Andrew Forrest: Europe's Distress Should Not Disturb Australia, Asia
The worsening financial crisis in Europe, according to Fortescue Metals Group (FMG) owner Andrew Forrest, appears more disturbing than it ought to be, no thanks to the sensational media coverage trained on the struggling economic region.
In an interview with Macquarie Radio on Thursday, Mr Forrest downplayed the impact of the crippling credit crunch that the euro economies were currently dealing with.
"In global economic terms it is more storm in a teacup beaten up by the media," the maverick mining billionaire said in airing his take on the issue.
His comments were made following an earlier admission by the federal government that what happens in Europe will definitely disturb the domestic economic settings, though Treasurer Wayne Swan had assured that the nation's budget plan will mostly insulate Australia from the crisis' telling ill-effects.
Prime Minister Julia Gillard has also expressed confidence that Australia is robust enough to withstand economic challenges and in the event of a spill over from Europe, the impact will be cushioned by the investment pipeline of about $450 billion, virtually all geared up to the resource industry.
The large chunk of the country's commodities shipments are headed to China, which may have led Mr Forrest to conclude that Australia was lucky enough to be geographically nearer to China than to Europe.
And since Australia and China mutually enjoy a healthy trade partnership, the FMG chief claimed that the turmoil in the eurozone is negligible as far as this side of the world is concerned.
"Europe has to sort out its own problems," Mr Forrest said in describing what he believes is Asia's general sentiment about the financial storm that has so far caused the exit of key European governments, foremost of which is the recent defeat of former French President Nicolas Sarkozy.
In his mind, Mr Forrest is convinced that China, with its newly acquired financial and economic influence, will not lift a finger to rescue the ailing euro economies, Greece being the latest to succumb to heavy credit pressures and now teeters on the brink of abandoning Europe's single currency.
"We are not going to bail Europe out, we can get as much demand, or much more for our products, for our jobs growth, for our people by simply putting the money into Asia," the Australian Associated Press reported Mr Forrest as saying in laying out what he believes was China's take on the euro crisis.
But analysts countered that the flamboyant FMG owner may have overlooked the fact that China, apparently factoring in the euro development has opted to tweak its growth target this year and with its industrialisation pace hitting the breaks for now, the prices of commodities have followed suit in a downward trend.
Repercussions of the euro crisis have been gradually emerging too, experts said, with giant resource firm BHP Billiton recently affirming reports that it was considering a downward revise on it near-term expansion plans.
The readings voiced out by Mr Forrest on Europe was at best short-sighted, economists said, with Business Day quoting a taunt by Stephen Koukoulas on his Twitter page, which says: "You don't have to be smart to be rich."