Life on our South Pacific archipelago is an oasis of calm when it comes to what's going down elsewhere. Photo / File
Life on our South Pacific archipelago is an oasis of calm when it comes to what's going down elsewhere. Photo / File
COMMENT:
I'm willing to bet that all those business people who have perfectly timed their trips to Japan this week – 'to entertain clients' – don't 'give a damn ma'am' right now about the predictable result of the latest bank confidence survey; whether Simon Bridges has finally found hispolitical cojones, or, whether Jacinda Ardern will (ever?) shaft Shane Jones instead of contriving the lengthiest political defence on record.
The Rugby World Cup is the only confidence index that matters in the next fortnight. Not the bank surveys. Not the political polls. Both tend to compound each other, prompting news commentators to short either the economy's or politicians' futures to the point where "stories" could more usefully be outsourced (in the national interest) to Reuters Lynx Insight – leaving its AI tool to automatically churn through the datasets to mine out buried trends leaving journalists to focus on what's really going down at the coal face of our companies and politics.
It is trite but true that our national confidence is quite fickle.
In truth, life on our South Pacific archipelago is an oasis of calm when it comes to what's going down elsewhere: Boris Johnson with his mad wrecking ball named Brexit; Donald Trump threatening to destroy Turkey's economy; China and the US fighting over Australia's rare earths (Hey, NZ has them too – a national treasure we could leverage but for the political numpties).
A hapless New Zealand Government which is short on execution skills seems not so much of a worry compared with the situation in the UK right now. Let's park that and as a thought experiment fast forward to say mid-2020.
It's just nine months away. Summer has gone.
A general election is pending. Time to toss out under-achievers from all sides of politics (if you are that way inclined).
But time also for New Zealand to start gearing up for 2021 – party-time - the year in which this nation plays host to major events such as the America's Cup; the women's World Rugby Cup; the men's Softball World Cup; the women's Cricket World Cup; even the kapa haka Te Matatini Festival and of course the Apec Leaders' meeting where some 10,000 international visitors including the presidents of the US, Russia and China are expected to swarm on Auckland in mid-November for their meeting.
By December 2021, Auckland in particular, may be experiencing host fatigue.
But what a price to pay for a year of fun and business opportunity.
The international order is under threat to the point where our top trade negotiator openly states that the "golden weather is over."
Thankfully, the US and China have declared a partial truce in their trade war. As the IMF notes the cumulative effect of trade conflicts could mean a loss of around US$700 billion by 2020, or about 0.8 per cent of GDP - approximately the size of Switzerland's entire economy.
IMF managing director Kristalina Georgieva. Photo / AP
Some straight-talking from incoming IMF managing director Kristalina Georgieva is worth noting. In her first formal speech, Georgieva said, "Uncertainty, driven by trade, but also by Brexit, and geopolitical tensions, is holding back economic potential.
Even if growth picks up in 2020, the current rifts could lead to changes that last a generation: broken supply chains, siloed trade sectors, a 'digital Berlin Wall' that forces countries to choose between technology systems."
She has asked nations to forget their differences and prepare a united response to the most serious threat to the global economy since the GFC.
The IMF head stressed it was now time for countries with room in their budgets to deploy, or get ready to deploy, fiscal firepower. Particularly, as low interest rates might give some policymakers additional money to spend, She singled out Germany, the Netherlands and South Korea as nations that could increase spending on infrastructure and research and development, which would boost economic activity.
This is exactly what New Zealand business and Reserve Bank Governor Adrian Orr have been advocating to Finance Minister Grant Robertson - to no avail. Maybe Georgieva could pick up the phone?
There are challenges posed to business and our farming communities from climate change adaptation and technological change. But there are also business opportunities there to be grasped.
New Zealand has enjoyed 70 years of relative calm. We've survived a global sharemarket crash and the Global Financial Crisis and massive earthquakes. Our companies have and can adapt.
Most of our companies have.
Summer beckons.
As Newstalk's Mike Hosking would say, "Happy Days".
