On the edge [Australia resources] – Banyon (The Economist – January 26, 2013)


Australia still does not seem entirely sure where it is

IN FEW countries do history and geography tug in such different directions. It is half a century since Japan overtook Britain as Australia’s largest trading partner, itself to be overtaken by another Asian giant, China, in 2007. More than 40 years have passed since “White Australia” immigration policies were dropped and Australia began to look a little more like Asia. And it is 16 years since an Australian prime minister, John Howard, claimed “we do not have to choose between our history and our geography.”

It is only three months, however, since Australia’s government produced a white paper on “Australia in the Asian Century”, which has provoked renewed debate about Australia’s place in its closest neighbourhood. As Kevin Rudd, a former prime minister, says, Australians feel they live “slightly on the edge”, a feeling heightened by extreme natural events, such as the recent heatwave and accompanying bushfires.

Their head of state is still the British queen and their security is founded on a treaty with America. Indeed, by agreeing to play host to up to 2,500 American marines, Australia is central to the Obama administration’s “rebalancing” to Asia. And most of Australia’s foreign investment is still from America and Europe. A poll last year by the Lowy Institute, a think-tank in Sydney, found that 95% of Australians thought China already was, or would become, “Asia’s leading power”; 52% felt uncomfortable about it.

The upshot of months of bureaucratic arm-wrestling between independent experts and various government departments, the white paper offers a predictably awestruck view of Asia’s economic rise. By the early 2020s Asia will overtake the combined economic output of Europe and North America. The white paper offers an exhaustive list of recommendations as to how Australia can take advantage of this (it was even more exhaustive before it was drastically pruned, in a late fit of editing, to a mere 312 pages). These cover everything from education, with every Australian school to be linked to one in Asia by 2025, to the transformation of the civil service and even corporate boards by ensuring one-third of their members are “Asia-literate”.

The plea to Australians to wake up to Asia’s potential recalls the efforts of governments in the 1980s and 1990s to rebrand Australia as an “Asian country”. But the context has changed utterly. Back then Australia was languishing and a booming Asia enjoyed condescending to it. In 1980 Lee Kuan Yew, Singapore’s patriarch, warned Australians that they risked becoming “the poor white trash of Asia”. In 1986 an Australian finance minister (and later prime minister), Paul Keating, fretted that without reform the country might become a “banana republic”.

In contrast, 2013 is expected to be Australia’s 22nd consecutive year of economic growth.

For the rest of this article, please go to The Economist website: http://www.economist.com/news/asia/21570729-australia-still-does-not-seem-entirely-sure-where-it-edge