NZ an export economy? Yeah right

• Published date: 18 April 2024
• Publication title: Northern Advocate, The (Whangarei, New Zealand)

Even then, it seems we have a long way to go

In fact, New Zealand has the lowest export intensity of 24 OECD small countries (with populations smaller than 20 million), says the New Zealand Institute of Economic Research (NZIER) in a discussion paper called “Pathways to Prosperity: Capturing more of the value of our food and fibre sector exports for New Zealand”.

The paper, commissioned by the Helen Clark Foundation, said New Zealand’s goods and services export intensity — exports as a proportion of GDP — — in 2021 was 27 per cent, compared to the OCED small-country average of more than 60 per cent.

After a decade of major adverse domestic events, including earthquakes, the pandemic and severe weather issues, the public and private sectors had, out of necessity, focused their attention and resources domestically on recovery and building resilience, the paper outlined.

Now is the time to prepare and chart a course for increased exports as domestic demand begins to pick up in 2024, the paper suggests, recommending actions both sectors should take to lift export productivity in the food and fibre industries, which account for 80 per cent of New Zealand goods’ exports.

Improving the productivity of the food and fibre sectors was “crucial to New Zealand’s prosperity and standard of living”.

The paper noted research showing the portion of GDP from exports today is essentially at the same level and composition as in the 1980s.

It acknowledged in comparisons between New Zealand and other OECD small economies, there was a fundamental difference: most of those were in Europe and well-integrated in the EU’s single market. New Zealand was distant from key markets which posed significant barriers.

“We can participate in global value chains (GVC) by importing foreign inputs to add value to goods and services we then export (backward GVC participation), and also by exporting local goods and services to countries that use our exports as inputs to their goods and services exports (forward GVC participation).

“However, we rank at the bottom of the OECD small economies on participation in GVCs.

“Finding ways to improve participation in GVCs is critical to reaping the benefits from them,” the paper said.

The paper’s recommendations for the food and fibre sectors and the Government include:

❏Food and fibre exporters should be supported to be “mini-multinationals”. Extracting more value from competitive export markets means companies, even small ones, have to do everything...