If South Korea had the resources of Australia

If Korea ran Australia, the focus would not be on exporting more iron ore. It would be on exporting steel, then ships, then trains, then cars, then advanced manufactured products.

It’s the end of the semester and between writing deadlines and teaching doldrums, academics gather to compare summer plans for conferences and research trips with barely concealed envy. As you probably are aware, once the ringmaster has introduced the clowns and the show is well underway, I like to throw a few left-handers and see how people react. Inevitably, these left-handers involve middle powers. This time it was Australia and Korea.

What would South Korea do if it had the resources of Australia? What would South Korea do if Hoju-do replaced Jeju-do as the southernmost province? What could be achieved if South Korea and Australia had a real strategic partnership, rather than one of those pointless, dime-a-dozen, rubber chicken diplomatic word salad Australian politician “is Korea a tropical country?” type agreements? What would Korea do?

The first thing it would do is stop exporting dirt! Not completely, of course. Australia would still export iron ore and the host of other minerals it digs up and sends around the world. But a Korean government would look at Australia’s economic model and immediately ask a simple question: why are we sending away the raw materials before the value is added?

Australia digs up iron ore, loads it onto ships, sends it overseas, and congratulates itself on another successful export. South Korea buys the ore, turns it into steel, uses that steel to build ships, cars, trains, machinery, and military equipment, and then sells many of those products around the world at a considerable profit.

Around three generations of Australian political leaders became messianic converts to 1980s University Economics 101. Ricardian comparative advantage ceased being an economic tool and became an article of religious faith. If Australia had iron ore, it should export iron ore. If someone else made the steel, built the ships, and captured the profits and jobs, that was simply the market at work. So Australia kicked the can down the road and kept digging things up, while others became rich making things.

If Korea ran Australia, that would change. Steelworks would be built near the mines. Why ship raw materials thousands of kilometres when you can add value before they leave the country? The objective would not be simply to dig resources out of the ground faster. It would be to capture more of the industrial chain.

Then Korea would look at Australia’s shipping industry—or rather, the lack of one. Australia is one of the world’s largest trading nations. Almost everything enters or leaves the country by sea. Yet Australia possesses a minuscule commercial shipping sector and builds almost none of the vessels upon which its prosperity depends. To a Korean policymaker, this would be extraordinary and absurd.

South Korea became wealthy not simply because it manufactures products. It became wealthy because it mastered the entire maritime ecosystem. It mines nothing, imports vast quantities of raw materials, turns them into high-value goods, builds many of the ships that move those goods, and operates world-class ports to export them.

Australia possesses the resources. Korea possesses the expertise. The obvious answer would be to do more together.

Imagine steelworks located close to iron ore deposits. Imagine shipyards built near them. Imagine Australian steel feeding Australian and Korean shipbuilding projects. Imagine bulk carriers, container ships, naval auxiliaries, and even submarines being built with Australian materials and Korean industrial expertise. Instead of exporting iron ore and importing ships, Australia could participate in the entire production chain. The same logic applies to infrastructure.

Australians have spent decades debating high-speed rail. Koreans would have spent those decades building it. The east coast of Australia contains the overwhelming majority of the country’s population and economic activity. Yet moving people between its major cities remains slower than it should be. Maybe it’s got something to do with QANTAS and the lifetime club membership for politicians? I don’t know, but Korea’s answer would not be another fast rail feasibility study. It would be fast rail construction.

Likewise with ports. Australia treats ports as isolated pieces of infrastructure to be sold away like it’s 1980s England and WHAM! can still wake you up before they go-go. South Korea would ensure ports become hubs within a broader industrial strategy linking rail, manufacturing, energy, logistics, and exports. Strategic national planning.

Energy would receive similar attention. Australia possesses vast solar resources, abundant uranium reserves, and enormous opportunities for power generation. Korea would not waste years arguing over whether the future belongs to nuclear power or renewable energy. It would build whichever combination generated abundant, reliable, and affordable electricity. Cheap energy is not an environmental policy. It is an essential industrial policy. Why Australians pay more for gas than Koreans, I’ll never understand.

Heavy industry requires power. Steel mills require power. Manufacturing requires power. Data centres require power. If Australia wants to move beyond exporting raw materials, it must ensure the energy necessary to support industrial expansion.

The automotive sector would inevitably return to the agenda. Korea transformed itself into a global automotive powerhouse within a generation. Looking at Australia, Korean planners would see a wealthy nation with stable institutions, plentiful resources, and access to Asian markets—the fourth most populist nation to its immediate north! The mystery would not be why Australia should manufacture vehicles. The mystery would be why it stopped.

Defence would be approached in exactly the same way. Australia currently seeks greater strategic self-reliance while maintaining a relatively limited defence-industrial base. Korea would view those two objectives as inseparable. Shipyards, steelworks, electronics manufacturing, missile production, and naval construction would be understood as both economic and strategic assets.

The submarine debate illustrates the point perfectly. Australia wants nuclear-powered submarines. South Korea builds some of the world’s most advanced conventional submarines. Rather than treating these as competing options, a Korean approach would pursue both. Conventional submarines could be built sooner. Nuclear submarines could follow later. Korea’s strategy—why build our own, why not build our own and export them to every other schmuck country that can’t! Most importantly, industrial capability would be developed continuously rather than postponed for decades.

Another angle? Australia’s migration debate focuses on filling immediate shortages in retail, hospitality, and low-productivity service sectors. At its heart, everyone knows the real aim is to keep the housing bubble afloat. Australia has immigration priority quotas that include yoga teachers for #%$^ sake! A Korean government would ask a different question entirely.

Which migrants help build industries? Which migrants help operate steelworks, shipyards, energy projects, rail networks, advanced manufacturing facilities, and defence industries? Refugees? Wha? Why?

The U.N. Convention on Refugees is today more abused than a suburban Sydney pub poker machine. Since its refugee system was introduced in the 1990s, South Korea has granted refugee status to 1,544 people out of roughly 122,000 asylum applications, or just under three percent. It does allow humanitarian stay, which grants protection, but by maintaining its strict interpretation severely limits the economic rationale into which the system has devolved. Instead, Korea asks which immigrants fit best into the society? The goal is not simply population growth. It is national development.

Oh, and Australia has a housing problem? Over the last twenty odd years, Korea built a second capital city, Sejong City, roughly the size of Canberra, on top of a tiny rural village. Around 400,000 residents housed in just over two decades!

Australia and South Korea are almost perfectly complementary economies. One possesses resources, land, energy, and capital. The other possesses industrial expertise, manufacturing capability, engineering talent, and decades of experience transforming national wealth into productive capacity. Yet despite endless talk of strategic partnership, the relationship remains modest. There’s no imagination or even sense of reality.

If Korea ran Australia, the focus would not be on exporting more iron ore. It would be on exporting steel, then ships, then trains, then cars, then advanced manufactured products built using Australian resources (and Korean expertise). The extractive banana republic (that ashamedly isn’t even a republic) that Australia has become, would end.

As the night went on, the ideas that the academics put forward between beers and mouthfuls of squid included Korean-led Special Economic Zones to stimulate joint investment, promote joint manufacturing, and accelerate industrial transformation; dedicated education and industrial visas for Korean investments; a Joint Economic Zones operating under development favorable regulations; a customs union; mutual recognition and labor mobility agreements; and my favorite—the relocation of a team or even integration of the two country’s football leagues.

Unfortunately, none of this would ever be seriously contemplated in Australia. Most Australian politicians still think of Korea as if it were the 1980s. They visit the country, are led around the U.N. Korean War cemetery and are praised incessantly for the nation’s sacrifice and soak it up as if they were part of the effort. I once heard an Australian politician sarcastically remark “Why drive a Hyundai, when you can drive a Mercedes?” before falling into line with the decision to secure the Korean-designed Redback Infantry Fighting Vehicles in 2023. In the back of their minds (and I’ve literally heard this), Australia has something to “teach” Korea. This could not be further from the truth.

At the end of the night, the consensus was that moving ten million Koreans to Australia, and ten million Australians to Korea, would improve both countries. Australia would speed up, and Korea would slow down. The last remark, though, made me particularly proud to be living here—the coffee in Seoul, now beats the coffee in Melbourne.

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