NZ klapper sammen - hva sier markedsfanatikerne naa?

From: Trond Andresen (ta@itk.ntnu.no)
Date: Tue Nov 21 2000 - 23:15:43 MET


Jeg kom over denne mens jeg naa oppholder meg i Sydney. Den forteller
om New Zealands oekonomiske og sosiale tur nedover skraaplanet.
For en god del aar sida valfartet alle mulige polikere og
byraakrater til NZ for aa laere om hvor fantastisk det fungerte
naar man virkelig slapp markedet helt loes. Jeg synes aa huske at
RVs Folkvord takket nei til aa delta i en slik pilrimsferd da
ei gruppe stortingsrepresentanter inkl. han skulle avgaarde.

Naa er det taust i norske media om new Zealand.

Trond Andresen

PS
"Kiwi" er ikke bare navnet paa den kjente og sjeldne NZ-fugl,
det er ogsaa den folkelige betegnelsen down under paa en
innbygger i NZ.

***********************

Economic Reform Australia
ERA EMAIL NETWORK

Subject: The Flight of the Kiwis and the NZ Peoples' Bank
              (SMH article, 20 Nov 2000)

I believe this to be a valuable article, which describes so graphically the failure
of the New Zealand testbed for Neoliberal economics that has been trumpeted by right-
wing think tanks for such a long time. There may be a few remaining hardliners who
will respond with the claim that the corporate take-over simply hasn't gone far
enough for the purpose of establishing their promised nirvana. Such claims surely
stretch the credibility of any reasonable person to breaking point. How much time do
they imagine they need? If ever evidence for the abject failure of economic
rationalism as a mechanism for promoting social advancement was needed, this is it!
One has to ask, can Australia be far behind? JAH

The flight of the Kiwis
Source: Sydney Morning Herald
Date: 20/11/2000
http://www.smh.com.au/news/0011/20/features/features2.html

New Zealand's best and brightest have become refugees, writes Bernard Lagan, fleeing
a falling currency, a lack of well-paid jobs and a country bowed by foreign debt.

The New Zealand of even 15 years ago is unrecognisable. It has been sold.
Globalised. Almost everything has gone to foreign owners - the banks, the insurers,
the brewers, the forest companies, the media.

Even those institutions regarded by many New Zealanders as public infrastructure are
no longer locally controlled. The railways and Telecom were sold to big American
companies a decade ago in an orgy of public asset sales first ignited by David
Lange's mid-'80s Labour Government and continued by its conservative successor, the
National Party. Lange has since recanted, many times. His treasurer, Roger Douglas,
never has.

If the economic wellbeing of the country is the measure of success, the great free
market experiment is now judged by many ordinary New Zealanders to have faltered, if
not failed.

The foreign owners of New Zealand who have watched the New Zealand dollar collapse
to US40¢ are sweating. Some want their money out, like the American businessmen who
bought the New Zealand railway system. They cut an organisation that once employed
25,000 to 4,000, and now want to sell the country's rail passenger services and cut
their workforce to just 600.

The New Zealand economy has been slowing while Australia heads for a record four
years of strong growth. About 70,000 New Zealanders are leaving a year. Half come to
Australia, and are this country's largest source of migrants. They are fleeing a
falling currency, a lack of well-paid jobs and a country that has pawned itself to
foreigners and owes vast amounts in private overseas borrowings.

Is this the end game for New Zealand? Is it to be, as some leading businessmen in
New Zealand fear, a welfare colony of the unskilled, the old and the sick? Perhaps
an outpost of Australia with its stock exchange subsumed by ours - as is now
contemplated - and with a shared currency?

Or can this little country strike out on its own as Prime Minister Helen Clark and
her deputy, Jim Anderton, so desperately want? Can it find its feet again in a world
where the decisions that really affect it are made in office towers in Wisconsin,
Toronto, London or Sydney?
Anderton, 61, who walked out of Lange's Labour Government in the 1980s in disgust
over State asset sales, is about to do something that will say to New Zealanders
that 15 years of business having its head are over; that the market forces
experiment mostly failed; that business did not deliver; that globalisation of
economies may not be an answer.

He is setting up a State-owned bank. Actually, re-establishing a State bank. The
last one, the Bank of New Zealand, is owned by the National Bank of Australia. The
people's bank - as it is referred to within the Government - will be set up in the
post offices that dot the nation, and Anderton is chipper about the two fingers he's
about to give to the mostly Australian-owned New Zealand banking system. "It's a bit
of a shock to their system, their worst nightmare," he says.

Anderton's mistrust of big business is deep-seated. He accuses the country's
business people of squandering most of the about $80 billion in foreign private debt
they have run up in the past 15 years, a debt now so large that New Zealand needs to
lift its exports by 40 per cent - to around $36 billion annually - just to balance
the books.

A few weeks ago, he says, he met privately with those he regards as the
country's "biggest wigs" amid accusations from business that the Labour-led
coalition's policies were destroying business confidence, scaring off investors and
driving the country's skilled workers overseas in ever-increasing numbers. Anderton
says he reminded the business leaders that successive New Zealand governments over
the past 15 years had done exactly what big business had wanted; the government got
out of business - it had sold the state's assets. The men in suits then became the
nation builders - and borrowers - because they said only business people knew how to
use capital wisely.

Anderton says he told them: "You borrowed it all - you tell me what you've done with
it. You tell me where all the new industries are. Where has this investment gone?
And they told me, 'We've blown it.'"

Many New Zealanders agree. They have seen the old industries wiped out on the theory
that the subsidies they got and inefficiencies they harboured would create bright
new ventures.

Lower Hutt is a bland, dormitory city just outside the capital, Wellington, where
this writer grew up. It was the centre of New Zealand's vehicle assembly industry.
Here General Motors, Ford and Chrysler assembled cars and trucks in plants which
employed thousands and spun off smaller organisations which supplied components.
Some exported.

It was killed overnight in the late '80s when Lange's government decided it would be
more efficient for New Zealand to import used cars from Japan. The Japanese import
is now the preferred choice for Kiwi motorists. They play tenpin bowling in the car
plant near where this reporter once lived and Holdens arrive by boat from Australia,
fully built.

Clark wants a resurgence in manufacturing - not car assembly but high-end products
such as electronics, food processing and software.
Yet in the 51 weeks since she ousted the conservative National prime minister, Jenny
Shipley, last November she has quickly moved to a nasty stand-off with big business.
It is a battle of ideas, the same battle that New Zealanders fought when Lange was
elected Labour prime minister in 1984 and stood aside, at first bemused, and
eventually paralysed by fear, as his treasurer, Roger Douglas, tore down the
regulated economy, trashed subsidised industries, sold assets and opened the door to
foreign money.

All the while, Douglas was cheered on by the true architects of his reforms, the New
Zealand Business Round Table, a heavyweight lobby of company chiefs, then led by New
Zealand's richest man, the brewer Douglas Myers.

The social costs were horrendous - thousands were pitched out of work, soup kitchens
reappeared - but the pace continued long after Lange and Douglas were gone and by
the early 1990s it seemed the years of pain were delivering. Economic growth in New
Zealand hit a whopping 7 per cent a year. The world began to take notice. NSW's then
new-broom premier, Nick Greiner, kept a newspaper cutting of Roger Douglas's big
bang approach to change under the glass on his desk.

But by the late 1990s the party was, suddenly, over. The Round Table argues that New
Zealand lost its nerve to continue reforms. Others say the emergence of an
underclass in egalitarian New Zealand could no longer be stomached. Third World
diseases were emerging within the crowded Pacific Islander and poor Maori
communities in South Auckland's public housing estates.

The country sputtered on, uninspired by its first woman prime minister, Jenny
Shipley, until, last November, it bought Clark's social democrat politics and her
message that the unfair society New Zealand had created needed changing.

Clark, a tall, stylish and steely former academic, has moved quickly in her first
year to create a fairer society: she's bumped up tax for those earning over $60,000,
curbed the ability of employers to demand staff sign individual employment contracts
without union involvement, and, perhaps most controversially, set out to spend $500
million to address disadvantage among Maoris. This so-called "closing the gaps"
policy has alarmed even white liberal New Zealanders and the country's race
relations conciliator who fear the path of Maori separatism.
Now business confidence surveys have hit rock bottom, the currency has collapsed
with no sign of recovery, some big foreign investors clearly want out and more of
the skilled and professional classes are flying out.

Clearly, Clark's Labour-led coalition Government is in trouble.

She believes the Round Table - which pushed, bullied and cheered for almost all of
the free market reforms - has set out to cut down her Government by stealth. It is
true that the Round Table was last month unmasked as secretly funding what had
previously appeared a spontaneous campaign by young New Zealand expatriates to sheet
home to Clark's policies the blame for the brain drain. She has now embarked upon a
strategy of snubbing business people deemed not to be on side, even if that means
dealing with friendly foreigners.
Two weeks ago even the country's national airline, Air New Zealand, whose chairman
has links to the National Party, was not invited to an ice-breaking business meeting
with the Prime Minister. Qantas was. Says Clark: "We are moving on with the new
crowd, not getting lumbered with the old."

Says Roger Kerr, the executive director of the Business Round Table: "Some of Helen
Clark's gaps might be closed but only because the most enterprising and talented
people continue to leave our shores. Those left behind would be the old, the
unskilled, the immobile ..."
Kerr raises the scenario of New Zealand as what he describes as a welfare colony
like Tasmania if interventionist policies which make New Zealand less attractive for
foreign investors continue.

While the Government can fairly claim that the queues of departing New Zealanders
are not as long as those of the early '80s - during the social and economic
repression of former prime minister Robert Muldoon's Fortress New Zealand policies -
the make-up of the departing has changed. Back then those leaving were
overwhelmingly unskilled and blue-collar workers, many for Australia. Now it is
overwhelmingly the skilled and the professionals who are leaving. About 20,000 of
them have gone in the past year.

The young man most likely to be New Zealand's next prime minister is Bill English,
the Opposition National Party's deputy leader and heir apparent to Opposition
Leader, Jenny Shipley. English, 38 and an arts and economics graduate, is the new
face of New Zealand. He's married to a part-Samoan doctor and easily straddles the
Pacific culture which permeates New Zealand.

He believes the middle classes have been stripped out of much of rural New Zealand
and now sees "the $100,000 jobs" beginning to leach out of the larger cities to go
offshore.

New Zealand isn't making up the ground by attracting new migrants, either. It is
still suffering a net loss of population of around 10,000 a year. Something else is
happening, too. If you question new migrants to New Zealand from Asia or the
Pacific, you will be told by many they intend heading across the Tasman once they
qualify for New Zealand citizenship, thereby gaining automatic access to Australia.

Yet the new crowd - if that means the new companies and the foreign start-ups which
Clark says the Government is duchessing - are few and far between. To convince New
Zealanders that her Government, which defines itself as social democratic and
redistributive, can stop the slide, Clark sorely needs evidence that business is
growing and investing.

Motorola looked long and hard last month at establishing 200 quality jobs in a New
Zealand-based software development plant. It went to Queensland instead, lured in
part, it has to be said, by tax breaks and incentives that New Zealand says it
cannot afford.
Its international competitor, Ericsson, has made a modest research investment.

While Clark and Anderton tell their nation they are hunting out fresh foreign
investors, long-time observers of the New Zealand economy are beginning to think the
foreign investment tap is running dry.

One is economist, Dr Brian Easton, a former director of New Zealand's Institute of
Economic Research and a member of the New Zealand Treasury's economic forecasting
panel. He says: "I am actually quite pessimistic. The pessimism is that investors
are beginning to get tired of promises of New Zealand's economic miracle which are
not happening."

So, too, some New Zealanders who've decided to stay or return home believe the
country should resist the forces of globalisation and perhaps accept its albeit
lower place in the world.

Tim Finn, founder of Split Enz, is one: "I think that New Zealand should pull its
horns in and not fret about its place in the world." He adds: "There is that feeling
here of heroic endeavour that's doomed to failure as well, which I love. I think
there is a poignancy in that.''
But Douglas Myers, the New Zealand businessman who inspired the Round Table and
arguably fathered the great economic experiment, has shifted his millions offshore
and is building a new house in London.



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