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COUNTRY ANALYSIS

ON

AUSTRALIA

SUBMITTED BY:

GROUP 1

OVERVIEW

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Australia is rich in commodities, including fossil fuel and uranium reserves. It is one of the few

countries belonging to the Organization for Economic Cooperation and Development (OECD

that is a significant net energ! e"porter, sending nearl! #$% of its total energ! production

(e"cluding energ! imports overseas, according to data from Australia&s 'ureau of esource and

Energ! Economics ('EE. E"cept for crude oil and other li)uids, Australia retains a surplus of

all other energ! commodities. Australia was the world&s second*largest coal e"porter based onweight in +$+ and the third*largest e"porter of li)uefied natural gas (-/ in +$0. Australia&s

stable political environment, relativel! transparent regulator! structure, substantial h!drocarbon

reserves, and pro"imit! to Asian mar1ets ma1e it an attractive place for foreign investment.

Despite falling commodit! prices, a slowdown in China and a deterioration in international trade,

Australia has managed to weather the storm. According to the latest /D2 data, e"ports made up

over +$% of /D2 and, despite a collapse in prices, iron ore still forms a large chun1 of e"port

revenues. A wea1 Australian dollar and low production costs have 1ept Australian iron ore

 producers competitive in global mar1ets. 3owever, mining companies are selling more than the!

are producing in an effort to 1eep prices low, b! drawing down on iron ore inventories. Also,

man! mining companies have hedged against the collapse in prices through favorable futures

contracts, protecting them from the current low commodit! price environment. 4hese factors are

currentl! helping to sustain the industr!5 however, their impact is not li1el! to last.

Government System

6rom the earl! 78$s onwards, the Australian econom! has undergone a continuing economic

liberalization. In 780, under 2rime 9inister 'ob 3aw1e, but mainl! driven b! 4reasurer  2aul

:eating, the Australian dollar was floated and financial deregulation was underta1en.

Australia is a federation, a constitutional monarch! and a parliamentar! democrac!.

4his means that Australia;

• 3as a <ueen, who resides in the =nited :ingdom and is represented in Australia b! a

/overnor*/eneral.

• Is governed b! a ministr! headed b! the 2rime 9inister.

• 3as a two*chamber Commonwealth 2arliament to ma1e laws.

• A government, led b! the 2rime 9inister, which must have a ma>orit! of seats in the

3ouse of epresentatives.

• 3as eight ?tate and 4erritor! 2arliaments.

4his model of government is often referred to as the @estminster ?!stem, because it derives

from the =nited :ingdom parliament at @estminster.

Regulatory Efficiency

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?tart*up companies en>o! great fle"ibilit! under licensing and other regulator! framewor1s. It

ta1es onl! one procedure to start a business, and no minimum capital is re)uired. 6le"ible labor

regulations facilitate a d!namic labor mar1et, increasing overall productivit!. In +$, the

government lifted price controls on electricit! to encourage mar1et*based production of power.

MACRO INDICATORS

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TRADE RELATIONSHIP OF AUSTRALIA

4he foreign relations of Australia are influenced b! its position as a leading trading nation and asa significant donor of humanitarian aid. Australia&s foreign polic! is guided b! a commitmentto multilateralism and regionalism, as well as to strong bilateral relations with its allies. :e!concerns include free trade, terrorism, refugees, economic cooperation with Asia and stabilit! inthe Asia*2acific. Australia is active in the =nited ations and the Commonwealth of ations.

Australia&s imports of ma>or weapons increased B per cent between +$$+$$7 and +$$,ma1ing it the si"th largest importer in the world according to ?I2I.

It has become steadfastl! allied with ew ealand, through long*standing AAC ties dating bac1 to the earl! 7$$s, as well as the =nited ?tates, throughout the Cold @ar and since.

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@ith the rapid growth in trade relations with China, however, Australia has been debatingwhether to shift its emphasis to Asia. A ma>or debate has been underwa! with a large numbers ofrefugees streaming into Australia, often via ver! dangerous smuggling

AUSTRALIA BALANE O! TRA"E

In ovember +$, Australia reported a trade gap of F+.7$ billion a decrease of percent from

a downwardl! revised F0.+ billion deficit in a month earlier and below mar1et e"pectations, as

e"ports rose while imports fell. 'alance of 4rade in Australia averaged *.7 A=D 9illion

from 7# until +$, reaching an all time high of +++7 A=D 9illion in 6ebruar! of +$$7 and a

record low of *07+ A=D 9illion in April of +$. 'alance of 4rade in Australia is reported b!

the Australian 'ureau of ?tatistics.

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AUSTRALIA# O$$ORTUNITIES

4he Australian /overnment welcomes foreign investment. As the Australian /overnment&s

investment promotion agenc!, Austrade wor1s to inform investors about growth opportunities infive areas which pla! to our strengths, >ointl! agreed b! Australian and ?tate and 4erritor!

/overnments;

• Agribusiness and food

• 9a>or infrastructure

• 4ourism infrastructure

• esources and energ!

• Advanced manufacturing, services and technolog!

@ithin advanced manufacturing, services and technolog!, Austrade focuses on highlighting

growth opportunities for investment in Australian medical and materials sciences andtechnologies, and digital technologies.

AUSTRALIA# RESOURES

AustraliaGs e"ports increased to an all*time high of AF+7,7#$ million in 6ebruar! +$ fromAF+7,8$ million in the previous month. Australia is rich in natural resources and is one of thema>or e"porters of commodities.

 atural resources of Australia consist of bau"ite, coal, copper, tin, gold, iron ore, silver, uranium,tungsten, nic1el, rare earth elements, lead, zinc, diamonds, mineral sands, natural gas and petroleum. @hereas metals such as iron*ore and gold constitute +8% of the total e"ports, coalaccounts for 8% and oil and gas account for 7%.

Australia&s land itself can be considered as a resource. Australian soil is used to grow food in theform of crops and to produce food for raising livestoc1, such as cattle. Australian forests are usedas a source of wood for building and ma1ing paper.

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RE!ERENES

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