National Development and the Sterling Bloc, 1951–52

Abstract

While Australian economic interests shaped its diplomatic and security objectives, its economic policies also increasingly diverged with Britain. Economic development was the central policy of the Menzies government. But ongoing growth required capital investment. Despite pursuing development, the Chifley administration had looked to Britain and reluctantly accepted the limitations of its reduced economic capacity and the restrictive Sterling bloc. The Liberal-Country government rejected this bottleneck. It viewed Australian expansion as a national security issue and, as with the ANZUS Treaty, sought American assistance: U.S. investment for development. Eventually, this need of dollars involved pushing for the relaxation of Sterling controls to increase dollar investment in Australia and, in the longer term, diversification of trade towards the faster-growing Asian and American economies.