Australia: Net international investment position worse than Italy

Wikipedia provide a ranking of countries net international investment position, as a % of GDP, from highest to lowest.

Top of the list are the usual suspects:

Country Date NIIP as % of GDP
Hong Kong 2009 353
Singapore 2010 224
Republic of China 2010 153
Switzerland 2010 136
Norway 2010 96

But Australia and New Zealand are in the wrong sort of company at the bottom of the list.

Country Date NIIP as % of GDP
Poland 2010 -63
Australia 2011 -64
Slovakia 2010 -66
Estonia 2010 -71
Spain 2010 -87
New Zealand 2009 -90
Greece 2010 -93
Ireland 2009 -98
Portugal 2009 -108

Interestingly, Italy’s 2010 net international investment position is only -24%.

Source: Wikipedia: Net international investment position

9 thoughts on “Australia: Net international investment position worse than Italy

  1. Bob says:

    Adrian, NIIP is money in the bank, and we owe more than we have.
    Meaning we will be Chinas little bitch in years to come paying them back.

  2. Ian Parker says:

    Please explain NIIP and explain how it can be negative, does that mean that overseas entities are investing more in Australia than we are investing overseas? If so I believe that is quite understandable for a country rich in resources. What is the problem? It is obvious that Australia and Switzerland etc would be at opposite extremes.

    • ColinTwiggs says:

      NIIP = the difference between a country’s external financial assets and liabilities
      There are two components of financial assets: debt and equity. Likewise with liabilities.

      Australia’s $2 trillion of offshore debt (not equity investment) dwarfs the other figures, which is why the NIIP is negative.
      You make a valid point about resource rich countries requiring large capital investment, but that is small in relation to the half a trillion international debt of our major banks — which they used to fuel the housing bubble.
      Other resource-rich countries such as Norway (96), Chile (-5), Canada(-8) and Brazil (-37) are far lower.

      • Net International Borrowing Position says:

        If the money is not being used to fund investment,and is instead being used to simply fund the purchase of existing assets, then it sounds to me like the correct term for it is Net International Borrowing Position.
        I mean, the way you explain it Colin, Australians are basically becoming poor because they are effectively borrowing enormous amounts of money from off shore to fund assets that are going to go pop one day when the bubble bursts. In the meantime,the banks merely make a margin to make it worth their while. Too bad if the Australian market falls flat and people go bankrupt and default on their loans, cos then they lose their house, and the banks still owe all this money to foreigners. Cripes! And then I guess they will simply incease their margins, so it’s the Australian borrowers that will lose again! Hope they are all locked in!

      • ColinTwiggs says:

        Australian banks are taking large risks — if they fail the taxpayer will have to pick up the bill — for relatively small gains.

  3. Leo says:

    NIIP = Net international investment position

  4. Guy says:

    Australia is dying. There is a strong correlation between the number of empty containers returning to China and the certainty of absolute poverty/loss of sovereignty in decades to come that no government will be able reverse. How sad.

    • ColinTwiggs says:

      Australian manufacturing is dying, but mining is not. The bulk carriers are returning empty to Australia’s shores. Only problem is: the iron ore, coal and gas are depleting resources.

  5. Adrian says:

    Please fully define NIIP as used here.

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