The Impact of Globalisation on the Australian Economy Globalisation is not new. Australia has been involved in trade, investment, financial flows, technology transfers and the migration of labour since its foundation as a colony. What has changed is the size, direction and influence of these transfers, especially since 1980. There are a number of factors that have aided this transformation. They include: • The expansion of new markets – foreign exchange and capital markets are linked globally. They operate 24 hours a day with dealings any where in the world possible in real time. Financial deregulation and the floating of the Australian dollar since 1983 intensified the impact of globalisation on the Australian economy. • New technology and the tools of globalisation – the internet, email, mobile phones, media and communication networks have all sped up the process of globalisation. They have increased the spread and speed of knowledge transfer and communication. Australian consumers can buy products from any nation in the world, transfer funds between accounts or purchase shares in any major market. Australian businesses can market their products at a fraction of the cost and be exposed to a global market place of competition. This potentially is the closest we will ever come to the perfect market. • New institutional players – The World Trade Organisation (WTO) has growing authority over national governments, as does the IMF with its restrictions and controls it can impose on nations requiring assistance. Multinational corporations have more economic power than many nations. Hedge funds and financial dealers are able to manipulate financial flows and subsequently exchange rates, leaving nations helpless in their wake. This in turn renders traditional economic policy tools virtually useless. • New rules and restrictions – Multilateral agreements on trade, services and intellectual property rights, backed by strong enforcement mechanisms, reduce the scope for national governments to develop their own economic policies. What is Globalisation? Globalisation is the growing economic interdependence among nations as reflected in increasing actual movement across nations of: • Trade • Inv... ... middle of paper ... ...ly be quite effective at pushing the Australian dollar down by selling the currency, it is very limited in pushing it up. The RBA only has its limited foreign reserves to buy the Australian dollar. The value of Australia's foreign reserves fell from $22billion US in December 1999 to $16billion US in September 2000. The amount of Australian dollars traded in one day in Australia's foreign exchange market exceeds its total foreign reserves. As was seen in the Asian crisis in 1997 in Thailand, running down foreign reserves will not always halt a currency decline. The US Federal Reserve is probably the only central bank that can strongly influence the decisions of fund managers. The financial traders and dealers seek a low inflation, low interest rate, low current account deficit, high growth, budget surpluses and small public sector. If the Government does not achieve these policies, the markets will punish it. If they do achieve them, the markets may still punish them. Any way you look at it, Australia is integrated into the globalised world economy and is dependent on the activities and policies of globalisation. Australia’s future will move with the ebb and flow of globalisation.
Globalization is the shift toward a more integrated and interdependent world economy (Hill, 2005). Globalization has several different areas including the
World War 1 was a war fought from 1914 to 1918, it was also known as the ‘Great War’. It was fought principally in Europe and the Middle East. It was fought between the Triple Alliance, which consisted of Germany, Austria-Hungary, and Italy and the Triple Entente, which consisted of Russia, France and the British Empire. World War 1 had major impacts on Australia, but the most obvious would be the economic impact, the social impact and the political impact. The war had great consequences on the Australian economy and the results of these consequences were varied. One of the first impacts on the Australian economy was the government’s cancellation of existing trade agreements with Germany and Austria-Hungary. World War 1 also had a great social
Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. Globalisation brings many benefits such as freer movement of capital, goods, and services; bigger companies are now able to operate in more than one country and because of that there are more jobs in less economically developed countries (LEDC’s). Of course there are a few disadvantages such as an intense competition and widening gap between rich and poor countries.
Everyone is connected to globalisation. Common foods that you buy may seem like they originated here in Australia, however they mostly originate from another country. Products like your iPhone, Nike shoes or your Nestle coffee didn’t originate here in Australia. For these products to be manufactured here would cost too much so the people behind these large corporations called TNC’s, move out to developing countries to get cheap labour.
Globalisation is the idea that bring businesses, technologies, services and goods to spread throughout the world. It empowers globalized companies, such as: McDonalds, Starbucks. It also increase trades for developing countries to developed countries and it gets the developing countries to trade with other countries around them or even countries overseas.
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.
It would appear that globalisation is seen to be the borders between countries, governments, the economy and communities, collective liberalization and openness of markets, particularly through the elimination of barriers to trade in goods and services and the expansion of integrated global financial market. PRUS (2001) simplified the term of globalisation as a process of increasing connectivity, where
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)
Eichengreen, Barry. Globalizing Capital: A History of the International Monetary System. Princeton, NJ: Princeton University Press, 1996.
Since the early 1980s, successive Australian governments have deregulated financial and labor markets and reduced trade barriers. Malcolm Turnbull, a former communications minister, replaced Tony Abbott as head of the ruling Liberal–National coalition and as prime minister in a leadership ballot in September 2015. Australia is one of the Asia–Pacific’s wealthiest nations and has enjoyed more than two decades of economic expansion. It emerged from the 2009 global recession relatively unscathed, but stimulus spending by the previous Labor government generated a fiscal deficit. Australia is internationally competitive in services, technologies, and high-value-added manufactured goods. Mining and agriculture are important sources of
During the year 2012, Australian Dollar (AUD) is the 5th most traded currency in the world, accounting for 7.6% of the world’s daily share. The Australian dollar is popular with currency traders because of the comparatively high interest rates in Australia, the relative freedom of the foreign exchange market from government intervention, the general stability of Australia's economy and political system, and the prevailing view that the Austra...
These global institutions are not totally unjust, but rather have become instruments for Western governments to pursue their own national interests that benefit themselves more than the others. An example can be seen through the current WTO treaty, where countries are not actually opening their markets enough and are still prone to protect their own markets against cheap products such as textile and agricultural products from being imported into the country. These imports are often subjected to tariffs, quotas and anti-dumping duties. The existence of these barriers has made it difficult for developing countries to enter and market their products in developed countries. Domestic industries are also often protected by developed countries through su...
The globalisation of Australian business has significantly advanced through recent years as the global economy has progressed. Some of the most prominent driving factors of globalisation include the technological advancements that have allowed for the expansion of the Australian market along with the establishment of free trade agreements with different nations. Benefits of Free Trade Agreements within the Australian Economy include higher quality products for Australian consumers and the low cost of exports for areas of Australian business. However, the changes to Australian businesses have also created severe consequences, such as a rise in the Australian unemployment rate. The different factors and consequences associated with the globalisation of Australian business have continued to allow it to progress and advance with the modern economy.
Globalisation is a broad term that is often defined in economic factors alone. The Dictionary at merriam-webster.com describes globalisation as “the process of enabling financial markets to operate internationally, largely as a result of deregulation and improved communication.” Also due to deregulation on the financial market, multi-national companies are free to trade and move their businesses to areas where a higher return or profit can be achieved. New technology also enables companies to relocate to areas where labour costs are lower, for instance movement of call centre jobs from the UK to India.
Globalisation is a very complex term with various definitions, in business terms, “globalization describes the increasingly global nature of markets, the tendency for transnational businesses to configure their business activities on a worldwide basis, and to co-ordinate and integrate their strategies and operations across national boundaries” (Stonehouse, Campbell, Hamill and Purdie, 2004, p. 5).