Trade board out to bag investment

By Yoke Har Lee

The Trade Development Board (Trade NZ) may not be the ideal vehicle to promote foreign investment, but it will do its best with the mandate it has been given, says chief executive Fran Wilde.

She says she is relaxed about the investment role, but the board's main task is to increase New Zealand's ability to earn foreign exchange.

"In fact, there is a strong case to be made that investment promotion should be with the Prime Minister's department," Fran Wilde told the Business Herald.

However, "as long as we have the mandate, we are going to have to deliver."

One source close to Trade NZ reported internal tensions because the board had taken on the task but had no clear descriptions of what investment promotion entailed or how to accomplish it.

The Trade Development Board Act 1988, which set out the services the Government bought from Trade NZ, made no mention of promoting investment, the source said.

Three out of four members of the investment team, including manager Geoff Cassells, have resigned since Trade NZ moved its head office to Auckland recently.

Fran Wilde said new people were being employed.

"In fact, we are going to raise the importance of the investment division within the organisation, with the new group manager reporting directly to me."

Last year, the Government unveiled a $2.9 million package aimed at marketing New Zealand as an investment destination, she said.

Trade NZ would try to capture business opportunities presented by the Apec summit in September, the America's Cup and millennium events.

Persuading businesses to move to New Zealand was one of the board's goals, said Fran Wilde.

International businesses would help to strengthen the local business community.

"We haven't been successful with that."

Competition for global capital has driven many countries to offer attractive incentives to investors.

In 1997, for instance, 76 countries made a total of 151 changes to their foreign direct-investment regimes, all aimed at creating a more favourable environment.

Sectors previously closed to most foreign investors, such as telecommunications, broadcasting and energy, are being freed up, says the United Nations' World Investment Report.

Worldwide foreign direct-investment inflows rose for the seventh consecutive year in 1997, to $US400 billion ($714 billion).

But overseas investment fell in New Zealand, from a peak of $5.36 billion in 1996 to $2.77 billion in 1997.

It recovered to $3.61 billion in 1998.

And according to the Global Competitiveness Report from Geneva, New Zealand dropped to 13th place last year from fifth a year earlier.