Why is the Oz economy still based on primary industry?
Countries that have a natural competitive advantage are best served to exploit that advantage. Consider a simple scenario of two countries Country 1 and Country 2 that can both produce product A and product B. Lets assume that: – product A and product B are both the same price as each other – product A and product B are the same price in both Country 1 and Country – regardless of how much of each of the products are supplied, the price remains the same. – Country 1 can make Product A cheaper than Country 2. Overall, it is better for Country 1 to produce as much of Product A as it can and import Product B. Now Australia generally has a comparative advantage over many other countries in primary industry (i.e. it costs less to produce than other countries). Therefore economically, Australia is best served by still being significantly based on primary industry. Of course there are many non-economic reasons why Australia should not be totally reliant solely on primary industry. For example,
