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Monday, 21 June 2004
Page: 30930

Mr BAIRD (4:23 PM) —On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee's report entitled Parliamentary delegation to the Gulf States: Report, June 2004.

Ordered that the report be printed.

Mr BAIRD —In bringing forward this report today, the committee would like to extend warm thanks to all the officials of the Australian government who assisted the delegation with the visit. We would also like to acknowledge and thank the officials and businesspeople in the countries visited for their hospitality and input. It proved very valuable. The committee would like to acknowledge the work of the Parliamentary Relations Office and the secretariat. We thank them for their assistance with the visit and their contribution and support, particularly the excellent work of the secretary of the committee, Pierre Huetter. I would also like to thank the members of the committee for their dedication and commitment to the objectives of this mission.

The Trade Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade decided in 2003 to inquire into Australia's trade and investment relations with the Gulf States, prompting this visit in April 2004. Several events in recent years drew the parliament's attention to the region. Though traditionally a strong primary produce export destination, Australia's exports of elaborately transformed manufactures, including cars, to the gulf grew dramatically in the 1990s. This shift created renewed interest in the region.

The delegation visited Dubai, Abu Dhabi, Tehran, Kuwait, Riyadh and Doha. Our strong impression from the visit was that the gulf is a region on the fast track to growth and development. The region's role within the world economy as global oil supplier, in combination with its demographics, has placed the Gulf States in a unique position. The committee believes oil wealth and young populations are the twin drivers of Gulf States development. To address the youth demographic, gulf governments have committed to rapid economic development to provide jobs for the young and therefore provide stability and prosperity in the long run. Unlike many other developing countries, however, the Gulf States also have the financial means to fully fund such rapid development.

The delegation gained several impressions of the region during the visit. One key impression was the window of opportunity currently open to Australia. The region has traditionally relied heavily on imports from the US, the UK and Europe. For numerous reasons, the Gulf States have decided to diversify the sources of their imports and broaden their economic bases. This has created a window of opportunity for Australia which is likely to remain open only for the next few years.

The region is also getting closer. Emirates, Qatar Airways and Gulf Air have in place or have planned direct flights from Australian destinations to the region. Sydney is now only a 13-hour flight away from Dubai, and Perth is only 10½ hours away. This has opened up opportunities in fresh produce exports and will undoubtedly open up more opportunities in agriculture, tourism and a range of other industries. The committee found several areas or sectors to be particularly promising for Australia. These include building and construction, engineering and consulting, health care and pharmaceutical services, education and training, tourism training, consumables, agriculture—includ-ing food and beverages—ICT products and services, and financial services.

The United Arab Emirates impresses with its spectacular growth, development, vision and ease of access. Dubai is an ideal entry point into the region, since it has successfully developed itself as the regional services hub, modelled on Singapore. Iran has the potential to be a major market if it manages its economic reform process well. Although there are challenges in entering the market in Iran, there is also a requirement for long-term commitment by exporters and investors. The committee feels that Iran in time will offer significant opportunities for Australia. Saudi Arabia is the biggest economy in the region and therefore provides a range of ready opportunities in the sectors discussed in this report. Kuwait and Qatar are smaller resource-rich countries with similar growing development and consumer needs.

Bearing in mind that this report is primarily focused on observations made during the course of the visit, the committee has made a limited number of recommendations. The recommendations are based largely on the visit and are intended to be complementary to the final inquiry report due out later this year. The report makes seven recommendations. The first two pertain to Iran. The committee believes Australia should complete an investment protection agreement with Iran as soon as possible and that we should also strengthen our links in terms of agricultural training and technological exchange. The committee recognised that some of the visa processing was slow. It looked at the opportunities in the defence sector. It also looked at responding to the current window of opportunity identified by the committee in that region and at lifting Australia's profile.

Recommendation 6 suggests the government consider strengthening two agencies which may benefit from the opportunities that arise from the wealth—the ATC and Invest Australia. Finally, recommendation 7 supports strongly the government's efforts to strengthen the live animal trade with gulf nations. In conclusion, the committee believes there is no time like the present to be pursuing export and investment opportunities in the region. The window of opportunity is open and Australia is well placed to build on its successes in the region and make the most of new opportunities.