Australian Economy



Australian Economy

Part A

Dutch Disease

Dutch disease is a term coined in economics to identify the negative consequences suffered by a country when you experience an unexpected growth in earnings of foreign currency. This problem is usually associated with the exploitation of natural resources, resources that are discovered, exploited and exported, which in short time can mean big revenues for the country, revenues have a negative impact on other productive sectors other than natural resource exploitation causing the "problem".

When you enter the country large amounts of dollars from the export of any natural resource, mediate consequence is the revaluation or appreciation of the currency local situation that diminishes the competitiveness of domestic industry. We are already seeing in Colombia, where the peso has appreciated between currencies other causes that are coming by and for the mining sector in recent times has had a good performance. It is well known that currency revaluation wreaks havoc among exporters, since it makes them less competitive and may even lead them to bankruptcy with the inability to compete with foreign producers (MacKinnon, 1991).

The Dutch disease, if not taken the necessary steps, you can easily ruin the entire industry of a country, making this become a single producer and exporter monkey, as is common in oil-producing countries like Venezuela, where it is estimated that oil represents over 90% of total exports. Paradoxically, a sudden increase of $ exaggerated cause so many problems, since it would imply that it would increase the wealth of a country, but what you do not have in mind is that while some sectors of the country will benefit from the new wealth.

Hollowing out of the Economy

This term means that the Economy is adopting the process of offshoring and outsourcing of work. It is an important part of globalization, it affects the local labor market as most of the work is carried out through outsourcing as foreigners are working for the task assigned to them. It also refers to the process of selling the products in international markets as in the case of Australia. According to a deal between Australia, China and UK's group, Gas will be exported from Central Queensland, with a total worth of $60 Billion. It will benefit the Australian industry as it will earn significant foreign exchange and will result in significant job creation.

Globalization

Globalization is defined as a procedure of increasing interdependence among all the people that are living on the planet earth. Individuals are allied mutually such as economically as well as socially via trade, investing money along with the governance. All of these linkages are stimulated through the market liberalization as well as the information, communiqué along with the advance transportation technology.

A global market is an unparalleled observable fact that should not be confused with the economic internationalization that is prevailing in the economy. In reality, a global market economy is in existence ever since the 16th century. The main base of the global economy is on the expansion of worldwide trade, overseas ...