Australia has captured the imagination of much of the West as a last frontier - a land of opportunity, a country that can still be what the United States once was, or almost was.
Much of that hope seemed submerged as the recent severe recession, exacerbated by a grueling drought, gripped this continent country. But the word from Australia today is ''recovery.'' The rebound from the recession - the worst since the Great Depression - and drought is in full force.
Already, optimistic forecasts for this year's economic growth have been revised upward in recent weeks to 10 percent growth over the fiscal year to end this June 30. This would be the highest growth rate among the countries of the Organization for Economic Cooperation and Development.
Geoffrey Howard, senior partner in the Sydney office of J. B. Were & Co., stockbrokers, predicts that net after-tax profits for public companies across the board will be up 22 percent this June over last, and up 20-plus percent next year.
But the recovery must be seen in context: It has followed a year in which the gross national product declined 2 percent in real terms.
And it depended on a number of factors that can't be repeated next year. Accordingly, the government has already begun fine-tuning public expectations for the economy in the coming fiscal year.
One of the major banks here has warned, ''As in 1980-81, one of the major dangers to sustainable recovery could well be excessive euphoria. . . . By and large, the world economies have not made anything like a complete or satsfactory adjustment to the host of structural problems related to their declining industries. Australia is no exception in this respect.''
Australia's fortunes began to improve in March of 1983 when the Labor Party government of Bob Hawke was swept into office. Almost immediately after the elections, something wonderful happened. It began to rain.
And it has continued to rain.
The agricultural rebound played a big role in the domestic recovery. So did government spending, especially a new home-buying assistance program.
But capital investment is still weak. Private-sector capital expenditure for the year starting July 1 is projected to be down 30 percent from this year, which in turn was down over last year. Says a mining industry official: ''For any recovery to benefit heavy industry, it must be sustained - that kind of recovery doesn't occur when consumers open their purse strings to buy more TVs. That is the aspect we've waited with bated breath to see - whether it's sustainable.''
Mr. Hawke and his ministers plead for private business to invest more; business leaders counter that they invest not out of civic-mindedness, but to make a profit.
''The recovery is shallow in nature,'' says Michael Blackett, a research economist for business conditions for the ANZ Bank in Melbourne. He notes that the much-touted 10 percent growth rate is really impressive in a context of the poor performance of the past year or so. The last year of 10 percent growth was 1968-69, which followed several years of high growth.
Robert J. Graham, chief economist at Westpac in Sydney, cites a number of reasons that this year's economic performance will be a hard act to follow:
* The agricultural rebound is a one-time event.
* Nothing is replacing the big energy and minerals investments of the early 1980s as these wind up.
* The federal government is planning less budget-deficit stimulus for the coming fiscal year.
* There has been some, but not much, buildup of inventories.
Unemployment is down slightly from its recessionary peak but still hovers not much below 10 percent; it is not expected to come down much further for a while.
ANZ's Mr. Blackett explains why: Economic growth of 4 to 5 percent annually is about all that most developed countries are experiencing over the long haul nowadays. Productivity growth typically accounts for two percentage points, or half of this. The other half of the growth is accounted for by an expansion of the labor force, at 2 percent annually. This means there just isn't enough economic growth to mop up unemployment.
But what about the current 10 percent growth? Isn't that helping?
In theory, it certainly should be. But much of the current recovery and growth has been and will be in capital-intensive industries, Blackett explains. And so unemployment hasn't fallen much - even though ''discouraged workers'' have been hesitant to reenter the labor force.
This recession is widely seen as a reaction to a minerals boom in the early 1980s which was overpromoted and hence shortcircuited. For the year ending March 1982, for example, real wages rose 16.2 percent.
''We were cautious about the mineral boom'' of the early 1980s, says Jim Mahoney, spokesman for the Mining Industry Council in Canberra, Australia's office-park capital. ''We saw it as the creation of the politicians with long spending lists.''
One of the sad lessons of that boom, says John MacLeod, an economist with Melbourne-based CRA Ltd., Australia's largest general mining group, is ''that public-sector authorities that provide things like railroads, power, ports, transport, simply can't do it at world-competitive prices. An aluminium smelter, for example, costs anything from 25 to 30 percent more to build in Australia than in the US.''
Australia has long been said to ''ride on the sheep's back''; the mining and agriculture sectors make up 80 percent of the country's exports.
But Mr. MacLeod sees a need for the country to go beyond mining and do more processing of minerals: ''Long term, if Australia continues the way it is, as a quarry and as a farm, providing merely the materials to the rest of the world, we'll be squeezed out.''
Up to now, other countries have not been interested in buying raw finished goods from Australia, since they have had their own labor forces to keep busy with processing industries. But with its abundant natural resources, Mr. MacLeod suggests, Australia can do more and more of the processing other countries are finding themselves less able to do.
''We've already had a breakthrough in aluminium,'' he says. The Japanese, deciding their smelting plants were largely obsolete and that aluminum wasn't a high enough value-added product in comparison with electronics or autos, have mothballed 70 percent of their smelting capacity. ''And for the first time we have been supplying aluminium ingots in large quantities to Japan.''
This process occurred first with aluminum, which involves a high-tech and energy-intensive smelting process; but MacLeod expects similar developments with other metals.
He also expresses doubts, though, about Australia's ability to put in place the infrastructure necessary for these processing developments.
''The very best example of all this is to be seen among the brown-coal fields in eastern Victoria, where they're building a new power station called Loy Yang, '' MacLeod says.
''It will cost in excess of $5 billion to build. Its main customer was to be Alcoa, which was to build an aluminium smelter at a country town, Portland. They started, and when it became obvious the power costs were going to be too expensive and a previous power agreement wasn't going to be honored, they stopped it.''
(All figures in this section are in Australian dollars, currently worth approximately 92 cents.)
Other sources explain there was controversy over whether the power plant was showing signs of being a good investment for the people of Victoria. That the project looked to be so unsatisfactory to both customer and investors suggests that much of the blame should go to management.
''Now we're left with a power station that is costing a lot more than it should, and with a level of operating efficiency that is less than optimal, to be polite. The power is simply too expensive. You can buy it cheaper anywhere else.''
Work on the station goes on, but still, MacLeod says, ''The Australian does not understand that Alcoa can put that smelter anywhere they like - Canada, Brazil, Iceland, just to mention a few places.
''Labor costs here are high. If you are to survive internationally you have to have large-scale capital-intensive industries. Aluminium is an ideal example of that. That ought to be an area where Australia has a competitive advantage - our bauxite is some of the best in the world. Why can't we do it?''
He answers his own question by blaming industrial unrest, management and public-sector inefficiencies, ''and a general attitude of Australians who don't recognize the importance of being internationally competitive.''
Bill Kelty, secretary of the Australian Council of Trade Unions, insists that the Alcoa facility has beendeferred, not canceled. ''I believe we will reach agreement fairly quickly with Alcoa. . . . If we can't develop Alcoa, then Australia hasn't much of a future, in my view. . . .''
Despite the entrenchment of trade unionism in this country, Hawke's is actually only the third Labor government since the war. A great communicator, not unlike Ronald Reagan, Hawke enjoys immense personal popularity (approval ratings of over 70 percent) and hence relative insulation from the demands of his own party's left wing - whose help he did not need to win the election.
These elements, in turn, have enabled him to push for things his Liberal (actually conservative) predecessors could not achieve - notably deregulation of the financial industry. A former president of the Australian Council of Trade Unions, Hawke has naturally had strong ties to the labor movement and hence has had more cooperation from labor.
Hawke's consensus building, which, as we have seen, seems to extend even to the rain clouds, has made for a some interesting political alliances. ''The conservatives now appear to be on the extremes . . . and the radicals are . . . in the middle,'' says Prof. Richard Blandy, an economist at the Flinders University of South Australia.
The importance of Hawke's dialogue with labor cannot be overstressed. An obstructionist labor movement striving to impede economic growth seems to be a given, in the view many people have of Australia. On the other hand, what looks to outsiders like obstructionism is considered by Australian unionists a natural expression of democracy and respect for the individual.
Says ACTU secretary Kelty: ''Democratic societies are not necessarily the most effective economic instruments. We can generate in this country, without any difficulty, in my judgment, extremely high growth rates with authoritarian leaderships. But the basic societal structure of society would be destroyed.
''The real task is to integrate our natural advantages with the basic political system that we have. The unions are obviously part of that.''
One of the themes emerging from conversations with a wide range of people here is a frustrating perception that this country is somehow muffing its opportunities. ''We took a natural advantage and squandered it,'' says Mr. Kelty of the standoff over the Alcoa smelter.
Peter Dixon of the Institute of Applied Economic and Social Research at the University of Melbourne, commenting on the economic gyrations that have worked against employment growth, says, ''We're sitting here today with 10 percent unemployment. We should be a very rich, happy society - and we're throwing it away.''
But a mining industry official expresses the other side of the coin: "These are problems that are within this country's competence to solve. What's really hopeless is if yo don't have the resources to straighten them out."
Australia doesm have the resources, both natural and human. This country's films, tennis players, pop singers -- and sailors -- have made the US more aware than ever of its distant cousin.
Many Americans will make their way to Australian shores, specifically to Perth, in Western Australia, by 1987. That is the date of the defense of the America's Cup, wrested from the New York Yacht Club for the first time in 132 years, as an entire nation held its breath in the early hours of September 27 to watch its namesake, Australia II, sail past the defender, Liberty and win by 41 seconds.