Australia Dug a Hole—Then Kept Digging: From Resource Wealth to Structural Strain. How 29 Years of Unbroken Growth Concealed a Crisis of Policy, Productivity, and People
For nearly three decades, Australia basked in the glow of uninterrupted economic growth. Headlines celebrated its prosperity, and analysts often referred to the nation as an anomaly: a developed economy that avoided recession while much of the world grappled with financial crises. At the heart of this economic miracle was a simple truth: Australia was getting rich by digging giant holes and selling what was inside. Iron ore, coal, and natural gas formed the backbone of this golden era. China, in the midst of a historic infrastructure and manufacturing boom, became Australia's largest trading partner. The Australian government collected massive revenues. Jobs were plentiful. Property prices soared. From afar, it all looked like a well-oiled machine. But underneath the prosperity, cracks were forming. The Resource Curse Revisited Economists have long warned about the "resource curse," sometimes referred to as "Dutch disease". The idea is that a country rich in nat...