Major Challenges Australia faces over next 10 Years
Major Challenges Australia faces over next 10 Years. Australia is a beautiful country, and one of the largest in the world. The second decade of the 21st century has come with numerous global shifts and geopolitical upheavals that require a strong yet nimble leadership at the helm. Recent events in 2016 (Brexit, Trumpism) and the looming Frexit in 2017 have upended the international world order that many Australians have been born and lived under for decades. A few years ago, it would have been almost impossible to predict a scenario where Britain exited the European Union and America elected a businessman with no political experience to the most powerful office in the country and arguably in the world. This begs the question: is there any worth in attempting to forecast the challenges Australia will face in the next decade and the next 40 years?
Well, come what may, there are a few challenges that are not going anywhere anytime soon. Australians need to be cognizant of these big ‘black holes,’ lest they orbit too close to them and get sucked in
1. The Economy
There is a lot to be said about the Australian economy and future challenges to it. It is said that a picture is worth a thousand words. The following are charts showing the status of the Australian economy in the next decade:
Graph showing GDP in Australia from 2010 to 2020
Graph showing unemployment rate in Australia from 2010 to 2020
Major Challenges Australia faces over next 10 Years
Australia has one of the biggest economies in the world and is one of the G20. The G20 is a group of the twenty biggest economies in the world. As can be seen from the charts above, Australia looks set to enjoy a favorable unemployment rate that is estimated to continually decrease over the years till 2020. GDP is estimated to enjoy a steady rise to 2020.
It is important to note that the country rapidly recovered from the 2008 financial crisis, which is a sign of a robust economy. However, the underlying risks that brought us the 2008 fiasco are still alive and well. Private financial markets are interconnected to such a high degree that there is almost nothing an individual country can do to stop the contagion in its track if a crisis erupts.
A high level of public indebtedness to advanced economies will not help the situation, though, from the chart below, it appears that Australia will reduce its public debt somewhat to 40.63% in relation to GDP in 2020.
The rate of inflation is set to rise from 1.31% in 2016 to 2.11% in 2017 and stabilize at 2.52% in 2019 and 2020. A relatively manageable inflation rate is good for the economy, although this might change at any time given a change in the political and economic situation in the country and the world as a whole.
According to the 2015 Inter-generational report, one of the main challenges facing the Australian economy is population change. The report projected that over the next 40 years, the proportion of the population participating in the labor force is expected to decline. By 2054-55, the participation rate for Australians aged 15+ will fall to 62.4%, compared to 64.6% in 2014-2015. This may translate to lower economic growth.
Over the long term, the growth rate of the economy is also expected to decline due to the aging population.
2. Nuclear Proliferation – Major Challenges Australia faces over next 10 Years
Another big challenge facing Australians in the future is nuclear proliferation. Nuclear weapons have been getting deadlier with the passage of time, as the following chart illustrates:
As of 2015, the countries with the biggest nuclear arsenals included:
North Korea, the Hermit Kingdom, recently tested a nuclear missile that has prompted a meeting by the U.N Security Council. To add insult to injury, Australia is one of the countries that could be hit by a North Korea H-bomb, as illustrated below:
Australia has a remarkable record in Nuclear material, earning the highest points in Nuclear Materials Security Index in 2016 (93 points):
However, emerging threats like North Korea are challenges that Australia will no doubt have to keep in mind in the next decade.
3. Climate Change and its effects – Major Challenges Australia faces over next 10 Years
Global Carbon dioxide emissions have been steadily increasing, and about 36 billion metric tons of carbon dioxide were emitted in 2013. The data chart below shows global CO2 emissions from 1751 to 2015, which should be cause for concern for every citizen of the world.
Climate change coupled with a growing demand for energy resources could lead to deforestation and loss of arable land, which will, in turn, translate into a lack of food security for Australians and the world at large.
4. The rise of China – Major Challenges Australia faces over next 10 Years
There is a new Superpower in town, and Australia had better pay attention! It is projected that the Chinese economy will surpass that of the United States in 2019. Its share of the global GDP will only increase with each passing year:
China’s GDP will continue rising, and with it will come increased spending power and money to increase its military might:
All this means that Australia must strive for the peaceful rise of China. The country cannot afford to aggravate the emerging great power, as this will translate into tension in the region and the disruption of trade ties. It is the role of Australia’s leaders to forge strong bonds with China while pushing for a regional rules-based order. In this way, the country will have mitigated one of the biggest and most dangerous challenges facing it in the future.
With India’s population growing by leaps and bounds, Australia also has to play a perfect political balancing act to ensure that it is not sidelined in the East Asia region.
While the onus will be on the leadership of the country to put in place strategic and sound policies to guide the growth and development of the nation, it will be up to the citizens to do their best to ensure their future. Anything is possible with careful determination and timing.
- Public Domain Photography