Why is Australia’s economy so successful
Australia has one of the highest quality of life in the world. Its economy is growing for more than 21 years. It is one of the few western countries which did not fall into recession. The unemployment rate is just 5,4% while the country’s debt as a percentage of GDP is 10%. What is the reason for this success? One thing is certain. During the past decade Australia is experiencing a mining boom. The country is exporting basic resources. The demand is driven by the developing Asian countries such as China and Malaysia. From 2007 onwards China is the largest trading partner of the country. The country wins a lot form the increasing commodities prices as well as from the foreign investment in its mining sector.
Nevertheless the success of Australia cannot be just explained by its mining boom. In addition to that the low unemployment level is also not due to the new mining jobs. The statistics show that only 2,5% of the workers are in the mining sector. In the services where 80% of the population works there is a hot product that sells a lot in Asia – education. In 2012 there were more than half million foreign students in the Australian universities. At the same time Australia has very open immigration policy that attracts tens of thousands of qualified workers every year. All this contributes heavily for the growth of the country’s economy.
Last but not least the Government funded direct social benefits for people who want to buy houses and this provided stimulus for the internal demand. The central bank on the other side decreased the interest rate from 7% to 3%, which increased the money in circulation. The mining boom in combination with the massive fiscal stimulus proved to be the silver bullet with which Australia avoided the global economic crisis.
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