Sunday, 6 July 2014

Australia - a Golden Future?

Twice in the last ten days, at the Wheeler Centre in Melbourne, I’ve stepped back in time to my former professional life in international banking, remembering its intellectual buzz and trying not to hanker for it.

On the first occasion, at a well-attended session, I listened to Andrew Charlton discussing his recent Quarterly Essay: Dragon’s Tail, the Lucky Country after the China Boom. I recommend it as essential reading for anyone interested in Australia's place in the world.

I had to pinch myself that someone still with the appearance of a 30-year-old could have been the senior economic adviser to Australian Prime Minister Kevin Rudd six years earlier. His youth belied his erudite ways. He took me back to my long-ago days in Harry Black’s lectures on economic development at Sydney University. We’ve learned a lot about the development process since and Charlton explained it better than anyone I’ve heard. I left the session impressed, thinking it’s a pity that a) Kevin Rudd was never able to articulate and convey to the electorate Charlton’s knowledge and b) that our new government appears bereft of intellectual firepower similar to Charlton’s.

But still I was uneasy that Charlton hadn’t told his audience the whole story: that we’d been in our current position once before. A century ago Australia was ‘top of the economic pops’. This had fascinated me in my early days at the Commonwealth Bank, when I pioneered the preparation of country risk analyses for Board papers. Is our long relative decline of the 20th century ahead of us again?

After the talk I purchased the Dragon's Tail essay and mentioned my concern to its author. Charlton immediately pointed to his interesting graph on page 12 of his essay, demonstrating the rise in our relative economic wealth throughout the 19th century, until just over a century ago when we were the richest country in the world expressed as GDP per capita. Throughout the 20th century we slid progressively down the rankings, not because we were getting poorer, we just weren’t sustaining the pace. Other countries much less well-endowed than us were doing better, going past us.
(Note: Because Charlton’s graph has scale problems on its horizontal axis, it should show a more gradual rise in the 19th century and a sharper (steeper) rise in the 21st century.)

It pains me that, although Australians might realise that in the last 20 years we’ve unexpectedly been handed another bonanza by China, we don’t understand the whole picture. I’d like to see Australians being totally familiar with Charlton’s graph (drawn to proper scale) and understanding what it means. We need to be much smarter about where we go from here compared with our 'strategies' throughout most of the 20th century. Our strategies were mostly lacking - usually we bobbed on the tide. We need to exercise much more long-term thinking and much more political bipartisanship, with Oppositions opposing at the margins, not just for the sake of opposing.

At the Wheeler Centre a week later, a packed house absorbed BBC journalist Nick Bryant’s insightful and often entertaining views on The Rise and Fall of Australia. I also recommend this book as essential reading for every thoughtful Australian.

Bryant holds up a mirror, showing us that by good luck (our historic heritage and our natural resource base), sound policy-making in the 1980s and 1990s, and the creative energies of our people, we’ve overcome our tyranny of distance and our cultural cringe to become the best performing economy in the western world and the world’s most successful multicultural country. In many ways we can hold our heads high.

But - trouble lies ahead. The cover of Bryant’s book portrays us as a shiny apple on the world stage, but an apple which is rotten at the core - because of our political ‘leaders’. They are taking us down, down, down, helped by a media which is poll-driven and often doesn’t understand or appreciate, and therefore cannot inform the average voters about, the real success story which is Australia.

Bryant suggested several ways in which we might reduce the level of Parliamentary aggression in Canberra, the ‘coup capital of the democratic world’, although we can’t do much about our structural political problem of a national capital located away from ‘real’ cities, our short term political cycle and the shrinking gene pool of potential politicians. He concedes that our politicians are capable of rising to the occasion in a crisis but, in the political hot house which is Canberra, our national success story means they don’t have real problems on which to focus their attention.

How I crave a return to the heady days of the 1980s, full of evidence of actual intelligence and solid intellectual effort rather than ideology and sloganeering as drivers for our national agenda.