“You’ve got to remember we’re on an island here,” my old friend Nicolas was saying, as the rains, the worst outpour in nine years, crashed down on Alice Springs, in the Northern Territory, and great chocolate-brown currents clogged the usually dry river-bed of the Todd, blocking the way back to our hotel and washing away roads for the moment. “Apart from here, and away from the agricultural zone, I can think of only three towns with populations close to the 20,000 mark in the whole interior. Everywhere else in Australia – everywhere – is within 200km of the coast. There’s no one here. Nothing at all.”

We got out of our rented four-wheel drive and walked across a muddy bridge, for dinner at Hanuman, an elegant restaurant serving roast-duck curry and beef vindaloo and nyonya specialties; the coffee-shop next to it, Balloons, commemorated the town’s status as one of the planet’s centres of hot-air ballooning. I was no longer surprised to find Thai restaurants in the Outback; there are two Swiss restaurants in Alice Springs serving up Indian curries, and the town was, I’d heard, full of “Sudanese – refugees from war – and people from South Africa. We used to have people from Lebanon, too.”

Everything is odd in the desert, of course, and characters stand out against the emptiness; if all Australia defines itself by its irreverence and non-conformity, then the Red Centre – the area of desert in the heart of the country – is Australia squared, where there’s no longer even conformity to react against.

Flying in the previous day, over speckled red earth that poked up through low-lying clouds, I’d half-imagined we were landing on the worn, leathery back of some giant dust-red reptile. When I stepped out into the heat, it was to face an “emergency eye-wash station” on the tarmac, and a sign prohibiting tomatoes, capsicum and chillies from entering the virgin territory. Inside the glossy terminal, flies were instantly in my eyes and ears, at my mouth. Outside it, Aboriginals sat in circles on the grass, some of them wearing Emirates Airlines T-shirts.

Alice Springs has grown 28 times in size since the war – when its population barely reached 1,000 – but size has done little to change its sense of primal, pristine clarity. Much of Australia has the feeling of a true new world (the US feels, by comparison, used up and parcelled out), its temporary-seeming shacks huddled together in small settlements with emptiness stretching out around them. But in Alice Springs, of course, the elements are unchallenged. The town boasts Australia’s largest truck museum, a winter regatta held in the dry river-bed and even its own gay and lesbian festival – Alice IS Wonderland – but for the most part what it offers, three minutes out of town, is towering red rock and pulsing quiet.

I’d been here 20 years before, but now I was coming back because of what I’d read in Nicolas Rothwell’s incandescent books. A legendary classicist at Oxford, 30 years before, Nicolas had been famous for his dark clothes, his air of mystery and the way he could talk in many-chambered Proustian sentences about every aspect of history, literature, theology and science before he was 18 years old. He’d grown up speaking French and Czech, and by now had supplemented those with Arabic, Spanish, German and some Aboriginal words. But now, somehow, this man of very high culture and global sophistication had found his home amid the thrumming silences and the unworldly apartness of Australia’s interior, a landscape he had begun to immortalise in books such as Wings of the Kite-Hawk and The Red Highway.

Attitude has long been Australia’s largest industry, and in Alice, not surprisingly, it is cultivated in every crevice. A peacock strutted around the Crowne Plaza swimming-pool, and the Yellow Pages in my room pointed me towards the Horny Devils Adult Boutique and a number for “Undercover Wear Consultants.” A Reptile Centre in town was proudly offering visitors the chance to meet “thorny devils, frill-neck lizards, pythons and huge Perentie goannas”. As we passed the airport one morning, Nicolas pointed out the huge transport plane that had just come in to provide “5,000 Hershey bars,” as he put it, for the US soldiers stationed 10 miles out of town at Pine Gap satellite tracking station. Across from the sudden high ridge that was, he said, a “sacred site,” there stood a Kmart and a Best Western hotel, with a drive-thru Kentucky Fried Chicken parlour not far away.

Just before I’d boarded my plane in Sydney, for the three-and-a-half-hour flight, Nicolas had added, in a casual postscript, that we might meet his companion Alison, itself a surprise from the most intensely solitary and self-contained soul I had ever met. Now we were driving through the torrential rain to an office that had “Alison Anderson” written all over it. Alison spoke six indigenous languages and was fluent in “mainstream culture” as well, and now worked to try to mediate between the two. Until five months before, she had been a minister in the Northern Territory government in Darwin and now, while looking after Aboriginal concerns in Alice, she was still speaking out passionately against a welfare system that, she said, encouraged her people to keep themselves in a state of lazy dependency.

“As soon as ‘self-determination’ came in,” she said – her eyes were bright and she spoke directly, without hesitation – “the whitefella jumped off the seesaw, and we went sliding off into the pond. To a place of poverty, a place of despair. Some of us had to claw our way up again.” Once, 40 years ago, there had been a balance, she suggested, between the recent arrivals to the country, from Europe and elsewhere, and the land’s oldest descendants, each group observing its own laws, in its own country. Now that tribal people were trying to lead a modern urban life, and whites hoping to go back to their Aboriginal roots, there was confusion all over.

We had taken shelter in a little restaurant where friendly, fresh-faced Kyle, with a Greek word tattooed on his arm (“The first word of the Iliad,” said Nicolas casually. “It means ‘wrath’”. “Yeah,” said Kyle, “It’s my favourite book. But most people aren’t interested.”), was serving up kangaroo tacos. Alison was talking about going hunting, as a girl, for emu and kangaroo and lizards, her pockets stuffed with prickles, or spine-covered seed casings, that she would throw at her deaf cousin when she was straying too far and light was growing scarce.

She was talking about indigenous people who wouldn’t eat camels – they were sacred now because they had brought the Magi to Jesus. She was showing me the hand-signs she used, with fellow Aboriginals, to keep communications even further from the interloper, and I was thinking of the single boulder that sat on top of a rock outside of town, hauntingly, in memory of John Flynn, the minister who had set up the Royal Flying Doctor Service.

Then we were in the car again, and driving out across the huge emptiness, past ghost gums and river gums, their thin, speckled barks silver in the golden light, with kite-hawks wheeling overhead. A large sign in the middle of the desert – aimed, my friends told me, at Aboriginals – said, “No liquor. No pornography”, and across it someone had scrawled, “Racist government policy.” We stopped at a little shed in the desert where some “old ladies”, who sat at the top of their Aboriginal communities, were sitting on the ground, dabbing dots on to huge canvasses, while a white patron barbecued kangaroo tails for them to eat. Some of these wild-eyed elders – “like the Queen Mother”, Alison had explained, “in terms of their authority” – earn half a million dollars a year from their art.

“There’s a dingo Dreaming,” said Alison, calmly, as we drove back across the red emptiness, past corkwoods and ironwoods, with a few trailers and half-junked cars scattered among the bare-branched trees, under the blue, blue sky.

In the Aboriginal vision, I was learning, slowly, everything is connected; the land is in you and you are in the land, which is why to be separated from it is to lose your ground, your being.

Back in Alice, kids were jumping around in the overflowing river – a “banker” in local parlance (because it floods over the dry river-bed’s banks) – and buckets had been set up along the hotel’s corridors to catch the downpour. “Due to leek in ceiling,” a sign said, “the gym is currently out of order” (and I imagined a vegetable launching a terrorist attack, with Uzi-carrying tomatoes and vengeful pieces of capsicum behind it).

Frogs appeared in the desert, like portents from the Bible, and when I picked up the local paper, the Centralian Advocate (“The Arrival,” its headline had shouted, of the rains), I read of two men swept away by the waters, apparently to their deaths. In Alice a girl had almost drowned until a stranger jumped in, fully clothed, to save her. In a typical piece of Outback drollery, he had then gone to a local pub to collect himself – he’d lost his mobile phone and $50 in the rescue, after all – only for another customer to start pummelling him and punching him till he was escorted, bleeding, home by the police.

“Ours is an uncut diamond,” Alison said, the next day, over lunch. “Uncut, unpolished, unshaped. And it has to be kept that way. It’s a jewel of identity, a jewel of presence. Exploit it, and the power will go, and we will break into a thousand pieces.” At night I dreamed about more journeys and conversations, all night, until I got up from my bed, feeling as if I hadn’t slept at all. Or else was still asleep as I walked out into the fresh silence, where the waters were now subsiding and the desert was returning to itself.

Pico Iyer’s most recent book ‘The Open Road’ is about the Dalai Lama

He was a guest of the Crowne Plaza in Alice Springs, 82 Barrett Drive, Alice Springs 0870, tel: +61-8 8950 8000

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