Newspaper article The Christian Science Monitor

THE WORLD FROM.Sydney Recession-Bound Australia Works on Ways to Become More Competitive in Southeast Asia

Newspaper article The Christian Science Monitor

THE WORLD FROM.Sydney Recession-Bound Australia Works on Ways to Become More Competitive in Southeast Asia

Article excerpt

AUSTRALIA'S two warships are on their way back to their home ports. Their return is helping to shift the Hawke government's attention from the Middle East to concerns closer to home. For Prime Minister Bob Hawke, now in his fourth term, the most difficult postwar challenge is economic. Like most other industrial nations, Australia is in a recession. The normal monetary fix of lower interest rates is beginning to reawaken the interest-sensitive parts of the economy.

But Australia's economic problems go beyond a cyclical downturn. The Hawke government hopes to bring reforms that make his nation competitive with the rest of the world. These include deregulating the airline industry, selling off some government assets, lowering transportation costs, removing protective tariffs from industry, and forcing unions to enter the 1990s.

The process is rapidly becoming a political rugby match. Take the issue of transportation. It is cheaper to ship an automobile from Melbourne to Japan to Auckland then to send it directly across the Tasman Sea. A joint industry-labor task force has been working on ways to reduce costs, but the process has been proceeding at a koala-bear pace.

The opposition Liberal Party senses this issue is a political Achilles' heel. Thus, after the prime minister said he would reduce protective tariff barriers two weeks ago, opposition leader John Hewson attacked the slow pace of macroeconomic reform. At a press conference, Mr. Hewson suggested that as a last resort he would send in the troops to load ships if the waterfront unions did not agree to reforms at a faster pace.

This certainly got everyone's attention. Unions complained that with the reforms already agreed to, thousands were expected to lose their jobs in the future. Business replied that the Australian waterfront was nowhere near as competitive as the docks of Singapore, where ships are unloaded in hours, not days. …

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