Africa is set to become the world’s next miracle economy and Australia is uniquely placed to join in and help kick it off, writes Frank Jordan.
WITH A population of over a billion people and vast potential for growth, Africa is set to become the world’s next miracle economy. It is the future and as it develops it will create a massive consumer market.
China, on the other hand, is starting to look old and tired. Its stifling centralisation of power at home and the bullying of trade partners like Australia will only hasten its decline. This is not new. As noted by American sociologist Rodney Stark, back in the 11th century, Chinese mandarins killed off their thriving iron industry with overzealous state control.
While most people have portrayed Brexit as the leaving of Europe there are those who portray it as rejoining the Commonwealth. As a result, English-speaking African countries with democratic values will become an important destination for British investment. The higher risk of these investments will be balanced by even higher returns.
The risk will lessen over time as improvements are made to health, infrastructure and education. The self-interest of the European Union will play an important role here because African growth will act to lessen the numbers of incoming economic refugees.
American multinational corporations have enormous wealth squirrelled away in tax havens to avoid repatriating their profits to the U.S. where they will be taxed. It’s only a matter of time before this money finds its way into Africa to chase higher returns. The American Government will no doubt give them a bit of a nudge to establish another source of non-Chinese imports.
Australia is uniquely placed to join in and help kick start the African economic miracle. We can do this by building modern efficient steel mills in South Africa and the East African Community. They will provide jobs and exports. An immediate 20 per cent levy on all our iron ore exports will raise sufficient finance for this. As these mills come on stream, we will be able to redirect our iron ore exports away from the fickle Chinese to a more secure destination.
China has already indicated that it may ban its students from attending Australian universities. We should start the process of replacing them with African students. Since upskilling the African workforce is in our strategic interest initially, most of them would have to be subsidised. As growth in Africa picks up, this can be reduced.
Australian mining companies already have a significant presence in Africa. They’re involved in diamonds, graphite, scandium and who knows what else. There needs to be greater involvement in other more diverse parts of the economy.
To achieve this we should mandate large Australian superannuation funds to invest five per cent of their funds in South Africa and the East African Community. These seven countries have a combined population of about 240 million people. Australia will be in on the ground floor of an expanding and growing market.
The distance from Perth to Johannesburg is 8,323km while Sydney to Beijing is 8,986km. So Africa is closer than most people realise.
We must act decisively and grab this opportunity presented by Africa. The sooner we disengage from the communist Chinese dictatorship, the more secure our future will be. Australia has a surfing culture. Let’s ride the new wave of African growth to a prosperous future.
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