Up turn and Down turn

Why is Australia growing when every other economy are in the down turn? This is not a million dollar question for a country lot smaller than Australia in the midst of high Himalayan Mountains- Bhutan.

Australian Bureau of Statistics have released its September headlines, the economy grew by 0.6 percent in June quarter 2009. The notable countries among the league are India, China, Indonesia, Poland and Korea. The GDP growth of India in April-June quarter was 9.3 percent, China’s GDP is said to have advance at 7.9 percent annual clip in the second quarter as announced in the G20 meeting and few are maintaining on the positive side while rest of the world are struggling to get out of negative side of the graph.

The country, which is also doing well and is usually, ignored both in good and a bad time is Bhutan. It does not have economic strength to lift the world or provide cushion to the falling ones. The GDP grew by 21.4 percent in 2007-08 as per the economic indicators published by the Royal Monetary Authority of Bhutan. By now, anyone would conclude that it is because of the growth in production of electricity from its swift flowing rivers.

Australia, on the other hand, has growing economic ties with China, the sixth largest economy of the world and fastest growing with a tremendous potential to consume Australian Iron ore and other raw materials. It was reported that Australia exports more than 17 per cent to China, while sourcing more than 17 per cent of its imported goods from there.

Australian International trade history show that its trading partners were Great Britain and rest of Europe. Since 1970 the trade pattern shifted to Asia and pacific regions when Britain joined European Union, where it lost its trade advantages with it. So it lead to the exploring markets closer to home, and China being one of them.

Bhutan had maintained close ties with India ever since it opened to outside world in the early 60s. More than 80% of its produce is exported to India while importing close to 70% from it. The growth in export was brought about by the hydropower projects.

Australia and Bhutan have negligible trade activities. According to the data compiled by the Australian Foreign Affairs and Trade, Bhutan ranks at 217th in total trade with Australia.

It could be my own imagination when I say that geographical shape of Bhutan and Australia appears similar, even though one is an island and other is a land-locked country, but I am quite certain that these two countries are flourishing even in the midst of crisis. The only reason, I assume, is because these countries are economically linked to the future economic giants of Asia.