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October 8, 2011

Tyranny of Distance No More

by Travis Marshall

With the rapid evolution of the Asian Century, Australia has successfully shrugged off the tyranny of distance and embraced its position as a periphery state.  One just has to glance at our trade data to realise that our fate has become intimately entwined with that of our northern neighbours, and that we are uniquely positioned to take advantage of the extraordinary trend of development that is likely to continue for decades.  Eight of our top ten trading partners are within our region showing the nature of our economic reliance on the west is a thing of the past.

Asian region trading partners shown in red. Source: DFAT (COT CY2010)

While the majority of attention in the public domain has focused on the China growth story, many other Asian nations have been accelerating at an unprecedented pace as they mutually support each other’s growth.  We are poised to witness one of the most extraordinary expansions of economic growth in regional history, as the vast populations of Asia seek and achieve prosperity.

Any grand strategy must recognise this regional context in which we live and the comparative advantages we possess.  While the majority of our export growth is being driven by the resources sector, we must not make the mistake of becoming overly reliant, and instead encourage a diversified base of trade.  Australia is becoming increasingly recognised as a knowledge economy with a tech savvy and highly educated population, and it is within this comparative advantage that the industries of the future will emerge.

The road to prosperity for the emerging nations in Asia is unlikely to be smooth, as they are likely to encounter social and economic upheaval as they adjust to new realities.  But with such a huge quantity of untapped potential, the growth trajectory of Asia as a whole is likely to remain upward when viewed on a 50 to 100 year time scale.  With a diversified economy, Australia will be able to prosper in the peaks and weather the troughs and become a critical component of the Asian Century.

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