Middle East Banker advises focus on agriculture & leaving energy to oil nations
Meguerditch Bouldokian is the Middle East’s leading eye on New Zealand. He has some surprising answers to our five questions:-
There is now this intense wariness, suspicion about China. Australia has torn up for example its Belt and Road trade deal with China. How much of this do you attribute to Covid?
Australia is facing many problems at present due to COVID-19, and due also to the value of its exports to China which doubled from AU$ 75 billion to AU$ 150 billion in the past 5 years (2015-2020).
There is Australia’s position on a number of strategic issues including insisting that the World Health Organisation conduct a proper inquiry into the origins of COVID- 19. Then you have its criticism of China’s actions in Hong Kong. These have clouded its relationship with China and triggered a growing list of export restrictions in return. China asserts that Australia is dumping and generally subsidizing many of its exports. So there are these tariffs on wine, barley and all the other disputes in trade relations including non-tariff obstacles such as China insisting ironically on hygiene, pest and health certificates.
We now find Australia concerned too about its future relationship with the World Trade Organisation in resolving trade disputes with neighbours, although its record with WTO has been more wins than losses.
It has problems too incidentally with New Zealand in using biosafety measures to keep NZ apples out of their market. Compliance with the rules of WTO must not be undermined if it has to benefit from globalization and not accumulating souring relationships with WTO partners.
New Zealand has banned oil exploration and will turn off its natural gas to comply with United Nations targets. This must be good news for the Middle East?
Consider this. If this sector is allowed to grow unrestrained then it will take investment away from other areas of your economy. I refer to the other industries and agriculture, which make 58% - 65% of the GDP and 70% of exports earnings. NZ growth rate is 2.8% compared to Canada 1.9% and Australia 2.2%. New Zealand is routinely cited to be the fifth richest country in the world.
Oil and gas explorer countries have not developed their other economic sectors like yours. I do not say these other countries have a poorly developed and non-diversified economic sector. But NZ has better alternatives from other export revenues beyond oil and gas in the short run.
Regarding the issue of banning New Zealand’s oil exploration and turning off natural gas to comply with UN targets this might be good news for not only for the Middle Eastern Gulf states, but also Russia, Azerbaijan and other natural gas producers worldwide.
In my opinion, this is a good measure for the benefit of New Zealand in the medium and long run because the unforeseen benefit is the way in which investment which might otherwise have gone into trying to compete with these oil and gas producers will now be diverted into premium sectors in which New Zealand is much more competitive.
Still, we are left with the fact that countries such as New Zealand and Australia have their exports dangerously weighted on China. Is there any alternative?
Both countries must initiate and search for new alternatives, while keeping a neutral balance between its Eastern
neighbours and Western alliances. What is short in China and Russia is Western style education in economics finance, banking and social sciences. Exports to China from NZ, was USD 17 billion in 2020 while Australia came second, Japan third, USA fourth, and the Republic of Korea fifth.
It is much the same with Australia. Interrelationships and interconnections can improve the future general relationships of NZ and Australia with China in the long run. China is a neighbour after all. The issue of alternatives is a long term one which needs a thorough study of the economic and financial sectors among the three countries in question. Interestingly this is one area in which my advisory group is routinely asked to evaluate and report on.
We recently saw New Zealand’s dairy cooperative take a large shareholding in a Chinese dairy company and lose the investment. Is bank exchange protocol the only way to deal securely with China?
Yes, a bank exchange protocol is a better way to deal securely with China. The three countries we are discussing are members of ICC (International Chamber of Commerce, in Paris). It has its Arbitration Department which solves any issue of its members including the case you have described. I am a member of ICC Paris Financial Crime Risk & Policy Group and I would be delighted to help if this kind of problem recurs. There is usually room for arbitration, at some point.
Which nation frightens you the most: Russia or China?
Neither. Each country has its problems to resolve. China has apparently the internal issues of Hong Kong, the Uighurs and Taiwan. Then external issues of its defence, space technology, and an opaque position of its human rights most recently with Philippines, which advises China to mind its own business over maritime exercises. China’s expansionist adventure in African countries is over-stretching its forces as it seeks raw materials, especially coal, iron ore and oil derivatives.
Also there remains its Belt and Road trade plan, which requires immense resources for it to be successful in the long run.
As to Russia, it has its internal and external problems notably in the CIS countries. The former communist countries are being aroused for the Moslem religion. This is and with ever increasing intensity being enflamed by Turkey and the Moslem states in the Gulf.
Then there is the internal opposition against president Putin in Chechenia along with the continuing Ukrainian imbroglio over Crimea. Externally there is Russia’s and Japan’s complicated relationship over Kuril Islands near Kamchatka and also Russia’s strained relationships with Europe and the US Administration.
Underpinning all this is that its economic position has not been developed like the China’s. During the past 30 years China’s economic performance averaged a yearly 8% growth rate, while Russia, after the fall of communism in 1990 had nothing to match economic progress like China under Deng Xiaoping.
Gorbachev’s reforms plans of Perestroika and Glasnost came late. Brejnev was too dogmatic and there was a failure to emulate or even observe the Chinese reform plans of Deng Xiaoping.
New Zealand South Seas Switzerland revisited role needs selective electronic niche selling
A global specialist in niche marketing has described focused selling as the most overlooked area in New Zealand climate preparedness. Mathew Collins said that with the era of bulk commodity exporting fading now looming in its place is a new epoch of selective, high process and high value product selling.
This new specialised premium era of exporting is imminent as a direct result of the New Zealand government’s determination to include food production restrictions in a rigidly-enforced regime of conformity to international climate change standards.
Mathew Collins founder of DigitalXMarketing said that in New Zealand he was surprised to find climate change enforcement the centrepiece of political and academic conversation and conducted as if New Zealand was a service economy instead of a primary one.
Why was there so little planning of the marketing techniques required to make up the difference for lost revenues? He asked
The topic he discovered was instead treated as one of ethical righteousness rather than as a three-dimensional commercial threat reality. The commercial priority now was to set in place alternatives to lost revenues through the reduced pastoral grazing capacity.
Mr Collins said he had gathered an “unsettling” impression that planning for the era of regulated climate change and thus lost productivity was what he described as “faith-based.”
This “other worldly” treatment of the nation’s self-imposed export income shrinkage contrasted with the last era in which New Zealand had faced a seismic scale shift in its export pattern when Britain announced it was joining the EU.
Confronted with the EU, he said, in this externally-imposed export shift in contrast New Zealand officials had “grasped the nettle.”
Planners then had adopted the notion of New Zealand becoming the “Switzerland of the South Pacific” in gearing the nation to use premium niche marketing to “get more from less.” In the event the nation had discovered alternative markets for bulk exports in the Middle East and Far East.
Farmers, according to Mr Collins, sought collectively to soothe themselves by believing that climate impediments and restrictions on output in the form of stock number reductions were in the category of “it can’t happen here.”
Agriculture in this ostrich-like attitude he said had collectively absorbed an impression from the oil and gas industries.
There was though a big difference in that the oil and gas sector was international and could cap its wells, tow away its rigs, re-deploy staff, and simply re-assemble somewhere else.
Farming though was tied to the land by its very definition. Therefore for farming there was no escape from the productivity restrictions imposed in the name of climate.
Discussing the replacement of grazing pasture by pine trees Mr Collins said that there would here also be a need for digitally-driven niche marketing for timber products and thus training which should be started now.
Timber exports in order to compensate for lost pastoral income also needed to be streamlined with a digitally-driven emphasis on by-products.
He cited pharmaceuticals, cosmetics, disinfectant and cleaning products, along with hospital-grade disposables such as latex gloves as among the standard by-products of the pine tree.
Pine by-products should be a much-evaluated response to the loss of jobs caused by the “officially-desired” closure of the coal and oil and gas sector.
Ignoring this timber output diversity opportunity is another example of the failure to face the reality of the climate movement, insisted Mr Collins pictured (above) at a conference in Dubai.
Emirates is gearing up to launch the world’s first “biometric path” which will offer its customers a smooth and truly seamless airport journey at the airline’s hub in Dubai International airport.
World-first verification framework takes premium Māori products to the Chinese market.
A “game-changing” new partnership between Victoria University of Wellington’s commercialisation arm, Viclink, and New Zealand financial services company Booster will see Booster invest at least $10 million in businesses spun out of the University’s world-leading research.
Fare Updates For Week Ending Saturday 01 September 2018 shown in red
Emirates is celebrating 10 years of A380 operations. Since its first flight to New York from Dubai on 1 August 2008, the Emirates A380 has carried more than 105 million passengers, 10.2 million of them being those travelling to and from New Zealand which is the second highest passenger destination for the A380.
Updates for Week Ending Saturday 01 September2018 shown in red
Your knees are touching the seat in front. The chicken pasta bake was, at best, unmemorable and the chance of a decent night's sleep seems remote.
Air New Zealand has been awarded Best Premium Economy Class and Best Premium Economy Seat at the Skytrax World Airline Awards.