For my main post today, I wanted to pull together some of my evolving thoughts, looking back at my writing over the last few years. I am not giving links or much supporting argument. Just think of it as a summary.
Global population and economic projections over the next fifty years show fundamental shifts in country and regional rankings. Australia's share of population and economic activity must decline, while the pattern of trade and political relations will shift.
For a number of years, Australian trade policy has centered on two threads, First, working for global freer trade since this gives a small country like Australia the best economic chance. Secondly, attempts to negotiate free trade agreements with key present and future partners. While there is debate about the immediate economic value and indeed success of this FTA approach, it does reflect longer term trends in economic structures.
Within the pattern of Australia's trade and economic relations:
- There has been a reasonably consistent focus on building relations with ASEAN, moving towards the ultimate creation of a larger ASEAN/ANZ economic trading zone. Within ASEAN, Indonesia is critical because of its future population size, its potential economic growth and its closeness.
- Trade and economic policy has tended to shift reflecting shifts in economic power, but with a bit of a lag. An initial focus on Japan broadened to include ASEAN and the tigers, then we had China and Asia-Pacific. We were slower to recognise the importance of India and the Indian Ocean, slower still to consider the potential rise of Africa.
In foreign policy terms, our approach and thinking has been confused to a degree because we are a super power to some of our smaller neighbours, a major power in a broader Asian context, a mid-size power to others, and yet relatively insignificant in a global sense. This pattern leads to a degree of confusion in behaviour, including a tendency to arrogance.
- In our concern with Asia, we lost sight of our own Pacific neighbourhood.
- We have a tendency to respond to domestic political considerations oblivious to the effects on others. I have argued that Australia has in fact become more insular, more complacent, as our population has got bigger.
On a more positive note, I have tried to explore the way in which cooperative linkages have grown, especially with Indonesia and our immediate neighbours.
At a more macro level, Australia faces a remarkably complicated foreign policy environment as we try to balance our traditional alliances with the rise of India and China in particular.
Australia is already a multicultural society. To my mind, Australia needs to avoid getting caught in debates driven by concerns and conditions in other countries. They are irrelevant and dangerous because they conflict with our own geopolitical realities.
There has always been a close link between the peopling of this country and shifts in economic and political relations. I have argued that when we look at economic and population projections and at our immediate neighbourhood, the population of Australia will continue to change. Here I have pointed, among other things, to Indonesia and the Pacific Islands. We don't have a choice in change. Our only choices lie in the best way of managing it.
In looking at change and responses to change, I have tried to critique what I perceive to be dangerous complacency.
I write a fair bit about the history of New England. The economic and social changes that swept New England in the period 1950-2000 were profound. Australia as a whole may have benefited from those changes, but much of New England did not. Here I have made two points.
The first thing that I have focused on has been the need to recognise the distributional affects of change. The second linked point is to challenge the implicit assumption built into current thinking that moves towards freer markets, more competition, microeconomic reform etc will necessarily benefit Australia. Just as New England did not necessarily benefit from the structural changes that took place, I see no apriori reason why Australia should benefit.
We are used to thinking of Australia and the Australian economy as entities, something that I have explored in various posts. An implicit assumption in this is that open markets and structural reform will redistribute resources and economic activity within Australia to maximum economic effect. We generally ignore redistribution of economic activity between Australia and other parts of the world. What happens, as happened in New England, if the redistribution actually disadvantages us? Global incomes increase, there are overall global gains, but Australia suffers?
The signs here aren't very encouraging. Looking back at past posts and analysis, I would summarise as follows:
- Australia's international trade has become less diversified. We are as dependent now on certain mining products as we ever were on wool at its peak.
- None of the various golden grails of the past have delivered in the way expected. Our service sector hasn't boomed as forecast. Sydney hasn't become the global financial hub so promoted at State and Federal level. We have a trade deficit on services. The one really genuine service export success, education, has been milked to subsidise domestic students, disrupted by Government policies introduced for domestic reasons.
- Now we have a new holy grail, renewables. Somehow we are meant to compete, to see a thousand flowers bloom, in an imperfect marketplace where other markets are bigger and equally subsidised. The one really big success we have had to this point is actually Chinese based!
In looking at this broad question, I have focused on three threads.
The first is one already mentioned, the varying distributional effects of change.
The second is the nature of conflict as varying objectives and desires come into play, with a special focus on environmental issues. The original discussions on the Murray-Darling focused on environmental issues and largely ignored food and exports.
I have written a fair bit about the environmental wars raging across New England.
New England is actually a good case study because it combines water (it is the wettest area of NSW); minerals (big coal deposits as well as other minerals); lots of pretty scenery and national parks; a big Aboriginal population (the largest Aboriginal population in pre-colonial NSW); good winds and space for wind farms; some of the richest agricultural land in Australia; and some of the poorest and best=off communities in Australia. There is plenty of space for conflict. At last count, there were some twenty environmental; battles underway.
This is not a comment intended to downgrade the importance of environmental issues. Rather, I am saying that they - the conflicts - all occur in isolation with no way of reconciling either the different distributional aspects or the broader national economic and social interest however defined.
This brings me to my third thread, Australia's failures in management and public policy.
I write a lot about this because of a very strong personal interest. I would summarise my arguments this way:
- At organisational level, management has become more short term, more mechanistic. The organisational folk memory that was once central to organisational performance has been cleaned out. As a consequence, organisations have reduced capacity to deal with either the long term or the new.
- Exactly the same thing has happened at policy level. Crudely, we don't have policy any more, just a set of not always very sensible performance indicators, of narrow statistics masquerading as policy outcomes.
Sure I'm biased at a personal level. But my core point is, one that I have tried to demonstrate by piling example on example, is that we have piled cost onto cost, rigidity onto rigidity. All this has to be administered, the compliance costs met.
This might not matter if we could actually show that performance had improved; that kids were better educated or better protected; that our universities had improved; that we had fewer underemployed people; that Australia's Aboriginal people had seen the gap narrowed; that tax evasion was less; that we had more housing for the less advantaged; or that our civic infrastructure had improved.
The reality appears to be different. We pay more, we have less freedom to do what we want, yet things don't get better beyond some narrow measures.
This brings me to the final point in this post.
Quite a bit of my writing has been concerned with change processes.
I have written about change at local level, change at organisational level, changes in culture. Some of that writing has been narrowly professional, the best way of changing an organisation whether it be a general business or professional practice. Other writing has been much broader. In all cases, my focus has been on understanding just what happened, how we might do things better.
Now link this back to my opening remarks.
We live in a time of change, We always have.
To understand this, we have to start with the global and work down. We have also to start with the local and work up.
The first sets a broad context.
If currency trading patterns are out of kilter with actual patterns of trade and economic activity, what does that mean? How might Australia take advantage? If global changes in population and economic activity are such, what might that mean for Australia?
The second tests ideas and implications at a purely local level. If we want coal seam mining, fracking, what does that mean for Hunter Valley wine producers, for the ground water supplies on the Liverpool Plains? Who wins and who loses? How do we compensate? Can we compensate?
Just at the moment, we sit between the two with no connect. We use a universal, Australia or the Australian economy, and then apply it as though it has meaning outside its very specific context.
We set universal rules that are meant to apply regardless of varying local or regional conditions or, indeed, events outside Australia. We just don't think.
And that is, I think, the final point of this post.