When the British founded the first settlement and named it Sydney in 1788, there were a few hundred thousand Aborigines living in the country. Two centuries of discrimination and expropriation were to follow, during which, at one point, the number of Aborigines fell as low as 60,000.

Today 99% of the population in Australia are of European or Asian descent, but there is considerable support for a treaty which recognises and apologises for past injustices towards the Aborigines.

The focus of Australia's foreign policy has shifted in the past 20 years or so from Europe and the US to its near-neighbours. It has acted as a broker between warring groups in Papua New Guinea and the Solomon Islands.

Australia's economy is also geared to Asia. It is a foremost member of Apec, the Asia Pacific Economic Cooperation forum. Its three top export partners are Japan, South Korea and New Zealand.

The sport-mad Australians are known for their uncomplicated friendliness. This was particularly in evidence at the Sydney Olympics in 2000, which were dubbed the 'friendly Games'.