Covid 19 coronavirus: Fran O'Sullivan: NZ's choice - Surf curve or be crushed

New Zealand can hold itself up as a safe place to restart the global film industry. Photo / Mike Scott

COMMENT:

Here's the choice: Double down on New Zealand's prowess at corralling the Covid-19 virus.

Mount a major international brand campaign on CNN and Fox News promoting this country.

Invite international — and New Zealand's own wealthy — investors to back our best brains to form new agile, high-tech companies and develop new agricultural and horticultural brands.

Send out talent scouts to attract back well-educated Kiwis working in the US, Europe and the UK, create a top cadre of teachers who will be at the centre of our future education export industry, leverage NZ's investment in 5G broadband and our remote distance from "the world" as a selling point for businesses.

Resell ourselves to Hollywood and China as a safe place to relaunch the international film industry once we are back down to alert level 1 — and of course — promote new environmentally sound industries.

How exciting is that?

I could throw in, open the doors to super-skilled migrants (as long as they have sufficient money to pay their way for at least one year). But that would simply result in paroxysms of rage amongst those who want the Coalition to seize the moment and finally get on and complete the policies to house New Zealanders and rid this country of poverty that Labour, in particular, campaigned on in 2017. We could do both.

But my fundamental point is: New Zealand should be international. Embrace openness, ideas, and talent. Be exciting and excited. And embrace "other people's money" and turn it to our advantage.

This is the opportunity that lies in front of us.

Here's the other choice: Take the low way. Be protectionist. Shrink back into our South Pacific archipelago. Put up the shutters against foreign direct investment. Fool ourselves we can bring back significant import substitution into our puny market as a valid long-term economic strategy.

Take advantage of a historic set of circumstances to again beat up on our stellar companies like Air New Zealand and seize the opportunity to concentrate far too much economic and business power at the Beehive under elected politicians.

There was a smidgeon of that in NZ First Leader Winston Peters' pronouncements this week which will no doubt be amplified in the coming election. Peters has a point when he makes the case for more development of our forestry assets. There is also a valid case to build back some resilience into our manufacturing industry so it can step up when confronted with future crises.

There is a place for "the State". We've seen what only governments can deliver with the assistance to keep small business alive — including yesterday's offer of interest-free loans to SMEs which Finance Minister Grant Robertson announced after trading banks failed to come to the party. It may be that the banks do not want to lend to customers who are "sub-prime" but IRD has incentives to be slightly less stringent.

There's plenty more besides, as has previously been announced.

But the question is "where to from here?"

For those that argue against the Government "picking winners" — New Zealand already does.

Successive governments have given significant tax advantages to the film industry; they have got behind the primary sector, matching company investments to create new products; they have concentrated diplomatic negotiating skills to open markets (and keep them open) for agricultural exporters and are now (finally — and excitingly) concentrating their diplomatic efforts with colleagues on the other side of the Tasman in an endeavour to get bilateral business and tourism moving as soon as there is reasonable certainty the virus is corralled.

Then there are the various funding agencies — like a New Zealand version of Singapore's Temasek — which could take stakes in troubled NZ companies and support them while the global economic crisis washes through and new equity can be introduced.

Then there is the opportunity for big thinking.

Take Singapore after the late 1990s Asian Financial Crisis. Singapore leveraged its crucial positioning as a giant transport and finance hub for Asia with major investments in petro-chemicals, the development of Changi Airport, widely regarded as the world's best, and the expansion of international investment and trading links, including a closer economic partnership agreement with New Zealand.

Malaysia under former Prime Minister Mahathir Mohamed slapped on capital controls to prevent an outflow of hot money. But Mahathir also persuaded multinationals invested in his country to back a global TV campaign backing investment in Malaysia and the emerging "information superhighway" that was developed to increase business.

We can congratulate ourselves for having sufficient discipline — even if reinforced by the Government's emergency powers — to stay home under lockdown and reduce the spread of the virus. This is not the case in many countries including one of our major trading partners, the US.

This reality heightens New Zealand's attraction.

Prime Minister Jacinda Ardern. Photo / Getty Images

Jacinda Ardern has (so far) brushed aside suggestions to incentivise major foreign investors to invest in New Zealand either as bolthole insurance as tech entrepreneur Rod Drury has suggested, or as investment banker Troy Bowker suggests to gain a pathway to citizenship by investing upwards of $50 million here to create jobs.

New Zealand also has the opportunity to look hard at our geographical advantages including our mid-way point between China and Latin America to create a future hub. Others are.

This week the Financial Times — which is among the many prime international media to laud Ardern's leadership through this crisis — amplified the tune.

Wrote columnist Simon Kuper: The country should use the pandemic to lure not just the world's highest-value individual migrants but entire businesses. Kuper pointed out the leading talent hubs of the past 25 years have mostly been dense, well-connected global cities.

"The new demand is for a safe haven from Covid-19 ... NZ's isolation has suddenly gone from historic disadvantage to unique selling point. If New Zealand succeeds it will be the 'ultimate remote location for the age of remote working'."

Anyone who thinks the impact of this pandemic will pass the world swiftly by is clearly not a student of history.

There will be second order effects. Our companies will find themselves engaged in the international hunt for equity as the global recession deepens. Better to stay ahead of that curve and embrace opportunities than be smashed under it.

• Covid19.govt.nz: The Government's official Covid-19 advisory website