AUSTRALIA: Fears Indian market may collapse

Prime Minister Kevin Rudd was in India in a desperate effort to defuse growing concern among Indian politicians and parents alarmed by violent attacks against their offspring studying in Australia.

Rudd and his ministers fear the flood of Indian students into Australian education institutions is about to dry up, along with a fair slice of the $2 billion (US$1.86 billion) they contribute each year to the national economy. The Prime Minister's visit follows a series of trips to the sub-continent in recent months by senior members of the government after an India-wide outcry over the students' treatment.

In meetings with Indian Prime Minister Manmoban Singh and other top officials, Rudd offered assurances regarding the action his government and state authorities had taken to ensure the safety of Indian students in Australia. He also announced the government would exempt foreign students affected by the sudden closure of private vocational education colleges from paying a student-visa application charge of A$540 (US$500).

Many of the students affected by the college closures must obtain new visas to complete their studies at another college. Selling education to foreign students is Australia's third biggest export earner and India sends the second largest number of its students to Australia after China.

Last week's collapse of nine colleges in Melbourne and Sydney had education authorities struggling to find alternative places for the students, many of whom were almost at the end of their courses. Teachers and other employees of the colleges appear to have also lost out as there is no money to cover their entitlements.

The collapse was caused when the colleges' owner, a Cayman Islands-based Chinese group called SinoEd, went into voluntary administration. The Victorian government accused SinoEd of ''blatant disregard for the welfare of their students'' but reports suggest the company deliberately went bust after it lost confidence in the international student market and refused to provide a further injection of cash.

It seems clear more colleges will close following a tightening by Australia's Immigration Department of the rules affecting permanent residency and a crackdown on fraud being perpetrated by agents and students in India. The increased vigilance by immigration officials has resulted in a sharp rise in the withdrawal of student applications, with the rate more than tripling to 17% in September compared with 5% in July.

As well, the government last week increased the amount of money international students must first prove they have to obtain a visa to study in Australia. The increase - from $12,000 to $18,000 - has been welcomed by critics of Australia's lax control over students obtaining permanent residency after completing courses, many using fraudulent documents to bolster their chances.

The $12,000 minimum has not been increased for eight years and is believed to have given many foreign students a false impression of the cost of living in Australia. In the big capital cities, this is probably closer now to $20,000 a year.

* During a tour of Indian research facilities in New Delhi, Rudd also announced that Australia would provide an extra $70 million towards joint research projects. The money includes a $50 million boost to the Australia-India Strategic Research Fund, to which India will also contribute the same amount, to support 50 projects in agricultural research, renewable energy and vaccines. Rudd said Australia would also invest $20 million over five years in dryland agriculture research.