Opinion: Economic Debate - Formative Not Robust
Business Think Tank 4.2.00.
Economic Debate Formative - but not yet Robust
By Howard Scott
I was pleased to see further economic debate in the NZ Herald today but have concluded that it isn't deep or robust enough to start seeking INTEGRATED solutions to the lethargy of the NZ economy.
Whilst Rod Oram correctly identifies that NZ is not part of the New Economy (NZ Herald 4.2.00. - page C 1) Ralph Norris (NZ Herald 4.2.00. - page C 2) does not give me the impression that he (or the Round Table) fully understand the micro economic linkages between fundamental facits of our economy.
To clearly make these linkages in my mind - I find it useful - to distinguish five economies in NZ. These are: the primary economy, the domestic economy, the import economy, the export economy and the new economy.
Unfortunately these five economies are not currently within the same "cycle" and in my opinion - when overviewed - are dysfunctional.
These five economies need to be co-ordinated through "harmonious" - micro economic policy, a sensitive Reserve Bank approach to macro economic policy and innovative competitive economic policy advanced through the Minister of Finance.
In this way the five NZ economies can be brought into one integrated cycle and shed their dysfunctional dis-equilibrium.
In my opinion, to achieve a new functional integration - of the NZ economy - there needs to be greater discussion and debate across the five economies by members of the five economies - so that a greater understanding of the micro economic policy linkages across all five economies - can be developed
For NZ to be internationally successful and competitive all five economies must FUNCTIONAL - this means in practice - that they must be innovative, profitable and robust - and not working at cross purposes - as at present.
The extent to which INTEGRATION is successful can be quickly confirmed by the Current Account Deficit/Surplus.