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26 March 2014
A San Francisco Global View, South Asia, Australia, New Zealand

Australia in the Asian Century

Every decade or so, an Australian Prime Minister rediscovers the importance of Asia to Australia. In launching a White Paper on Australia in the Asian Century, Julia Gillard has joined that tradition

Every decade or so, an Australian Prime Minister rediscovers the importance of Asia to Australia. In 1971, Gough Whitlam travelled to China as national opposition leader. He then quickly established diplomatic relations with the People's Republic of China when he was elected prime minister in December 1972.

A couple of decades later, prime ministers Bob Hawke and Paul Keating strongly promoted Australia's relations with Asia. And now, in recently launching a White Paper on Australia in the Asian Century, Julia Gillard has joined that tradition.

This is a good thing because Asia has been changing dramatically, and Australia's economic and political links with the region are deepening. Thus, calibrating Australia's relations with Asia is a now mammoth and complex task -- all the moreso, given that, despite its multicultural appearances, Australia's Anglo-Celtic blood runs deep.

What are the main elements of Gillard's White Paper on Australia in the Asian Century? Or as she formulates the question, "Can Australia be a winner in this Asian Century of change and growth?"

Gillard predicts that this century will bring Asia's return to global leadership. "The weight of world's economy is genuinely moving in our direction."

Average GDP per person in Asia is set to almost double by 2025, and Asia is likely to account for almost half of the world's economic output. In other words, the 21st century will really be the Asian Century.

Moreover, Asia will become home to most of the world's middle class by as early as 2025, and with the right plan, Australia can make the new middle-class Asia a new market for a high-wage, high-skill Australia.

The "right plan" is of course Gillard's White Paper on Australia in the Asian Century.

Across five key areas, the White Paper prescribes a vast array of objectives and pathways, only a small selection of which we discuss here.

First, developing an 'Asia-capable' workforce will help foster Australia's economic strength. Also, the goal is for Australia to be in the world top five for the ease of doing business and to have a world top 10 innovation system by 2025.

Second, to develop the necessary strong minds, studies of Asia will be a core part of the Australian school curriculum, and all students will be encouraged to study a priority Asian language. Further, the 2025 goal is for the school system to be in the top five in the world, and for 10 universities to be in the world's top 100.

Third, Australia's trade links with Asia are targeted to be at least one-third of GDP in 2025, up from one-quarter in 2011.

Fourth, Gillard wants to ensure that by 2025 one-third of board members of Australia's top 200 publicly listed companies and one-third of the senior leadership of the Australian Public Service have deep experience in and knowledge of Asia.

And the fifth goal is for, by 2025, Asia to be a region of "sustainable security" in which habits of cooperation are the norm -- a far cry from the situation today!

Overall, we believe that the White Paper on Australia in the Asian Century is a commendable intiative with admirable and ambitious objectives and goals. And as commentators are arguing about many of its details, we believe that the main benefit is indeed to promote discussion and debate in order to motivate Australia to take the Asian Century more seriously.

And while a continued strong Asian performance seems very likely, even if growth rates do slow down, Asia is a very complex and diverse continent. Not all countries will succeed, and opportunities will vary greatly across the region. Australians will thus require a more granular appreciation of Asia in the future.

Australia is presently a very comfortable, complacent and prosperous country -- thanks in part to good management, but thanks also to Asia's booming demand for commodities, and for education and tourism services. But as Asia continues its development, and its middle class rises in importance, Asia's market demands will also evolve, and Australia needs to be ready as a more competitive supplier of services and innovative manufacturing niche products. At the moment, Australia is virtually absent from Asia's dynamic manufacturing supply chains.

How successful the White Paper will be in motivating the lucky and lazy country is very much an open question. In recent decades, "Asian literacy" in terms of language skills and cultural knowledge is judged to have declined in Australia.

However, now that the Asian Century will provide an overall framework for government policy, across the full range of policy issues, it is to be hoped that Australia will rely on a sound strategy, rather than just luck, for its future.

Author

John West
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
Tags: asia, Australia, White Paper on Australia in the Asian Century, Julia Gillard

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