THE Prime Minister, Julia Gillard, is right – this is Asia’s century and it presents huge opportunities.
But it is not going to be easy for Australia to make the most of them.
Despite this reliance on Asia, most Australians do not know that much about it, especially compared with the North Atlantic. We can name small US states and dank British towns. We know American movies are made in Hollywood and San Francisco’s Silicon Valley is home to some of the world’s biggest information technology firms. But ask most Aussies to name China’s 32 administrative divisions or the 28 states of India and you are likely to get a pretty short list.
Financial news from the North Atlantic still commands disproportionate attention. We hear surprisingly little about economic developments in Indonesia and the Philippines, even though some forecast that they could rank among the world’s 10 biggest economies by mid-century.
The same goes for politics. Most of us are far more familiar with political machinations in Britain than say, India or South Korea, even though Britain purchased just 4.4 per cent of our exports last year.
Australia’s proximity to Asia, and the capabilities of its workforce, have given it a head start to take advantage of the region’s economic transformation. We live adjacent to a burgeoning Asian middle class which the Asian Development Bank estimates will account for more than 40 per cent of global consumption by 2030.
This is a massive potential market for exports. As Asia gets richer, its demand will shift from raw materials to services Australia has experience in delivering, such as tourism, education and financial, business and professional services. Australia’s food and wine, and even niche manufacturing, will also be in demand.
But selling services in Asian markets is a very different to exporting minerals. The attacks on Indian students in Australia in 2009 and last year, which sparked tension between New Delhi and Canberra, highlighted the cultural challenges that come with exporting services.
Australia will need to be quite a different place if it is to make the most of the Asian century.