Business has allowed a Prime Minister — who blames capitalism and market failure for homelessness and poverty — instead of the root cause which was the prior National Government's policy failures — to upset their apple cart.
Investment intentions are now quiescent. This is an absurdity and business needs to talk itself out of this self-limiting scenario or it (and New Zealand) will miss out.
Thankfully, there were few Jeremiahs at the Hong Kong forum.
Keynote speakers like the International Monetary Fund's David Lipton and Hong Kong's Treasury Secretary James Lau spoke of an expansionist phase where the global economy was "going from strength to strength" (Lipton) and where 2018 is likely to be a watershed for the global economy as markets continue to recover from the 2008 financial crises (Lau).
When it came to risks to this sunny optimism, Lipton's view was that it was "time to fix the roof while the sun is shining". A message his boss Christine Lagarde will expand on at Davos next week where global powerbrokers including President Trump will muster for the World Economic Forum's annual meeting.
Lipton's optimism was underpinned by fresh IMF economic forecasts which will be released next week.
He said the signs point to faster growth across all regions. "We must also recognise that the global economy is in a late stage of the long and gradual recovery from the global financial crisis. With economic slack in advanced economies diminishing, it is not clear how long the good news will continue."
And that's the point. While investors are concerned that geopolitical tensions and over-priced markets could upend the world economy's best performance in years, it was time to "address vulnerabilities and structural issues that could impede sustained growth, and to take steps to enable stronger growth once cyclical recovery is no longer driving the economy".
He cited weak wage and productivity growth — issues which should concentrate minds in NZ.
Two standout perceptions.
First from Lipton: The importance of Asia as the world's growth motor.
The IMF deputy managing director indicated that Asia contributes two-thirds of global growth (China alone is one-third).
This likely to be borne out in next week's IMF release.
Clearly there is mutual dependence between China and the United States, and that relationship must not be allowed to fracture.
Second from Lau: Instead of looking at traditional factors that steer economic growth in the financial markets, fintech and technology innovations are now to the fore.
The impact of technologies, big data, artificial intelligence (AI), blockchain and fintech — sometimes called The Fourth Industrial Revolution — was the new factor determining innovation, growth and sustainability.
Lau cited the recent McKinsey Global Institute report which predicted AI tools and robots replacing about 800 million or one-fifth of the world's workforce by 2030.
Although a lot of jobs lost are likely to be in manual labour, Lau said that doctors, lawyers, accountants and financial professionals would also be affected: "We are already seeing plenty of examples of how machines can ... outperform humans." He added that the positive aspects of The Fourth Industrial Revolution have the potential to spur growth in the global economy and create benefits for businesses and consumers.
The forum was upbeat — 58 per cent were optimistic about the global economy for the year ahead (in 2017 it was 20 per cent); only 6 per cent were pessimistic compared with 31 per cent last year.
Maybe NZ business should get out more often. Optimism is catching.
