Asian Neighbours to 'dwarf' Australia's economy

Australia's economic and military power will inevitably be overshadowed by larger Asian neighbours, according to a new report released by the Australian Government's strategic think-tank. The report also says promoting family planning in neighbouring countries is vital to Australia's national security. The Defence Department-funded Australian Strategic Policy Institute has released a new report that examines the longer-term demographic and economic trends on Australia's strategic environment. An Australian Perspective on Demographics and Security says Australia faces changes in strategic circumstances as China and India emerge as major economic powers and South-east Asian growth rates reduce Australia's relative strategic weight.

In the long run, globalisation will ensure that China and India will come to dwarf us in economic size, and populous countries like Indonesia will reach parity and then surpass us, no matter what. However, while sustained economic growth will deliver improved standards of living across much of Asia, the report warns some vulnerable countries will be left behind as their populations grow. Critically for Australia, East Timor and parts of Melanesia are among those countries with poor prospects.