Local-global connection-building to get through a global economic crisis

Antipodean Village Blogger writes:

Countries previously considered prosperous find themselves mired in debt they cannot repay. Ireland, Greece, Spain and Italy illustrate how difficult life can become when countries drift blindly on, unaware of the need for change.

New Zealand’s own net international liabilities are pushing towards $150B, or about 70% of its gross domestic product. (cf Department of Statistics media release last month)

Like those indebted European countries New Zealand has, as its new Reserve Bank governor Graeme Wheeler said recently, an “addiction to debt”. To help address this, he says, there is a need for more “value-added” exports.

How has this indebtedness come about and if a more effective export sector is needed, how can it best generate the needed surpluses? This blog will seek to demonstrate, with New Zealand as a case-study, how understanding the causes of its debt problem can help in identifying opportunities to deal with it.

The New Zealand case: how it got heavily into debt

Until 1973, New Zealand exports generated regular surpluses, giving this country one of the very best standards of living in the world. Since 1973, however, the country has experienced cumulatively mounting trade deficits.

What happened in 1973?

Export income was severely curtailed, while the cost of imports massively increased.

Until Britain joined the European Economic Community in 1973, it took all the agricultural exports New Zealand could send. Since then, what used to make New Zealand billions – a narrow dependency on bulk agricultural commodity production for a receptive English-speaking market has, year on year, lost billions.

Since then, New Zealand has had to try sell to Asian markets – first Japan, and latterly, especially, China – with little or no knowledge of Asian languages, cultures or tastes.

1973-4 also saw a sharp rise in oil prices. The $2-3 a barrel price that had prevailed since World War 2 quadrupled to $12, and has since spiraled upwards towards the $100, give or take, levels of today.

Caught between this simultaneous drastic cut in income and rise in costs, New Zealand turned to borrowing, year after year; hence, its “addiction to debt.”

Globalisation: technologically-mediated and multi-cultural  – so what is the question?

Increasingly also, since 1973, the world economy has become globalised. This globalisation has been powerfully amplified by an ever-increasing use of powerful information and communication technologies (ICTs).

Notably also, whereas the United States led the first wave of globalisation, now China is taking the lead, with India another increasingly powerful contender.

In other words, the environment in which New Zealand, along with the rest of the world have had to make their way, is technologically-mediated and multicultural.

That suggests the question, how might people and countries make the best use of technologies to relate effectively in a multicultural environment?

As New Zealand’s opposition Labour Party Finance Spokesperson David Parker has well said, “bold new ideas are needed to ensure New Zealand paid its way in the world.”  Thu, 20 Sep 2012

Some such ideas will be offered here.

Two kinds of change, one cultural, and the other technological, will be proposed and drawn together.

James Liu on immigration to “grow economic pie”

Like it or not, New Zealanders need to connect well with Asia.

New Zealanders could choose to like it and experience a future that works well for them.

Connecting within and from local villages could be made enjoyable and productive.

Professor James Liu from Victoria University of Wellington identified precisely how immigration could help when interviewed on Chris Laidlaw’s Sunday Morning program about “Multiculturalism in Europe and New Zealand” (21 October). He pointed out how immigration

embeds talented people within this very outward looking ocean trading state that then has connections all over the globe and can ride this globalization better than most, to grow the pie as opposed to fighting over increasingly smaller shares of pie.

The useful question here is how might such diverse talents be brought to collaborate practically and effectively? Especially to produce more sustainable, rather than unsustainable, goods and services?

Social science conference “Pathways to Metropolis…”

Professor Liu’s interview preceded a conference in Auckland, “Pathways to Metropolis in the 21st Century: Immigration Issues and Futures.”

I was not able to attend, but abstracts of the papers presented indicated a wrestling with difficult issues around this “embedding” of immigrants with host New Zealand populations. Some of the abstracts referred to technology and the internet. I do not know how far they brought out the practical ways social networking technologies might be utilised or leveraged for Professor Liu’s project.

New Australian programme to connect Australian and Asian schools

However, I imagine the attendees will have been very interested in a major policy announcement by the Australian Prime Minister Julia Gillard (28 October, 2012)

Launching her government’s “Australia in the Asian Century” white paper, she demonstrated a clear understanding of the need for inter-cultural connection-building skills, and a communication-technology infrastructure that supported these.

Her strategy included every Australian school using broadband to connect directly with a counterpart school in Asia. This kind of communication infrastructure will help make it possible for all young Australian people to grow up learning intercultural communication skills and Asian languages as a matter of course.

This use of broadband is an excellent start, and will help Australians relate well and do well in the global economy even when they can no longer rely on mineral exports as they have to date.

If these broadband-connected schools were also nestled in locally and internationally well-connected villages, they could accomplish considerably more.

The next blog,  Local-global connection-building for futures that work,  will outline some ways of creating such villages.

Your comments – and any additional information or links most welcome