During a recent Group of Seven summit in Canada, US President Donald Trump unexpectedly departed early, missing his first face-to-face encounter with Australian Prime Minister Anthony Albanese. This move was interpreted by some as a slight against Albanese, who intended to address key topics such as the AUKUS alliance and existing tariffs on Australian imports, especially concerning steel and aluminium.
Leigh Howard, CEO of Asialink Business, viewed this snub as evidence that Australian businesses need to reassess their priorities. He asserted that it’s paramount for Australia to expand its investment horizons beyond traditional allies like the US and UK, particularly in light of the increasing importance of South-East Asia and India.
Howard emphasised the need for Australia to adopt a more proactive approach when interacting with its neighbours. He pointed out that current engagement strategies are still based on outdated notions of aid and development, whereas countries in the region have progressed and are now seeking economic partnerships rather than dependency on aid.
The Australian business landscape has historically regarded investment in Asia as risky compared to the established stability of the US and UK. At present, while a mere 4% of Australian exports are directed to the US, over 50% go to Asian markets. Conversely, approximately 30% of Australian investments target the US, while less than 12% focus on Asia. As the US adopts a more isolationist stance, there is potential for this investment trend to shift.
Howard expressed concern that Australia risks missing valuable opportunities as other nations, including the US, seek to strengthen their ties in the Asia-Pacific region. He urged businesses to increase their awareness of these developments, stating, “You need to start educating yourself about what these developments mean for you and your business.” An example of the growth potential in the region is Indonesia, a G20 economy showcasing modernising industries and a burgeoning middle class, particularly in sectors like healthcare, technology, and education.
While recognising the inherent investment risks in emerging markets, Howard urged Australian businesses to become more knowledgeable, suggesting that the greater danger lies in failing to engage with these evolving markets. He concluded that being left behind could be a significant setback for Australia’s economic interests as it navigates a rapidly changing global landscape.