Speech
Australian Minister for Trade, Mark Vaile
1 March 2000
Australia and the UAE: A growing relationship
Speech by the Minister for Trade The Hon Mark Vaile MP at a luncheon hosted by Australian Business in the Gulf (ABIG). Dubai
Introduction
Thank you, Ambassador Hines; good afternoon, ladies and gentlemen
It's a pleasure to be with you today, as part of my first visit to the United Arab Emirates. Thank you to Peter Deacon and the committee members for organising this luncheon.
The growing Australia-UAE relationship
I'm here in Dubai to gain a first-hand impression of the size and scope of the business opportunities that are developing so rapidly for Australia in the UAE.
I’m very excited about the prospects that exist here and the increasing prominence of the UAE as the hub for regional markets. These include Iran and Central Asia to our north, the sub continent to the east, and increasingly important, Africa to our west and south, as well as the Peninsular markets themselves.
I'm very pleased that some 59 business people from Australia have made the effort to join me on this visit. They represent a wide range of interests as diverse as the relationship itself.
I was keen to visit the Gulf States early in my tenure as Australian Trade Minister for three major reasons.
I wanted to meet senior members of the Government to emphasise the importance Australia places on developing strategic partnerships with the region.
I wanted to meet members of the local business community to encourage them to look more to Australia as a source of quality, well priced goods and services which are ideally suited to their needs.
And, and importantly, I wanted to come here to co-chair the third Australia/UAE Joint Ministerial Commission in Abu Dhabi on Saturday.
But behind all these reasons is my recognition of the need to encourage and facilitate Australian business links with the region.
ABIG members are prime examples of just how Australian businesses can compete with the world’s best, and, in increasing numbers.
From a handful of Australian companies based here 15 years ago, our business presence on the ground in the UAE now totals about 70 firms and organisations, which is very encouraging.
Australia’s fortunes, and indeed survival, depends on our ability to trade. We MUST be out there in the markets, not only trading, but also investing.
To do this successfully we need to have freedom of access to markets.
We must continue to work hard, using the rules-based system of the WTO, to ensure that Australian businesses have the fairest opportunities to compete.
Sure, the WTO system is not perfect. But without a rules-based trading system, we would surely face the prospect of retreat into the darkness of protectionism.
We must use every avenue available to increase our trade and investment opportunities across the globe – especially through building strong and mutually beneficial relationships, which is what this mission is really all about.
All of you here today are aware of the value of Australian exports to the UAE - over $800 million in 1999 – having doubled over the past five years.
The Australian Government recognises the importance of the UAE, and we’ve sought both through the Consulate-General and Austrade office here in Dubai, and through our new Embassy in Abu Dhabi - which I’m to open officially next Saturday - to support your efforts and further develop the commercial and political relationships we have with the Emirates.
Resident representation in our respective capitals will significantly enhance our relationship, not least by allowing both governments to work together to lift our mutual profiles.
I congratulate HE Khalifa Al-Falasi, HE John Hines and Consul General John Yeudall for their efforts towards achieving these outcomes.
While Australians are becoming more aware of the Middle East, particularly its commercial potential, we need to do more to change some of the old stereotypes at home.
We also need to continue to impress on our friends in the Gulf that Australia is a technologically sophisticated economy that holds excellent prospects for investors and trading partners.
Indeed, the increasingly diverse composition of Australia's population, which boasts immigrants from throughout the region, brings growing cultural and academic links with this part of the world.
The Arab ethnic diversity that Australia enjoys is a valuable community resource, and it enriches exchanges between Australia and the Gulf.
I’m very confident about the future of our relationship with the United Arab Emirates for a number of reasons:
- we are able at our third JMC to focus on the way forward
- transport links between our two countries are good with significant expansion of air services now institutionalised
- both governments are working to conclude a bilateral investment promotion and protection agreement, which will encourage further commercial linkages
But we in Australia need to continue to work to lift our profile in the Middle East. We are still, to some degree, “over the horizon” even though we are geographically closer than the West Coast of the US.
The Australian economy
There are good reasons for our UAE business partners to deal with Australia. Our economy is strong and soundly based. Australia is also strategically located; in our case, near the recovering markets of Asia.
In the light of Japan's recession and the East Asian financial crisis that slowed global activity over the past two years, Australia's recent performance has been very impressive indeed:
- the latest figures put aggregate growth at 4.5%, which compares very favourably with any other industrialised economy in the world at the present time
- inflation remains at its lowest level since the 1960s, giving savers and investors the confidence to make long term decisions
- unemployment is at its lowest level in a decade and employment rates are trending upwards
- and productivity growth is averaging 1.8%,compared with less than 1% in the 1980s
- interest rates remain near historically low levels (despite a recent half a per cent rise by the Reserve Bank of Australia), underpinning robust business and consumer confidence
- our national budget has been put into very healthy surplus, and the task of reducing Australian Government debt has begun.
On the latest figures, Australia's balance of trade in goods and services for 1999 was a deficit of $16.2 Billion. Total exports of goods and services were unchanged at $114.2 Billion.
Exports of goods were down 2% on 1998, but rural goods were 1% higher. Exports of services were 6% higher in 1999 compared with 1998.
- The Government expects an improvement in the terms of trade and 5% growth in export volumes for 1999/2000.
- The new Business Tax System will provide a substantial boost to Australia's exports. Under the new tax system, exports will be GST free, and when taxation currently imposed on exports is lifted, costs to all exporters will be cut by more than $3.5 billion a year.
- Reforms in areas such as Capital Gains Tax will add to the attractiveness of Australia as a destination for foreign investment.
Overall, it is noteworthy that, in its recent Economic Survey of Australia, the OECD said: "The resilience of the (Australian) economy in weathering the Asian downturn is largely the result of a judicious mix of sound macroeconomic and structural policies, which brought inflation down to a very low level, strengthened government finances and generated an acceleration in productivity growth".
Add to all of this the spotlight that the Sydney Olympics will bring this year, and you have an “Australian Proposition” that is extremely compelling. I urge you to “talk it up” as you move around this region.
Conclusion
In conclusion, I believe the JMC will be a very forward-looking meeting that will set the scene for us to build our growing bilateral commercial relationship.
ABIG, of course, has a large role to play in expanding our relationship with the Emirates.
Your membership reflects the diversity of Australian industry and our services sector. ABIG itself allows you to network with each other and regional business representatives and facilitates information flows.
ABIG's future too looks bright. In a little over four years, you've grown from a committee of 12 to a group with around 160 members. This, in itself, is an encouraging sign of increasing Australian awareness of the Gulf markets.
But there is much more to be done, and while you can rest assured that I will personally be “spreading the word” back home about the opportunities in the GCC markets, I urge you to also encourage your business associates in Australia to seriously consider having a crack at this exciting part of the world.
Thank you once again for this opportunity to meet you. I wish ABIG all the best, and wish each of you success in your own individual projects as you continue to build Australia’s profile as a strong and reliable trading partner for the UAE.
ENDS