From lucky country to banana republic?

In May 1986 the federal Labor government's Treasurer (later Prime Minister), Paul Keating, sent shock waves through the Australian community when he warned that the country was in danger of turning into a ‘banana republic’. ¹ He identified a number of emerging economic problems – the decline of the manufacturing sector, a poor trade performance and a rapidly increasing foreign debt – that effectively put Australia at risk of becoming ‘re-peripheralised’ in the global economy. Keating's statement became something of a watershed in public discourse concerning the Australian economy's relationship to the global economy. For the first time in the postwar era, Australia's view of itself as ‘the lucky country’, a country that enjoyed one of the highest living standards in the world and that ‘punched above its weight’ in international affairs, was called into question. Although Australia's economy since then has undergone extensive restructuring and internationalisation accompanied by a period of sustained growth, concerns about Australia's problematic position within the globalised economy recently re-emerged when in January 2005 the Liberal/National Coalition government of Prime Minister John Howard signed a contentious trade agreement (AUSFTA) with the USA. The signing of AUSFTA again raised questions about Australia's national independence. Some commentators believed AUSFTA reflected, and would further contribute to, a serious loss of Australian national autonomy ² (Capling 2005; Weiss et al. 2004; Hawthorne 2003).