Dialogue: Export promotion only path to growth

By GILBERT ULLRICH*

It is time I think, in matters of trade, of globalisation and of New Zealand, that we should be re-stating the basics.

All the structural measures you can dream of - and these include all the policy devices like bilateral trade agreements - are quite useless unless this nation develops its ability to promote itself and its industries.

I worry that we have not been good at promotion and that we are not moving fast enough to become so.

I cannot criticise the Government's efforts so far in promoting quality bilateral trade agreements, nor the financially restricted efforts made by our Trade Development Board, and I have nothing but praise for Jim Anderton's intentions with his Industry New Zealand, particularly in the less developed regions.

But I must make a plea that none of us should lose sight of the basics - of this overall need to promote New Zealand.

Here are three separate aspects of what I am talking about, and they all involve promotion in some form.

First, the only way we can prosper is by increasing our export receipts ahead of our costs long term. Whether we make it, sell it or service it, it is imperative that we export it profitably. That is fundamental and we must never lose sight of it.

So we must actively promote our export interests, even to the extent of planting small potatoes in future developing regions like East Timor.

Second, consider free trade and globalisation. Unless we ensure that free trade is also fair trade, we expose ourselves to something I recently saw overseas: people in Reunion, a French dependency in the Indian Ocean, living on imported tinned fruits while no export market was developed for their own produce.

Similarly, in the Seychelles and Papua New Guinea, coconuts and local fruit drinks once exported are replaced by Coca-Cola.

Only by developing fair trade can this nonsense be rectified. Promotion is a vital part of that, and supporting it in other small nations benefits New Zealand.

Let me give force to this by asserting that there is nothing produced in New Zealand that cannot be profitably traded overseas with efficient promotion. This may involve tweaking the product, but with proper marketing it can be done.

Third, consider the knowledge wave and all it means. Of course this brings opportunities for New Zealand. But it's not the whole solution.

We have to efficiently grow potatoes or extrude aluminium to ensure most of the workforce is gainfully occupied. Low unemployment is a nice philosophy, but not enough. It is the highly profitable production and employment sectors that we need and must promote.

Nobody will miss the connection between these three points. Nobody will miss the need for maximum promotion in this country. Promotion is the key. Promotion involves everybody.

Let me give one example which illustrates the breadth of the issue and which does not have proper recognition in New Zealand.

Both tourists and investors focus on the quality of the roads as a general sign of a nation's commitment to itself.

Nearly every country I know, except New Zealand, seems to grasp that principle. But in New Zealand, after the crowded motorways stop at the city edge, we lose it.

I drove a visitor down State Highway 1 to Hamilton in the early morning fog recently. When we struck that dreadful stretch at Meremere he said, as we dodged the giant trucks, "Why do we come this way? Shouldn't we be using the main road?"

"Yes," I agreed, "but unfortunately this is the main road. It's terrible and it hinders the growth of both Auckland and Waikato."

As I say, promotion involves all things at many levels. And whether we accept it or not, it's promotion that makes exports possible and it's promotion that takes care of the three points I've touched on.

What therefore is needed is to define a method of achieving a rapid growth curve in our ability to promote without falling back on our traditional reaction, which is to form another committee.

I see it this way. We have three institutions involved in this process: ministers of the Crown, the public service and industry.

A nationwide movement to promote New Zealand trade requires both industry and the political leadership to work together with the assistance of our public servants.

Luckily, I think in both our Prime Minister and Deputy Prime Minister we have people who know this.

If we take chosen members of our exporting industry and that class of politician, we can build on what has been achieved so far with Industry New Zealand and create a ministry under strong leadership given primarily to promotion of exports.

In other words, everything should lead directly or indirectly to export promotion.

It isn't necessary to spell out how to do it beyond this point. Everything needed exists now. All I am speaking of, therefore, is the accord and the focus to do it. I would personally love to be a part of it.

We've had some good returns recently with export commodity demand and the low dollar, but I doubt that will last indefinitely.

* Gilbert Ullrich is managing director of Ullrich Aluminium Industries and chairman of the trade and transport committee of the Employers and Manufacturers Association. He was made an Officer of the NZ Order of Merit in the New Year Honours.