Opinion

The Great Debate

A shifting global economy brings Australia to a crossroads

Australia is no longer immune to the stagnation in the West. Despite a resilient housing market, Australia’s economy is slowing. With a worsening labor market, consumption is eroding, along with business confidence.

In the past two years, the benchmark interest rate has been almost halved to 2.5 percent. Still, Australia’s real GDP growth is likely to decrease to 2.4 percent during the ongoing year and will remain barely 2 percent until the mid-2010s.

Australia is at a new crossroads.

In the past decade or so, exported commodities fueled Australia’s terms of trade, thanks to rising commodity prices. While agriculture and natural resources each account for barely 3-5 percent of GDP respectively, they contribute substantially to export performance. True, the service sector of the economy, including tourism, education, and financial services, continues to account for some 70 percent of GDP. However, the country’s abundant and diverse natural resources attract substantial foreign investment.

Before the global financial crisis, the Australian economy grew for 17 consecutive years. As export-led growth collapsed worldwide, then-Prime Minister Kevin Rudd’s Labor government introduced a US$50 billion fiscal stimulus package to offset the effect of the slowing world economy, while the Reserve Bank of Australia (RBA) cut interest rates to historic lows. Further, China’s 2009 stimulus package sustained demand for commodities from Australia.

Except for just one quarter of negative growth, Australia actually grew by 1.4 percent in 2009. Last year, growth amounted to 3.3 percent, whereas unemployment was 5.2 percent. However, despite past efforts to refocus on increasing economic productivity, Australia’s growth has been driven somewhat narrowly by a mining investment boom, which has rendered the economy more vulnerable to trade shocks.

Drone coalition: Key to U.S. security

The Pentagon’s biggest, most high-tech spy drone aircraft — one of the hottest items on the international arms market — is the key to a burgeoning robotic alliance among the United States, Japan, South Korea and Australia.

The RQ-4 Global Hawk, a $215 million, airliner-size Unmanned Aerial Vehicle (UAV) built by Northrop Grumman, could help this four-nation coalition monitor both China, as it increasingly flexes its military muscles, and North Korea, as it develops ever more sophisticated nuclear weapons.

If, and when, Canberra, Tokyo and Seoul acquire their Global Hawks — all three sales negotiations are still at an early stage — they could all share intelligence with Washington and vice versa. For all would be using the same hardware and software system. The resulting network could monitor millions of square miles of land and sea around the clock and in real time.

from The Great Debate UK:

Women leaders: High peaks, low gullies

glenda_stone- Glenda Stone is an Australian businesswomen in the UK, CEO of Aurora and a commentator on economic gender issues. The opinions expressed are her own. Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2010, International Women’s Day. Please tune in.–.-

In Australia there is a common expression of social phenomenon called the “Tall Poppy Syndrome”. It is a pejorative term that describes human behaviour of attacking, despising or attempting to cut down or criticise people of genuine merit because their achievements or talent distinguish them above their peers. Targets are often accomplished people with a public profile: business leaders, politicians, academics - and at times even celebrities and sporting personalities.

The media can be especially vicious in strategising, fuelling and orchestrating smear campaigns with the sole intention of defaming and questioning the character and ability of high-profile leaders.

from UK News:

The royals on tour

HORSE-RACING/Prince Charles is in Canada, the Queen is expected to go there next year and William is preparing to go to New Zealand and Australia -- but are there signs that the locals are revolting?

Polls published in advance of Charles' visit show support for Canada's constitutional monarchy is weak, even if the public's frosty opinion of the Prince of Wales himself has begun to warm just a bit.

Sixty percent of Canadians felt the constitutional monarchy was outdated, although 80 percent said it was an important part of Canadian history.

What the U.S. can learn from Aussie health care

Sydney skyline

global_post_logoBy Alan Mascarenhas — the views expressed are his own. This article first appeared onGlobalPost

SYDNEY, Australia — Here’s a damning statistic: Australia spends 8.7 percent of its GDP on health care and covers everyone, irrespective of their employment status. The U.S., meanwhile, spends 16 percent of its GDP on health care — far more than any other industrialized country — yet 47 million of its citizens lack health insurance while millions more are underinsured.

Critics of nationalized health care paint systems such as Australia’s as anything but healthy or caring, with putrid public hospitals that offer little more certainty than a long waiting list. This is a point not lost on Australians, with the topic of hospital waiting lists a perennial hot-button topic at election time.

from The Great Debate UK:

Making the most of the Commonwealth’s potential

d2- Danny Sriskandarajah is Director of the Royal Commonwealth Society. The opinions expressed are his own -

In recent years the Commonwealth has become an easily derided organisation. From its inception as a clever way of easing de-colonisation to the heady 1970s and 1980s when the association showed a radical dynamism on issues like Apartheid, the international association has shown itself to be unique and useful.

However, today, the Commonwealth risks being drowned out in a more crowded field of international organisations, many with a clearer sense of purpose, more collective will and better resources.

China and the world economy

gerard-lyons Dr. Gerard Lyons is chief economist and group head of global research, Standard Chartered Bank. The views expressed are his own.

The world is witnessing a shift in the balance of power, from the West to the East. This shift will take place over decades, and the winners will be:
- Those economies that have financial clout, such as China
- Those economies that have natural resources, whether it be energy, commodities or water, and will include countries, some in the Middle East, some across Africa, Brazil, Australia, Canada and others in temperate climates across, for instance, northern Europe
- And the third set of winners will be countries that have the ability to adapt and change. Even though we are cautious about growth prospects in the U.S. and UK in the coming years, both of these have the ability to adapt and change.

China is at the center of this shift.

The scale and pace of change in China is breathtaking. Against this backdrop of dramatic change, let me look at China’s impact on the global economy, especially in the aftermath of the financial crisis.

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