The decline of economic complementarity? Australia and Britain 1945-1952

• Published in: Australian economic history review 1997-07, Vol.37 (2), p.91-117
• Main Author: Robertson, Paul L.
• Format: Article
• Language: English
• Subjects: Australia; Australia: Commerce; Australia: Economic history; Balance of payments; Convertibility crisis; Defence policy; Economic development; Economic relations; Foreign exchange; Foreign relations; Great Britain: Commerce; Import quotas; Industrialisation; International Bank of Reconstruction and Development; International finance; Manufacturing; Marshall Plan; Post war reconstruction; Sterling Area; United Kingdom; United States: Commerce
• ISSN: 0004-8992; 1467-8446
• DOI: 10.1111/1467-8446.00008

At the end of the Second World War, Australia implemented a development program designed to improve the nation’s defence capabilities through a rapid increase in population and the growth of manufacturing industry. These plans were contrary to the vision of `complementarity’ promoted by the United Kingdom, in which the British economy would export manufactured goods to other members of the Commonwealth in return for primary products. Despite British objections, the Chifley government persevered in its development policy although Australia did control the level and origin of its imports to fit the availability of dollars within the Sterling Area. In the early 1950s, however, the Menzies government attacked the autarchic policies of the Sterling Area, first by arranging to borrow dollars directly from the World Bank, and later by calling for an abandonment of the inward focus of the Sterling Area.