The idea of exceptionalism is ingrained in the Kiwi psyche, with some justification, given our small status. But there are holes in our armour, writes Eric Frykberg in Part I of the Listener’s Kiwi exceptionalism feature. Illustrations by Anthony Ellison.
Does New Zealand really punch above its weight? Do we really set a good example to people in bigger countries, when other small nations, such as Slovakia or Paraguay, go largely unnoticed?
The answer is “yes”, according to an iwi leader, and “probably”, judging by the economic record of many business enterprises. But the claim is probably untrue, according to a foreign policy expert, and is definitely false, according to an independent economist.
The theory of New Zealand exceptionalism rests on two arguments. One is that we produced people like Ernest Rutherford, Edmund Hillary, Bruce McLaren and Kiri Te Kanawa from a small population pool – smaller than many cities around the world. And this process has not stopped: we have continued to send our bright sparks to Ivy League universities, Hollywood, even to the White House.
The second argument is our record of significant actions on the world stage. For example, the first Labour government argued strenuously for the establishment of the United Nations, and the third Labour administration sent naval frigates into a French nuclear-testing zone. More specifically, we have had a way of signing free trade agreements ahead of some of our rivals, and we also gave women the vote before anyone else.
The phrase “punching above our weight” came up during the Clark and Key administrations, and is sometimes thrown around in general conversation. But it is spoken less often now, and has possibly become tired from overuse. And even if it has some truth, how useful is it when social problems have a way of going unfixed, year after year?
NZ has pockets of excellence in the way it engages with the outside world.
Hamish McDougall has been rolling his eyes for years at the repeated use of this boxing metaphor for New Zealand’s foreign policy. “I guess I have a little bit of scepticism regarding phrases that suggest national exceptionalism,” he says. “They can be used to romanticise particular initiatives in the past, which can perhaps be blown out of proportion or misremembered and distorted over time.”
McDougall is executive director of the New Zealand Institute of International Affairs, an NGO that fosters discussion on international issues. He says the apogee of exceptionalism – sending ships (first HMNZS Otago, then HMNZS Canterbury to replace it) to France’s Mururoa nuclear-testing ground in 1973 – was less dramatic than it seems.
“It obviously played very well for domestic opinion, but it was partly a response to the UK government, which had its own ships in the area and was not feeding information about nuclear explosions back to New Zealand. So it was an intelligence-seeking action, which is often held up as an example of an independent foreign policy.”
McDougall adds that New Zealand is remembered for the fight against apartheid in South Africa but spent previous decades in a cosy relationship with Pretoria, suggesting that if we were punching above our weight, it was sometimes in the wrong fight.
Despite these misgivings, McDougall says New Zealand is far from failing in foreign policy, and often works diligently and subtly to protect its interests without attracting attention.
“New Zealand has pockets of excellence in the way it engages with the outside world,” he says. “The current government works very hard at that, and the Foreign Affairs Minister gets 9 out of 10 for effort.
“It is a very long-held New Zealand foreign policy position to see multilateralism work … We like to have a rules-based system to protect small countries. There are also examples of keeping our heads down, such as during the first Trump presidency, when the government actually said very little. It was seen to be in New Zealand’s interest to not engage publicly, and I expect the current government will take a similar view.”
In other words, New Zealand does not really punch above its weight in foreign affairs, but has somehow found a way of staying upright in the ring for a succession of rounds.
Above and beyond
Where New Zealand does do better than average is in sport, where it excels at rugby, the billionaire’s hobby of America’s Cup yachting, and many disciplines in between: cricket, equestrian, cycling, rowing, canoeing, motor-racing, athletics, snow sports … But for most people, sporting excellence is all very well; what we need is an economy that works.
In some areas, our economy is a heavyweight champion. The country’s farmers supply nine times the local need for food and fibre, and the surplus goes overseas by the shipload. An example of how well this works: our farm products can be shipped 20,000km to Europe and compete with local produce. This is in spite of the tariff walls many countries erect to defend besieged locals against the onslaught of exports from the likes of New Zealand.
But there is more to our economy than commodity goods exported in bulk. In pockets across the country, smart people are doing clever things, selling interesting products to powerful clients in unexpected ways. The best-known example is Rocket Lab, whose founder, Peter Beck, applied his expertise in his own country and has subsequently sent more than 200 satellites into space from three launchpads, the main one in New Zealand. But Rocket Lab is not alone in its distinctive, somewhat idiosyncratic, progress. Kea Aerospace and Dawn Aerospace do groundbreaking research in the same field.
Other Kiwis are more down to earth but show equal levels of entrepreneurial flair and create jobs and investment returns in unexpected ways. They deal with products as diverse as whisky, games, anti-shoplifting software, recycled metals, anti-ageing therapeutics, gastrointestinal care, perfumes and supplements.
Examples abound. One is Seequent, which has developed 3D imaging for mining, geothermal prospecting and other uses, and grew from a university common room into a major company when it was bought by US-based infrastructure engineering software company Bentley Systems in 2021.
On a smaller scale, Julia Marshall set up a tidy business in Wellington, Gecko Press, acquiring the rights to children’s books from places such as Japan, Sweden and France and translating them for sale all over the world.
Kiwis have also created the lunch-box friendly Rockit miniature apples, waste-free packaging, globally-adopted fitness programmes and, of course, innovative boatbuilding.
Employer group BusinessNZ has annual awards for business enterprise and lobbies for policies to assist entrepreneurs. One proposal is to have more incentives for research and development, which, it says, lags so far behind the OECD average that, based on current progress, it will take almost a century to catch up. Another call is to have less bickering in Parliament and, instead, build bipartisan support for basic initiatives, as the Australians have done for infrastructure projects.
Powder-puff economy
With or without this sort of state reform, New Zealand’s commercial inventiveness still seems ubiquitous.
Even so, it does not add up to what it needs to, says economist Cameron Bagrie. His response to all this evidence of entrepreneurial flair is “yes, but” – and it’s a moderate “yes” and a very large “but”.
“There are some bright spots. You’ve got a selective group of success stories,” he says. “But all countries have their own selective success stories. If you look at the New Zealand economy in aggregate, productivity growth has been progressively slipping down the OECD rankings. I think it’s a bit of a stretch to say our economy punches above its weight, I think it’s probably the reverse.”
On agriculture, Bagrie notes the coalition government wants to double exports in the next 10 years, but says that is unlikely to happen because environmentally, there is not enough land available for any significant expansion of dairy.
“The environmental constraints on the agriculture sector are real. We will need to shift to other sectors, such as seafood and horticulture, and they will have to triple, not just double.
“If I look at economics in aggregate, there are two big deficiencies for New Zealand. Deficiency No 1 is productivity growth going from averaging 1.4% to averaging 0.2% over the last decade. Deficiency No 2 is New Zealand progressively slipping down the OECD rankings in regard to GDP per capita.”
A recurring theme of criticism alleges successive governments will have to take a lot of the blame if New Zealand’s claim to be a champion boxer unravels. According to this argument, governments focus persistently on the three-year election cycle in preference to long-term thinking (Read Paradise lost here).
One of this country’s few long-term projects, the New Zealand Super Fund – the investment fund designed to help meet future pension costs as our population ages – will meet only 19% of the total net cost by the mid 2070s.
And Treasury publication He Tirohanga Mokopuna forecasts state debt could quadruple in real terms by the 2060s, based on pension and healthcare costs alone. Paying the interest on this huge bill would leave New Zealanders with little financial armour to protect against climate change, another pandemic or the next big natural disaster.
Bagrie, meanwhile, lists other problems: poor infrastructure, pressure points on the health sector, a fraught energy sector and the previous government’s practice of “confetti economics – you know, just throw money around and hope that problems go away”.
Reconciliation process
But there is more to life than economics and one of them is the need for people to be self-aware – to look themselves in the mirror without flinching. And in this respect, New Zealand has performed well, says iwi leader Helmut Modlik.
“There are some things to be proud of in our history, but there were a lot of colonial injustices,” he says. “But from the 1970s on, we started a journey of truth and reconciliation, which turned into the treaty settlement process that was definitely world-leading.
“The world has looked at New Zealand, and I can say with confidence that in the past four decades, we were seen by the international community to be dealing with our colonial past and pursuing a truth and reconciliation process.”
Modlik, the chief executive of the governing body of lower North Island/top of the South iwi Ngāti Toa, says the consequence of colonial-era policies was impoverishment and marginalisation of Māori. This degenerated further in the 20th century into social disadvantage, urban ghettos, gangs, abuse in state care and disconnection from whānau and community.
“But one of the things about the Māori community is we are a fiercely independent people, individually and collectively. Even in our impoverished and marginalised state, we still got on with doing our best. If you throw into that mix the use of resources [from treaty settlements] to help a renewal of kinship, reclaiming of culture and language, and other social and economic opportunities, then we definitely have some world-class examples of what can be achieved when indigenous communities are empowered. In this instance, New Zealand is definitely punching above its weight; the evidence is compelling.”
It’s often argued that the country can’t really take the credit for outstandingly gifted individuals such as Hillary or McLaren – they were simply brilliant people who had to come from somewhere. Modlik thinks this argument is wrong – he says an expansive mentality is built into the New Zealand psyche.
“There isn’t anybody who came to New Zealand who didn’t have a higher-than-average propensity to take risks,” he says. “You just don’t sail a waka or a ship to the ends of the Earth if you aren’t genetically predisposed towards independence, towards having a go, towards risk-taking.
“Everybody who came to these far-flung shores – from the indigenous heroes of 1000 years ago to courageous colonials to the more recent settlers – everybody came here with a lust for life.
“We don’t hear it much any more, but we used to hear a lot about solving problems with No 8-wire thinking. It was a real thing: we got things done with what we had.”