In order to get a better understanding on how Australian fits into the world it is important to look at its economy.
According to Countrywatch.com Australia has one of strongest economies in the world. Like other liberal democracies their economy has moved away from an agricultural centered economy to a service directed economy. This type of service centered economy focuses on tourism, industry, insurance, property, retail, communication, and transportation. And although their economy is dominated by services, agriculture and mining still play a big part in revenue of Australia, contributing to over 50% of Australia’s exports. Australian economy is also supported by many structural reforms and policies that protect not only businesses the people.
Once Australia began to establish a highly recognized and respected economy they began to focus on how to best support Australia. To create a more prosperous country the economy began to support more internal competition, and became more export oriented. To accomplish this they reduced tariffs and set up systems to protect the dollar exchange rate. But because of Australia’s remoteness it has a very small domestic market so it is important that Australian maintains a healthy amount of foreign trade and investment.
Although Australia has seen relative economic stability, recently it has been it affected by the economic down turn, surprisingly not as much as other countries. Although their economy wasn’t affect as much as the United States, it still had set backs. For example commodity prices fell, domestic markets were strained, currency depreciated, and prices of real estate dropped.
But how could have Australia avoided some of the crippling effects that other countries experienced? According to countrywatch.com it was due to their vast amount of commodity exports with China, which continued despite the economic downturn. Another thing that protected the economy was the government’s timely response to the by setting up strong policies which protected the country. And lastly Australia has a very strong banking system that helped maintain Australian’s ability to obtain credit and provided many stimulus to improve the economy.
It is really interesting that Australia has such a large dependency on agriculture and mining exports. In other words, the myth of having to export mainly industrialized products or services ,as opposed to raw materials, in order to be a wealthier country is not entirely true.Huh!
ReplyDeleteI think you are on to something Steph! I have heard it said that the U.S. could produce more agriculture - even enough to feed billions of starving people in less developed and marginal states. Why won't we grow food and have more agricultural exports? -- South Korea has been signing more deals with independent beef raisers in the U.S. and other agricultural products from farmers in certain states for potatoes and grains.
ReplyDeleteThere is great wealth in the knowledge of agriculture and farming because hey, WE ALL GOTTA EAT! There is a ton of land in the U.S. that could be used more for farming and international exports of agriculture. An interesting concept nonetheless.
Josie, I think your articles are very thorough. You are pinpointing some very curious topics. I would be very interested in a comparison on Australia and the United States in many regards. Economically, Politically, International Relations etc.
My roommate right now is doing a study on the knowledge of global events by United States College students vs. Australian college students. Maybe that would be something you are interested in as well.