Western Australia prepares for new growth era

Western Australia prepares for new growth era

With resource and infrastructure projects worth more than US$18 billion on the drawing boards, Western Australia is set to be the center of the biggest investment surge in Australia's history.

The increase in investment enhances the opportunities to develop even closer business relationships between resource-rich Western Australia and the rapidly-expanding economy of Indonesia.

The investment covers many industries, including oil and gas and mineral development, as well as the downstream processing of the states abundant mineral wealth.

A good example is the new Direct Reduced Iron (DRI) briquette plant being built by BHP in Port Hedland and a $240 million expansion of the state's largest titanium dioxide plant located south of Perth, the state's capital.

Foundations for the ongoing expansion of Western Australia's economy are being laid with work going ahead on a new $560 million coal-fired power station, as well as a new $360 million gas pipeline that has just been completed. The pipeline will deliver cheap, efficient and environmentally-safe energy from the northwest of the state to the mineral-rich Goldfield's region near Kalgoorlie.

Western Australia's wealth of natural resources will continue to provide opportunities for economic growth (currently 5 percent per year) well into the future.

This growth is not only in the mining area but also in agriculture, which is the state's second-largest export industry. Wheat, wool, beef, lamb and seafood (lobsters and prawns), as well as a wide range of fruit and vegetables, cereals (such as lupines, barley, oats and canola) are also exported.

There are increasing opportunities for the downstream processing of foodstuffs. Industries that are already established include plants producing noodles, fruit juices, small goods, a wide range of dairy products and some of the finest wines produced in Australia.

The manufacturing industry is also undergoing rapid development, with exports now accounting for $1.1 billion per year. Western Australia is the center for shipbuilding with companies producing a wide range of high-speed ferries and other craft which are being exported all over the world.

Research and development activities by local and international companies have produced internationally competitive innovations in engine technology, alternative and renewable energy, biotechnology, building products and electronics.

Geographically, Western Australia is the largest state in Australia, accounting for 2,252,500 square kilometers, or close to 33 percent of the continent's landmass. It has a population of 1.7 million people, 1.2 million of which live in Perth. Western Australia's total exports for 1994/1995 was $13.2 billion or 26 percent of Australia's total exports.

Perth is only 3.5 hours by air from Jakarta and Western Australia has developed a close economic relationship with Indonesia.

In order to enhance the growing commercial and cultural relationship between Australia and Indonesia, Western Australia signed a sister state/province Memorandum of Understanding in 1990, which was re-signed in 1995 by the premier of Western Australia and the governor of East Java.

In order to enhance this special relationship, the Western Australian government established its regional trade office in Surabaya in 1992.

The Western Australian Trade Office offers a wide range of services to Indonesian businesspeople to assist the ongoing development of the strong business relationship that exists. It also plays an active role in the various programs that have been developed under the sister state/province agreement. By establishing a trade office, it stresses the importance the government of Western Australia places in the relationship with East Java and Indonesia as a whole.

To emphasize the point, trade between Indonesia and Western Australia continues to flourish.

Currently, exports to Indonesia from Western Australia are $504 million (1994/1995) comprising mainly of crude petroleum products, live cattle, titanium dioxide, wheat and a range of mineral and manufactured products. Imports from Indonesia for the same period were $126 million (an 80 percent increase) and comprised of petroleum, paper products, furniture and a range of manufactured goods.

The continued expansion in the number of businesspeople and tourists visiting Indonesia and Western Australia has resulted in the steady increase of air services. Currently, there are nine flights per week between Perth and Jakarta, 15 flights between Perth and Denpasar plus a weekly service from Broome in the northwest to Denpasar.

The increase in the number of air services runs parallel to the increasing number of shipping lines now offering services between Fremantle and Indonesia's major ports.

The foundations for the ongoing development of the relationship between Western Australia and Indonesia are firmly in place. There is no better time for the business communities to take advantage of the current environment.