The economist describes the definition of a banana republic as “a country dominated by foreign investment and dependent on a single export commodity” (The Economist. 2014). This definition has some correlation to the Australian economy as over previous year’s Australia has experienced a commodity boom which has dominated and under pinned the nation’s economy. The development of the natural resources industry in Australia has grown the economy and has become the number export for the nation (Figure 1). Australia’s reliance on the commodity industry does not support long term economic stability for the nation, commodity prices are falling as the developing world industries slow down. The Australian government must continue with the development of the commodity industry but must also invest into developing new industries that will ensure the economic growth of the nation continues and to ensure the nation is not dependent on the natural resources of the country.
Figure 1: Composition of Exports 2009(Ian McCauley 2012)
In the past the nation has been a significant exporter of agricultural products such as grain and livestock, it was able to make advancements in the manufacturing industry by imposing high tariffs on imported goods. This was until internationally and locally it was not viable to continue with these economic policies and the Australian market was opened up with the lowering of tariffs and the floating of the Australian dollar. While this benefited the economy with free trade agreements, foreign investment and a diversification of the export base it also contributed to the demise of other industries (Sara Cousins 2013). Throughout Australia’s economic history mining and the exports of commodities have been ...
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...conomy–well prepared for the challenges ahead. [ONLINE] Available at: http://www.dpmc.gov.au/publications/skills_for_all_australians/chapter2_the_australian_economy_of_the_future.html. [Accessed 04 March 2014].
(The Economist. 2014). The Economist explains: Where did banana republics get their name? |. The Economist explains: Where did banana republics get their name? | The Economist. [ONLINE] Available at: http://www.economist.com/blogs/economist-explains/2013/11/economist-explains-16. [Accessed 28 February 2014].
(Zheng, Bloch 2012) Australia’s Mining Productivity Paradox: Implications for MFP Measurement by Simon Zheng, Harry Bloch: SSRN. 2014. Australia’s Mining Productivity Paradox: Implications for MFP Measurement by Simon Zheng, Harry Bloch: SSRN. [ONLINE] Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1715235. [Accessed 03 March 2014].
In 2011 BANZ lost around 1000 jobs due to a restructure that would fundamentally alter the Australian steel industry. However, before we assess whether this decision was economically and managerially sound we must first assess why this occurred.
This can be generalised in this basic explanation: Most primary production takes place in Rural Australia. When the producers (for instance farmers/graziers/miners) aren’t making sufficient income from their businesses to provide a profit they reduce spending. Falling profits can be caused by numerous factors for instance: a poor season’s harvest, reduced prices at market for their products, increased costs in production or in transport, among other reasons. There are various avenues open to producers in this circumstances but the most common is to restructure their business by reducing the staff they employ and lowering expenditure by reducing purchases of new equipment, goods or services. This reduction of spending flows on to supplying business in the region that relies on this custom for their profits. These other businesses then have to change the way th...
Iron ore is Australia’s highest valued and most successful commodity export (see Figure 1). Throughout the 1990s and early 2000s, this mining industry played a key role in both Australia’s and the global economy. The change in the industry was brought about, particularly, by the many operations and movements resulting from globalisation that pushed Australia’s exports further than they had ever been. In 2007, “Australia produced around 16% of the world's iron ore and was ranked third behind China (32%) and Brazil (19%)” (Minerals Council of Australia, 2008). Although Australia is not the largest producer, it is currently the largest exporter of iron ore in the world (Australian Minerals Industry, 2008).
Australia’s fortunes are shaped and determined by the political, economic and social forces with the engagement with the Pacific. Australian policies towards the Pacific show a massive measure of continuity with the policies pursued by the conservative Coalition government. The engagement with the Pacific has the impact of proximity and the regional variations with the international policies on Australian policies in relation to neighbouring countries.
One of the main features of Ecuador ’s economy is its dependence on only a few key export commodities, most importantly oil and bananas. Oil accounts for approximately 40% of the export economy, while bananas are responsible for about 17%, and Ecuador is the largest producer of bananas in the world. The rest of the economy is mostly based on less important agricultural exports, such as shrimp and flowers, which account for 6% and 4% of exports respectively. Ecuador is almost completely reliant on the success of these few industries, particularly oil, and so has suffered through a cycle of boom and bust economies over the past several decades, since oil was discovered in the 1970s. Furthermore, in the last six years Ecuador has had four different presidents, and the national office has been dogged by scandals and corruption. This environment has made it very difficult for the government to accomplish the reforms that are necessary to stabilize the nation when the economy faces a serious downturn.
In a typical year, the mining industry is responsible for almost 20 per cent of Canada's total export earnings3 (See Appendix A). As for the employment rate, over 70 per cent of the mines are owned by Canadians and approximately 108,000 Canadians are directly employed in the mining industry4. Mining is very important in Canadian life. Not only do the products power the family car and heat the family home, the manufacturing sector, the high tech industries and even the better known resource industries are all dependent, in some way, on the mining industry. The mining industry will continue to be an important support to the economy. Mining is taking full advantage of the quick expansion of computers and microelectronics.
- High external debts (Australia has an account deficit due to high amounts of money invest towards mining)
According to statistics, there are several benefits and disadvantages of mining related to the economic sector. Some of the main benefits of mining are that it leads the economy to expansion and decreases poverty. It also helps in improving and increasing employment by proving more jobs. Moreover, the economic demand for goods and services makes the economy of local communities thrive. However, when it comes to justice, there are many things in which the industry sector falls behind. For example, “Mor...
All societies today are faced with the economic problem of relative scarcity. Relative scarcity rises from the fact that all our wants and needs cannot be completely satisfied as we have a limited amount of resources. Australia, which is predominately a market economy, is faced with this particular economic problem of relative scarcity, which results in facing the three choices of what to produce, how to produce and for whom to produce.
Five years ago, in the middle of 1997 Australia’s economic growth had begun to upturn after a period of recession during the ’96 year. This was unmistakably shown through the composite indicators of retail trade, dwelling investment and Australian share market valuations, all concurring with one another and demonstrating the effects of an upturn in economic growth.
Australia has had one of the most outstanding economies of the world in recent years - competitive, open and vibrant. The nation’s high economic performance stems from effective economic management and ongoing structural reform. Australia has a competitive and dynamic private sector and a skilled, flexible workforce. It also has a comprehensive economic policy framework in place. The economy is globally competitive and remains an attractive destination for investment. Australia has a sound, stable and modern institutional structure that provides certainty to businesses. For long time, Australia is a stable democratic country with strong growth, low inflation and low interest rate.(Ning)
Legal agriculture fell because globalization taught farmers to grow the best-selling crops, which would continue to be illicit drugs until removals on restrictions of exports occur and a wider variety of crops could be cultivated. “Since the mid-1970s, declines in agriculture and manufacturing have been picked up by services and mining. Mining had not really been important until the late 1980s (Thoumi, “Political Economy” 27). This shows how legal agriculture had been declining for an extended time and how other, less important ways had to rise up to make up for that loss of profit. If legal agriculture could rise up again, then it would massively improve the economy because it would overly make up for the other businesses, including services and mining. Loss in profits, due to agriculture and other businesses, also relates to unemployment, and how less money and the restriction on exports have increased the unemployment rate because of the possible jobs
"Australia." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. N.p., n.d. Web. 2 Dec. 2013. .
The banana was a way for the US to get behind the tactics of banana farming, because they truly believed that the people were beneath them, Soluri goes as far as to say "slothful" (2). The English are very accurate when it came to their comment on mass consumerism of the era; Americans have to have the best. That is the whole point of the Miss Chiquita banana, not only did companies want to sell a banana, they wanted to sell you the best banana; some bananas are better than others (186). This caused a major issue in Honduras where companies would rather abandon a land, that spend time to fix it due to the over-cultivation. Workers were forced to become migrant and follow the fruit company jobs or risk being unemployed (85). Things like this are still happening today in our own culture. The popular company, Walmart, is famous for building stores in communities, and then tearing them down to rebuild them several blocks away forcing many out of work while the reconstruction occurs, and destroying the land it was built upon (The High Cost of Low
The prices of primary products in the international markets are very low hence the producers are not compensated for their efforts. After being processed into finished products by other nations, the final commodities are imported into the country at a very high price. This implies that in most cases, other countries are the ones who benefit from the raw materials produced in the primary industries in Australia (Peters et al., 2010 1330). The government of Australia should improve its manufacturing industry so that it can process raw materials domestically and export the finished products. This will enable the country to benefit from its primary industry more than it could when exporting the raw commodities.