Australia Must Diversify the Economy Essay -- The Australian Economy

The economist describes the definition of a banana tree republic as a country dominated by inter realmal investment and dependent on a single export commodity (The economic expert. 2014). This definition has some correlation to the Australian economy as over previous years Australia has experienced a commodity wave which has dominated and under pinned the nations economy. The development of the inborn resources intentness in Australia has grown the economy and has become the number export for the nation (Figure 1). Australias reliance on the commodity industry does not second long term economic stability for the nation, commodity prices are go as the developing world industries slow down. The Australian government moldiness continue with the development of the commodity industry but must too invest into developing new industries that will ensure the economic exploitation of the nation continues and to ensure the nation is not dependent on the natural resources of the cou ntry. 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 start out advancements in the manufacturing industry by imposing high tariffs on import 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. bit 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 Australias economic history mining and the exports of commodities have been ... ...conomywell prepared for the challenges ahead. ONLINE lendable 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) Australias Mining Productivity Paradox Implications for MFP Measurement by Simon Zheng, chivvy Bloch SSRN. 2014. Australias Mining Productivity Paradox Implications for MFP Measurement by Simon Zheng, molest Bloch SSRN. ONLINE Available at http//papers.ssrn.com/sol3/papers.cfm?abstract_id=1715235. Accessed 03 March 2014.