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PM's Breakfast Meeting with Korean Business Reps.


Rt Hon Helen Clark
Prime Minister


Address to Breakfast Meeting with Korean Business Representatives

at

Hyatt Hotel, Seoul


Friday 25 July 2003


It is a pleasure for me to be back in Korea. I last visited in 2001 with a delegation of New Zealand business leaders. A great deal has happened in the world since then, and it is good to have the opportunity to return to update a business audience on what is happening in New Zealand. It is also an excellent opportunity for me to meet with your new President, which I will be doing later this morning.

There have been two especially positive developments in business links between Korea and New Zealand since my last visit : the establishment of the Australia New Zealand Chamber of Commerce, and the enhancement of the Korea New Zealand Business Council chapter in Korea.

I believe the Australia New Zealand Chamber is now the fastest growing Chamber in Korea, and among the most active.

The new Korea New Zealand Business Council¡¦s executive committee arrangements involve most of the major players in economic relations between our countries. That should inject new energy into our economic relations.

I thank all those who are involved in these important initiatives. Korea¡¦s economic relationship with New Zealand is of great importance to us. You are our sixth biggest export market; you send 110,000 visitors to our country every year; and the 15,000 Koreans who study in New Zealand each year are our second biggest group of international students.

Clearly this is not an easy period internationally. The world economy remains fragile, with prospects over the short term uncertain. Problems like SARS could not have been predicted, and there has been an ongoing impact from the effects of terrorism and the Iraq crisis. This uncertainty is constraining growth potential in many countries, including New Zealand and Korea.

Here in Korea I am acutely aware that you have the added complication of what your near neighbour to the north is doing. North Korea¡¦s actions of late are of grave concern to all of South Korea¡¦s friends. Nuclear proliferation is a threat which affects us all. We in New Zealand want a peaceful and lasting solution to the problems posed by North Korea. We will do all we can to achieve that. North Korea needs to understand that its nuclear brinkmanship has no place in the modern world.

The armistice commemorations I will attend tomorrow in Busan and on Sunday at Panmunjom and Seoul are a reminder to us all of the consequences of war. No one knows that more than the people of the Korean Peninsular whose lives and communities were destroyed by war.

In New Zealand our economy has been performing strongly, despite the challenging international environment. Over the past year our country has been a top performer in the OECD, with annual average growth of 4.4 per cent in 2002. Unemployment fell to 4.9 per cent last year, the lowest level in fifteen years, and now stands at five per cent.

New Zealand continues to be seen as a very attractive place in which to live and work, and net inward migration remains strong. Other indicators are also encouraging. The government¡¦s fiscal position is healthy and inflation is trending down low to around 1.5 per cent. Overall business confidence reflects the international uncertainty, but businesses¡¦ own investment and employment intentions are solid.

A number of factors beyond New Zealand¡¦s control will see our growth slow to closer to two per cent this year, before lifting to around three per cent in 2004. This is a strong performance for a developed economy. It also means that New Zealand is better placed than many countries to ride out the current international conditions. With inflation low and public finances very healthy, there is room for monetary and fiscal policy to respond should the need arise.

The very open nature of our economy requires all our businesses to be internationally competitive, and to innovate continually in order to maintain their competitiveness over time.

That is why innovation is at the heart of our government¡¦s growth strategy. In that strategy, formally promulgated in February last year, we prioritise:

„h Investing in skills and talent;
„h Improving our research and development capability, and the capability of our innovation system;
„h Lifting key innovative sectors with the potential to have significant spillover effects for productivity and growth across the economy; and
„h Strengthening our economy¡¦s global linkages.

Let me briefly describe some initiatives that the government is implementing in each of the key areas of the policy framework.

Skills and Talent

The foundation of a dynamic economy and society lies in the talents and skills of its people. By most measures New Zealand has a very well qualified workforce. Tertiary enrolment rates are amongst the highest in the world, and New Zealand¡¦s top performers are among the best in the world. Participation in skills training has soared. Even so, employers still report skills shortages which constrain our ability to grow. We are working with industry to overcome skill shortages, through increased opportunities for education and training. We are also aligning our migration intakes with our workforce and broader economic needs.

New Zealand seeks migrants globally, including from Korea. There are now around 25,000 Koreans in New Zealand. We value the contributions that Koreans are making to our development.


Innovation

Innovative economies place a high value on science and research. In New Zealand we have set out to boost our investment in this area, through increased government funding, new centres of research excellence, new research and development partnerships with the private sector, and improved tax treatment for research and development. The private sector has responded well and is reporting a sharp rise in its research and development investment.

I know that Korea also is investing heavily in these areas, and that there are many opportunities for our scientists and researchers to collaborate. Earlier this year there was a New Zealand-Korean symposium in Wellington on Advanced Materials and Nanotechnology, which involved the New Zealand born and educated Nobel Prize laureate Dr Alan MacDiarmid. Planning is underway for more such events. To advance our science and technology co-operation, our Minister for Research, Science and Technology is planning to visit Korea in the next few months.

Focus Sectors

Last year our government established industry taskforces in innovative sectors with the potential to lift growth in the economy more widely. We identified three areas: biotechnology, information and communications technology, and creative industries. Bold strategies have been produced to increase their value to New Zealand.

With me on this visit is a strong delegation from the New Zealand film industry. New Zealand has a sophisticated film-making infrastructure, a skilled workforce, and fantastic locations. The world¡¦s largest ever movie production, The Lord of the Rings, was made in New Zealand. We have recently announced a new policy of grants to encourage big budget films to be made in New Zealand.

In the area of information and communications technologies, I am very aware that Korea is at the leading edge of development and uptake, and I hope there will be more opportunities for us to work with you.

New Zealand¡¦s Global Connections

The fact that the New Zealand economy is very open means that we have much to gain from a successful World Trade Organisation round. New Zealand seeks progress in agricultural market access, and in the phasing out of export subsidies and trade distorting domestic support for agriculture. Tariff barriers in non-agricultural areas like forestry continue to be a concern to us, not least here in Korea !

New Zealand has registered its interest in the past in a free trade agreement with Korea. Two years ago we released a study showing that it would have benefits for us both. We remain ready to talk when Korea is.

New Zealand is in the market for high quality foreign direct investment, including from Korea. Soon the chief executive of our investment agency, Investment New Zealand, will be visiting Seoul to strengthen our investment linkages here.

Conclusion

This is the fourth time I have visited Korea officially. I came twice as Leader of the Opposition, and now have come twice as Prime Minister. Each time I have come because of the importance of Korea to my country.

Half a century ago our people here came as part of the United Nations Force to defend the Republic of Korea. Our modern relationship is based not only on trade, tourism, education, and science and technology, but also on the growing Korean community in New Zealand and the many New Zealanders, including teachers and young people on working holidays, who live and work here.

I hope that this broad and friendly relationship will grow and prosper in the years ahead.

ENDS

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