LAURA TINGLE, HOST: Nicholas Moore, welcome to 7:30.
NICHOLAS MOORE, SPECIAL ENVOY FOR SOUTHEAST ASIA: Thank you, Laura.
LAURA TINGLE: You say that Australia’s trade performance with Southeast Asia has been good and that it is growing but not as fast as the region, but that investment is actually falling back. What have stakeholders told you about why this is happening?
NICHOLAS MOORE: Well, the positive story about the growth of trade is that people see a lot of opportunities in terms of what we’ve been doing traditionally and some of the areas we’d like to move forward in, so it’s been a very positive experience. . history in terms of trade on both sides, both trade from the region to Australia and from Australia to the region.
From an investment point of view, again we can highlight the positive and the positive is that the region’s investment in Australia has been growing and, in fact, it is greater than Australia’s investment in the region.
The key question, however, is why Australian companies have not invested as much in the region as the rest of the world, because we can see that investment from the rest of the world has been increasing. So foreign direct investment in the region has been increasing. So why is that?
It is partly as a result of what our companies do. Much of the growth that has occurred there has been in export-oriented manufacturing companies, but that is not the whole story.
And the whole story is how can we raise awareness of what the opportunities are in the region for Australian businesses and allow them to get comfortable with what they see the future for them there might be.
LAURA TINGLE: One analyst noted that a major challenge is “the often perceived or real risk related to political instability, regulatory barriers, corruption and currency fluctuation.” Do Australian businesses need to take a really fresh look at the business environment in these countries and how the opportunities are different now to, say, 10 years ago?
NICHOLAS MOORE: You’re absolutely right. Many changes have occurred. Obviously, the economies are much larger than they were 10 years ago.
The average growth rate over the last 20 years is 8.5 percent. Obviously the economies are much stronger than they were and the opportunities are much greater.
Every Australian business leader who goes to the region, and hasn’t been there for about 10 years, is amazed by the amount of growth that has been achieved. So number one is much bigger in terms of what’s happening there.
Secondly, from the point of view of political risk and currency risk, yes, there was political risk and currency risk if you look back to 1997 and the Asian crisis, but the economies have been very stable and have been growing strongly. Politics in the region have also been very stable during that time period.
So when you look at the level of debt in most countries as a percentage of GDP, it is modest, certainly manageable, and the ambition in terms of where the companies, the countries and their companies are, is much greater than in the past.
LAURA TINGLE: You have spearheaded this new economic strategy for the Government. What can governments do to improve things here?
NICHOLAS MOORE: We’ve come up with four different categories of recommendations in our report.
The first is to return to this question of consciousness. What are the opportunities in the region for Australian businesses and investors? And secondly, what are the opportunities in Australia for Asian investors and companies?
That’s why we have a whole set of recommendations on how we can increase awareness of each other’s business opportunities.
The second thing is to focus on the blockages. So always between trade between two countries there is a whole range of different blockages, issues that need to be addressed and that’s why we have identified a whole range of them. In two ways: Everything we are doing is in two ways, not just Australian investment in the region or regional investment in Australia, but in both directions.
So we have identified a number of obstacles that the Government can take steps to address.
Thirdly, capacity and capability largely comes down to people-to-people skills, how can we increase the capacity of Australians to engage in the region and the region to engage in Australia, to really look at the opportunities that exist today and the opportunities we have. I know they will come tomorrow.
And finally, we talk about investment. Can the Australian government think about its balance sheet, where it puts its investments and say how it can help deepen investment between the two countries?
So, those are the four different categories where we’ve put 75 different recommendations and we’ve focused them on broad outcomes and we’ve also identified 10 different industry groups that we think have high potential.
LAURA TINGLE: Finally, you’ve obviously had a long history in business. We have made greater and more successful progress in Japan and China. What can we learn from those experiences about who the leaders of a market are?
NICHOLAS MOORE: Well, I think we can be very optimistic, considering our situation with Japan and China.
When we look at Japan and think about the situation in Australia in 1950 and compare it to the current situation in the region, we see that high levels of growth are occurring today in a variety of different countries in the region.
It is important to obviously note that countries are very different in terms of where they are located.
There is huge growth happening in a range of countries, much like Japan, and export-led urbanization taking place, but think about the number of people from the region living in Australia today: over a million people They come from Southeast Asia in comparison. where we were with Japan in 1950.
Let’s think about the number of Australian universities that today carry out their activities in the region. We currently have more than 500,000 students from Australian universities in the region, so we are in a very strong position in dealing with people.
Our relationship with Japan and China, of course, is very strong and we benefit from their industrialization and the growth of their exports. We are seeing the same story in many of these countries of industrialization, urbanization and export growth, but we are in a much stronger position as a nation in terms of where we are with the region than we ever were with Japan and China and as a consequence, we know that Australia will benefit from the industrialization, growth and urbanization of the region.
It is a question of how much more we can benefit, given the stronger position we have, particularly in our relationships between people today compared to where we were in the past.
LAURA TINGLE: Nicholas Moore, thank you very much for your time tonight.
NICHOLAS MOORE: Thank you very much, Laura.