Rod Oram has got it right again
OPINION: JULY 19, 2010, must become a pivotal date in our history. We must mark it as the moment we finally realised we had to radically change the way we do business.
If we don’t, we will continue to limp along happy with the crumbs our current businesses throw off.
We’ll remain incapable of baking tomorrow’s bread. We won’t stand a hope in hell of building a prosperous, resilient economy.
Two deals this past Monday made it such a day of infamy. First Bright, China’s third-largest dairy company, said it was paying $82 million for 51% of the downstream processing and marketing operations of Synlait, one of our most ambitious dairy companies.
Then Olam, a Singapore company, said it was making a full bid for New Zealand Farming Systems Uruguay. It picked up PGG Wrightson’s 11.5% stake for $15.5m, taking its holding in NZFSU to 29.95%.
The deals showed once again that we are incapable of growing sophisticated international companies of scale and lasting economic value. The handful we already have, such as Fonterra and Fletcher Building, are legacies of earlier eras.
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The simple truth is that this economy is tiny. So to prosper, we have to earn the bulk of our living in the international economy. We can export but there are limits to how much we can produce and ship from here or how many markets we can serve from here. So, we also need to invest in operations overseas.
But we’re bad at both, as the New Zealand Institute has shown with its Internationalisation Index. For each OECD country, it analysed exports and foreign direct investment as a percentage of GDP in 1990 and their gains by 2005. The more a country grew those two income streams, the more engaged it became with the international economy. It turns out we were the only OECD member to come up with a negative number. Our share of world trade and foreign direct investment had fallen.
Guys I hope you all realise that State ownership in alot of cases in NZ is the ONLY alternative to foreign ownership. Look at our banks for example. They are all foreign owned except for Kiwibank which is state owned. These industries have naturally ended up in oligopolies which no NZ privateers have the capital to enter.
Yee haa for state ownership!
Your right Loota about the three groups of people, the problem as I see it is 80% – 90% of the people are making no attemt to move from group 3 to group 2 and therefore having a chance to enter group 1…
A true capitalistic society were all the population is in group 1 or group 2 would be ideal and what I hope we keep striving for… Not the tall poppy society where everything is the asset rich wealthy’s fault that you are advocating for on this thread…