7 ). this reflects the better lending decisions in earlier years. graph 7 our common external interests of course, good domestic policies can do only so much to ameliorate the impacts of very adverse international developments. both economies have slipped into recession as international forces have taken hold, albeit through differing chains of causation. but for the reasons articulated above, there are good grounds to think that both countries should be in a relatively good position and well placed to take part in a renewed international expansion. it is too soon to say this is beginning yet, though developments over recent months are certainly consistent with the view that a recovery will get under way towards the end of the year. that said, most observers think that the early part of any new global expansion will be characterised by pretty slow growth. even with the uncertainty over the near - term global outlook, however, it makes sense to look forward. so in the final part of this address, i should like to talk about the common interests we have at stake in the way the international community responds to the crisis and shapes the next expansion. first among these is the openness of trade and capital flows. the extent to which trade flows slumped late last year perhaps gives a sense of what could happen were trade barriers to go up. everyone would suffer, and badly. this is fully understood at an intellectual level around the world. yet we know that in times of domestic economic difficulty, the pressures for protectionism increase. countries like ours need to keep making the point that trade is not a zero - sum game ; it is collectively a positive - sum process that stimulates innovation and productivity, increases global growth and raises living standards. secondly, the continued development of many emerging economies will enrich the opportunities for firms and individuals in economies like ours over time. but it will be sensible for emerging countries to have strategies that rely less on the absorption of consumer products by the developed world, at least for some years. that will involve, roughly speaking, more consumption and investment at home, lower trade surpluses and a step back from very large outflows of capital to the developed world. this is actually a rational choice for emerging market countries. but a lesson many countries took from the asian crisis was that a strategy such as that was dangerous, because the rules of international engagement did not provide adequate protection in times of difficulty. their response was the build - up of reserve assets in the period since 1998 – a costly form of international self - insurance, involving sending

glenn stevens : australia and canada – comparing notes on recent experiences1 remarks by mr glenn stevens, governor of the reserve bank of australia, to the canadian australian chamber of commerce, canada - australia breakfast, sydney, 19 may 2009. * * * thank you for the invitation to be here. as a one - time temporary resident of canada and graduate of a canadian university, it is pleasing for me to see the canadian australian chamber of commerce contributing to economic interaction between the two countries. it is surprising that australians and canadians do not spend more time comparing notes, given the things we have in common. apart from a shared heritage as members of the british commonwealth ( though canada, of course, has the french - speaking heritage as well ), 2 we are both federal states and constitutional monarchies. both nations have relatively small populations that occupy physically large continents. we are both commodities producers. our economies are open, and free flows of trade and capital are very important to us. there are some interesting similarities, and the occasional informative difference, in experiences, and examining these is helpful for australians to understand better the way the past six or seven years have evolved. i propose to look at some of those today. looking to the future, both our countries have reason to believe that we will come through this episode in reasonable shape. we also have important shared interests in the way the international economic and financial system evolves over the years ahead. in canvassing some of these issues, i am mindful that david dodge, the former governor of the bank of canada, spoke to this group only a few years ago, concerning many of the same questions. 3 i find myself agreeing with the sentiments he expressed then, and repeating many of them today. similarities, differences and recent developments australia and canada have similar levels of gdp per capita ( based on purchasing power parity, nominal gdp per capita was around us $ 37 000 for australia and us $ 39 000 for canada in 2008 ). since 1990, australia ’ s growth in real gdp per capita has been a little higher than canada ’ s. in terms of economic structure, the primary production sectors, combined, are of similar size in the two countries ( table 1 ). australia has less manufacturing, but more mining than canada. there are also some notable differences in the composition of our mining sectors. both these turn out to have been of some importance over recent years, as i shall point out shortly. but, overall, the economic structures of the two countries at