Economic and foreign policy issues facing New Zealand: some reflections: Gerald McGhie responds to the report of a recent NZIIA conference.

• Position: COMMENT - Conference news

The conference report, 'The Major Economic and Foreign Policy Issues Facing New Zealand, 2012-2017', in the May-June 2012 issue (vol 37, no 3) provides a valuable oversight of major economic and foreign policy issues facing New Zealand over the next five years. In the same issue Terence O'Brien's discussion of the complexities of international relations and New Zealand's responses to them is also relevant. The following comments provide some additional markers.

A summary comment of conference concerns must necessarily be limited in scope. But there is little doubt that for New Zealand 'global commons', trading partnerships, technology, overshoot, paradigm conflict, climate change and illegal fishing are issues that will remain high on the agenda. The role of economic diplomacy and strategic partnering will also remain preoccupations while increasing concerns over security issues and the environment will continue to exercise policy-makers.

That the world is a complicated place and getting more so is a given. Adapting to the changing situation, as New Zealand must, will remain a constant as we now learn to live with uncertainty--both within New Zealand and without. Policymaking will continue to involve ministers and officials, but, as foreign policy becomes increasingly intertwined with domestic issues, a wide range of effective community based networks will demand to be not only heard but also listened to and provided for.

My point of departure relates to the future of globalisation and how it relates to the future of the liberal democratic tradition. Globalisation is now an accepted part of international trade and finance. But rising inter-dependence, the growing mobility of labour, environmental degradation, unemployment (as major production resources move off-shore), and the substantial increase in inequality of income and wealth, particularly in the United States but also elsewhere in the Western world, are being met with a potentially explosive mix of resignation and growing resistance.

Past crises suggest that liberal democratic states, and the post-Second World War international order they promoted, are well equipped to grapple with economic and social problems. But Azar Gat asks whether the broadly liberal order is as secure as we assume. Until now a strong school of thought has seen liberal values as an inevitable, universal product of industrialisation and greater affluence. But Gat asks whether this particular set of values has been decisively shaped not so much by an inevitable process as by the overwhelming political, economic and cultural liberal hegemony of the United States and Europe. (1)

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Testing developments

Two major developments test this view: the current serious malaise in international financial institutions, and China's emergence as an important international player. We can also add the rise of militant Islam.

For a number of states, non-democratic capitalist China's package is attractive. Beijing offers not only a policy of 'non-interference' in the affairs of other states but also support for state sovereignty, group values and ideological pluralism within the international system.

There is resentment in non-Western societies at being lectured to by the West on the need to justify themselves according to the standards of a liberal morality. These standards essentially advocate individualism to societies that value community as a greater good. Nevertheless, compared to historical precedent, the global liberal order is in many ways benign and seeks as wide a membership as possible to produce wealthier nations.

The tensions have generated a lively debate. Two important commentators, Daniel Deudney and John Ikenberry, suggest that China's admission to the institutions of the liberal international order, established after the Second World War and during the Cold War, will oblige Beijing to transform and conform to that order. (2) Azar Gat is not so sure. He sees large players as unlikely to accept the existing order as it is, and their entrance into the system is as likely to change it as to change them. (3)

New Zealand will not and cannot be a major participant in this debate, but, to adapt a comment of Lee Kwan Yew, when elephants scrap a great deal of grass gets flattened. Shifts in the international tectonic plates will have an important effect on New Zealand's trade and foreign policy relations. In our immediate area the United States remains wary...