The following quotes are both from today’s Sunday Star Times - they come from different fields but say much the same thing about the Kiwi psyche.
“Sometimes Kiwis are scared to say ‘we’re good’. You get a little embarrassed by it and I don’t know why. As a club we’ve accepted that being good is ok.” – Australian Andrej Lemanis, coach of Australian National Basketball League champions, the NZ Breakers.
“We’re such chokers man. We’ve got all the talent in the world, but when we are put in that final situation where you finally step up, we go ‘oh no, f**** that’.” – Jon Toogood, singer, songwriter Shihad.
It’s not particularly productive to beat ourselves up over endearing national traits like modesty and self-deprecation, but they come at a cost, for example an inability to win sports tournaments or seeing luctrative record contracts go west.
This also applies in global business where being a dinkum Kiwi can get in the way of closing business deals.
A NZ Trade and Enterprise report on Australian market perceptions of NZ exporters comments: “The problem is they don’t hear enough from us. New Zealand’s modesty, rather than Australia’s parochialism, is what is preventing us from getting more business in Australia.”
Reports from other markets make similar comments.
Losing our modesty would be a loss – it’s one of the things that make Kiwis stand out in the world and in the right place it is a desirable character trait.
One of the wrong places is the international market place – I’m including sports and music in here.
How do we fix this? One way is to have more successes and then to celebrate them.
And, hey, judging by the post-match joy of the Breakers and their fans, may be we’re getting the hang of celebrating.
Another international survey has NZ rating highly in overall wellbeing with 63% of Kiwis saying they are thriving in their day-to-day lives – 8th best in the world.
It’s further evidence that in terms of quality of life, we are holding up well even if in many ways (for example in health and education spending) we are spinning out of the orbit of first world countries.
Predictably in this latest survey we are behind Australia (4th with 65%), but we’re ahead of the US (12th with 59%).
The top three in the Gallup survey of were:
- Denmark (72%)
- Sweden (69%)
- Canada (69%)
Gallup says the survey of 124 countries is based on how people rated their lives at the current time and their expectations for the next 5 years.
A lowly median of 21% of countries were thriving ranging from Denmark through to a low of 1% in Chad. The survey again showed the strong relationship between wealth and wellbeing with majorities of residents in only 19 countries — mostly in Europe and the Americas — rating their lives well enough to be classed as thrving.
(Hat tip – The Atlantic via Richard Florida)
A question: Can we catch Australia if their population is growing a hell of a lot faster than ours?
Brian Gaynor touches on this issue in his latest column, saying that in 1970 Australia had 4.3 times more inhabitants than us; now it’s 5.5 times greater and by 2050 it’s forecast to jump to 6.8 times.
Many Kiwis would be happy with our relatively low population growth, but as Gaynor says “at the same time we want all the trappings of the modern world, including the latest electronic gadgets, late-model automobiles, generous retirement schemes and a world-class health scheme.
“We cannot expect to have these unless we generate sufficient domestic economic growth and exports to pay for our imports. We also need a higher tax base to pay for a world-class state pension scheme and health system.”
Philip McCann from Waikato University has also pointed a finger at our tiny population. He says being small and far from markets is the worst position to be in. In Australia’s case, size can help overcome the limitations of isolation. And small European countries have large markets nearby to help develop economies of scale.
The role of population growth in economic growth is highlighted in a pwc report “The world in 2050”.
The report notes:
• A rapid convergence between the E7 emerging economies (Brazil, Russia, India, China, Indonesia, Mexico, Turkey) and the G7 (US, Japan, Germany, UK, France, Italy and Canada). In 2007, total G7 GDP at purchasing power parity (PPP) was still around 60% larger than total E7 GDP. By 2010, pwc estimates the gap had shrunk to only around 35%.
The E7 (Russia excepted) has fast growing populations; the G7 (the US excepted) has slow, static or negative population growth.
• pwc says the catch-up process is set to continue over the next decade - by 2020 total E7 GDP at PPPs could already be higher than total G7 GDP, although any difference would still be within the margin of error of such projections.
• In the following decade from 2020 to 2030, however, the process of overtaking is likely to be reinforced, with total E7 GDP projected to be around 44% higher by 2030 than total G7 GDP in PPP terms. The gap would widen further beyond that, with the E7 almost twice as large as the G7 by 2050 in PPP terms.
Population growth is identified – along with labour force quality and size, and technology– as a key driver of this economic power switcheroo.
pwc says the emerging economies have stronger potential growth than established OECD economies on most of these measures, assuming they “continue to follow broadly growth-friendly policies”.
On this basis India is expected to overtake China’s trend growth at some point during the coming decade due to India’s significantly younger and faster growing working age population. (Or put another way, India eventually overtakes China in the growth stakes because of China’s ageing population, accentuated by its one child policy).
There’s also the fact India is starting from a lower level of economic development than China and so has more catch-up potential.
pwc says most of the variation in growth rates reflects differences in population growth.
Australia, Canada and the US, which are picked to have relatively strong population increases, are projected to continue to grow at around 2.2-2.4% a year up to 2050, while countries with shrinking populations such as Germany, Italy and Japan will see total GDP growth of only around 1.0-1.9% in domestic currency or PPP terms.
Meanwhile the younger and faster growing Indian and Brazilian populations race along till around 2030, then their ageing populations start to apply the brakes.
NZ is not well placed in this regard. According Statistics NZ projections, by 2051 half of all New Zealanders will be over 45 (in 2001 the median age was 35). The number of New Zealanders aged 65 years is expected to reach 1,220,000 by 2051.
pwc admits such long-term projections are subject to great uncertainties but believes the trend is clear.
[NZ is not mentioned in the report]
Author Lloyd Jones says New Zealanders are great travellers, but we also tend to have strong homing instincts.
In an interview in the UK’s Independent on Sunday for his new novel, Hand Me Down World, Jones says Kiwis are “sojourners. [NZ Herald review here]
“We’re not like the Africans, Indians or Pakistanis, who come [to the UK] because it’s a better world. For generations we were quite secure that our world was better. We were just inspecting the source before going home.”
Past tense.
However, it is still largely true, except (and it’s a big exception) for Australia.
HT – nzedge
Is it significant that three of the top four nations in the UN’s Human Development Index – Australia, NZ and the US - are immigrant nations?
If it wasn’t for Norway’s luck in having a belly full of oil, then it’d be the top three.
Is this outperformance by the “New World” just some sort of geographical/historical accident?
BigCake figures, that as in life, what countries do with their luck is what matters.
Anyway Karl Smith, Assistant Professor of Public Economics and Government at the School of Government at the University of North Carolina at Chapel Hill, reckons massive immigration is one of three reasons why the US is so rich.
You’re inclined to forget it at the moment, but the US depending on what measure you use always ranks in the top 10 wealthiest nations in the world. (US gross domestic product at purchasing power parity par capita US$46,000; NZ $26,600).
Smith, in a blog, puts the US’s wealth performance down to a combination of three big factors:
• The Common Law
• The Great Scientific Exodus during WWII and
• Massive immigration.
Actually 2 and 3 look to be much the same thing. And the US was rich before WWII.
However, commenting on the blog The Economist says Smith is on to something important in discussing immigration and talent.
“The economic geography of the world is lumpy, and talent likes to clump together into centres of innovation.
“Through fortune and foresight, America managed to develop world-leading centres of talent in places like Silicon Valley, Boston, and New York. Relatively open immigration rules and the promise of a safe harbour for war refugees, including persecuted Jews, helped build these knowledge centres.
“When one combines that innovative capacity with a system that makes it relatively easy to develop ideas and relatively lucrative to exploit them economically, the potential is there for rapid and sustained growth.”
But this doesn’t fully describe the economic performance of the twins from downunder.
I reckon it’s something to do with the energy and dreams of the new immigrants. They want a better life for themselves and their children and in the process drag the wealth of their new home country up with them.
But then consider what happened to Argentina, another immigrant country blessed with an abundance of natural resources. It went down the tubes. So the type of immigrant is important too.
Argentina may never have had the immigrant energy of the US, Australia and NZ thanks to its stultified social structure, but this energy can weaken (or is it inevitably?).
The common law factor is I think pretty dodgy. (Common law being the law of precedent inherited by former British colonies, including the US).
Smith says “you’ll notice that four of the top five countries in the Human Development Index have the Common Law and the top, Norway, is a awash in oil. Without the petro-kronors they probably wouldn’t be so hot.”
Depends how you want to spin this – 5 of the top 10 countries in the index don’t have common law.
And dismissing Norway because of its oil wealth is also dodgy. Nigeria also has large reserves of oil but it hasn’t done that country much good.
Yeah, so it’s complicated when you try to isolate various factors in economic growth.
Cycling has a great term to describe how your eye can fool you about the gradient of a section of road, meaning you are working hard, but you’re not going as fast as you think you should.
It’s called a “false flat”. That is, it’s the flat you’re on when you’re not on a flat, probably a gradient of just 1 or 2 percent.
And it looks like the NZ economy is stuck in one of these dispiriting stretches at the moment with flukey side winds thrown in to really piss you off.
The “false flats” I can think of, for example the straight into Havelock on the Marlborough Graperide, often happen after a down hill – the bike’s momentum just dies when you’re thinking you should be cruising.
But the economy’s one has come after a bugger of a climb – it’s crested the hill and a flat ride into the distance beckons and maybe a downhill around the corner.
Oh happy days.
Except not. We’re going faster than before, but not as fast as we think we should be. And as on the bike, you think you’re in the wrong gear, or there’s a been an equipment failure (eg. brakes rubbing).
And all around you, everyone is getting shitty.
I’m picking the “false flat” our economy is part of the international topography. Maybe the bike could be tweaked to go a little bit faster, perhaps we should have taken on more fluids or eaten that energy bar earlier, but basically we are a shit bit of road.
Australia’s in the same spot.
There, business conditions dropped to their lowest level in more than a year in October, which the Sydney Morning Herald says suggests the Australia’s economic activity is faltering.
The National Australia Bank business conditions index dropped to 2 in October from 7 in September, well below the long-term average of 6. It was the lowest monthly level since July 2009, when business activity was still recovering from the impact of the global financial crisis.
The profitability index dropped to -4 from 6, going into negative territory for the first time in more than two years as prices weakened.
The trading index dropped from 13 to 4 over the same period, NAB said, while retail conditions trended down for the first time since September 1997.
NAB business confidence also slid to 8 in October from 10 in September, while remaining well above the levels seen during the financial crisis.
The results of NAB’s October survey were taken before the Reserve Bank surprised the market by lifting the official rate to 4.75 per cent from 4.5 per cent in November.
There’s been a bit of media triumphalism around NZ picking up 3rd place in the United Nations Development Programme’s (UNDP) 2010 Human Development Index.
For Brash 2025 lot, releasing their downbeat progress report on catching Australia, at the same time as the UNDP report was bad timing. Many Kiwis would be left wondering what Brash was on about, though we were pipped by Australia.
‘But hey, 3rd in world. We’re doing okay.’
BigCake is not so sure as there are signs we are working harder than other countries to keep up. But back to the reaction to the UNDP report.
Online there looked to be a lot of scepticism about the report – “More NZ Government funded UN PR smoke” – but as the media coverage indicated, it played right in the mindset of a sizeable chunk of the NZ populace including:
• Growth sceptics – Kiwis sceptical of the motives of growth proponents and in need of convincing that there’s an issue anyway.
• Growth apathetics – those who believe economic growth doesn’t matter or if it does, it’s a close run thing between the benefits of growth (more jobs etc) and its costs (increased congestion etc) so ‘who cares’
• Growth fatalists – those who believe our ability to improve our economic lot is beyond our control.
The UNDP report also shows up the sterility of pure gdp/income measures which put us way back in the field in terms of wealth. As the report says “It is now almost universally accepted that a country’s success or an individual’s well-being cannot be evaluated by money alone.”
But at the same time, key contributors to the index are money-hungry services such as health and education.
So if we’re substantially poorer than other countries we like to think ourselves the equal of, how come we’re 3rd?
Are we a bunch of jammy buggers?
If you look at just income, NZ is lowest in top 30 (bar Iceland and the Czech Republic) in terms of gross national income (GNI) per capita. The GNI measure the UNDP uses is converted into purchasing power parity (PPP) terms, eliminating differences in national price levels, giving a truer comparison of standards of living between various countries.
(Note standard of living is mostly about income; quality of life includes broader things like health).
We basically pull it off because of our strong non-income HDI performance, such as in environmental issues. Non-income HDI wise we come 2nd, ummm again after Australia.
Which gets you thinking that maybe we should be measuring ourselves against Australia on the HDI. It’s more achievable target and a much better measure of how we’re doing as a country. Time to swap horses as the NZ Institute and BigCake has been advocating.
Anyway, we did relatively well in:
• High expenditures (as a percentage of gdp) on health and education
• Being relatively more happy about our personal health
• Relatively high perception of personal safety
• Good air quality (but not water)
• High employment ratio (though we have a relatively high rate of vulnerable employment)
• High tertiary enrolment ratio
• High share of renewable energy
• Low carbon dioxide emissions per capita
• High percentage of protected areas
• Low levels of arms imports and exports.
We did relatively badly in:
• Income inequality
• Education attainment (% of labour force with primary and secondary education) and percentage of population with at least secondary education
• Gender inequality, including paid maternity leave
• Low expenditure on health (per capita and based on purchasing power parity) including relatively poor immunisation rates, but high number of hospital beds
• Low average gdp growth 1970 – 2008
• Low gdp per capita
• Poor ecological footprint of consumption.
The health purchasing power parity thing is why I think we’re struggling (or are jammy buggers).
We’ve managed to stay relatively healthy as a nation by, as the Ministerial Review Group on health bluntly saysconsuming health services like other OECD countries, but being we are less able to afford it.
We’ve got around our shortage of purchasing power in health by skimping in other areas such as infrastructure and passing on the extra bucks on to our hospitals etc.
So yeah, money still matters.
The HDI measures average achievements in three dimensions:
• A long and healthy life
• Access to knowledge
• A decent standard of living.
I haven’t been able to figure out how each is weighted, but guess it must be pretty generous towards the non-income stuff. The HDI is apparently the “geometric mean of normalized indices measuring achievements in each dimension”.
Foreign Policy magazine says aspirations for a less oil-dependent world, and for a more prosperous one, are colliding in a global race for a better battery.
The battery could be part of a half trillion US dollar electric-car industry capable of spawning companies on the scale of ExxonMobil, General Electric, and Toyota.
This, as Foreign Policy points out is the stuff of creating or remaking whole economies and the rebalancing of political power.
As you’d expect the Chinese are on to it.
FP says that China, starting virtually from scratch, wants to become the world’s largest producer of battery-powered vehicles within the next few years.
This is based on the recognition that “the world doesn’t just need a better car — it also needs a better means of building and sustaining economies”.
And as usual you need to take Chinese ambition seriously – very seriously.
Similarly with the Singapore Stock Exchange’s A$8.1 billion offer to buy its Australian counterpart, the ASX.
As the Sydney Morning Herald points out “The real issue is ambition”.
Size, as BigCake has said on numerous occasions, matters.
Our lack of size, along with our distance from markets, is a big factor holding us down in our economic rut. The OECD reckons distance alone lowers our ability to generate more wealth by around 10 percent.
People like economist Philip McCann argue that governments can’t do much about our our isolation and lack of size.
But they’re not impotent.
The Ministry for the Environment has released a discussion document that focuses on improving the planning system for the country’s urban areas and infrastructure.
A key acknowledgement is that our international competitiveness relies more and more on the competitiveness of our major cities.
BigCake figures a large part of the competitiveness picture is to do with size. Until our cities (well Auckland) can foot it with at least Adelaide and Brisbane across the Tasman, we’re basically a good small guy in a fight.
The discussion document identifies issues getting in the way of the competitiveness of Kiwi cities as:
• Planning and urban design – there’s inadequate recognition of the urban environment in the RMA
• Complex planning system
• Lack of consistency in decision-making
• Ineffective implementation tools
• Lack of national clarity and consistency of objectives, direction and standards
• Mixed access to RMA designations
• Complex and inflexible approval processes
• Lack of robust and integrated decision-making
• Inefficient and inadequate land acquisition processes.
One of the earliest ideas behind BigCake was that wealth is relative – if NZ wasn’t becoming less wealthy (or if you like, poorer) compared to the nations we usually liked to rate ourselves against, then no worries, no need to catch Australia by 2025.
A slightly newer idea was that wealth alone wasn’t a great way to measure how we’re doing as a country. A more accurate state of the nation would have to include life style factors such as the environment, education, health etc.
Economic growth is a means to an end, not just an end. And the end?…maybe just being happy.
And just arrived on the BigCake agenda is equality, mostly based on the book “The spirit level – Why equality is better for everyone”.
The guts of this book is that wealth inequality is tearing some Western societies apart. The greater the difference between rich and poor, the greater the problems such as crime, obesity, smoking, drinking…
The scary thing here is that NZ, relative to many Western countries, is a very unequal society.
Of the 23 nations the authors look at, NZ has the 6th highest income gap – as measured by the difference between the richest 20% of citizens and the poorest 20%. Worse than us were: Australia, UK, Portugal, the US and Singapore (with the biggest difference).
The book’s big weapon is a series of graphs that show the relationship between income inequality and a bunch of ‘bads’ such as health problems and social issues. (For the wonks, the graphs have regression lines). Basically countries with high levels of inequality are likely to have high incidences of health and social problems.
And mostly this is true of NZ.
Of course the opposite is true also –countries with low levels of inequality (such as Japan and the Scandinavian countries) enjoy better health and so on.
A lot of the time the ‘bads’ of the poor get dismissed as the result of poor housing, poor diets etc, so fix these and you’ll fix the big issues.
The challenging bit of “The spirit level” is the claim that this won’t work because they are symptoms not causes. “The problems in rich countries are not caused by society not being rich enough…but by the scale of material differences between people within each society being too big. What matters is where we stand in relation to others in our society.”
What corrodes society is high levels of inequality. The active ingredient at work here is the way we humans rate and compare ourselves. The thing that causes us greatest stress is being evaluated by others – what we wear, where we live, what cars we drive…
And how we measure up in these tests mostly depends on how much money we have.
As theBigCake moniker implies, I’m not much into a redistributive fix, but this is food for thought.
Anyway, still working my way through the book.
Expect more posts on inequality.