Go to Asia or starve

A look back at Australia's history shows us that "choosing Asia" has long been the right way forward.

In 1790 the settlement of Sydney was near starving. The season's crops had failed and the stores were almost empty. Stationed on the cliffs, soldiers searched for a billowing sail that would signal new supplies from England. They had been waiting for months.

If he were around today the conclusions of the government's just-released white paper on Australia in the Asian Century would be of little surprise to Admiral Arthur Phillip, the founding Governor of New South Wales. Back then, as his colony faced famine, he had to choose between sourcing supplies from three markets: domestic, traditional and Asian. His decision over 200 years ago offers some clear lessons to Australian businesses, especially those in the non-resource sector, who have failed to act on the Asian opportunity. If Australian businesses are to heed a key recommendation of White Paper and lead our response to the Asian Century they could worse than look to the old Admiral's example.

First, the Admiral considered re-investing in local agriculture in order to reap rewards in the next season. Yet local crops were failing to facilitate growth in the colony. It seemed unlikely that time or further investment would solve the underlying structural problems of crop failures, at least in the short-term.

Second, he thought about sending his only remaining seaworthy vessel fully around the world to Cape Town. It was a journey of some 8000 kilometres and it was uncertain whether the small brig Supply, the only ship remaining in the colony after the loss of the Sirius, would survive such an expedition. Cape Town however, was a familiar market. It would have had the necessary supplies and the route was well-known.

Finally, the Admiral wondered if he should send his supply ship north, to Asia. The monsoons along the route were known to be calamitous. The ability of the Supply to secure needed provisions at the Dutch port at Jakarta was uncertain. However, the journey was shorter, the pay-off significant and, with a good navigator, the route potentially safer.

In 1790, Admiral Phillip weighed up his options and decided to send the ship north, to Jakarta. Only Asia could deliver the supplies in the time necessary to ensure the colony's sustainability. The ship met contrary winds and returned to Sydney with full supplies over six months later. By that time the second fleet had already arrived from England and famine in the colony had been averted.

The expedition to Jakarta was not easy. Nor could it be called a resounding success. Uncertainty over the route to Asia, the availability of provisions and the potential for disaster stalled the Admiral's decision making. Yet Asia was the logical destination and the journey did deliver the needed provisions – albeit after the necessity of the expedition had passed.

Today, Australian boardrooms are uncertain how to expand into Asia. Somewhat fairly, they are reluctant to take unfamiliar risk for an unclear pay-off. For all the talk of the last three decades, especially in the non-resources sector, Australian businesses continue to shelter in the familiar waters of domestic and traditional markets. Non-resource exports to Asia, once adjusted for inflation, have barely grown in Australian dollar terms since 2001. In the same period, our share of Asian non-resource imports has declined. Australian business investment in Asia represents less than 10 per cent of our total investments overseas.

The days of fortress Australia are over. Domestic and traditional markets are increasingly uncertain and they do not harbour the potential of the Asian Century. As Admiral Phillip did in 1790 so must boardrooms realise that aging markets of the old world may not to come to their rescue. Australian businesses should not need a government white paper to force them to take the Asian market seriously. The risk of Asian expansion is real but so is the risk from missing the opportunity of a century.

In the same situation we can be sure of the advice Admiral Phillip would give the business leaders of today. Go to Asia, he would say, do not stall, go to Asia or starve.

Robert Tilleard is an executive member of the Australia-China Young Professionals Initiative. 

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