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December 23, 2008
Jobs need much more than a Job Summit (part two)
January 23, 2009
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Jobs need more than a Job Summit (part one)

Guest Blog by John Gallagher

Late last year the New Zealand Prime Minister John Key signalled, firmly, in the context of the growing world economic cisis, that jobs were going to be a strong government priority. He said, “I’m going to have all the armoury of government focused on keeping as many people in jobs as we can.” (Dominion Post, 24 December 2008)

Now he has announced a “Summit on Employment” to be held in Auckland on 27 February. His press statement says that summit will bring ” business, union and other leaders in the community” together to address the employment situation. Mr Key has emphasized how he intends it to be a “do-fest, non talk-fest” affair (New Zealand Herald, 15 January, 2008).

The Prime Minister’s pragmatic emphasis on doing what can be done to retain and create jobs indicates a tightly-focused, action-oriented approach. Supporting the Prime Minister’s call the BNZ chief economist, Tony Alexander, also strongly endorsed the need for very short-term action. He feared that “the central goal would be lost amid the clamour. ‘There’s a lot of people out there who are going to use this to push their own barrows. And their barrows are based on longer-term issues.'” (Christchurch Press)

I very much agree that some urgent measures are needed, including to minimize job losses. Such measures should not be buried in extended discussion about long term issues.

But that must not be the end of the matter. By itself, such short-term pragmatism precludes a more broadly-based economic strategic analysis from which maximum, high quality employment opportunities in a complex, changing world could be identified. Broader, longer-term issues also require broader concepts and, as relevant, quality research.

Simple reflex short-termism must not, by itself, be allowed to prevail any more. Present problems have been made so, so much worse by over 3 decades of continual short-term policy responses. Short term pragmatism attempted without a grasp of complex, long-term factors can turn out to be no pragmatism at all.

New Zealand’s history since 1973 well illustrates this problem. Before then, it had one of the most prosperous world economies, structured around a fairly simple, stable and profitable economic and political relationship with a white, Anglo-Saxon colonial mother country, Britain. Ever since refrigerated ships in 1881, Britain had absorbed all our bulk agricultural commodities. (Refer also to my previous blog)

This comparatively simple formula did not prepare the country well to relate economically and politically to the diverse nationalities, cultures and market-places as it needed to in a fully post-colonial stage of its development.

Many have still to grasp how much the world changed for this country in 1973 with Britain’s entry into the European common market and the costly oil shocks that began then. Notably, the nation’s decision-makers’ response to year-on-year gaps between what this country could earn and its financial outflows has been to keep borrowing.

The problems were exacerbated in the 1980s and early 1990s. Then certain the political decision-makers, without seeing any need for any public warning or education to enable people and organizations to cope, suddenly flung a hitherto highly insulated economy open to world market forces. Ensuing changes included selling railway and telecom assets to what turned out to be international asset strippers, and Australian takeovers of almost all New Zealand banks. The subsequent increased repatriation of profits overseas further exacerbated our continually accumulating overseas debt problem.

Do your agree or disagree that the details presented above are accurate, and the analysis so far is valid and useful? Any feedback will be most welcome.

Tomorrow’s concluding blog will explore how in the 1980s some major, if largely unnoticed, opportunities arose that could be drawn together into a new paradigm for projecting ourselves more effectively out into the wider world diplomatically, economically and in many other ways.

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