Exploring the Economic Dimension of Globalization in Australia

Exploring the Economic Dimension of Globalization In Australia

 In the economic dimension of globalization in Australia, the widespread of neoliberal economics and global expansion of transnational corporation [1] was certainly influential in the growth and sustainability of the economy. It can be attested that Australia has embraced the ideology of Nandan Nilekani in his article “The Prophet of Progress” [2] that “the world is flat”. He seconded through the increased level of trade among nations and not putting barricades can beat economic crisis. This criterion may have served its purpose in the development of Australia as an economic leader. Let us explore and take a closer look at the short historical and structural sectors of the Australian economy.

Transition from ‘Colonial Economy’ to ‘Australian Economy’

By the time the British had setup their colony in 1788, it began the first settlement in the Port Jackson in New South Wales. With the arrival of tradesmen, clerks, and laborers, there were also convicts who were skilled to contribute to the welfare of the so-called ‘colonial’ economy. However, during the early settlement, the establishment of trade and abundance of resources were not immediately sought, as the British were preoccupied with their own war with France. It was only in the 1820s where the population of the colony had start to increase where the primary production was of wool and rural commodities (rice, wheat, cereal) in the market. The settlement and access to the land of the indigenous population allowed the British to begin the rise of capital movements in the form of organizations like the Australian Agricultural company.

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Australian Agricultural Company was granted 1 million acres of land

By 1870s, the paradigm from wool shifted to the explored discoveries of gold and mineral deposits (iron ore, coal, uranium). With new exports of gold and minerals in demand, it accelerated the growth of not just the market, but also of labor workforce. Further in the wake of the Commonwealth of Australia in 1901 and after effects of industrialization, the Australian economy was heavily invested in agriculture and mining and had eventually expanded in domestic manufacturing. [3]

Sectors of Agriculture and Mining

Two of the strengths of the Australian economic sectors are agriculture and mining. With an abundance of resources to which the country was endowed, maximizing the labor and quality of the products were recognized as the future of economic development.

The best agricultural products are meat and animal products.

 

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Meat from Australia known for its high standards

BHP Billiton is the world’s largest mining company. [4]

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Workers of BHP, the world’s largest mining company

Although the increase in GDP through agriculture and mining were disclosed, there were still issues faced and needed to be addressed. The crops and fields have experienced droughts and lessened production. The emission of greenhouse gases by the coal production created massive pollution of the environment. This was why the importance of research and development for innovation for environment-friendly were needed to be in place. This is to ensure the competitive advantage in the market and at the same time manage the environmental forces that affect production.

Sector of Manufacturing

The systemic operation of manufacturing was small-scale in the beginning – process of raw materials, repair and manufacture of goods for immediate consumption. It was stimulated by increased use of agricultural machinery and refrigeration equipment, even after World War I and II. In the late 1950s, the economy continued to find its rise in manufacturing and has added automobiles, electrical equipment, and iron-steel, with Americans serving their largest import of direct investments.

Below is the table of GDP% in the manufacturing from 1913-1949. [5]

gdp-imageWith surmounted competitive advantage in the economy, the high intensive labor jobs in the market were deeply affected by the entry of globalization. It has displaced the economy to shift to low-wage countries to manage manufacturing jobs. Australia’s manufacturing sector has decreased in the low-tech industry, but with highly innovated opportunities, it focused its manufacturing industry in the high-tech goods. An example of which is Boeing operations, the first outside of US, and General Motors for their research and development operations setup in Australia.

Trade

Trade protectionism and tariffs rose between the World Wars. This limited the export trade and led to the crisis as part of the Great Depression. Towards globalization, the General Agreement on Tariffs and Trade (GATT) have pushed to open foreign market. An excerpt from the letter of Minister of Foreign affairs describes the end of protectionism.

“Through the General Agreement on Tariffs and Trade, fore-runner of the World Trade Organization, and the International Monetary Fund, governments agreed to bring down trade and financial barriers between countries and build a fairer and more rules based international trading and investment environment…

From 1985 to 2002, freer trade and investment and other economic reforms helped raise Australian’s real income per person by over 55 per cent from $23,000 to $36,000.”[6]

From open trade with Britain and European countries, the trade had transitioned to Asia, particularly China, and the U.S.

Below is the table of exports shares from 1983-2004. [7]

exportsWhat Australians have learned in the course of its economic progress is the development of programs or policies and understanding to adapt to the changes of globalization. The below statement from Downer wrote it clearly on what was structurally achieved to maintain their exemplary economic status.

“The Government has overhauled comprehensively Australia’s taxation system, reformed labour and capital markets and introduced privatization into the transport and telecommunications sectors.” [8]

As a nation highly regarded with a stable government and strong economic sectors, globalization has somewhat shaped Australia with a more positive outcome. The economic outlook for this year is further explained in the short video below from James McIntyre, the Australian Head of Economic Research.

In addition, below is the snapshot of the economic statistics for reference [9].

  • GDP: $649.9 billion
  • Inflation rate: 2.7%
  • Exports: $103 billion; major items include coal, iron ore, non-monetary gold, crude petroleum, and beef
  • Export partners: (2004) Japan, China, US 8.1%, South Korea, New Zealand
  • Imports: $119.6 billion; major items include passenger motor vehicles, crude petroleum, computers, medications, and telecommunications equipment
  • Import partners: (2004) US 14.8%, China, Japan, Germany, Singapore

References:

[1] Harvey, David. 2007. “Neoliberalism as Creative Destruction.” Annals of American Academy of Political and Social Science 610. March. 22-44.
[2] Gee, Marcus. 2009. “The Prophet of Progress.” The Globe and Mail. May 6.
[3] Attard, Bernard. The Economic History of Australia from 1788: An Introduction. Retrieved from: https://eh.net/encyclopedia/the-economic-history-of-australia-from-1788-an-introduction/
[4] Ilahi, Ryan. 2014. Globalization and Its Impact on Australia. Retrieved from: https://ryanilahi.wordpress.com/2014/11/01/globalization-and-its-impact-on-australia/
[5] Attard, Bernard. The Economic History of Australia from 1788: An Introduction. Retrieved from: https://eh.net/encyclopedia/the-economic-history-of-australia-from-1788-an-introduction/
[6] Downer, Alexander. 2003. Globalisation: Global Opportunities And Global Responsibilities. http://australianpolitics.com/2003/07/24/australia-benefits-from-globalisation-downer.html
[7] Attard, Bernard. The Economic History of Australia from 1788: An Introduction. Retrieved from: https://eh.net/encyclopedia/the-economic-history-of-australia-from-1788-an-introduction/
[8] Downer, Alexander. 2003. Globalisation: Global Opportunities And Global Responsibilities. http://australianpolitics.com/2003/07/24/australia-benefits-from-globalisation-downer.html
[9] Edugate website. Introduction to Australia. http://www.edugate.com.au/introduction-to-australia/

 

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5 thoughts on “Exploring the Economic Dimension of Globalization in Australia

  1. Very interesting blog, it describes the actual situation of economic globalization in Australia. Based on this information, I also find it interesting add Australia’s involvement in UN Global Compact. On which it is known that in Australia, the business-led Global Compact Network Australia brings together signatories to the UN Global Compact, including a number of Australia’s leading companies, non-profits and universities, to advance corporate sustainability and the private sector’s contribution to sustainable development. (According http://www.unglobalcompact.org.au/) .
    This is how this country, being part of this program, also confirms its national interest to improve its economy through the globalization. This also confirms what this blog details about Australia; as a nation with a highly regarded stable government and strong economic Sectors.
    somehow it has benefited positively on some aspects.

    Like

  2. “Exploring the Economic Dimension of Globalization in Australia”. As the title suggests the blog explores the economic sectr of Australia and how globalization has affected the economy. Globalization, as per your blog, seemed to have positive impact in the economy of Australia. The strengths of Australia, Agriculture and Mining seems to be improving as a result of globalization. Nice to see the snapshots of economic statistics of Australia too.

    Like

  3. Transition from ‘Colonial Economy’ to ‘Australian Economy’ part is explained really well. From your post, I came to know that the progress in economy especially in agriculture sector after industrialization, has contributed a lot to the country’s economy. Also Australia has taken benefits from the free- trade market. We can also see from your table of export and openness from 1983-2009, how shares of GDP has increased every year.

    Like

  4. How globalization effects in Australia and how Australian people make progress form colonial period to now is present interestingly in this blog. Australia is rich in natural resources and it’s main strength of economy is agricultural and mining. The best agricultural products are meat and animal products. it is good to know that Australian meats are known for high standard.. BPH Billiton is the world largest mining company which lies in Australia. exact statistics of export and manufacturing can be seen in the table and current economic growth and trend is presented in the video.

    Like

  5. rriggs2015

    I suppose that without the British empire creating Australia in its younger years, it may not have seen the same level of industrial growth. Excellent work tracing the economic path that Australia has taken to become one of the wealthier countries in the world today. It seems that climate change is a serious problem.

    Like

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