By Isaac Cohen*
In the United States, the economy has entered the tenth year of sustained expansion and it is projected it may become the longest on record, if it lasts more than the 120 months of expansion achieved during the Bill Clinton presidency.
However, on the other side of the world, “Down Under,” there is an economy that is now achieving 27 years of sustained expansion. This outstanding economic performance of the Australian economy has been achieved despite the regional downturn of the 90s in East Asia, the Great Recession and the commodity downturn of this decade. Furthermore, the Australian economy has expanded despite the succession of six prime ministers in the last ten years.
Sound policies and a positive external sector have contributed to the sustained expansion, with prudent policies in good times, such as public debt reduction, together with countercyclical measures in downturns, such as tax cuts, increased public spending and a devaluation to stimulate exports. Also, the Australian economy is one of the main beneficiaries of the spectacular growth of the Chinese economy, the main consumer of its mineral exports and its main trading partner. This relationship is supported by a free trade agreement and abundant trade in services, such as tourism.
Nonetheless, change is coming. Former Australian Prime Minister Tony Abbott, in a recent lecture at the Heritage Foundation in Washington, excerpted in The Wall Street Journal (07/14-15/18), said “the rise of China means that Australia can no longer take for granted a benign strategic environment.”
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
