When The Going Gets Tough

An Expert's View about Business Environment in Australia

Last updated: 31 May 2011

Peter Mace says it’s not all doom and gloom. Smart exporters will find opportunities in a recession.

EXPORt opinion WhEn thE gOing gEts tOugh peter Mace says it?s not all doom and gloom. Smart exporters will find opportunities in a recession. he tales of businesses downsizing on the opportunities in the BRIC (Brazil, place in Thailand. The agreement brings and demand falling have become Russia, India and China) economies. As Australia and New Zealand closer to our Tfamiliar ones as we move into a year noted by keynote speaker David Thomas, neighbours, the Association of South East which is very different to 2008, faced with of Think Global, the BRIC economies are Asian Nations, which comprises Burma, the GFC (Global Financial Crisis). And now apparently investing heavily in infrastructure Brunei Darussalam, Cambodia, Indonesia, we are also faced with the R word. development to move their economies Laos, Malaysia, The Philippines, Singapore, A short survey the Institute ran recently along, providing opportunities for both Thailand and Vietnam. indicates that many local businesses are domestic and international firms in design, It?s the largest FTA Australia has facing a contracting export order book. engineering and construction. The BRIC ever negotiated, covering 16 percent of However, the response is varied across the countries were also not so directly involved Australia?s trade in goods and services, board, with some industry sectors doing in acquiring the now referenced ?toxic worth $71 billion. The combined population particularly well and finding that demand assets?, and had not seen the same level of the ASEAN countries is some 570 million, is increasing. of asset inflation and consumer borrowing so it represents a sizeable market. The demand for payment protection for as in the developed West. Accordingly, the Focusing on the opportunities is export payments has certainly spiked. The argument goes, they should pull out of certainly the way forward. That?s not to traditional Documentary Letter of Credit, the global downturn sooner. With large say that a level of caution is not warranted. which had moved out of favour as too These countries will also cumbersome over the past decade, has had be subject to financial The BRIC economies a resurgence. It may be a bit cumbersome, buffeting, but with a but it adds a bank guarantee to the buyer?s sensible approach, there are apparently investing promise to pay. And with many overseas may be amazing potential heavily in infrastructure banks seeing their ratings drop, there is also for our exporters across an increased demand for confirmation by a range of industries development to move exporters, a guarantee on the buyer?s bank, in these markets. The generally given by the seller?s bank. demand for quality food, their economies along In tandem, the interest and enquiries for good education, health export credit insurance have also spiked, populations, that leaves a sizeable consumer care and, increasingly, environmental while insurers are reducing their exposure market to approach. Together the BRICs solutions will continue even through the in some industry sectors in the face of hold 41 percent of global foreign exchange downturn. increasing claims. Of course this increase in reserves, so they are not short of finance. Many of today?s major corporations were demand and the higher risk profile of both Other positive news is the recent founded in times of extreme difficulties banks and buyers has led to an increase in signing of a Free Trade Agreement with or during great wars. So when the going prices and premiums. Chile which, as a gateway into South gets tough, we know what good Australian So with slowing demand in traditional America, is a wonderful new opportunity; exporting businesses will be doing. markets, added to the higher cost of certainly an opportunity our miners and protecting payments, it is very easy to mining service companies among others, ? PETER MACE focus on doom and gloom, and not look are looking to explore. General Manager for the opportunities. And on 27 February 2009, the signing Australian Institute of Export Against that backdrop, a very interesting of the ASEAN Australia New Zealand www.aiex.com.au seminar run by the Institute recently focused Free Trade Agreement (AANZFTA) took 10 dynamicbusiness.com may.09
Posted: 19 April 2010, last updated 31 May 2011

See more from Business Environment in Australia

Expert Views    
2011 Exporter Guide   By Foreign Agricultural Service
Australia Economic Outlook   By Hong Kong Trade Development Council (HKTDC)
Reflecting… What We, As Leaders, Should Think?   By Patrick Kim Cheng Low, Businesscraft Consultancy
Hot Tips    
Rules of Trade   By Australian Institute of Export
Costing Your Export Sales   By Australian Institute of Export
Presenting the contributor