G-20 nation profile: Australia
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Here is an overview of Australia, one of the countries in the Group of 20 attending the economic group's upcoming Pittsburgh summit.
WHO IS THE LEADER FROM AUSTRALIA ATTENDING THE G-20 SUMMIT?
Prime Minister Kevin Rudd (a.k.a. "Kevin 24/7"), swept into government with his Labor Party in a landslide in 2007 over John Howard, the more conservative prime minister of 11 years. Mr. Rudd is a former Australian ambassador to Beijing who speaks Mandarin fluently. His main focus since taking office has been political and economic engagement with China, Australia's biggest trading partner. However, relations have been strained since Canberra weighed in on a move by Chinese metals company Chinalco to purchase Australia's second biggest miner, Rio Tinto, in a bid to protect Australian resources from foreign ownership. Mr. Rudd also has been seen as intent on balancing Australia's relations with China and those with the United States, a longtime ally and major trading partner. But he has argued recently that China should, to reflect the changing world economic order, have greater voting rights within the IMF and a greater say in how its funds are spent.
WHAT IS MR. RUDD HOPING TO GET OUT OF THE G-20 SUMMIT?
Canberra's key ambitions heading into the G-20 summit go beyond the trilateral Australia-China-U.S. relationship. They are also a bit wonkish. Kevin Rudd has played up the changes in the global economic imbalance, emphasizing the role that developing countries should play in broader financial and economic discussions. Mr. Rudd -- currently co-chair of the G-20's working group on IMF reform -- is arguing for a clear role for China in the management of the global economy.
WHAT ARE THE CURRENT ECONOMIC CONDITIONS IN AUSTRALIA?
Australia has had a faster-than-expected recovery from the global financial crisis. After a modest contraction in late 2008 and early 2009, Australia's GDP has held up better than most in the developed world, partly because of its trade dealings with China, whose continued growth has translated into demand for Australian commodities. Australia's financial system was also relatively unaffected by the credit crisis in the U.S. and Europe. A surge in government spending on infrastructure has also spurred economic activity. An IMF commentary issued Aug. 7 commended the Australian government and Reserve Bank (ABS) for responding quickly to the global crisis, saying the country's "aggressive" action was expected to "limit the decline in activity to 0.5 percent in 2009" before a slow recovery to growth of 1.5 percent in 2010.
WHAT IS THE GENERAL MAKE-UP OF THE AUSTRALIAN ECONOMY?
Australia is a Western-style market economy and the world's 14th largest by nominal GDP -- currently at just over $1 trillion, according to the IMF. Following a recession in the 1980s Australia had enjoyed 16 years of uninterrupted growth, aided by demand for commodities and the policies of the conservative government, with an impressive average growth rate of 3.3 percent from 2003 through 2007. Although the agricultural and mining sectors are small, 4.7 percent of GDP combined (the services sector accounted for 72 percent of GDP in 2007), they contribute about 65 percent of exports. Australia is a major exporter of natural gas, coal, iron, bauxite, copper, tin, gold, silver, uranium, tungsten, mineral sands, lead, zinc, opals, diamonds, grain, wool and food products and has benefited greatly from the surging demand for such commodities.
WHAT ELSE SHOULD WE KNOW ABOUT AUSTRALIA'S CURRENT POLITICAL AND ECONOMIC SITUATION?
In August, Australia's central bank upgraded its forecasts for GDP for the rest of 2009 and 2010, underscoring the economy's resilience. It now expects GDP to grow 0.5 percent in the fourth quarter of 2009 from a year earlier, instead of shrinking by 1 percent. However, analysts have warned that the economy is still fragile, with consumer spending possibly tapering off later in 2009 as government stimulus payments wind down. There is concern in the mining industry that new commodity orders could slow as China rebuilds its inventories.
Correction/Clarification: (Published Sept. 4, 2009) Canberra is the capital of Australia. The city's name was misspelled in a map that accompanied this article as originally published Sept. 2, 2009.
First Published September 2, 2009 12:00 am
