Economic, Political, and Legal Factors for Foreign Direct Investment in Australia

ECONOMICS
GLOBALISATION
[DATE]
STUDENT NAME

Contents
Introduction................................................................................................................................2
Background of Australian economy...........................................................................................2
Economic factors in context of FDI...........................................................................................2
Legal factors in context of FDI..................................................................................................3
Political factors in context of FDI..............................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

Introduction
Over the recent years, there has been a dramatic growth in the world trends in terms
of the globalisation and technological advancements, thereby leading to economic
progressions in different economies. The markets have become global in terms of goods,
services and the financial instruments as well. As a result of the pervasive growth of the
interpenetration, the economies are inevitably affected by the external factors. The following
work is aimed at evaluating the country of Australia, in context of the economic, political and
the legal factors to conclude on the feasibility of the country for the foreign direct
investments.
Background of Australian economy
It must be noted that the country Australia’s regulatory regime was liberalised in the
year 1980. The step was seen as vital for the Australian economy to receive the greater
proportion of global capital investment and was achieved with the aid of bi-partisan support.
The FDI currently accounts for around a third of the country's GDP. According to the World
Bank's 2019 Doing Business report, the country is currently ranked 18th among 190 countries
in terms of ease of doing the business (Nordea Trade, 2019). It must be noted that according
to the Australian Trade Commission, crucial segments of foreign investment in Australia
have been stated to be tourism infrastructure, agribusiness and food, resource and energy and
the manufacturing service and technology (Thomson Reuters, 2019).
Economic factors in context of FDI
Australia provides a steady economic background for inward foreign investment,
characterised by robust political regime and legal foundations, together with a vastly skilful
labour strength. It must be significantly noted that according to the Index of Economic
Freedom for the year 2018, Australia had achieved fifth rank in the world for economic
freedom by virtue of the moderately free economy. Australia was lagging behind Hong Kong,
Singapore, New Zealand, and Switzerland, in this context. Further, the Australian economy
has been rated triple 'A' by all three global rating agencies, as per the data of the Australian
Trade Commission (Austrade). Further, estimates have been made about the period between
2018 and 2023 that a real GDP growth of 2.8% would be achieved (Tang, 2018). In terms of
the economic factors, it must be noted that Australia is a part of varied range of international
economic organisations and forums such as International Monetary Fund (IMF), World Trade