‘New Zealand keen to offer stakes in mineral resources to India’

Unassuming, intelligent and charming are the three words that could perfectly capture the persona of Bill English, the deputy prime minister of New Zealand. While geographically, his country is located at the bottom of the world, English takes pride in having top of the class infrastructure and a pleasant environment. But at the same time, he accepts that there are internal issues that the country could tide over only by extending its co-operation with countries such as India and China. With another six months to go before India and New Zealand sign a free trade agreement, English, who is also the finance minister of the country, talks about the areas where both the countries can co-operate and engage and the benefits that could accrue to both.

What has kept New Zealand so quiet about its expertise and prowess all these years?

Well, I think we probably have developed a much greater focus on India and now are in the process of negotiating a Free Trade Agreement (FTA). But traditionally, New Zealand had been fairly focussed on European markets because of long-term inter-cultural connections. But that has changed and now, we are moving pretty quickly to shift our focus towards faster growing markets, especially China and India.

What are the immediate and long-term benefits that both India and New Zealand can have from the proposed FTA?

We think that there are going to be tremendous long-term benefits for both the countries, but because we are very small and India is very big so the benefits would be more obvious to us than to India. But we are a developed food producing country and the processes and products we have in the food sector will be very valuable in India. This is because we have commercialised and developed several innovations in the food industry which India can largely benefit from.

Which are the other areas of co-operation that the FTA might look at? And which are the areas of expertise New Zealand can offer for India’s growth?

I think energy is certainly one sector where New Zealand can offer a lot as India is rapidly intensifying its energy usage. We have, though we are at a small scale, developed a great expertise around renewable energy and currently, over 70% of the country’s energy needs are met through renewables.In fact, we are going ahead with partial privatisation of the state-owned energy companies because we believe that they are in a strong position to take advantage of growth in energy consumption in emerging markets. We want to set those privatised companies free to go out, share and tap the potential globally.

Considering India’s needs of natural resources, business houses from the country are acquiring mining assets globally. Is New Zealand too open to such a model and ready to offer stakes in its assets?

New Zealand is, of course, open to that. We have a very solid exploration programme in oil and gas and are slowly building up our assets. We are also expanding our asset base in coal and the government is creating a positive environment for global investments in these sectors.

What are the opportunities that your government sees which could flow from India to New Zealand?

One of the most noteworthy things in India is a rapid spread and massive use of low-cost technology, which we have traditionally regarded as difficult and expensive. We would like to import those solutions, especially the way mobile and mobile banking has picked up in India for everybody. So, what we are going to do is as India’s growth momentum builds further, we will look at buying those solutions and innovations and apply here. I think the other thing is education. We are very impressed by the way India has developed mass institutional education so that there is a huge base of well-qualified skilled people and that we see in an increasing part of our migration pattern. And they are helping us understand what kind of educational achievements you need if New Zealand wants to maintain its position as a high income country. Besides these, information technology, engineering, consultancy and design are some of the places where India can come and invest. From an investor’s point of view, you have to look fairly clearly at New Zealand as it offers small but deep forms of expertise and unexpected opportunities.

Although there are advantages, India has several loopholes in terms of bureaucratic hassles and procedural delays... So, don’t you think these experiences could act as a deterrent for companies in New Zealand to enter India?

Oh yes, certainly. From what I read about India is that in spite of a growth in spending in the country, there is a traditional bureaucratic process, which is dampening growth and investments. There are a lot of columns and discussions which talk about how to clean up the system to make it more efficient and transparent. While there are problems, that doesn’t mean it will stop the progress but it does mean that we have to be realistic about what they can achieve in such a market. One has to be willing to invest quite a lot of time and reasonable amount of capital and patience to get those benefits we are targeting.

So, what is the fine-print the FTA is expected to have?

That I cannot tell you now, but if it happens in the same pattern as some of the other free trade agreements, we could see a doubling or even tripling of revenues in five to six years.

Both India and New Zealand are prominent members of the Commonwealth, but in today’s scenario, it has lost much of its relevance. Are there some plans among the Commonwealth nations to give it a facelift?

One of the advantages of Commonwealth is that we get to interact with countries with whom we are otherwise not attached to in terms of business partnerships or cultures. But the focus has always been on governance and bureaucracy and that is what Commonwealth will continue to focus on. Going forward, the Commonwealth will continue to struggle in front of the might of bigger and more active groups.

While what meets the eye in New Zealand is a picture of cleanliness, organisation of infrastructure and order in terms of rules and regulations, what are the issues internally which are a matter of concern?

I think internally and primarily, there are two issues - one is that of competitiveness. When you are a small and distant country, you have to be very competitive to keep pace with the growing world. We devote a lot of time to becoming that as we need to be very good at that. The other issue we deal internally has more to do with social quality. Although we are a developed country, we need to impart more quality education and bring up the income levels of the population here. At the same time, we believe that there is a huge scope to improve the quality of healthcare and these are the places where we can seek active Indian participation.

The 2008 global crisis had shaken the entire world, including India and China, and now there are chances that the world might witness what is called a double dip recession. What was its impact on New Zealand and what could be the fallout of it this time? Could it hurt the process of co-operation between India and New Zealand?

Well, we are impacted by any global cue and 2008 was no different. The economy contracted and we took measures to ensure the financial system’s stability. The government continued to support the economy by borrowing and spending. Now, we had to go through an adjustment to bring the government’s financials under control and work through the excesses that were built up during that time. It led to the creation of a housing bubble as too much of our resource went into non-tradable government sectors at the expense of exports and other competitive sectors. But now, we are in a much better position to deal with a crisis than we were three years ago especially because our trade is increasingly oriented towards the faster growing markets like China, Australia and India. And as these markets continue to grow, our engagement with these countries will continue to grow.

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