We can do e-anything in new millennium

By ROD ORAM

Between the lines

This year New Zealand has turned two crucial corners, one economic and one political. Together they have set the country on a very different path.

Ahead stretch new avenues for economic development, offering opportunities which could make the first few decades of the next century as dynamic and prosperous for this country as were the first few decades of this century.

Economically, this was a critical year. As a country, we finally woke up to a harsh reality: we are being left far behind in the global race to make a living from knowledge. While we are still stuck selling agricultural commodities of diminishing value, other countries are reinventing their economies.

Ironically, the message was driven home not by economic failure but by "success". This year's recovery from the short recession triggered by the Asian Crisis looked good at first glance but truly ugly on closer inspection.

The rebound was based largely on personal consumption which drove imports to record levels. Meanwhile commodity exports languished, driving the current account deeper into the red.

In other words, New Zealand was increasing the foreign subsidisation of its living standards by selling more assets to overseas investors or by borrowing more from them.

This is not to say that the economic reforms of the past 15 years were wrong or not worth the cost. They were essential. The country had gone bust under the old system. A new economic structure was needed which was adaptable, resilient and efficient. Indeed, further reforms are necessary in areas such as education and roading but they will not happen under the new Government.

The task now for all New Zealand society - not just business and government - is to build on the economic base created since 1984. Thankfully, this was the year people began to grasp that potential.

Venture capital, e-anything, value added output, research and development, intellectual property, industry clusters and all the other buzzwords of the new economy are bandied about today with an ease unthinkable a year ago.

Politically, this was also a crucial year. The balance of power swung back to politicians who believe governments have an active role in shaping the nation. It was a fundamental change after 15 years of governments determined to devolve responsibility to individuals and markets. Since no political philosophy has a permanent grip on power, it was also an inevitable change.

But just as businesspeople have much to learn about the new economy, so too have politicians a lot to learn about new government. It is not about subsidies, grants or other forms of undesirable intervention. It is about being a catalyst and facilitator.

If both sets of players can master the new tools and rules, 1999 will go down in history as an auspicious start to the new New Zealand.