to get a meaningful number of condemnations and sent perpetrators to jail.
In the case of the DRC, if you do not punish, there is no way to advance. All of these prevention efforts alone do not work. We were able to be effective in this in Katanga, but we are not yet there in the Kivu regions. Our capacity is limited because we have no law enforcement capacity, but we are pushing. I hope we will be able to have the same level of success in North Kivu and South Kivu that we have started to have in Katanga.
Senator Stollery: This committee has been in Kivu. We visited a clinic in Goma. I was in Kivu about 55 years ago and I know both ends of the dreadful voyage. The committee visited a clinic where the only operation was repairing the vaginas of raped girls.
As far as we could make out — and I think it is true today — nothing is being done in Kivu. I would suspect that 1,000 people were killed today in the region within 50 kilometres going west of a line from Goma to Bukavu — both places I knew in colonial times. As far as I or anyone else can make out, nothing is being done.
The Chair: I think that was a statement, not a question.
[Translation]
Senator Stollery: I am well acquainted with Kivu.
Mr. Guterres: If I could just add something, when a country is at the point where the worst violator of human rights is its national army, a group of armed gangs — In any case, the national army is effectively the worst violator of human rights. And when there is, in my opinion — and I hope this will be corrected in future — a contradiction in MONUC's mandate — Because MONUC, the United Nations Force, has three obligations: protecting civilians, helping to build national institutions — an army, police, and so on — and, third, supporting the army's operations against the rebels.
And when you are supporting the army's operations against the rebels, which in themselves are a major source of human rights violations, how can you go about protecting civilians?
Senator Stollery: When you talk to MONUC army commanders in Kivu, they tell you — the commanders or the general — that they have orders from New York to do nothing. They complain about being given orders from New York which are the opposite of what you are saying.
We attended a dinner with the Pakistani commander of the MONUC mission, who said to us, ``Well, I can do it but they won't let me.''
Mr. Guterres: As I see it, the real issue is that New York tells them to support the military operation, but at the same time protect civilians. But how can you support a military operation which involves killing and raping people, and at the same time protect civilians? It is impossible; there is a contradiction in the mandate.
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Senator Smith: I have two crisp experiences on which I would like your reaction. First, in 1980, there was a government change; Mr. Trudeau was re-elected and I was a member of Parliament. The previous government had imposed visa requirements for people from Chile because they were coming up as visitors then seeking refugee status. Mr. Trudeau advised us to talk to everyone so we spoke to the Marxists, the church leaders and our own people. They told us that about 95 per cent of them were simply queue jumping, but we would give visas to the other five per cent anyway. We recommended Mr. Trudeau maintain the status quo. Have you any comments on how Canada has bona fide refugees, but does not address that problem?
Second, seven years ago, I went to Bosnia and Herzegovina with seven senators to talk to the troops. This relates to your comment about peacekeeping where there is no peace. They said they were making a real contribution and were happy to be there, but only under NATO. They did not want to be put under the UN mandate straitjacket where they would only sit and watch and not do anything. What is your reaction to that?
Mr. Guterres: Visa policy is an instrument of the foreign policy of a country. We cannot argue against the rights of countries to issue visas.
Senator Smith: This was before President Carter.
Mr. Guterres: We always say that whenever you apply a visa policy, ensure that it does not impede people in real need of protection to have access to the territory.
The second point is that one operation is seen as a peacekeeping operation the other is peace-enforcing operation. In some situations, we are witnessing peacekeeping operations where there is no peace to keep. If the mandate is a traditional peacekeeping mandate, obviously you become unable to do anything that makes sense.
In my opinion, there are two kinds of solutions that need to be enforced, with two different approaches. One is to have robust peacekeeping, which makes peacekeeping look more like peace enforcing, which then is to assume that the international force will fight if necessary to guarantee a certain number of defined objectives.
Senator Smith: It worked in Bosnia.
Mr. Guterres: That was a peace-enforcing situation, not peacekeeping. It is just to keep the peace that was established by the parties. If the parties do not establish peace, you cannot keep peace that does not exist.
For other situations, we need to say we are there to protect humanitarian spaces in a certain area. It is the EU force mandate for eastern Chad. They are not there to intervene in any confrontation but they are there to preserve a humanitarian space in an area for the displaced refugees.
We changed peacekeeping minds. It is not to preserve the peace; it is to protect a certain area. Peace enforcing is ``peacekeeping plus.'' I believe the problem is in the mandates established by the UN forces. These distinctions need to be established. If you are presented with a situation in which there is no peace to keep, and you establish a peacekeeping mandate, the forces will be unable to act.
The Chair: We have kept you over your scheduled time. We appreciate that this is a very broad area and I think your first three points highlighted some of the issues you are facing and which we will have to face as a country and as a committee.
We thank you for including us in your program. We will continue — some with great vigour — to have opinions on the topics you deal with every day. However, we do wish to convey to you and to all of those who work in UNHCR that their work is extremely valuable and we monitor it and support it as a country and as individuals.
Thank you for coming.
(The committee adjourned.)