Archive for May, 2012
It’s not a direct quote so I’m not sure if ANZ economist Cameron Bagrie actually said it, or the journalist reporting his speech made it up, but I like it.
NZ was caught between legacy issues and opportunity.
The legacy issues:
• “In 2008, the global economy’s old school, debt-driven economic model blew up.”
• Net external debt of 72% of GDP. “That is world class, at the Spain end of the spectrum.”
• “In close to four years after we had a global financial crisis, NZ still runs a current account deficit of 4% of GDP so every $1 we earn, we spend $1.04.”
“If you are waiting for the economy to go back to the way it was in 2005 and 2007 to rescue your business, sell it, because we’re not going to be back there for a long time.”
To get to opportunity, Bagrie says we need a “fundamental change in the DNA of society because the economic model that people have been used to (is gone)”.
• Business sector success determined by microeconomics, not macroeconomics.
• The winning plays would come from leadership, adaptability, governance, management foresight, strategic planning, leveraging unique points of advantage and going after market share.
• “Rip the guts out of the competition… That is the reality in terms of where New Zealand sits today.”
The next five to 10 years, Bagrie says are going to be defining – “We’re either going to make a meal of it, or make a bucketload of money, and I think it will actually be the last one.”
I can’t let this pass without commenting. It’s personal.
When I chose the name BigCake for this blog, I was clearly pinning my hopes on economic growth being able to solve NZ’s ills, or at least the ills that could be fixed by having more money.
Growth was “normal”.
Implicit in this of course was the idea that growth was not only desirable, but possible.
Desirable goes without saying. Possible because NZ, with a wealth of resources compared to other countries, could outperform the world if only we could get our act together.
And the world bought our stuff.
Environmentalists have always been dubious about the staying power of the global economic growth vehicle, but BigCake believed NZ was so blessed we could expand where others couldn’t.
Well, now I’m thinking maybe. (And maybe I’m making a late move from the age of opportunity to the age of anxiety).
As Interest.co’s Bernard Hickey, after a déjà vu moment at the Budget lockup, points out promises of growth are beginning to wear thin. We are taking a very long time to get back to “normal”.
Global economic growth is stuck in a lengthy limited speed zone, and that’s slowing our economy.
Endemic high debt levels look to be the handbrake.
“Something is broken, and it still hasn’t really sunk through into the economic models and thinking of bureaucrats and politicians in the developed world, who are still forecasting that their economies will bounce back to pre-2008 averages.
“These policymakers are like the Energiser bunnies. They keep bouncing up and down on the spot, hoping to move, but just go around in circles.
“Accepting that growth will be lower for decades rather than just a few quarters is scary.”
Following up on my earlier post on schooling local.
A story in the New York Times has made me realise I was being a little bit self centred about who benefits from schooling local. It’s not just white middleclass kids from the likes of the BigCake household.
It’s also probably going to be Pacific Island and Maori kids, and maybe their benefits are even greater.
They too are not being prepared for the real world in schools that are cocooned from demographic realities. As one kid interviewed in the NYT said: “You see one race, and you’re going to be accustomed to one race.”
The NYT comments:
“Decades of academic studies point to the corroding effects of segregation on students, especially minorities, both in diminished academic performance and in the failure to equip them for the interracial world that awaits them.”
One ticklish issue here is teachers as role models – most teachers are white.