"Australia in the International Economy"
BY: KYM ANDERSON
University of Adelaide
CIES, Centre for International Economic Studies
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=253710
Paper ID: CIES Discussion Paper No. 0049
Date: December 2000
Contact: KYM ANDERSON
Email: Mailto:kym.anderson at adelaide.edu.au
Postal: University of Adelaide
CIES, Centre for International Economic Studies
School of Economics
Adelaide SA5005, AUSTRALIA
Phone: (+ 61 8) 8303 4712
Fax: (+ 61 8) 8223 1460
Paper Requests:
Contact Jane Russell at Mailto:cies at economics.adelaide.edu.au
University of Adelaide, Centre for International Economic
Studies (CIES), Adelaide, SA 5005, Australia. Phone:+618 8303
5672.
ABSTRACT:
At the start of the twentieth century, Australia was arguably
the highest-income country in the world. By 1950 it was ranked
third; by 1970 it was eighth; and by 1999 it was twenty-sixth,
according to the World Bank Atlas method of measuring GNP per
capita (or twentieth using the World Bank's Purchasing Power
Parity method)--not counting several rich countries with less
than one million people. By that standard at least, the
long-term performance of Australia's economy has been relatively
poor over the past century.
Over the decade of the 1990s, by contrast, Australia has,
according to that same World Bank source, 1 out-performed all
other advanced economies other than Ireland and Norway in terms
of GDP per capita growth. This difference between the economy's
recent and earlier performances is arguably due in no small part
to the economic policy reforms of the past two decades and in
particular the belated opening of the Australian economy to the
rest of the world. Having been more protectionist towards
manufacturing than all other OECD countries except New Zealand
for most of the century, and having stood aside from the
industrial trade policy reforms agreed to by other Contracting
Parties to the General Agreement on Tariffs and Trade (GATT) in
the first seven rounds of multilateral trade negotiations (1947
to 1979), Australia has undergone remarkable reforms in the late
20th century.
The present chapter first explores the extent to which the
Australian economy has become more integrated into international
markets in the past two decades, not just absolutely but also
relative to the rest of the world. It then focuses on how the
structure of our trade has changed and on the extent to which
markets abroad for Australian export products have opened up,
this being another potential contributor to the
internationalisation of our economy. A third contributor is the
reduction in non-governmental barriers to trade, most notably
via the information technology revolution. The chapter concludes
by examining opportunities and challenges ahead for Australian
businesses and governments assuming the recent frenetic pace of
globalization continues.