Issue: 6
Sent: 22-08-2005 05:48:49
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Australia's Exports: A Different Culture - John A Robertson
Australia's export performance has lost its bounce. Better commodity prices will help the balance of payments but successful penetration of foreign markets is needed to boost volumes.
The chart divides Australia's export history into three phases: the period to June 1983 with growth averaging 4.9% a year, the following period to September 2000 with growth averaging 8.2% a year and the subsequent five years during which export volumes have grown at less than 1% a year.
The data in the chart drawn from the chain volume measure of exports in the national accounts published by the Australian Bureau of Statistics are a measure of export volumes.
The second of the three periods shown in the chart is now regarded as a time of renewed effort from a rejuvenated economy. The growth acceleration in the mid-1980s was associated with more aggressive marketing and renewed efforts to make the Australian economy more competitive. A lower exchange rate helped exporters to gain a price advantage in international markets but the gains seemed to reflect a business cultural change which did not rely on exchange rate weakness for its longevity.
More recently, a higher dollar exchange rate would have hindered opportunities to press into new markets. Since 2000, prolonged economic weakness in Europe and Japan and below average growth in the USA have also provided excuses for less aggressive export development opportunities. The relatively strong growth in the domestic Australian market would have also removed some incentive to go looking elsewhere for growth opportunities.
Despite the excuses being made for Australia's exporters, the global economy expanded at 5% in 2004, the fastest rate of growth for three decades. In years gone by, Australia's exporters have done much better in more difficult circumstances than those prevailing recently. Through international recession, business uncertainty and dangerous global conditions Australian businessmen had been able to expand international markets more consistently.
One of the risk factors to Australia's economic performance is the possibility that the business and government cultures have changed.
Being a "banana republic" in the 1980s might have focussed the collective mind more clearly on the necessary tasks. In contrast, the unfortunate "miracle economy" rhetoric of later years might have engendered a complacency that eroded the continuing national effort necessary to build living standards.
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