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Old World Crises, New World Opportunities – New Zealand in the Global Economy

Old World Crises, New World Opportunities – New Zealand in the Global Economy. Dr Oliver Hartwich The New Zealand Initiative 2 April 2014. What a difference a few years make …. What a difference a few years make …. What a difference a few years make …. What a difference a few years make ….

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Old World Crises, New World Opportunities – New Zealand in the Global Economy

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  1. Old World Crises, New World Opportunities – New Zealand in the Global Economy Dr Oliver Hartwich The New Zealand Initiative 2 April 2014

  2. What a difference a few years make …

  3. What a difference a few years make …

  4. What a difference a few years make …

  5. What a difference a few years make … 经济学家 ?

  6. A historical perspective on global change World population in 2050: 9.07 billion World population in 1500: 438 million World population in 1960: 3.04 billion World population in 1900: 1.57 billion World population in 2300: 8.97 billion

  7. An Asian world

  8. The world is ageing (but the West ages faster)

  9. Wealth moves East ... and fast (Source: Credit Suisse) Distribution of global wealth in 1990 Distribution of global wealth in 2015

  10. Economic gravity is shifting

  11. Economic gravity is shifting 2010 1980 2050

  12. Economic gravity is shifting

  13. Public debt dynamics

  14. Drowning in debt Total debt of ten largest mature economies, Q2 2011, percent of GDP (Source: McKinsey)

  15. But aren’t we deleveraging? Total debt, percent of GDP (Source: McKinsey)

  16. It’s a Western debt problem

  17. The end of the world as we know it • Watching the global debt crisis risks missing the wood for the trees • We are not watching a ‘normal’ default of governments • What we are witnessing is the rapid replacementof one world order by another

  18. Has the West lost its killer apps? • Niall Ferguson, Civilisation: The West and the Rest • Six killer apps of the West: • Competition • Science • Democracy • Medicine • Consumerism • Protestant work ethic

  19. Killer app: Science Engineering/IT graduates (bachelor level) Engineering/IT graduates (Ph.D. level) Percentage of foreign engineering/IT graduates in the US Engineering/IT graduates (master’s level) Gereffi et al., Getting the Numbers Right: International Engineering Education in the United States, China, and India, Journal of Engineering Education, January 2008, 13-25

  20. Killer app: Science OECD PISA education test

  21. Killer app: Consumerism Source: OECD

  22. New Zealand’s place in a changed world • No more ‘tyranny of distance’ becausea) distance matters lessb) the world moves closer to NZ. • Remarkable opportunities available to NZ compared to most other developed countries:a) a young population;b) sound economic, social and political institutions;c) low level of public debt. • But are we aware of our good fortune?

  23. New Zealand’s strategic choices • “Splendid isolation”:Inward looking,uninterested in or hostile to FDI,unengaged in emerging markets,accepting Australia as its benchmark (but finding good excuses for not reaching it) • Joining the Pacific growth club:Open doors to skilled migrants and FDI,reaching out to Asia and Latin America,lifting productivity by once again embracing economic reforms

  24. Have we arrived in the Asian century yet? Cumulative effect of increasing net migration to 40,000 per year (Source: NZIER) (Source: McGuinness Institute)

  25. New Zealand is well placed to participate in Asia’s boom Composition of New Zealand exports

  26. New Zealand is well placed to participate in Asia’s boom New Zealand terms-of-trade

  27. New Zealand is well placed to participate in Asia’s boom New Zealand exports to China as % of GDP

  28. New Zealand is well placed toparticipate in Asia’s boom (Source: Westpac)

  29. Geographic proximity and sound institutions

  30. Making New Zealand a better place

  31. A final good reason to feel good about New Zealand Number of hours of minimum wage work to earn a beer. (Source: Number / ILO)

  32. Thank you Dr Oliver Hartwich oliver.hartwich@nzinitiative.org.nz

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