Queensland emerging from devastating floods

Four months after the Queensland flood and cyclone disasters, the state government told Korean authorities and business leaders that the Australian state is open for business.

The series of disasters that hit Queensland, including the capital city Brisbane, forced the evacuation of thousands of people from towns and cities.

“Our estimate for the flood damage is in the order of ($6 billion),” Queensland Treasurer and Minister for State Development and Trade Andrew Fraser told The Korea Herald.

At least 70 towns and over 200,000 people were affected with the estimated reduction in Australia’s GDP at about $32.5 billion.

Three-quarters of Queensland was declared a disaster zone and the state’s coal industry was hit especially hard.

“The pace of repair has been very strong and the main message is that Queensland is back open for business,” Fraser said. “Our tourism industry is operating fully and our export infrastructure is all repaired.”

The remaining challenge for the state’s infrastructure is completing the repairs of their road network ― which has a total length equal to the distance from Brisbane to London and back.

The Australian government is shouldered the burden by paying 75 percent of the cost of rebuilding Queensland.

To help pay for the remaining 25 percent, the Queensland government concluded the sale of a major coal terminal.

Before the floods, Queensland had a forecast of 3.75 percent growth for this year and a long-term average growth rate of around 4.5 percent for next year.

“Instead, the loss of production, tourism, mining, and agriculture means that the result for this year will be around 1 percent or less,” said Fraser.

On the bright side, the business investment that was already under way is continuing; couple that with the reconstruction activity to existing economic activity for next year, and Queensland growth could hit around 5 percent.

“The economic forecast for our state looks to be as wild as the weather forecast,” he said. “But the perception damage is probably more lasting that the infrastructure damage.”

Fraser was in town recently as part of a high-level trade mission to meet with government officials and company representatives across a range of sectors.

“A growing number of Korean companies are investing heavily in our state,” Fraser said. “Our abundant reserves of natural resources, the development of new projects, and our expertise in various industries can offer support to Korea’s industry and economic growth.”

The largest ever export deal for the state was signed with Korea Gas Corporation, agreeing to take an equity position in an LNG project in Queensland.

“Kogas is the largest importer of LNG in the world and we’re developing a new industry that will see Kogas as part of the development,” he noted.

Queensland exports to Korea amounted to $5.1 billion from 2009-2010, driven heavily by the energy and resources sectors with agriculture in second and equine industries quickly developing into an important part of the relationship.

By Yoav Cerralbo (yoav@heraldcorp.com)