OPINION: I was in Hawke’s Bay the night the cyclone hit. No-one
slept.
Daylight
revealed no electricity, wi-fi, cellphone towers, even water. The stuff we rely
on to live our lives.
We’ve
known for years that the road to Gisborne needs upgrading. Flooding was a risk.
Storm pipes were too old. Power cables needed to move underground to protect
against the next storm.
This web
of pipes and cables is much the same as it was 50 years ago. Like the old ships
we send across the Cook Strait, still breaking down like it’s 1968.
As I
write this, the traffic into Wellington is at a standstill. Trains aren’t
running. It’s only raining.
We’re not
just falling behind in infrastructure. We are falling behind in the politics of
sorting it out. The world is changing around us, and we’re not keeping up.
Elsewhere,
governments are putting more emphasis on making things work, less on making
things at the lowest cost.
There’s a
greater focus on resilience in most of the countries we do business with.
China did belt and road. President Biden
announced major investment in ‘infrastructure’. He wants
private providers to invest, provoking a race between the US and Europe to hand
out the biggest subsidies to attract investment
into development.
It’s easy
to see storms when they hit. Harder to see epochal shifts when they are
underway, but the world is in the middle of one, and New Zealand is still
playing the old tunes.
A bipolar
world, with China in one corner, the US in the other, has us straddling both as
they move further apart.
Globalisation
is in retreat, bilateral and regional trade deals are on the rise.
Economics
and trade are no longer decoupled from domestic politics or values.
There’s
less appetite to trade with the bad guys.
There’s a
turn to protecting your own manufacturing. That’s why Joe Biden argues that buying stuff closer
to home reduces risk and creates local jobs.
He knows
that people expect growth to deliver jobs where they live, or what’s the point?
Free markets didn't lift all boats. Some sank. No-one in any town anywhere
said: “Well, I lost my job, but at least aggregate incomes have gone up.
”The US
is creating a domestic economy that makes its own semiconductors and food, and
buys stuff only when it needs to, and preferably from its friends.
US
Treasury Secretary Janet Yellen calls it 'friend-shoring'. It’s about “bringing
together partners” committed to “a set of core values and principles”.
On the
face of it, none of this is good for New Zealand. We make our living selling
milk and wood to some people who are not good friends.
We have
been systematically deconstructing our manufacturing base and replacing it with
low-wage ‘tourism’ jobs making lattes and beds. Of our remaining heavy
industries: steel, timber, paper, aluminium, methanol, fertiliser - all could
follow the Marsden Point refinery and Norse Skog paper plant out the door in
the next decade, taking well-paid skilled jobs in regional communities.
We can't
even make our own beer since our CO2 production was slashed when the
refinery closed.
The age
of globalisation is over. We have spent the higher incomes that came with it on
paying more for houses instead of on the power, pipes and services we needed.
As we
rebuild after this cyclone, we have to be better prepared for all the ‘storms’
heading our way.
That
means a muscular industrial plan to build better roads, power stations and
communications networks.
Stop
thinking in terms of ‘cycleways versus roads’. Look instead to resilient whole
communities, in which cycles, cars, ferries and buses all keep working when it
rains.
The rest
of the world is going local. We need to plan for 'place-based' economics too, where good
jobs happen where people live.
A new era
of protectionism is scary for us. But it’s a wake-up call to look at our own
manufacturing.
China,
Germany and Japan have shown that promoting manufacturing leads to more
knowledge-based innovation, R&D, skills and training.
Our
future wealth needs to come from being stronger, instead of cheaper.
We need
to do our own ‘friend-shoring’.
Our
existing major partners, Australia, China, the UK and the US are heading slowly
in other directions where our role is difficult. We should look to Pacific
friends Japan, South Korea, Singapore and Canada. They are like-minded
countries that play by the rules and, like us, have no interest in taking sides
in a superpower rivalry between the US and China. We should draw closer to
them.
The
climate is changing. Political and economic winds are threatening. Our
resilience is being tested, and found wanting.
Around
the world, the focus is turning back to people and the strength of the things
we rely on in a storm, from pipes to neighbours. It’s time for us to catch up.
