|
March 4, 2009
The big miners, who once talked in terms of an eternal boom ensuring an Australian utopia, are now turning to Chinese capital in the form of direct investment to help them pay their debts in the face of falling demand for their products. The headline example is Chinalco's proposed $A30 billion investment in Rio Tinto that would give Chinalco an 18% shareholding in Rio. Chinalco's investment has to be approved by the Treasurer, who needs to consider whether the national interest will be harmed by the Chinese Government owning important Australian resources.
The context of this is the contraction of the Australian economy into recession and, with the global economy increasingly entering negative territory, that contraction or downturn will continue for some time to come.
Since the already deep US recession seems to be worsening as house prices and car sales continue to decline, the question is how severe will the contraction be and what will be its duration. That depends on the United States finding a new foundation for a resumption of growth, and that in turn, depends on its banking problems being resolved.
This turn to China is no different from the past in the sense that Australia has always depended on foreign capital to fund our capital expansion. Instead of the British, Americans, or Japanese, it is now the Chinese. Will the judgement about Chinalco's investment in Rio Tinto be judged in terms of needing to address climate change. Delaying until the rest of the world signs up to an international agreement would see us miss opportunities, as we have done already with areas such as renewable energy where other countries have stolen a march.
It is unclear whether the context means that energy is included in national security. It is the fossil fuel energy companies and the miners who write Australia's energy policy. Does the national interest include reduce carbon emissions as a goal, the need for cleaner energy and conservation technologies and environmental sustainability? Not according to the The Department of Resources, Energy and Tourism, which basically agrees with the miners in taking a denialist position on global warming.
These days it is unclear what the national interest actually means. Is it enlightened self interest of a nation state? So we have the tensions between sovereignty, national interest, and enlightened self-interest. Are concepts of sovereignty and national interest changing their meaning within the global economy and global warming? Enlightened self-interest means accepting shared sovereignty and multilateral commitment.
In contrast, the denialists work with both a narrow definition of the national interest and then reduces to that to assert the primacy of the interests of the coal-fired power stations and heavy energy issues.
|
What do I know, but is it not the case that only living things can grow, whereas the economy increases or decreases in size? Rivers, for example, do not grow, but their floods and contractions have downstream effects, which are real enough, as are the similar effects in the economy.