Island News

Will Asia save New Zealand?

Written By : RAKESH KRISHNAN SIMHA. LIFE magazine once did a photo feature on Australia headlined: The Luckiest Country. “Luckiest” because at the height of the Cold War the sunny
02 Oct 2010 12:00

image Written By : RAKESH KRISHNAN SIMHA. LIFE magazine once did a photo feature on Australia headlined: The Luckiest Country. “Luckiest” because at the height of the Cold War the sunny nation, tucked away in the armpit of the world, was safe from the danger of nuclear fallout – a very real threat those days. But it seemed the Aussies were not fully satisfied with their location in Asia. “Given a chance most Australians would like to tow their country up the seas and position it somewhere in the North Atlantic between Europe and the United States,” wrote LIFE.
Like their cousins across the ditch, many New Zealanders would like to do the same. It’s understandable given that people would like to be closer to the country of origin. But it’s clearly a fantasy, especially because New Zealand is firmly attached to the Asian shelf – in more ways than one.
Contrary to the popular notion of a shrinking planet, nations – or rather trading blocs – are actually drifting apart. Consider this – dealing with traditional trading partners like the United Kingdom, Europe and the United States is becoming a game of dodging carbon footprints. From trading goods we have moved on to trading charges. New Zealand should count itself extremely lucky that it is close to less protectionist Asia, where the economies are growing so fast they are leaving skid marks.
Indeed, Asia has turned out to be New Zealand’s economic saviour. While other markets shrank, New Zealand’s exports to China, for instance, grew 43 per cent and effectively this increase saved the country from the global recession.
The Asian sweep of local markets is plainly evident. Walk into any branch of The Warehouse, Farmers, Pak ‘n Save, JB or Harvey Norman and you find yourself in a sea of products manufactured in China, Korea and Taiwan, Hong Kong, India, Vietnam and Thailand among others. And don’t forget that most motorists wouldn’t go very far without the Jap crap.
In a recent TVNZ interview, Prime Minister John Key acknowledged that a “balance of power is unquestionably taking place from, to a certain degree the West, to the Asia region. Not just China, I mean India’s a big player… so you’re seeing countries like Korea, Malaysia and Indonesia, all starting to branch out and be successful”. Clearly, New Zealand has come a long way from the xenophobic days of “the Asian peril”.
The importance New Zealand gives to its Asian trading partners can be measured from the fact that democracy – the sacred cow of western civilisation – is being sacrificed at the altar of realpolitik. This was amply demonstrated recently when Key apologised to the head of a Chinese delegation after Green Party co-leader Russel Norman got into a scuffle with Chinese vice-president Xi Jingping’s security.
Protesting at China’s atrocious human rights record in Tibet, Dr Norman was waving a Tibetan flag a few metres away from Mr Xi at the entrance to the New Zealand Parliament.
But these are mere roadblocks in New Zealand’s journey towards becoming an Asian country. While Tibet is a worthy cause, New Zealand has to live with the reality of China rather the chimera of Tibetan independence.
After all, how many divisions has the Dalai Lama?
With the inconvenience of democracy and human rights out of the way, free trade agreements are being scratched out with a slew of countries, including South Korea and India. Indeed, worldwide there seems to be a scramble to jump into bed with the Asian countries. The European Union, the US and Australia are also negotiating FTAs with Korea.
John Key knows New Zealand must get its act together. Speaking to the media in Seoul last month he said, “The reality for us is if they do complete a deal and we don’t we’re in a relatively worse position.” In fact, in the two years since New Zealand signed the FTA with China it has gone from the country’s fourth to second largest trading partner.
Here are some key reasons why it is in New Zealand’s best interests to tango with Asia.
Trade logistics: Flashback to 2008 – a German shopper is reported to have objected to the presence of New Zealand strawberries on a supermarket shelf.
According to her, the carbon footprint created in the transportation of the strawberries from the bottom of the world didn’t justify their German consumption.
The German produce manager pulled the product. Whether justified or not, New Zealand’s location will handicap its products in the European and American markets.
However, Asia is right next door and green concerns won’t be echoed there for a couple of decades at least. In Asia the mantra, is grow, grow, grow.
Changing marketscape: Both the US and Europe have been gobsmacked by the recession. Economic growth in the PIGS – Portugal, Ireland, Greece, Spain – is not just unfeasible, it is outside the realm of possibility for a generation.
By the time the recession pans out, living standards in wide swathes of Europe will come down to the level of Thailand.
On the other hand, Asian economies are unscathed by the recession and an increasingly affluent class, the middle class is able to afford products like wine, artisan cheeses and designer water – all of which New Zealand can supply in ample quantity.
No business like the food business: Ever noticed that few restaurants close during a recession? Asian countries, with rapidly growing populations, have reached the saturation point in food production. They are entirely concentrating on high tech and IT while neglecting their agriculture. New Zealand with its mainly agrarian economy is perfectly poised to export to these economies.
Declining Britain: Britain used to be New Zealand’s fallback option, but today it has become a pale shadow of its former colonial self. Faced with industrial decline, plummeting living standards and insignificant global influence, it is increasingly turning towards continental Europe. Once New Zealand’s leading trading partner, Britain is no longer a major buyer of its goods or a provider of high technology.
A key sign of New Zealand drifting away from its western moorings is that 2010 is the first year that more students in New Zealand started learning Mandarin than Latin.
Future conflicts: Who thought the mighty Soviet Union would dissolve itself voluntarily in 1991? It just shows how the world can change suddenly.
The current global power play could see the US and China become implacable adversaries in the near future.
In that scenario whose side should New Zealand take? It’s a tricky question.
My guess is trade – rather than any sense of western association – will decide which way the country swings.
Conclusion: Despite the irresistible plunge into Asia, most Kiwis will continue to hope for an Anglo-American revival. Nothing wrong with that but the only hitch is the sun has set on that empire. New Zealanders must realise they are lucky because they are an Asian nation.

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