By Maria Bergwitz
Internationally-renowned futurist Nicole Foss has warned WA faces a major backlash in the wake of 30 years of unprecedented economic growth.
Ms Foss made her dire observations at a recent talk in Beaconsfield hosted by Ecoburbia.
“There will be a particular vulnerability for Western Australia, because this is the heart of the mining boom,” said Ms Foss.
She warns the state will receive a chunk of the economic downfall on a scale equivalent to its financial winnings.
“What comes after a boom is proportionate to the scale of the boom, in the same way that a hangover is proportionate to the scale of a party,” she said.
“So we’ve had an enormous blowout of a boom and we’re now going to have an economic depression as a result.”
With an academic background in finance, science, and law, the Canadian systems analyst says the boom-bust dynamic is not just a theoretical construct.
“It is exactly what happened in the 1930s, it is what’s happening today in Greece, and it is what’s beginning to happen in China, and in various other places,” said Ms Foss.
All eggs in one basket
Ms Foss says Australia’s commodity export economy with its large trade dependency will be a major contributor to the upcoming economic depression.
“The business model for the country is ‘dig it up and sell it to China as quickly as you can’,” said Ms Foss.
“And that’s a bad idea when China is reaching a limit of its own.”
Ms Foss says China’s rapid developments of infrastructure and overbuilding of cities will have major repercussions on trade partners such as Australia.
She says China’s economic bubble is now starting to burst, as the excessive construction work was done on the basis of ‘reckless lending and bank debt’.
“Their demand for resources is going to fall a very long way when China’s economy moves into much sharper contraction than it currently is, and that’s going to have major knock-on effects for all commodity exports,” said Ms Foss.
“It’s the beginnings of an economic disaster.”
Searching for alternative options
Also present at the event was mining industry professional Patrick, who asked for his last name not to be used.
He initially found employment within mining to build up financial resources, though recently chose to leave his position fearing a collapse of the industry.
Now unemployed, the Fremantle local is currently researching ways to prepare for a financially secure future.
“I attended in order to get Nicole’s insight on the present economic situation,” said Patrick.
“Basically what’s her best guess on how long it will be before we move into a depression.”