A year of border closures and the diplomatic brawl with China is making Australia rethink its embrace of globalization. Before the pandemic, the country’s economic strategy was predicated on attracting large numbers of immigrants, foreign students, and tourists to supplement earnings from mineral and farm exports.
The country suffered its first recession in decades last year, yet the central bank is now forecasting that gross domestic product will return to its level at the end of 2019 by the middle of 2021. Experts say that the biggest reason the economy rebounded so quickly is that Australia turned to inward trade strategies.
Part of the drop reflects the absence of tens of thousands of international students, mostly from Asia, many of whom become residents after graduation. Education is Australia’s fourth-largest export, contributing $A37.6 billion in the 2018-19 fiscal year. One area where Australia has become more selective is investment. A law approved last year gives the Treasury the right to block deals even if they’ve been approved by the Foreign Investment Review Board.
Will the urge to splurge on wine at dinner fade once government stimulus runs out? Will millennials keep heading to Byron Bay once borders reopen, instead of jetting off to Fiji? And will the country continue to turn away Chinese investment if Beijing and Canberra patch up their differences? It’s too soon to tell, but at some point Australians will have to decide how much they want to return to their old ways.
