Comparing Australia to the World

Associate Professor Geoff Dow of the University of Queensland spoke today about some of the variables that can be used to compare Australia’s economy to the rest of the world.  One of the comparisons he made was based on the Human Development Index (HDI).  The HDI measures how rich a country is by taking into consideration factors affecting quality of life such as education, life expectancy, and health conditions.  Using the HDI, Australia ranks number two in the top fifteen richest countries.  This measurement is important because a rich country according to GDP may not also have the best quality of life.  A country that provides the best conditions for a quality life is overall the richest. 

Another comparison Professor Dow made was based on unemployment.  Over the past 70 years, unemployment in Australia has fluctuated following similar trends to the rest of the world.  Between 1974 and 2004 Australia’s unemployment rate has averaged about 6.6% as compared to the US which is about 6.2%.  The unemployment rate has been as low as 2% in Australia and many economists, such as Professor Dow, would like to see it that low or even lower once again.  The unemployment of Australia currently is around 5% while the US unemployment rate has risen to 9.2% after the recession.  The unemployment rate shows the stability of an economy and the availability of jobs. 

A third comparison Professor Dow made was about the sense of egalitarianism a country possesses.  Australia, for instance, believes they are egalitarian because the difference in incomes between rich and poor has been mediocre.  They have never had an extremely small gap between the rich and the poor, such as the Scandinavian countries, but their inequality has never been as great as the USA.  It is somewhat of a social attitude that has Australians convinced that they are egalitarian, even though they are in the top 8 countries with the largest income gap from 1965 to 2010.  Egalitarianism is a sense of equality and particularly with incomes, it is important for a country to minimize the gap between the rich and the poor to maximize their economy.     

(All statistics and information above from Geoff Dow’s packet)   

Since WWII, Australia, much like America, also experienced times of recession and times of success.  Industries such as auto development and agriculture expanded greatly to prove Australia’s role in the global economy.  Today, however, such industries have been diminishing  private companies become less and less popular and large companies begin to rule.  Professor Jones mentioned that inflation has risen by about 20% in the last year.  GDP has increased with only minor fluctuations over the past five years and is predicted to continue increasing in 2011.   The external balance of Australia has fluctuated with increases and decreases from year to year, but is most commonly seen at around $54-59 billion.  The five main trade and finance partners that interact with Australia are China, Japan, Republic of Korea, India, and the USA (Jones packet).