Sunday, April 24, 2011

Musings on turning five

This blog turned five on 19 March. Since then I have written 1,743 posts here, something over a million words given that many of my posts are long, far too long at times for easy reading.

I didn't celebrate the birthday at the time because I had other things on my mind. Really, it escaped me. However, a current event - the release of the Australian Government's new trade policy - caused me to check past posts going back into this blog's early years. This post is a simple reflection on one set of themes that appeared to me to be important back in 2006, themes that are relevant today.

  In September 2006, Blogosphere Woes reported on a tour I had taken of the blogosphere. I can still remember this, for it left me very depressed. Just following links through, I ended up in a series of blog streams linked to the war on terror, to Islam and to Islam vs Christianity. I quote from the time:

I found blogs that satirised anti-semitism but in such a heavy handed way that at least some of their readers would have taken them seriously, blogs that were in fact anti-semitic but were really more satirical than the satirical. I found blogs that presented a Muslim view, blogs that presented a Christian view, in both cases in terms of opposing absolutes. I found right wing blogs and left wing blogs, individual and group, that made me blink at the distortions presented.

I read news reports about Australia that represented significant distortions. Not conscious distortions, or at least I don't think so, but distortions because the facts were forced into a different world view frame.

With one exception, I ended the whole process wishing that I had never started, blogged out.

The exception? Australia really is culturally different from most other countries, quite remarkably different. We don't see it unless forced to by the type of journey I have just taken. I will try to capture this in a post once I have recovered.

On 24 November, an article by Chan Akya, Hazards of Oz, in the Asian Times on-line caused a degree of outrage in this country. Mr Akaya (or should that be Mr Chan?) was scathing. Australia faced a changing strategic environment; the Australian economy was unbalanced; while the country's still racist attitudes meant that Australia faced regional hostility and would not be able to attract the migrants it needed. One quote to give a taste.

As if the strategic position explained above were not challenging enough, Australians have worked assiduously to cultivate an image of being the region's bully. Their behavior toward various neighbors is poor even by the low standards observable across Asia, while the country's politicians have managed to put many a nose out of joint across the region. Famously, Malaysia's Mahathir Mohamad pooh-poohed Australia's role in the late 1990s, in essence dismissing the country as a listening post of the United States.

The reasons for countries such as Indonesia and Malaysia to exercise hostility against Australians are of course related to Australia's long-standing animosity toward Muslim immigrants. Racial riots in Sydney aimed at Australians of "Middle Eastern appearance" as recently as 2005 were but a culmination of years of hostility shown by the country's politicians to immigrants from Muslim countries, including the infamous case of the boat people from Afghanistan beginning in 2001.

Mr Akaya concluded that the best solution for Australians was to sell their land to Asians and move back to Europe!

All this led me to begin a series of posts linked to the idea of the Australian Way. If, as I argued, Australia really was culturally different from most other countries, quite remarkably different, what did this actually mean? Why did it mean that Australia's future would be different from that portrayed by Mr Akaya?

Although the tag Australian Way gives a taste, I was never as structured with those posts as I should have been. I wandered, so that many posts on the topic won't be picked up by the tag. Essentially, my arguments centred on Australia as a migrant country, on Australian tolerance at an individual as opposed to a group level, at the strength of and elements in Australian popular culture that encouraged integration over time.

One area that I did agree with Mr Akaya lay in Australia's insensitivity to the external world, to insularity in general as well as in particular groups such as politicians and the mainstream media.

  In December 2006, trouble broke out in Tamworth over the issue of Sudanese refugees. Initial Australian reporting presented the issue in simple terms, another example of Australian racism at local level. This reporting went round the world, making Tamworth and refugees a global story and reinforcing the views held by Mr Akaya and others like him. Of course, it wasn't a simple as that as I tried to report at the time.

Tamworth and Refugees - follow up note provides an entry point to the posts I wrote. Incidentally, in light of later events note the role played by Tony Windsor. By the time that the mainstream media corrected its stances and started reporting the nuances, the damage had been done. Nobody outside Australia was really listening.

In another response to Mr Akaya, in November 2006- GDP - Australia in its Region - I looked at GDP, population figures and Australia's trade policy. Before going on, the post includes an earlier  photo of youngest, Clare, whom I wrote about recently in The many faces of Clare. The caption on the GDP post reads:

Photo: Clare Belshaw and friends, Clare's birthday, four friends, six ethnic ancestries, one country.

This post links to  several themes.

One was the need for Australia to look to its region. A second was the likelihood that Australia's relative position even including New Zealand must inexorably decline in economic and demographic terms even though we would remain a regional power for the immediate future.

Since then we have had a mining boom, the GFC and then a further mining boom. This may seem to disprove Mr Akaya's gloomy prognostications. Yet the reality is, at least as I see it, that the basic numbers remain the same. Australia's relative position must decline.

The GDP post suggested that Australia's trade policy recognised the economic realities facing the country.

As a relatively small country, our best interests were served by a free global trading system. We must therefore support moves towards global freer trade within the WTO. At the same time, and recognising the impediments to global free trade, policy looked towards free trade agreements that would integrate us into not just China, but all our key trading partners. ASEAN as our most immediate neighbour was especially important.

The Australian Government's most recent trade policy statement is intended to differentiate the Gillard Government from its Howard predecessor. I quote from the Minister's press release:

In an important economic reform, the Gillard Government has overhauled Australia's trade policy, re-connecting with the Hawke-Keating philosophy of free and open trade.

If you ignore this and look at the detail of the policy statement, it is actually a direct continuation of the previous Government's trade approach with its emphasis on freer trade and then the negotiation of specific free trade agreements as a fall back position. There are some differences in nuance and focus, but the core is the same. It could hardly be otherwise.

Looking back to that post in 2006, there were several conclusions from it that affected my writing. Here I find it a little difficult to properly disentangle views then and what came later. Accepting this, my key conclusions were:

  1. The relationship with Indonesia along with the success of that country were absolutely critical to our long term future for both geopolitical and economic reasons. If Indonesia failed, we were in great trouble. If, as we all hoped, Indonesia succeeded, then we were in trouble in a different direction because we would then have to adjust to a growing power to our immediate north. Given the population imbalance between Australia and Indonesia, we would just have to accept a large and growing Indonesian presence in Australia measured by people and economic penetration. This would require adjustments on the Australian side.  
  2. A second central strategic challenge lay in balancing the rising economic and strategic power of India and China. We needed to build links with both, but we also needed a countervailing force. This was where Indonesia and ASEAN came in. The combination of ANZ/ASEAN could be powerful in its own right, a balance.
  3. Whether Australia liked it or not, our immigrant intake was going to be driven by our economic and political interests. Among other things, this meant a potentially very large rise in the Muslim population of this country. The challenge here was how to adjust. How do we preserve the Australian Way?

In all this, I have also been concerned about balance in the Australian economy.

Mr Akaya's view was that Australia's weaknesses in manufacturing and services meant that Australia could not compete in a changing Asia. Like it or not, there is some truth in that view.

Once wool and other primary products dominated Australian exports. Today, mineral products and especially coal and iron ore are equally dominant. On my rough calculations, Australia's export base is less diversified than it was twenty years ago.

In the late 1980s and early 1990s, service exports were seen as the new game. I stand to be corrected, but outside education services that are now in trouble, I do not know of a single services sector that has established a really significant net export position.

I have tried to write on some of this, but I doubt that I have had any impact even at the margin,

Now none of this may matter. It may be that the current mining boom will carry us through to a golden future, I just doubt it because I have been through previous resources booms.

I will stop here. I leave it to you to form your own views.               


Anonymous said...


Struggling with terminology here, but your "outside education services that are now in trouble, I do not know of a single services sector that has established a really significant net export position"

Where does finance and insurance sit within all this?

I only ask because my old partner of many years used to get quite huffy about what he termed "invisibles" - by which I think he meant the net export of our dosh for insurance and banking services. So, has that changed at all - and if not, then where is the product of this mineral golden goose ending up?


Jim Belshaw said...

Hi KVD. I will check the numbers.

The problem with so many services exports lies in the fact that we also import. For that reason invisibles were negative for a very long time. I think that services as a whole are still slightly negative. Take education services out and they are decidely negative.

The short answer to your end question is that I don't know. One of the reasons that I hammer on as I do about some topics simply reflects my concerns here.

I am aware of the various economic arguments, but I also remember that a number of Australian mining towns once had stock exchanges. Once the minerals went, so did the exchanges.

We live in a global economy. I know of no a-priori reason why market forces should be kind to Australia as a 2% part of that economy. Market forces have not been kind to New England to take another hobby horse, and New England was a much bigger part of the Australian economy than Australia is to the global economy.

One of the reasons why freer trade is so important to us at this point is that it gives us a chance over time of economic diversification. Both agricultural products and services are internationally constrained markets.

We largely missed our chance of building high technology exports in the late 80s and early 90s when the things that I was working on fell over in policy shifts. Some of my colleagues would challenge that statement, but I believe it to be true and arguable.

If the climate change arguments are correct, then it seems to me that major exports such as coal are very vulnerable.

Over the period 2007-08 to 2009-10 our goods exports rose by $18.5 billion. During that same period, exports of metals plus coals rose by $24.1 million. Numbers bounce around, but the figures do suggest that we have a problem.

Jim Belshaw said...

Sorry, the last number should be $24.1 billion, not million!

Legal Eagle said...

Happy Blog Birthday...that means my blog must be about 5 too...should look up when I first posted...

Jim Belshaw said...

Thanks, LE. You should check. I actually looked at the old blog after reading your comment, but couldn't work out how to get back to that first post!