NZ/FIJI FIJI/NZ BUSINESS COUNCILS JOINT CONFERENCE

  • John Luxton
Commerce

I am delighted to be here on the Coral Coast to participate in the eighth joint conference of your Business Councils. The presence of business and government representatives from both our countries demonstrates the importance which is attached to get-togethers of this type. It also demonstrates the attraction of a wonderful venue such as this.

I have been very pleased to start getting to know my counterpart, Minister Bose. Congratulations on your speech. You have given us all a great deal to think about and discuss during the conference.· Thank you to the organisers of the Conference for the invitation to speak. I wish to use the next few minutes to set out a New Zealand perspective on the issues before this conference and before our two countries. You have chosen as your overall theme Partnership : The Way Forward. That certainly offers plenty of scope for comment - there are very few occasions in life when going it alone is the best option.

Almost always there is strength in numbers. That certainly is the case when major challenges are being contemplated. Major challenges face both our countries as we strive to get the best for our peoples in these the last years of this decade and this century. In almost all of these the role of the business community is important. Politicians who forget this do so at their peril. So it will come as little surprise that I will be very much in a listening mode as you, the business practitioners, spell out your views over the next two days.

PARTNERSHIP BETWEEN COUNTRIES

Before getting down to the nuts and bolts of the economic opportunities and challenges facing us all, I want to speak a little about the partnership which exists between countries -most particularly between New Zealand and Fiji.·

New Zealand and Fiji are both members of the broader Pacific family of nations. Contacts between our people go back well over a hundred years. They span virtually every aspect of activity. It should come as no surprise therefore that many New Zealanders take an interest in what happens in Fiji.

While a great deal is being said about prospects for greater links, particularly business ones, with the countries of Asia, it is important that we remember our Pacific roots. The South Pacific is where both our countries will always be and we need to invest the time and effort to building the best possible links.

This wont always be easy - some of the most important partnerships we are involved in require the most effort. There may be times of some tension and misunderstanding. We need to accept this reality and understand that it is the ability to be able to discuss and debate issues of importance, rather than the need to always have identical positions on all subjects that demonstrates the maturity of a true partnership.

My colleagues and I in the New Zealand Government consider that the New Zealand/Fiji partnership is a good example of such a mature partnership. In the past there have been times when we have viewed matters from differing perspectives, be they business or political. The most important feature of such situations has been the ability to keep talking, to work it through.

It is vital that leaders from both countries - politicians, community and religious leaders and those in business - work to maintain and enhance the sense of partnership our two countries have.

I can assure you that we from the New Zealand side will watch with interest developments here in Fiji in the coming months as you complete the review of your Constitution. This process, established by your Government with the full support and participation of all your communities, is clear evidence of a determination to move forward together. We know that the outcome of these efforts will be crucial in determining the future direction and prosperity of your country. We wish you well as you tackle the tasks ahead.

It wont surprise me either if many in Fiji find themselves taking an interest in New Zealand in the coming months as well. I'm not only thinking of the prospect of a winter of very exciting rugby but also of our election campaign and new proportional representation system and the way it will impact on our political process.

PARTNERSHIP IN BUSINESS

The success of your joint conferences over past years is clear evidence that I don't need to spell out the benefits of close contact and cooperation between the business sectors of our two countries.

I do, however, wish to acknowledge from the New Zealand side at least the importance which Government attaches to the efforts of the business community within the overall relationship our two countries have. Government to Government contact is important but nowhere near as pervasive as the links you have. Over the years the spread of business activity between our two countries has expanded enormously. The growing range of items and services being traded in each direction reflects the increasing sophistication of the economic interaction of our countries and, most importantly, of those engaged in the trading relationship. Long may this continue.

Fiji is New Zealand's largest Pacific island market for merchandise exports with provisional figures for the December 1995 year of $157.4 million, down somewhat on the previous year. Fiji's export of merchandise items to New Zealand for the same period was $51.5 million. Of course these figures, or whatever ones you may be working from, tell a different story depending on your perspective and experience. This conference is the right place for such differing views on the trading situation between our countries to be aired.

It is my hope, indeed expectation, that discussion here will centre on the opportunities which exist in both countries for greater trade in goods and services. We must look for a win-win situations where the complementarity which exists in many areas of business can be enhanced and strengthened.

From our perspective Fiji is and will remain an important market for New Zealand producers, particularly manufacturers. This gives us all a real vested interest in seeing Fiji's economy thrive and its producers become ever more effective as exporters.

The way in which businesses cooperate and form alliances - be it through joint ventures, share holdings, operating under licence, agency arrangements or whatever, is plainly a matter for those in business to decide. I put it to you however that the opportunities for such business cooperation - or partnership - are considerable.

Many of you here have first hand experience of such business partnerships.

You know that two way trade brings many advantages to both sides - proximity of our countries, familiarity with our markets, complementarity of products such as tropical and temperate produce. In New Zealand we have a lively market situation, open to new products to an extent never seen before. Never has the opportunity for Fiji business interests wishing to get into our market been better. Good quality, well priced goods and services will always be of real interest.

And there is much more to ensure the success of such partnership arrangements. We have good lines of communication, we are well served by air and shipping links. New technology brings us ever close.

Already we are seeing many examples of cooperation. In the manufacturing sector we have the examples of shoes, swimwear, clothing and furniture. Scope exists for working together to improve design and enhance the marketing skills of those engaged in exporting to New Zealand.

We are also seeing close links growing in the services area such as accountancy, insurance and the media. The presence here of representatives from this sector is clear proof of their growing role.

Nowhere are both the possibilities and the realities of cooperation and partnership between our two countries so well displayed as in the tourism and travel sectors. If ever there is an example of win-win it is here. In New Zealand we have come to understand very clearly the importance of quality tourism as a generator of economic growth and long term sustainable employment. I know that you have a similar clear appreciation of the vital role tourism will have in Fiji's development.

I note the considerable growth in Fiji tourism, which from the New Zealand viewpoint is very internationally competitive..

New Zealanders constitute a major portion of Fiji's overall visitor numbers. The reasons for this are many and varied. Put simply we like what is available here, the price is right and we are made to feel welcome. It is vital that this combination continues.

Many opportunities exist in the coming years for both Fiji and New Zealand, and indeed other Pacific island countries, to continue to grow through tourism development. For this to be possible cooperation is clearly the way forward. Events such as the Americas Cup defence in 1999-2000, the Olympics in Sydney in 2000 and, of course, the Millennium celebrations will all bring extra visitors to this region. Time is short to prepare well for their arrival. Governments need to be supportive but the major responsibility must lie with the business community in each country.

Apart from those who come by boat, both our countries get their visitors by air. The vital contribution of airlines to the prosperity of our two economies deserves full recognition. It is in our interests to have a strong, well functioning set of airlinks between our countries and the rest of the world.

Some of you may recall that at last years Joint Conference in Auckland concern was expressed about the health of the air services agreement between Fiji and New Zealand. There had been calls for it to be renegotiated yet again and for limits to be imposed on some sectors. Fortunately that is all behind us with the conclusion of an amended agreement that offers to both sides increased opportunities. A true example of win-win working for both sides.

At the very centre of any effort to increase business activity, especially in the tourism sector, is the issue of investment. In New Zealand we are having a healthy debate about the advantages of investment from offshore in our economy. Our Government is convinced of the powerful role of such a contribution to the overall growth of our economy. I am aware of the very clear, consistent statements of ministers from Fiji's Government about the desirability of increased investment here.

Obviously investment goes where the returns are best and where the conditions for long term viability exist. Investment from New Zealand in Fiji is significant. It is probably at its highest ever level. Let us hope it continues to grow.

Nowhere is this investment more evident than in tourism. It is investment in the undoubted advantages of Fiji hospitality, climate, and beautiful beaches. While the Denarau project is the most recent large investment injection there has also been support for tourism plant throughout Fiji, the involvement of tour operators and the introduction of new attractions such as the Shotover Jet and yacht charters.

Alongside investment in tourism there are many other examples of a growing New Zealand commitment to the Fiji economy through investment - the purchase of the shipyard in Suva by MCI is an excellent example.

GOVERNMENT BUSINESS PARTNERSHIP

I've touched on the importance of the partnership between countries and cooperation among and between businesses. So where do governments fit into all this? One thing that is coming to be clearly accepted in many countries, particularly in New Zealand is that governments should not be seeking to pick winners, nor to make decisions which are best left in the control of those doing business. New Zealand's experience, when it has ignored these facts, has been costly both in economic and social terms.

Decisions about the market need to be taken in the marketplace, based on hardnosed business assessments.

Our role as Government comes in facilitating the operation of business - stripping away administrative impediments to good business practices, streamlining the processes of government, reducing the burden business has to bear for the cost of government, and reforming the labour market.· You will be aware of our experience in this regard. The process has been a hard one, but one that has brought and will continue to bring rewards. I am pleased to hear that Fiji, too, is embarked on its own programme of public sector reform. Speaking from the New Zealand perspective again, I cannot over-stress the importance of ensuring that all elements of such programmes are addressed - to tackle one element without paying attention to the others is not a recipe for success.

Governments also help businesses thrive when they give a clear steer on their future economic intentions. I note that just recently Fiji has done this through the publication of its budget strategy document. The more governments can take the surprises out of the economic process, the more business confidence will grow.

Consistency in the application of policies and transparency in policy direction is another essential of a good business environment. It is especially important for investors, as I am sure we all recognise. No country will attract the steady flow of direct foreign investment essential to growth if such consistency and transparency is not evident. We can be sure that business interests will be watching the fortunes of those already committed here as they weigh up their own options.

In today's world, Governments can no longer capture people, technology or capital investment. They will move to companies and countries which offer economic stability and an environment where they can prosper.

Another important and related element is political stability, and broad-ranging public and business support for the political process. Both New Zealand and Fiji this year have to manage political processes that will have implications for continuing political steadiness.

TRADE ACCESS

I have spoken about the importance of Governments providing a clear steer on their future economic intentions. In no area is this more important than on trade access issues. Successive New Zealand Governments have set out their intention for a substantial and continuing reduction of both tariff and non-tariff barriers into New Zealand. I know that the implications of this policy are of concern to some of you as you see previous preferential access schemes reduce in value.

But we in New Zealand cannot afford to encourage investment in less competitive sectors of our economy and still hope to get good economic growth.·

At the same time I need to confirm that there can be no turning back on this fundamental issue - it lies at the heart of New Zealand's economic restructuring policies. It is important that all those involved face this reality fully and work together to find new ways of supporting Fiji's economic growth.·

In this regard I have been pleased to read the public acceptance of Fiji Ministers that in terms of increasing Fiji exports to New Zealand, SPARTECA cannot provide the long-term answer. As some of you know well, SPARTECA access concessions have been diminishing in value for several years because of reducing tarrifs on competitive products entering New Zealand.

This must not be seen as a constraint on Fiji exports to New Zealand. Far from it. What is needed are longer term solutions, new ways to get part of the action in the new, more dynamic New Zealand economy. Many exporters from the Pacific island region are finding that good opportunities exist - if they show they are competitive, innovative and stay in touch with their customers. Those of you who use the services of the South Pacific Trade Commission in Auckland (which incidentally is funded by New Zealand aid) will know of the opportunities which exist. As the demand for tropical and subtropical produce from the Pacific island region continues to grow, major opportunities are emerging for increased exports to New Zealand.

I don't have a crystal ball to rely on when it comes to questions of where the trade access relationship between New Zealand and Australia on the one hand and Pacific island countries on the other will end up. What I do know is that we need to look at all possible options. Realism must be a feature of such assessments. The clock cannot be turned back and we have no intention of trying.

The recent announcement by Australia of a full review of SPARTECA will enable a further frank look at options for trade and investment. Both New Zealand and Fiji are members of the World Trade Organisation. This brings obligations with it which we must respect and fulfil. We will be working with Australia in this SPARTECA review and will be keenly interested in its conclusions. The time has come to think hard about how Pacific island economies can best be assisted within the context of common international commitments.

PARTNERSHIP THROUGH DEVELOPMENT ASSISTANCE

In my comments I have sought to give strong emphasis to the vital place of private sector business in the growth of a country's economy. Alongside this there is also, in the case of Pacific island countries, the added dimension of development assistance.

New Zealand has worked with Fiji in this way for a very long time. And over the years as Fiji's economy and infrastructure have continued to develop the emphasis of our assistance has also changed. Increasing emphasis is being given to Fiji's productive sector. I saw one of the best examples of this yesterday, when I visited Tropik Wood, now a thriving commercial concern and saw some of the plantations of Fiji Pine which New Zealand helped to establish through its development assistance programme over a period of more than 20 years.

Today we are providing Fiji businesses with assistance to enhance their performance in exporting to the New Zealand market, through the export enhancement scheme and the private sector training awards. Again, yesterday, I saw the new heat treatment station at Nadi which will enable Fiji producers of tropical fruits to meet the phytosanitary requirements of overseas markets including New Zealand. I am pleased that, through a private sector training award, we have been able to provide training in the effective operation of this important facility.

New Zealand is committed to continuing its level of development assistance to Fiji. Over the years a very good partnership has grown up between us, and we have together developed a programme of assistance which focuses very clearly on activities designed to enhance the capacity of Fiji to grow its economy. Besides assistance to the private sector, we contribute to the development of the human resources so vital to sustained growth.

CONCLUDING COMMENTS

There are, of course, many other dimensions to the partnership which exists between New Zealand and Fiji. We work closely and effectively on many issues at the regional and international levels. Together with other Pacific island countries and Australia we make sure the view from our region is well understood by other countries.· I have taken a deliberately upbeat view of developments as they affect our countries. Of course it will not all be plain sailing. There are, nevertheless, more opportunities now for sustainable growth than in the past. The challenge is for those most involved - in business and in government - to take up these opportunities and stay committed.

New Zealand and Fiji have a partnership of longstanding. On our side we are committed to making it one of real meaning, one which endures. You as business practitioners have a vital role to play in achieving this objective. I am confident that the discussions at this Conference and the follow-on contacts that flow from it will assist the attainment of this goal.