New Zealand's economy has been dynamic in the last decade
and comparisons with Australia are misleading, according to
Mastercard Worldwide economic adviser Yuwa Hedrick-Wing.
But he also believes New Zealand needs to invest more in the
productive part of the economy, rather than in residential
property, and harness the talent of a well-educated workforce
to produce more high-end niche products.
"The proper comparison is with New Zealand's own previous
decade, and from this perspective, the improvement is very
impressive," he said in a report entitled Growth Prospects of
Australia and New Zealand in the Post-Recovery Global
Economy.
"I do not believe New Zealand competes with Australia. If
anything to the extent that Australia improves its services
exports, especially in tourism, New Zealand improves," he
said.
New Zealand's per capita income in 1990 was estimated at
$US12,951. By 2000 it was little changed at $US13,557 but by
2008 it had almost doubled to $US30,030.
"You really want to get out of the low productivity area
where the competition is intensifying," he said.
The report notes that experimentation with making milk powder
for export in the small Manawatu town of Bunnythorpe from
1873 led to the formation of Glaxo Laboratories Ltd, which
was now part of global company GlaxoSmithKline.
The story of entrepreneurial spirit demonstrated that a
remote location and a small local market were not a deterrent
to global success.
Mr Hedrick-Wing highlighted the services sector as a
potential new growth engine.
"The future of both Australia and New Zealand lie in
expanding the knowledge economy," he said.
"Investment in the service sector is perhaps the best
position to leverage the information and knowledge economy to
achieve greater success in the future."
He noted the importance of China as an export market for New
Zealand. For the next decade demand would stay high in China
but there were risks as the inventory cycle had peaked in
China and China was trying to slow its economy.
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