By John Armstrong
Hosting next year's Apec summit is not likely to be a big moneyspinner for a sluggish New Zealand economy.
An analysis by economic consultants Infometrics cautiously suggests the international bun fight might inject only $27 million into the local economy.
That is despite the Government diverting $44.5 million of its spending into the cost of hosting the Asia-Pacific Economic Co-operation forum, which ends with next September's leaders' summit in Auckland.
The Infometrics figure - akin to the $29 million boost to the Vancouver economy when that city hosted Apec in 1997 - is more downbeat than other assessments trumpeted by the Government and related bodies. It is much lower, for example, than the $64 milllion that the Tourism Board initially predicted would go directly into the New Zealand economy.
Infometrics says hosting the leaders' summit could create the equivalent of around 600 temporary full-time jobs in Auckland. But many of those "jobs" could simply turn out to be overtime paid to existing hotel and restaurant staff working longer hours to look after the roughly 7000 delegates, media and security staff in Auckland for one frantic week.
The Infometrics study - done by Dr Adolf Stroombergen and released yesterday - was commissioned by the Ministry of Foreign Affairs' special Apec taskforce and the Tourism Board.
The net impact of hosting Apec is assessed as $27 million nationwide - a minimal increase in gross domestic product of around 0.027 per cent.
That largely comprises money foreign delegates and media will spend in New Zealand during and after the various Apec-associated meetings through the year.
Auckland benefits the most, however, because a large chunk of the $44.5 million the Government is forking out to host Apec is being spent on the leaders' summit in that city - money which in any other year would be spread across the country on other activities.
Consequently, Auckland gets a $30.5 million boost in economic activity. That means other regions will suffer a marginal cut in such activity, given the reallocation of Government spending. The Bay of Plenty, however, gets a small boost of less than $1 million as it will host an Apec officials' meeting in Rotorua in August.
The study punts that up to a quarter of the 10,000 people coming for Apec-associated meetings during 1999 will stay on for an extra week for a holiday or for tourist-related promotions.
The report complains there is a total lack of information about the likely extent of traffic disruption and congestion which may occur in Auckland during the leaders' meeting.
The report also expects some businesses in central Auckland to suffer a decline in trade, and also warns that the large number of delegates visiting Auckland (occupying some 7000 hotel rooms for up to a week) may deter other tourists from visiting Auckland over that period.
About 30 per cent of the temporary jobs will be created in restaurants, hotels, tour companies and sightseeing attractions with a further 45 per cent employed by industries that supply the tourism industry.
But the report cautions that some firms may be able to accommodate an increase in demand without taking on more staff.