Archive for category Globalisation

The empire sneaks back

I was watching Winnie Peters announcing from the London meeting of the Commonwealth Foreign Ministers that Britain was now keen to resurrect the glory of the British Empire by putting together a trade deal between we proud members of the Commonwealth of Nations.

Foreign Ministers of the Commonwealth

Pub quiz night: name the 52 members, outside Britain, of the Commonwealth of Nations. Did you get to 10? If so I think you are well above average. Did you get Lesotho, Tuvalu, St Kitts & Nevis, Belize, Malawi, or Swaziland? This Commonwealth has 19 African members, 7 Asian, 13 Caribbean & American, 3 European and 11 from the South Pacific.

The total GDP of these 53 nations is $US11 trillion which sounds impressive until you note that China on its own has $US12 trillion GDP and the USA has nearly $US20 trillion GDP. But if there is anything ‘common’ about them it is certainly not ‘wealth’.  The top 4 countries in the group (UK, India, Canada and Australia) account for 75% of the total group’s GDP. The top 11 (where New Zealand is #11) account for 95% of the whole group’s GDP. So 42 countries out of 53 (79%) bring in only 5% of the total group’s GDP. The Commonwealth includes the three poorest countries on the planet. In the same pub quiz, name them! Answer = Kirobati, Nauru and Tuvulu. Bet you didn’t know any of them.

This Commonwealth alliance that today has little practical reason for being, has also bugger all chance of ever being a trading bloc especially when you consider that Commonwealth members Canada, Australia, New Zealand, Singapore, Brunei and Malaysia already belong to TPP bloc; India and South Africa already belong to BRICS; Cyprus and Malta are in the EU and the African nations have their own trading blocs.

We, the Commonwealth of Nations, are the largely-abandoned urchins of the British Empire who were left to fend for ourselves after Lady Britannia decided to go back to her Eurochums’ social circuit after their two little WWs were all forgiven and forgotten. Yes we do meet up for family games every few years, and play a bit of cricket together which is jolly good fun, but thats as far as it goes. If we ever go to visit mother England we will stand and wait in the foreigners’ queue while the Germans are welcomed through lovers’ lane.

But now there are spats in the Euro love nest, mainly about Angela the Hun letting riffraff in through the back door (not intended as a euphemism, but with Germans who knows? Out of the mouths of the innocents…..). But Britain is committed to leaving the European Union and so, whatever eventually happens with Brexit negotiations, Britain will be short of a few quid for a while and that is likely to make the rabble a bit restless and looking to bring back the guillotines. And like many an absent parent finding themselves hung over, short of a few quid and debt collectors knocking, she turns to the forgotten family and reminds them that we are still family. So last week the Queen called a meeting of all the heads of their global families, perfectly timed right after the fun of the family games in Australia and immediately before her grand birthday party to which they had all been invited. She told them that she thought that we, as the family of the British Empire, might like to setup some sort of a trade thingy between us and, since she was getting a bit wobbly on her pins, perhaps we should put Charles in charge of it all. Did she really mean all 53 members of the Commonwealth? That would be an enormously daunting prospect for a trade deal, particularly given the disparity in populations, locations, cultures and economies. The EU only has 28 members and our Trans Pacific Partnership has twelve members. Is Charles the man with the experience and charisma to pull together the biggest trading bloc on earth? Especially given the disparity that 79% of the members only account for 5% of the wealth.

But perhaps I am being cynical? Maybe its not all about the size of your GDP. One thing Charles would bring to the leadership of any trade alliance would be a focus on ecological sustainability. You have to admit he was all over this ecological crisis way back when we could still swim in our rivers and drink tap water. And he has approached the challenges in a far more practical way than all the attention-seekers floating around in little boats with banners. Since buying Highgrove, a 15-acre estate, in 1980, the Prince has personally overseen its transformation from pasture land to what is now regarded as one of the most important gardens in the UK. His rejection of chemical pesticides and promotion of species once considered weeds attracted criticism in the 1980s long before the boom in organic gardening. His estate even includes an innovative sewage treatment system, using only reed beds to cleanse waste water from the house. The reed-bed waste system is an artificial wetland that converts sewage back to clean water, while allowing the solid matter to be returned to the soil in the form of manure. He has even built a biogas plant in Dorset to supply gas from food waste to 56,000 homes.

Is the Prince of Wales now girthed, girded and ready to lead the CommonWealth, re-named as the CommonHealth of Nations, in a global eco-war reminiscent of the Crusades? Fifty three disparate nations united under the banner of King Charles the greenheart, re-inventing trade within the commonwealth with a war cry of ‘sustainability before profit’. Is this the Royal intent?

I would love to think so, but I am quite sure the tragic reality is that Britain really does think they can resurrect the old bones of their 19th century trade Empire, or at least the ten biggest of us, and have us committed to all buying British solely to help balance their books after Brexit. In the words of Daryll Kerrigan, Australia’s only philosopher, “tell ’em they’re dreamin’.”

 

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A bad haircut day

Yesterday was haircut day. A brief time to settle back for a pleasant natter with my hair-cutter. The parking meter outside was out-of-order so I was hoping not to be too long at the hair cutter to avoid a parking ticket.

As luck would have it, no-one was in any of the four chairs on this mid morning, so this shouldn’t take too long as long as my hair cutter didn’t natter on too long. But the natter was far from what I would normally expect in a men’s barber shop. One of the other hair-cutters (female) was trying on and modelling some pants for the other staff that she had bought online. The pants were bottle green instead of the black she thought she was getting, the waist fitted a bit funny and the length wouldn’t look so bad if she had different heels on, but otherwise an exciting and successful online shopping mission was completed.

“So how are the shops doing around here?” I enquired. “Oh its terrible,” I was told, “so many have closed down all up and along the street.”

” Mmmm so I suppose fewer people coming in to their hair cut then?” I speculated. Went straight over her head as three of them looked on while the fourth was tending to me, their sole customer and one other bloke who popped in for some tobacco that they didn’t have in stock (would have to get the boss to order more). Anyway, sensing my opinion on the subject, my hair-cutter assured me that she preferred going to the shops because she was too short and wide to shop online. But there won’t be any shops left to attend to your short, wide needs I thought. At least I hope I only thought, these days I have a tendency to think aloud without realising it.

Credit D. Lloyd photographer 1976

Credit D. Lloyd photographer 1976

I recalled a few days ago noting the name “Johnson’s” still visible at the top of a building in George St and starting to recall what businesses were actually along the main street when I wore a younger man’s clothes. Johnson’s was a fish shop. A good one too, nowhere near as good as the Best Cafe in Stuart Street, maybe not even as good as Fresh Freddy’s in St Andrew Street, but certainly in the top 3 or 4. And as we went along we remembered Wing On Fruiterers, Eskrick’s butcher shop, Queen Anne pastry shop, Pacific Fruit Supply and on and on we could have gone. George Street was just like an old European market. Now their windows either promote boutique fashion stores, Australian Banks, the fine purveyors of credit and debt rather than meat, fruit, fish or pastries, or Colliers’ For Lease signs. Who could have imagined such a retail landscape change back in the heady, hippy days of the sixties and early seventies.

But now they are all gone as the ‘think-big’ eighties dawned and we all bought into the convenience and excitement of the supermarket. The independents collapsed and the supermarkets grew. Now in a blind taste test the only way that I could differentiate between beef and lamb is by the flavour of the sauce normally used with either. The meat itself could be anything; it is water-logged, preservative-polluted, indeterminate flesh. I have a lot more salads these days and it is nothing to do with moral vegetarianism.

And now we are watching the rapid closure of the boutique fashion stores because we prefer to shop online at the global supermarkets based in China or Bangladesh. So exciting, so much more convenient. So what? just a few shops. But when the shopping for every conceivable product goes off shore to the global online super-shops, so does the manufacturing.

In the same time that I recalled the shops that once lined the main street, I also recalled the things we used to make and do here. I recall the number of printers we had in Dunedin in recent times, before it became more exciting and more convenient to get printing done in Hong Kong. Now we don’t need so much printing because we no longer have any printers working here to buy things off other manufacturers. They used to print brochures for businesses like furniture manufacturers. But furniture can now be imported online from Indonesia in flat pack, much more convenient and cheaper. Where have all the furniture makers gone? long time pahassing..?

In Dunedin we used to make Fisher and Paykel appliances, now made in Mexico. We used to make soap! McLeod’s soap; we used to make electric heaters, Zephyr heaters in Kaikorai Valley. We used to make mattresses at Arthur Ellis, we used to make trains in Hillside Workshops. We made biscuits when Cadbury still had the Hudson name on its letterhead. We made woollen yarn and blankets at the Roslyn and Mosgiel woollen mills; Ross & Glendining, Hallensteins and Sew Hoys manufactured clothing; Methvens made taps and all sorts of plumbing equipment, McSkimmings made bricks and pipes at Abbotsford;  engineers were everywhere making all sorts of products. And on and on it went.

I was in the advertising agency business back in the 70’s. Princes St was our Madison Avenue. Not the Mad Men, we were the Princes of Advertising. (You thought the street name was Princess? you were wrong!). Our agency was only one of four national ad agencies with an office in Dunedin: Ilotts, Inglis Wright, Charles Haines and Dormer Beck who were all busy little beavers selling Dunedin made products around the country. We all organised photography, brochures and advertising campaigns for a vast selection of Dunedin businesses. That is how much productive business that Dunedin had back in the 60’s, 70’s and 80’s. Now there are no national ad agencies in Dunedin, they followed the yellow brick road.

Collectively over one or two short decades, we all bought into buying at the big overseas supermarket, we went global. We travelled a lot more. We made overseas contacts. We imported. We have absolutely destroyed the economy of a great little city (and country). Now the most creative business in Dunedin is the Australian banking industry. They create credit and false hope. Where once money issued had to be linked to the value of gold stored by the government, now money has no foundation other than the will over governments to keep putting more numbers onto more digital accounts so perpetuate an illusion of wealth in the hope that they will survive another term in government. The truth will lose an election, the people only vote for hope. Our individual and communal debt builds and, in reality, the Australian banks own Dunedin. And they bought it cheaply as they gave us all the credit we wanted to buy whatever we wanted from the global supermarkets rather than keep on making it ourselves. Our Scottish forefathers would weep into their Wilson’s.

Screen Shot 2016-03-17 at 12.28.30 PMWhere once, not very long ago, if NZ Rail wanted a train carriage they came down and talked to the people at our Hillside workshops, today they can order one cheaper on the AliBaba website.

Today Dunedin essentially is a University town and that is probably successful because the University operate quite independently of Dunedin City Council and has the managerial talent to run a very smart business. But they have also setup Otago University branches in Auckland and Wellington and no doubt are embracing online technology as well to sell their education. So don’t bank on the Dunedin campus growing. The Dunedin campus experience is probably more to do with the well publicised, willingly tolerated, party culture  that students can experience in Dunedin.

While all these nostalgic thoughts were running through my mind and I was wondering what job prospects faced our young people I passed this scene.  graffitiThree able-bodied men spending the best part of a morning painting out the illegible social protests of someone with a spray can. I wondered whether one of these men was formerly a skilled wood-turner in a furniture factory? or could one have machine-lathed steel parts for a train carriage? Could one have once been a skilled brick-maker? Who knows? But if so and if they wanted to continue to ply their skilled trades, they would have needed to have moved to Asia. Nothing here in Dunedin but a paint-brush a hi-viz vest and $15 an hour less tax to spend on the cheapest goods the internet can provide. And successive governments at both local and national level have let it happen, even encouraged it, as they went on trade mission junket after trade mission junket and were wined and dined around the globe. Sister cities, trading partners. Our politicians have been babes in the wood. Today we no longer have the resources or skills to actually make the basic products upon which we depend for our survival. One well-directed solar flare, from the hundreds that are emitted annually, and our satellites will be fried, along with our ability to dial-up the internet or even make a phone call.

That haircut really ruined my day. If I want to invest in any business for the future, I think it would be the “Hunting and Fishing” retail franchise. After a single generation experiment in global trading and subsequent loss of our skills of manufacture of the products required to sustain our civilisation, I think the farmer and hunter gatherer may again find a vital role in our Kiwi society. Meantime, if you want to save what little economy you have left in your community, whenever you have a choice you must buy locally made and sold. It might cost a little more but at least they won’t be bottle green and they might fit better. Throw a local manufacturer / supplier under the global supermarket bus and you are throwing another chair on the fire.

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Its Thursday-its TPPA day

The Trans-Pacific Partnership Agreement! Is it the right Key to the wrong door? Who knows? The main ‘talk-back’ argument against signing up to it seems to be that ‘we just don’t know all the details of it.’ Actually I think all the details and implications would be well over the heads of any of those I heard on talk-back or saw on TV. Are they expecting to get a referendum on it? I would not expect to be making such an agreement a public vote because we elect our representatives to employ the best qualified specialists to make such decisions for us. This is not a subject for a referendum. The worst possible scenario, in my mind, is a referendum in which the opinions of perhaps 50 of the country’s best minds on such a complex agreement would be out-voted by perhaps 50% of the 50,000 or even 500,000 of our citizens who have a legal vote but in whom you and I would not trust to make a strategic decision about a local Four Square store let alone our national economy. Because the silent majority would possibly, and quite reasonably, not vote, rationalising that they do not have the necessary skills to assess the best decision. So in a referendum the noisy minority who protest everything just because protesting is what they do, would make the decision for the rest of us. Such a process is the fast track to 3rd world status.

The protesters have come out in droves. The Greens were always going to oppose it. Opposing the establishment is just what they do, without any rationalisation. Labour have also decided to oppose it, despite the fact that it was Labour who initially introduced New Zealand into the process and were very energetic pushing us through the negotiations during their years of Government and even afterwards. It must be remembered that the TPPA came out of a much smaller arrangement that did not include the USA or Australia. The Trans-Pacific Strategic Economic Partnership Agreement was signed between Singapore, New Zealand, Chile and Brunei back in 2005 when Labour were in power. From 2008 other countries showed interest in the Agreement culminating in a total of 12 countries, representing a third of the global GDP, signing the agreement adding USA, Canada, Mexico, Peru, Japan, Vietnam, Malaysia and Australia to the original partners. Actually you have to say that is an impressive outcome for the relatively small-economy group of original partners.

Through this TPPA New Zealand is trying to become expand our markets for milk powder and other dairy products of butter and cheese as well as our beef and lamb and a pleasant bottle of wine to wash it all down. Nothing new about that; nothing to be concerned about. It was how our economy was established with Britain being our sole markets. But since Britain joined the Euro club and shut us out, we have had to seek out new markets and this TPP Agreement is simply an extension of that process. Yes we make concessions about what is in it for our partners as well as ourselves and what rights and obligations we all have as partners, but negotiating that is for intellects much sharper and better informed than mine. On this history alone, I would support the TPPA, because I just do not have the ability to predict the economic outcome of such a complex agreement. But I would also concede that I should not even have a vote if the best I can offer is an analysis of the history of the agreement. So the government today made the decision to sign and acted on that. I support that as all done and dusted now, as long as the USA Congress ratifies it.

But if the USA Congress do not ratify the agreement, then is it all bets off and back to the drawing board? A few years ago we would have thought that this would be a USA Congressional rubber stamp job for a country which saw itself as the messiah for open borders and free trade. But today, this is no longer an assumption we can make. Decades of embarrassing and expensive military campaigns with a major personal impact on many families before and after the 9/11 embarrassment has resulted in a USA that is far less confident. They are quickly becoming more and more the paranoid police state that we used to associate with Mao Tse Dong and Soviet communism.

So what happens if TPPA all falls through the USA Congressional floor. What do we do then? Take the USA out of it and we take half of the GDP value out of the Agreement, which is relevant. The TPP group is then about 15% of the global GDP, the equivalent of USA or China or the European Union. So the TPP would still be a significant partnership. With the USA out of it I wonder if the protesters will still protest so vehemently? No other partner in the could be accused of global domination ambitions. But if the protesters still want us out of the agreement with the ten signatories other than the USA, then we can only presume their vision for New Zealand economy is that we are just one of the village craft and produce markets of the world, complete with tie-dyed T-shirts, coloured sunbeam-catchers and buskers. Perhaps an idyllic life-style, but we would have to give up a lot of the luxuries in life that many have now assumed to be necessities. The surplus from our village-market economy would not generate too much in the way of overseas funds necessary to buy the things we cannot make. Still, if that is the way the majority want us to go, then c’est la vie. That is democracy. I will send them a postcard from my new home in Australia.

 

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