Economies of Australia & the Pacific Islands

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  • 0:01 Economy of Australia
  • 3:17 Pacific Islands Economies
  • 4:32 Lesson Summary
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Lesson Transcript
Instructor: David Wood

David has taught Honors Physics, AP Physics, IB Physics and general science courses. He has a Masters in Education, and a Bachelors in Physics.

After watching this video, you should be able to describe the economies of Australia and the Pacific Islands, including sectors, partnerships and imports/exports. A short quiz will follow.

The Economies of Australia, New Zealand & Hawaii

For Americans, the Pacific might seem like little more than a dream holiday destination. But there's a lot more to these areas than their beautiful weather and unspoiled beaches.

Australia and the Pacific Islands cover a wide area and include a population of 37 million people. For this reason, summarizing the economy of the area is difficult: it varies a lot by island. But there are certain generalizations we can make. Australia, New Zealand and Hawaii are the only fully developed nations in the area, and so their economies are quite different than the remainder of the islands. Since they have many similarities, let's first talk about those three countries.

Australia, New Zealand and Hawaii (which is part of the United States), like most developed countries, have significantly service-driven economies. The service sector is much bigger than any other single sector for all three: it accounts for 68% of Australia's GDP (that's gross domestic product), 63% of New Zealand's GDP and a full 90% of Hawaii's GDP. These services include healthcare, law, accounting, tourism, engineering, government services (including the armed forces), finance and education.

In the case of Hawaii, tourism is very much responsible for the large service industry - few countries in the Pacific come close to achieving Hawaii's success in promoting itself as a tourist destination. There's a reason that saying the word 'Hawaii' makes most people think of sunny weather, pristine sandy beaches and hula dancing.

Australia's next most important sector is industry at 27% of GDP as of 2012. This includes mining and manufacturing. Agriculture is also an important sector at three to four percent of GDP. New Zealand's next most important sector is also industry at 23% of GDP as of 2013, a full 6.5% of which is primary industry. Hawaii's remaining ten percent is spread between agriculture, manufacturing and fishing.

Australia's main industries (in order of importance) are mining, industrial and transport equipment, food, chemicals and steel. Mining in particular has been a boom industry in Australia since the 1960s. New Zealand's main industries are food, textiles, industrial and transport equipment, finance, tourism and mining.

Australia and New Zealand are both part of several trade organizations, including APEC (Asia-Pacific Economic Cooperation), WTO (World Trade Organizations), EAS (East Asia Summit) and the OECD (Organization for Economic Co-operation and Development). But most notably for the focus of this lesson, EAS has the potential to become a full trade bloc in the future. This is especially important for the smaller pacific islands that rely on trade with Australia and New Zealand. Australia mainly exports to China and Japan and imports from China and the U.S. New Zealand's main import and export partners are Australia, China and the U.S.

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