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Swain Speech To India & NZ Joint Business Councils

Minister For Communications And Information Technology

Hon Paul Swain

Address To 10th Joint Meeting Of The Indian And New Zealand Joint Business Councils

New Delhi

Thursday 6 December 2001

I am delighted to be here in India and have the opportunity to address the India and New Zealand Business Council. This is my first visit to India, since arriving last Friday I have been delighted with the warmth and hospitality that has been shown to my delegation and me. It is greatly appreciated.

It is appropriate that I make this address because earlier this year your IT Minister Pramod Mahajan and a delegation of Indian IT specialists visited New Zealand. As we say in cricket this is the return match and I have strengthened the batting line up by bringing several delegation members from specialist IT firms. I am also to give a keynote address to the ASOCIO conference here tomorrow before going on to sign a joint India/New Zealand cooperation Arrangement with Pramod Mahajan.

There are two further reasons why I join you today: Firstly as New Zealand’s IT and Communications Minister I have made it a priority to come to India to learn what has made India the world leader it is in software engineering, and other information, communications and telecommunications skills.

Secondly, I want to give you a glimpse today of a New Zealand that is innovative and technologically savvy. New Zealand too is riding the knowledge wave and, like India, we are transforming our economy into one where knowledge and information both add and generate new value.

If the 80’s and 90’s were about reforming the economy, this century is about economic transformation, from the old economy to the new.

The government has since coming into power made significant advances in this transformation such as:

- Establishing Industry New Zealand as a government agency for business development.

- Reforming major aspects of business law - competition policy, telecommunications policy and intellectual property law.

- Introducing electronic commerce and electronic government strategies.

- Enhancing New Zealand’s venture capital market and providing support for business incubators.

- Boosting research and development.

- Refocusing immigration policy on skilled and business migrants. (India is now contributing to NZ 8000 migrants a year.

- And providing a strategic focus for our tertiary education system to help meet the demands of our growing economy.

Innovative New Zealand links in India

Getting back to New Zealand as an innovative and technologically savvy country. Let’s take a look at a few places where you might be surprised to find New Zealand.

Let’s start with your wallet. Take a look at your credit card. It was probably made in New Zealand. A New Zealand company, Security Plastics has over 70% of the market share for credit cards in India.

OK, now think about the last Indian movie you saw:

Odds on it was shot in New Zealand. In the past three years over 75 Indian film crews have been in New Zealand. New Zealand film location costs are 50% lower than European or US costs and some producers believe even lower than shooting in India.

Just as your film industry is booming so is ours.

In February Lord of the Rings, a $400 million US funded film, shot, produced and directing in New Zealand will be launched in 70 cities across India. Globally this film will be the blockbuster of 2002. It demonstrates New Zealand’s global leadership in computer-based special effects and animation.

Now, take a train on Western Railways. The state of the art communication system is supplied by New Zealand company, Tait Electronics

And if, god forbid, you need medical treatment you may find yourself using sophisticated healthcare equipment supplied by one of New Zealand’s leading companies, Fisher and Paykel.

The Indian IT sector is also recognising this:

- Tata Consultancy Services has an (active) office in New Zealand with more than a 100 people working on site with a major insurance company, Tower Insurance. Following my meetings with Tata senior management in both Mumbai and Bangalore we have agreed to work together to accelerate their plans to establish a high end software development centre in New Zealand. Trade NZ and Investment NZ have agreed to provide staff in New Zealand and here in India to assist Tata Consultancy Services with this project.

- Wipro senior management are coming to meet me and industry representatives with the objective of forming strategic alliances with New Zealand software companies. They wish to help New Zealand companies take their software solutions using Wipro’s skill and scalability into the Indian market and beyond. Some of the software solutions they have expressed interest in are healthcare, finance and gaming.

- Indian education provider KarROX and New Zealand’s Auckland Institute of Studies have formed a joint venture to introduce to New Zealand a range of KarROX’s high end certified training programmes. What I like about their model is that they intend to use New Zealand and New Zealand staff to springboard their training programmes into China, Taiwan, Korea and the Pacific. Using New Zealand as a hub in this way is hugely attractive to me and I believe India as well.

- There are a number of other Indian IT companies with direct links - service or product based - with New Zealand. Infowavz, a Mumbai based call centre, with New Zealand equity and management participation. QED NZ, which I visited in Bangalore, has an application software development centre in that city. Versaware, an electronic publishing firm in Pune, with a New Zealand CEO. Other leading Indian IT companies like Kale Consultants have an active presence in the New Zealand market. I met the CEO of Kale, Mr Vimil Jain, and he told me how his company, working with Air NZ, jointly developed airline management software that has now been on sale to over 30 other airlines.

Other New Zealand Presence in India.

The India New Zealand story just gets better. For example

- Fonterra: Fonterra NZ (Our new name for the NZ Dairy Board) is the world’s largest trader of dairy products. Two weeks ago it entered into an $80 million US agreement with Britannia to bring to India New Zealand processing technology, brands and new milk based health and food products. This will be New Zealand’s largest ever investment in India.

- The New Zealand engineering firm, Beca, recently won another contract to manage the construction of part of India’s quadrilateral road project. Another, Meritec, recently set up an office to offer similar consultancy services in the highways sector.

- Airways Corporation of New Zealand was involved in upgrading the air traffic control system in Kolkata.

- Cardex New Zealand in association with Digital Alarm Technologies India is providing sophisticated security control systems to some of India’s largest corporates.

- We are seeing innovation even in traditional areas such as forestry. New Zealand will this year export to India over $50 million dollars worth of pine logs. To demonstrate the versatility of our product, my Trade Commissioner here, armed with a hammer and nails, recently travelled to Bhuj and in a single day he and another New Zealander from Fletcher Forests, with assistance from an Indian workforce, built a wooden kitset house shipped from New Zealand for disaster relief. The all up cost including transportation was only 50,000 rupees. When I met with the Chief Minister of Karnataka, Mr S.M. Krishna he asked if the building could be adapted for use as a class room. His state, he told us, is planning to build 36, 000 new classrooms in the next two years. Trade NZ is now working with the New Zealand companies and the Chief Minister’s office to ship a prototype classroom to Bangalore within the next few weeks. We have an excellent timber resourced in New Zealand, which could assist India with its need for low cost housing, schools, medical clinics and other community buildings. New Zealand timber will enable you to build safe, earthquake and cyclone proof buildings at a time when you are addressing your own timber conservation issues.

A nation of innovators

So where does New Zealand’s innovation come from?

Firstly, New Zealand is geographically isolated. New Zealanders are traders. We have to be. We earn our living by selling overseas what we produce in New Zealand. Most of our agricultural production is exported. Agriculture makes up about 16% of New Zealand’s GDP, 16% of total employment and more than 60% of exports by value. Over 90% of our dairy products, meat and wool exports go offshore.

We have to be smart to compete in the world, even in our traditional area of commodity exports. New Zealand is far away from most of its major markets and faces protectionism in markets and subsidisation of production and exports by other exporting countries.

Faced with these challenges, New Zealand turned to innovation to overcome them. It probably started with the invention of refrigerated shipping in 1882 and hasn’t stopped since.

New Zealand producers receive no subsidies whatsoever. They are exposed to foreign competition. Over 90% of New Zealand’s current applied duty rates are zero. Half of India’s exports to New Zealand, for example, attract duties of 1.1% or less.

To many of you here merchandise trade is still important with a two-way trade of almost $US150 million. Indian exporters seem to be awakening to the excellent opportunities available in New Zealand.

The rapid gain in Indian exports to NZ reflects the major liberalisation of the NZ trading regime in recent years. All quota controls were dropped some years ago and tariffs have been consistently lowered.

It is clear that much of your ongoing discussions as a committee surround the relative trading regimes. I think the best message I can give you is that freeing up trade is good for both our countries.

Secondly, New Zealand is a nation of migrants. Even the indigenous people of New Zealand, the Maori, arrived only 1000 years ago. The ancestors of most New Zealanders arrived in the last 160 years. This includes a sizeable Indian community, the first of whom arrived over 100 years ago.

Thirdly we are also world-renowned travellers. Migrants and travellers bring new ideas and fresh approaches to a society. Like India, we too have a diaspora. Over 400,000 New Zealanders - that’s equivalent to 10% of our population - live in Australia. New Zealanders are found in all walks of life around the world. Not to mention India, where the CEO of Virgin Atlantic in India, the CEO of De Beers, the head of UNAIDS and the head of the International Federation of Red Cross South Asia office are all New Zealanders.

And need I say it, John Wright, one of New Zealand’s best opening batsmen, is currently coach of the India cricket team. We wish him and the team well.

We are working on a diaspora project whereby New Zealanders overseas will be encouraged to keep in contact with each other and New Zealand, and to act as ambassadors for our country. India already has a very successful diaspora programme which we can learn from.

An essential factor for an innovative and productive population is education. New Zealand offers an education equal to that available anywhere. Over 35,000 foreign students are enrolled at New Zealand institutions. The number of Indian students is growing fast. This financial year we are expecting a further 1500 students to join the estimated 1000 Indian students already studying in New Zealand.

In many respects this is not a new phenomena, the doors of New Zealand’s schools and colleges have always been open. Students from Asia in particular - but also elsewhere, have been enjoying the benefits for decades. We are pleased that Indian students are joining the party in increasing numbers and warmly welcome them.

We also welcome Indian tourists - and they seem to like us. Over 11,000 Indian holidaymakers and business people visited New Zealand in the year to September - an increase of over 47% over the previous year. Despite the recent tragic events that have affected tourism worldwide, we expect 16,000 Indian tourists to visit New Zealand this year.

New Zealand too is actively recruiting skilled migrants. We see India as a place where we can find the sort of people we like and need. We are particularly interested in IT professionals. The New Zealand IT sector offers excellent opportunities for software developers and engineers. We expect a 200% increase in the number of applications for permanent residency from India this year and many will work as IT professionals.

Other knowledge based links with India

So where else does New Zealand innovation and versatility appear in India?

-

-

Some people might say innovation and the competitive spirit runs in our veins.

Sir Edmund Hillary - known I’m sure to all of you - is perhaps the most famous embodiment of this spirit. First - with Tenzing - to climb Mt Everest.

And many of you know the exploits of Sir Richard Hadlee.

New Zealand is also of course an international leader in yacht design and building. People come from all over Europe and the US to have their world class yachts designed and built in New Zealand. This explains partly why New Zealand still holds the Americas Cup. And these days the international television coverage you see of yacht racing frequently uses graphics technology developed by a small IT company in New Zealand with a big international reputation.

Learning from India

As I said at the outset, I have two reasons for being in India: to learn from India and to promote New Zealand as an innovative and technologically savvy economy.

India is now one of the world’s foremost producers of IT skills, and it is important to have a good relationship and to learn from such an IT powerhouse. It’s not surprising that I have a representative from Waikato University in my delegation looking for opportunities to develop links. In Delhi I will be visiting a range of private and public education institutions, including the prestigious Indian Institute of Technology.

I will be discussing digital divide issues, a divide which we in New Zealand are also conscious of trying to close. Access to information - not least through information technology - is an essential factor in building (and maintaining) an educated and productive workforce.

Conclusion

Ladies and gentlemen, it is a pleasure to be in India. I look forward to seeing far greater links develop between our two countries in the coming years, based on innovation, complementarities in our economies and rapidly increasing people-to-people links.

Thank you


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