Michael Cullen Speech To EAOSEF Conference
Thursday 27 April
27 April 2000
Hon Dr Cullen
Minister of Finance
Minister of Revenue
Ladies and Gentlemen
It is my pleasure, on behalf of the Government of New Zealand, to welcome you today. The fact that this opening is being held within the precincts of Parliament is testimony to the importance we place upon it.
This year is the first time the East Asian and Oceanian Stock Exchanges Federation has met in New Zealand and I would particularly like to offer a warm welcome to new delegates attending the conference for the first time.
You meet at an important time for the development of the Asia Pacific region. It is an important time also for the examination of the nature and work of the international financial and equities markets and, even more, for the process of international co-operation and economic integration.
Recently I had the pleasure of representing New Zealand in Hong Kong and Tokyo. The briefings I received confirmed the general picture that the Asian economies in general are in a state of recovery from the crisis of 1998. The recovery, indeed, seems to be both earlier and stronger that had originally been predicted. The recovery of the Asian economies is an expression of the resilience of its peoples and their determination to succeed.
For us in New Zealand that is good news. The Asian markets are of crucial importance to us and will continue to be so.
We have set ourselves an economic challenge to stimulate world class innovation and skills-development capable of sustaining New Zealand as a leading knowledge based economy.
To achieve that goal we need foreign investment. New Zealand is already an attractive investment destination. We have an educated and computer literate population, a stable political system, a sophisticated infrastructure, low energy costs and our public institutions are remarkably free of corruption.
This is a good time to invest in New Zealand. The economy is going through a growth surge and our export sector is looking forward to a bright year.
So much for the New Zealand scenario. With respect to international financial markets, we want to see a sensible and balanced approach to international rule making.
The fact that the recovery from the Asian crisis of 1998 has been faster than anticipated should not blind us to the reality that highly mobile, opportunistic capital is still capable of doing great damage.
It seems likely that, at least, there will be some moves towards greater disclosure and transparency. But it is very doubtful if those by themselves, will do as much as can be done to avoid recurrent crises wiping out years of strenuous efforts to lift living standards.
We should not seek to stop the operations of the natural self-correcting mechanisms of markets. Nor should we seek to protect people against their own incompetence and even dishonesty in financial dealings. But a sane and rational world order ought not to be one in which the populations of whole nations are held to ransom by short-term capital movements. It is the existence of such possibilities, which feeds the opposition to openness and efficiency which would prevent progress.
This conference assembles at a time when there is also real debate about the future of the New Zealand sharemarket. The reasons for its modest performance over the last decade are the subject of frequent debate. Some even see its future as merging with the Australians.
Whatever the outcome of this debate it seems likely there will be growing co-operation between sharemarkets. That is no bad thing. If we can keep our national identities and independence while at the same time creating such a convergence of our economic and social interests, that conflict seems an absurdity, then this must represent a clear net gain for humankind.
This is why, in the end, and with all qualifications, I range myself on the side of greater openness, accompanied by proper international rules to govern that openness so that it does not become simply dominance by the richest and most powerful.
I wish you well. I trust that those of you visiting New Zealand for the first time will have the chance to see as much as possible of our beautiful country while you are here. We are fiercely proud of it and of our achievements as a people but equally conscious we are but a small part of the great region that you here tonight collectively represent.