Truth be told, I’m fed up of the slew
of bad news from India. Yet another quarter of
miserably low GDP growth; the High Command’s hope
that the Food Security Act will get it votes in 2014
irrespective of how it bankrupts the exchequer, and
the opposition going along en masse since none wants
to be labelled as ‘anti-poor’ however ridiculous the
new law may be; the rupee going downhill faster than
all other emerging market currencies; Veerappa
Moily’s touch of genius when he advocates shutting
petrol pumps at 8 pm as a way to combat the widening
current account deficit, while gas-guzzling
motorcades accompany every minister wherever they
go; ex-RBI governor Subbarao’s impassioned pre-exit
defence of why he was so totally right and all else,
especially the finance ministry, were so wrong; and
our prime minister’s resoundingly reassuring speech
to Parliament.
This fortnight, I wanted to look elsewhere — at a
continental country which, despite the global
economic mess, is managing to do extremely well for
itself barring Test cricket. The country is
Australia whose land and seas have by far the
largest number of lethally poisonous creatures known
to man, and where the verbal combativeness of its
members of parliament can make our most intemperate
MPs blush in shame.
Australia is in general election mode. The Labor
Party under prime minister Kevin Rudd, all of 55
years, who returned to the hot seat after ousting
Julia Gillard in June this year, is in bruising
fight to win a third term for his party; on the
other side of the ring is Tony Abbott, also 55 years
old, of the opposition Liberal-National coalition
who is determined to win the election, which is to
be held on 7 September. However, amidst electoral
blood-letting and global economic mayhem, the
country keeps purring along. Incidentally, Abbot won
by a landslide.
For April-June 2013, Australia’s real GDP grew by
2.6 per cent over the same quarter of the previous
year. It was 10 basis points higher than the annual
growth achieved in January-March 2013. Remember, we
are dealing with a developed OECD nation.
Comparisons with others of that club are: the USA at
1.4 per cent; Japan at 0.9; the Euro area at (-)0.7;
Canada at 1.4; and the UK at 1.5. In recent times,
Australia has often grown faster than South Korea,
which would have been inconceivable even five years
ago. In plain-speak, as far as GDP growth in
concerned, Australia is the best among all developed
nations.
Now consider unemployment. As of July 2013, the
country had an unemployment rate of 5.7 per cent.
Compare this with the US, which is doing well, but
still has unemployment at 7.4 per cent; the Euro
area at 12.1; Canada at 7.2 and Britain at 7.8 per
cent.
Australia’s consumer price inflation for the quarter
April-June 2013 was 2.4 per cent. While this may be
higher than the US at 2 per cent, and more so
compared to Canada at 1.3 and the Euro area at 1.6
per cent, it is lower than many of its Asian
neighbours such as China, Hong Kong, Indonesia and
India.
At 1.3 per cent of GDP for 2013, Australia also has
a far lower fiscal deficit than many other nations.
Compare this with the USA which is at 4 per cent,
the Euro area at 3.3, Japan at 8.3, Britain at 2.9,
Canada at 3 and even China at 2.1 per cent, and you
realise that the Aussies have been careful with
public finances. Consequently, Australia’s
government debt to GDP for 2013 is pegged at 20.7
per cent, which is very creditable compared to 212
per cent for Japan, 102 for the US, 91 for the Euro
area and the UK, 85 for Canada and even 24 per cent
for China.
And the currency has hardly depreciated in twelve
months. So, here is a country that is chugging along
just fine despite global volatility everywhere. If
only it can play better cricket and gives a
thrashing to the Poms!
Published: Business World, October 2013
