The scale and pace of Asia’s rise in the coming decades offered opportunities for Australia across all sectors of the economy, including natural resources, Deputy Prime Minister and Treasurer Wayne Swan said in a statement following the release of Prime MinisterJulia Gillard’s foreign policy plan aimed at improving Asian ties. Swan said demand for raw materials had already created a boom in minerals and energy investment, and that the region’s ongoing industrialisation and urbanisation would continue to drive demand for a wide range of mineral resources.
The ‘Australia in the Asian Century’ white paper pointed out that Asia was set to overtake the combined economic output of Europe and North America and, by 2025, hold 4 of the 10 largest economies.Further, it was expected that the continent would become the largest goods and services producer, as well as consumer, globally by 2025, with the average gross domestic product per person doubling.“The structural shift of global economic gravity towards our region mean the scale and pace of Asia’s rise in the coming decades will be truly transformative,” Swan said.
Over the past decade, foreign direct investment into Australia has more than doubled, from $850 billion in 2001, to $2 trillion in 2011, with the mining sector accounting for more than 30% of it.Japan, Singapore and Hong Kong, which were among the top ten investors, poured about $211 billion into Australia last year. Total Asian investment in Australia in 2011 reached about $300-billion double that in 2001.
But Asia’s transformation would bring opportunities beyond resources, as the middle class was expected to reach more than 2.5 billion people by 2030. This would mean countries in Asia would demand a range of goods and services, as well as high-quality food products.“Australia is in the prime position to meet this burgeoning demand and take advantage of the enormous opportunities unfolding right on our very doorstep,” Gillard said.
Speaking at the launch of the national plan, she stated that the white paper outlined several targets to be achieved over the next 13 years to ensure Australia could fulfil its ambitions and compete effectively within Asia.Australia would focus on “five pillars of productivity” as it positioned itself to take advantage of the opportunities emerging from the “Asian century”.The pillars included education and skills development, innovation, infrastructure, tax reform and deregulation and aimed to ensure Australia emerged a stronger economy through the rise of Asia.
Swan said the country needed to build resilience and lift productivity growth and that it also had to find new ways to operate in, and connect with growing Asian markets.The report sets out the aim of developing Australia into one of the most efficiently regulated countries in the world, reaching the top five for ease of doing business.It also sought to initiate tax reform initiatives to promote new investment and boost productivity.Further, the government aimed to invest about $36 billion in roads, rail and ports over the six-year period from 2013 to 2014, acknowledging the central role that high-quality and coordinated infrastructure played in improving productivity, Gillard stated.
(Edited from an article by Natasha Odendaal in miningweekly.com.)