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Open markets

Calling all polyglots

Douglascomms's picture
Wed, 19/03/2008 - 13:21 — Douglascomms

We've trained our sights so far out we can't see what's in front of our noses.

There's something funny about the way we do business. 

Take a look at our trading partners for example. Last year Japan bought more of the stuff that we produce than any other country. All in all they spent $32 627 million goods we produce here in Australia. The Chinese follow at a reasonable distance paying us $22 845 million, then came South Korea spending $13 071 million,  India at $10 099 million, and then the US and New Zealand each of whom spent a little under $10 000 million.  

But if you look over to our services sector a very different picture emerges. For starters, the value of our services exports is much smaller than our merchandise exports - our entire services exports only brought in $46 233 million in 2007, compared to $215 850 million for merchandise exports.  

And our principal services customer is the US at $5286 million, followed but the UK, $4356 million, Japan, $3284 million, China; $3169, and New Zealand at $3006 million.  So while our commodities, agriculture and manufacturing sectors are largely focussed on Asia, our services sector remains trained on our Anglo allies the US and the UK.  

Looking for Love in Decoupling World

Douglascomms's picture
Wed, 12/03/2008 - 14:27 — Douglascomms

Can Australia withstand the shocks and blows of the global economy?

Sorry, the heading might have been slightly misleading, I'm not talking about the kind of person to person love that leads to coupling, weddings, mortgages, and occasionally even children. I'm talking about the coupling that leads countries to plunge, lemming like, into and out of economic crises, forming a macroeconomic conga line behind that pinnacle of consumer power the US of A. 

There's a debate currently raging as to whether the USA's economic woes will suck the rest of the world into a global recession, or whether Asian and European consumers have become sufficiently powerful to pick up where US demand is about to fall off.

If the global economy remains tightly coupled, and we're all on the verge of plummeting headlong into a global recession, I hate to break it to you, but it's our own stupid fault. 

For the last few decades open market evangelists have gone forth and multiplied, chanting the mantra that small open economies should focus on exports, constrain wages, and limit government spending on human capital development.