Trade and Investment -- Australia's potential<\/p>\n
Far-reaching structural reform and opening of the economy to
\nglobal competition over the past decade has made Australia a more
\ncompetitive exporter of a diverse range of goods and services,
\nand an increasingly attractive location for foreign investment.<\/p>\n
The pattern of Australia's trade has changed markedly over the
\npast decade. Rural and mineral commodities, partly responsible
\nfor Australia's tag as the \"Lucky Country\", still make a massive
\ncontribution to Australian exports. However, in the past decade,
\nAustralia has undergone a significant shift towards manufacturing
\nand services exports.<\/p>\n
There have been other changes. Exporting is increasingly
\nbecoming the domain of small to medium enterprises, and Australia
\ncontinues to integrate with the Asian region.<\/p>\n
Underpinning much of this change reflects Australia's
\nconsistent commitment in bilateral, regional and multilateral
\nnegotiations to the liberalization of trade and investment,
\nincluding the reduction of tariff and nontariff barriers to the
\nfree flow of goods and services.<\/p>\n
\"A leaner, more efficient, domestic economy is making
\nAustralia a more internationally competitive exporter\", Deputy
\nPrime Minister and Minister for Trade Tim Fisher said last August
\nwhen addressing the Australian Business in Europe group in
\nMelbourne.<\/p>\n
\"The government is establishing a framework for economic
\ngrowth for years to come with responsible macroeconomic policy,
\nthe acceleration of microeconomic reform, and by reducing the
\nregulatory burden on business.<\/p>\n
\"A key aim of our macroeconomic framework is to improve public
\nand private savings. In our first term of government we will have
\nturned an underlying budget deficit of more than A$10 billion
\ninto a surplus of $1.6 billion. By 2000\/2001, the budget should
\nbe in the black to the tune of $10 billion.\"<\/p>\n
Australia achieved a surplus of $1.4 billion on the balance of
\ntrade in goods and services in 1996\/1997, compared with a deficit
\nof $2.1 billion in 1995\/1996. For the first time, both
\nmerchandise and services trade were balanced or in surplus.<\/p>\n
In a statement last February, Fischer told the Australian
\nParliament that overseas markets had become more important for
\nsectors of the Australian economy, which, in days gone by, were
\nsheltered and could not venture beyond domestic borders.<\/p>\n
This is reflected in changes in the type of firms exporting
\nand the composition of Australia's exports. Once, exporting had
\nbeen the domain of large firms but today, more than 4,500 small
\nand medium enterprises trade overseas and generate earnings of
\naround $6.5 billion a year.<\/p>\n
The value of Australia's exports of manufactures and services
\nhas grown around three times as fast as primary product exports
\nover the past decade. Australia has developed a competitive edge
\nin the supply of computing equipment, medical equipment, and
\ntelecommunications and pharmaceuticals.<\/p>\n
And rapid growth in services exports has been driven by
\nsectors such as tourism, international education, music,
\ninformation technology, and other advanced industries.<\/p>\n
Engineering, construction and mining company PT Petrosea, a
\nsubsidiary of Clough Engineering, is just one example of
\nsuccessful Australian investment in Indonesia.<\/p>\n
International education has also been growing rapidly. In the
\nfour years 1993 to 1996, international student numbers in
\nAustralia increased 69 percent.<\/p>\n
Of the international students in Australia in 1996, more than
\n121,000 were from Asia, 6,090 from Europe, 3,255 from the
\nAmericas, and 1,567 from Africa. This source of income generated
\n$3 billion for Australia in 1996.<\/p>\n
Six of Australia's 10 largest trading partners are in East
\nAsia. Together, they account for just under 60 percent of
\nAustralia's exports. Australia's closer trade links with Asia
\nreflects proximity, and our status as a major supplier of raw
\nmaterials and intermediate products -- key inputs into Asian
\nproduction.<\/p>\n
The recent currency instability in East Asia reflects
\nfinancial market recognition of structural weaknesses in domestic
\nfinancial systems, exposed by the export slowdown in 1996. A
\nnumber of factors will determine how severe and prolonged the
\nslowdown in Asia will be, including responses by regional
\ngovernments to underlying problems, investor confidence and the
\nexpected rebound in export growth due to improved
\ncompetitiveness.<\/p>\n
While the economic adjustments in play will curtail growth in
\nthe next year or two, the medium-term outlook remains sound
\nprovided governments put in place policies to address these
\nweaknesses.<\/p>\n
Australia also continues to increase its investment links with
\nthe world.<\/p>\n
Foreign investment in Australia has grown at 11 percent over
\nthe past decade, reaching $438 billion at the end of financial
\nyear 1995\/1996. Australian investment abroad stood at $152
\nbillion at the end of financial year 1995\/1996, compared with $43
\nbillion at the end of 1985\/19986. The East Asia region is the
\nfastest growing area for Australian investment abroad, with
\nannual average growth of 18 percent over the past decade.<\/p>\n
The government's commitment to further reform and deregulation
\nwill enhance Australia's international competitiveness and
\nattractiveness as an investment location.<\/p>",
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"sponsor": "Okusi Associates",
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