THE FACULTY QUARTERLY 

Autumn, April 2013

The power of proximity

Economist Tim Harcourt on The Asian Century

Australia is entering a new phase in our
relationship with Asia contends Tim Harcourt,
The Airport Economist, and J.W. Nevile Fellow in Economics at the Australian School of Business at the University of New South Wales. 

According to Tim, although ‘rocks and crops’ will continue to provide the lion’s share of Australia’s export revenue to Asia, our engagement with Asia will be defined by a significant rise in the trade of services and a deepening of people-to-people relationships.

Delivering the opening keynote at the 6th Annual Asia Pacific CPO Forum, Tim will offer unique take on global and regional economics, and the opportunities and challenges they present for Australian business.

An active commentator in the Australian and international media on economic and trade issues, Tim joins an exceptional speaker line-up including: Don Argus, former BHP Billiton Chairman; Maxine McKew, journalist and former politician; David Lamont, Executive Director and CFO of MMG; and Lisa Martin, former Global CPO of Pfizer. View the full CPO Forum program here.

It was nearly half a century ago that Geoffrey Blainey’s The Tyranny of Distance argued that Australia’s geographic position shaped our psychological attitudes and future economic prosperity. 

Indeed, Australia’s post war engagement with Asia has been something of a ‘slow-burn’, punctuated by several crucial incidents which have served to progress and deepen our relationship with Asia, including: Gough Whitlam’s visits to Beijing during the 1970s; the breaking down of the tariff wall that had kept Australia isolated and uncompetitive for over a century; and the creation of Asian-focused regional economic institutions, such as APEC.
 

“Gradually, through these flurries of trade and considered policy developments, we have replaced the tyranny of distance with the power of proximity,” says Tim, who offers three key reasons why the next century will accurately be characterised as The Asian-Century: 

“First, we are now well situated within established Asia and are able to expand into the ‘frontier markets’ of Laos, Cambodia and Myanmar in the Mekong Delta and Mongolia and Kazakhstan in Central Asia”.

Secondly, Tim notes that whilst larger corporates have already formed strong relationships in Asia, the nature of global supply chains and open regionalism means that Australian small and medium-sized enterprises (SMEs) will also become increasingly enmeshed.

Finally, Tim notes that whilst the first three waves of our engagement with Asia have been focused on mining and agriculture), steel and iron ore, and pumping LNG offshore to the region, services will now play a more important role.  “Services will complement the role that ‘rocks and crops’ and advanced manufactures play in our trade; they are not a substitute for them.” 

The coming phase will not be without challenges, however, particularly given the ongoing risk and potential for external shocks within the global economy after the GFC.

Tim believes that climate change, in particular, poses a serious threat, though it also represents an opportunity for Australian environmental services exporters. “Those engaged in sectors like green building and environmental transport and infrastructure are well-equipped to assist China, India and Indonesia in reducing carbon emissions,” suggests Tim.

To hear more from Tim about our commercial prospects in Asia, register here for The Asia-Pacific CPO Forum, or for more on the Forum, contact Event Manager, Belinda Toohey on +61 3 9654 4900 or via Belinda.toohey@thefaculty.com.au.

The 6th Asia-Pacific CPO Forum – Shaken, Not Stirred
The Asia-Pacific CPO Forum is the region’s oldest and longest running event dedicated to lifting commercial leadership at the highest procurement levels. In 2013, it will be held at The Werribee Mansion & Spa on May 15 – 16

To register for The CPO Forum, click here