The future of Australia in an Asian Century

As a country, Australia has been blessed being able to be able to survive the harsh global economic conditions partly due to its substantial mineral exports to China and India. However, the bigger picture now is how the country can further maximise its capability to need the emergence of Asia as its future source for its economic growth.  Just consider the opportunity of the 100 million market present in the Philippines and how much more Australian trade and investment to the country should not be defined only in the mining industry. Think people. Think food. Think BPOs. Think education. Think technology. Let’s hope the state visit of President Aquino can open doors to this further awareness.

From the Sydney Morning Herald

Asian focus is vital for economy’s future, says Carr

By Phillip Coorey
Published: September 25, 2012

The Foreign Minister, Bob Carr, has had to deliver a major speech on behalf of Julia Gillard in New York last night after the Prime Minister fell ill.

The speech  was designed as a pitch to foreign investors to see the Australian economy as being about much more than just mining.

There were no immediate details on Ms Gillard’s condition.

Senator Carr described the prosperity generated from the mining boom as ‘‘low hanging fruit’’ as he warned today Australia must become Asia-literate and Asia-capable if it is to sustain the economy well into the future.

In a speech in New York to the Asia Society and the Economic Club, Senator Carr also impressed upon investors that the economy today is less reliant on mining than generally thought.

At the same time, he will stress the importance of ongoing Chinese demand for minerals and declare ‘‘Australia’s mining boom has long to run’’.

But to prosper over the longer term, Senator Carr will say the nation needs to be able to think beyond the boom and cater to the rising Asian middle-classes. To do so, ‘‘we’ll need to know Asia’’.

‘‘We’ll need Asia literate policies and Asia-capable people,’’ he said.

Senator Carr said more important than China’s growth rate next year is ‘‘what the basket of consumer goods and services will be for middle-class Asian consumers later this Century’’.

‘‘The most challenging risk to Australia, and to countries like Australia, isn’t China growing more slowly than we predict in 2013,’’ he said.

‘‘The most challenging risk is if we can’t make and sell the things that Chinese and Indian and Indonesian and Thai consumers are buying in 2033.’’

‘‘Growth for us requires enormous sophistication. We’ve picked the low-hanging fruit, we need to be smart to find our future.’’

Senator Carr’s speech is a prelude to the imminent release domestically of the Australia in the Asian Century White Paper which will contain several recommendations to ‘‘lift the Asia capabilities’’ of the government and the people, including a stronger focus on education and learning Asian languages.

But Senator Carr’s speech also looked to spruik the Australian economy to the international investment community an impress upon it that the economy is about more than just mineral prices.

Senator Carr stressed that as important as mining has been and will continue to be, the economy now is more resilient than most in the world due to other factors.

‘‘Australia’s economy today is less reliant on our natural resources and our mining boom than you might believe,’’ he will say.

Australia has a strong services sector and over the next four years, ‘‘we expect three times as many new jobs to be created in health care, social assistance, education and training as will be created in mining’’.

Senator Carr said mining is an important part of a bigger picture and he will seek to ease investor fears over commodity prices by calling for perspective. He said iron ore may be forecast to drop from US$126 a tonne this year to US$101 next year but, 10 years ago, ‘‘we got around US$20 per tonne’’.

It is similar with coal and Senator Carr said ‘‘pretty good examples of where the wide view gives you a very different impression from the close-up’’.

‘‘Clearly we’d prefer prices to stay higher for longer and the easing in prices squeezes profits, meaning slower revenue growth for government and hard decisions in the expenditure side,’’ he said.

‘‘But, clearly, if you’d offered us today’s price 10 years ago, we’d gave grabbed them with both hands.

‘‘And if you offered any country Australia’s fiscal position, they’d grab it with both hands too.’’

This is the third successive overseas trip which has not gone to plan for the Prime Minister. She came home early from the Cook Islands when five soldiers were killed in Afghanistan and she left APEC after only one day when her father died.

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