Plan Like the Auzzies Canada
Despite common roots in the British Empire, Australians and Canadians are very different people with divergent political styles, business cultures, and above all, clarity of national strategy. The Canadian government took decades to hammer out the landmark Canada-China Foreign Investment Promotion and Protection Agreement and only last summer released the long-awaited Canada-China Economic Complementarities Study.
The government has yet to lay out long-promised reforms to the Investment Canada Act and has been dithering over and rejecting foreign takeovers of Canadian companies and assets. Meanwhile, Brian Mulroney opined recently that it would take at least a decade to negotiate a free trade agreement with China if even deemed desirable.
Contrast Canadian planning, policy and behavior to Australia’s just released White Paper on the Asian Century, a blueprint for the country to take full advantage of the tectonic shift in world economic centrality to the Asia-Pacific region, lead by China and India.
Yesterday’s ‘tyranny of distance’ has been replaced by today’s ‘prospects of proximity’, noted the paper launched at the Lowy Institute, Australia’s premier think-tank, by Prime Minister Julia Gillard. She underscored that Asia’s rise in the 21st Century as “not only unstoppable, it is gathering pace” which will produce an unprecedented market to drive a “high-wage, high-skill Australia”.
The White Paper plots an ambitious agenda for action in several key areas to reform Australia’s ‘five pillars’ of productivity – education and skills, innovation, infrastructure, taxation reform, and regulatory reform. 25 objectives are set out for 2025 along with policy pathways for their achievement. Taken together, they draw a roadmap to guide governments, business, and educational institutions.
Within 13 years, Asia will be the world’s largest producer of goods and services and the largest consumer. The region will have the world’s largest middle class with much deeper pockets and multi-millions more will be lifted out of poverty. By that time, the paper envisages Australia’s trade with Asia as reaching a full 1/3 of GDP from 25% today, identifying China, India, Indonesia, Japan, South Korea, and the US as the six countries that matter most to the country.
To spur trade and investment with Asia, the paper calls for an acceleration of efforts to make Darwin a gateway to Asia and extending that strategy to other high-growth centers in northern Australia, especially along the coast. Australia will join the exclusive club of the world’s ten richest countries (from 13th in 2011) with average real per capita incomes topping A$73,000 from A$62,000 in 2012.
Australia will also become one of the top 5 countries for ease of doing business. The federal government plans to enter into a National Productivity Compact with states and territories, focusing on regulatory and competition reform. The Compact is expected to be agreed on at the next meeting of the Business Advisory Forum between business leaders, the Prime Minister, and her senior ministers.
The document lays heavy emphasis on education and aims for Australia’s schools system to be in the top five and 10 of its universities listed in the world top 100. Within 13 years, 40% of all 25-34 year-olds will have a bachelor’s degree or higher (up from 35%) and an increasing number of university students will take part of their degree in Asia. 3/4 of working-age Australians will have an entry-level qualification, up from less than 1/2 in 2009.
All students will be able to study an Asian language, the priorities for which are Mandarin, Hindi, Indonesian, and Japanese. Every school will link up with an Asian counterpart and 12,000 scholarships will be granted to Asian students. Asian students currently account for 77% of the more than 550,000 international enrolments annually.
The paper wants to reinforce the attraction of skilled migrants through expansion of online visa lodgement, multiple entry visas, longer visa validity periods, and streamlining the student visa process. 7 of the top 10 source countries fort immigration are in the region – India, China, the Philippines, Sri Lanka, Malaysia, South Korea, and Vietnam.
In addition to traditional strengths in mining and tourism, the paper sees a bright future for Australian agriculture and food exports to meet the high-quality food needs of Asia’s burgeoning middle class. It proposes setting up grassroots programs in agriculture while facilitating exports to Asia. It also encourages two-way investment in food and food processing, agriculture-related transport infrastructure, natural resource management, and water conservation. The paper believes this will help drive development of regions and remote areas, especially northern Australia and Tasmania.
Finally, the paper supports a bigger diplomatic footprint Asia, recommending new diplomatic missions in Ulan Bator, Mongolia, Phuket, Thailand, Shenyang, China, and in eastern Indonesia.
So, Canada, if you want deeper engagement with expanding Asia and reap the corresponding benefits, think big like the Auzzies.