Javed Ali.
In less than 10 years, the population of Australia will soar by almost 4 million to reach 30 million. This statistic released by the country's Center for Population could have gone unnoticed but the fact that the projected population is 1.2 million lower than the previous forecast has given Australia a renewed focus on its population and immigration policies.
The reduced rate of increase in Australia's population is caused by a number of factors, including an outward flow of migration. Many young people are looking for new destinations around the world in search of better opportunities.
Resultantly, the population forecast has raised a basic question for Australia: will it be able to meet the requirements of its economy after a decade?
When compared with other developed nations, especially those of the Organization for Economic Cooperation and Development (OECD), Australia has a far lesser population as compared to its landmass. That is because of vast inhospitable areas in the country that are neither fit for economic activity nor are too conducive for human habitation.
At the same time, Australia has ample amount of capital available for running its economic engine but its domestic market remains limited in size. This disadvantage also stems from its lesser population and is limiting overall domestic consumption and development of manufacturing and services that could have otherwise provided a strong drive.
To the country's North are some of the world's populous nations. Yet the cultural differences with them does not allow Australia to harness their human capital and market capacities. Moreover, the major Australian population lies to the South of the country, thus limiting their interaction with countries of Southeast Asia.
Consequently, the options available to Australia for diversification of its economy are much less. This phenomenon pushes it into a love-hate trade relationship with China. Both countries know that they need each other for increasing their trade volumes and are thus drawn back together after roadblocks in their relations.
But even the most optimal trade relations with China are still not going to solve Australia's domestic challenges of a dwindling population growth. The current policies allow Australia to bring in 195,000 immigrants but that number is just enough to keep the economy running; it is not going to enable the country to increase its economic capacity.
Thus, Australia's approach toward its population and immigration policies will be a matter of its economic development. The country will have to make it a national priority to ascertain how it is going to fulfill the needs of its economy. Many in the power circles have started to talk about the shortage of skilled manpower that is brewing and turning into a major national strategic issue.
Owing to its location, Australia has to make sure its supply chains remain resilient and its industrial base keeps growing. It is through a sustained level of population that it will be able to effectively manage its interdependence with other countries. Population is a major element of national power not without strong reason. It ensures that the human capital is capable of sustaining the country's economy and industry.
Australia has a far better record of integrating immigrants than most West-oriented countries. If the right policies are incorporated and the lawmaking keeps pace, the country will be able to sail through the upcoming demographic challenges.
