• UNESCO – A Missed Opportunity

    The decision this week by the UNESCO General Conference to admit Palestine to full membership has cast an unaccustomed light on an organisation that usually flies pretty much under the radar.

    The United Nations Educational Scientific and Cultural Organisation was the first UN agency to be established. It was set up immediately after the Second World War to strengthen the international bonds of mind and spirit in the hope that this would help to create a world that would be free from hatred and war.

    New Zealand was just the second country to step forward and put its signature to the UNESCO constitution. In the early years of the organisation, our country played a leading role; luminaries such as Doctor Clarence Beeby were rightly regarded as among the most significant of its founding fathers.

    Sadly, over recent years, New Zealand’s commitment to UNESCO has faded – and this at a time when, in the light of the global financial crisis and the consequent recession, UNESCO’s message that there is more to international relations than trade and the bottom line, and that international peace and progress depend on better mutual understanding, was surely needed more than ever.

    We have, however, turned our backs on our distinguished heritage as a consistent and valued member of this important agency. It is a process which I have observed with increasing dismay as the departing Chair of the New Zealand National Commission for UNESCO. As my three-year term ends, I can only regret and deplore the neglect (I wish I could say it was benign) shown by our government towards this important aspect of our international relationships.

    Our formal commitment to UNESCO and its Paris headquarters has now been downgraded to just 5% of the time of a single diplomat in our Paris Embassy. Our own NZ National Commission (a body comprising experts in their fields who give much of their time on a voluntary basis) has been allowed to languish, with the terms of four of its five members lapsing and no replacements being appointed – thereby negating one of the greatest assets of UNESCO, its ability to use experts across the globe to extend its message far beyond what would normally be possible with its own meagre resources.

    The small secretariat which has for decades been the executive arm of the National Commission has been merged into the Ministry of Education and required to undertake further duties. The result? Our capacity to draw on UNESCO’s expertise to improve our performance in the fields of education, science and culture, not only in New Zealand but throughout the Pacific, has been sadly diminished.

    New Zealand’s National Commission has been regarded for decades as a model of its kind, providing leadership to smaller Pacific states which have the will but lack the resource and expertise to play a full part.

    The puzzle is that the government continues to pay our (modest) membership subscription to UNESCO but seems determined to extract only the minimum value from our membership. This is seen at its most inexplicable in the refusal to take up a seat on UNESCO’s Executive Board.

    Membership of the Executive Board would give us a voice in establishing the direction the organisation should take. Members are elected to the Board, and New Zealand – historically – has been keen to fulfil the responsibilities that go with membership and has been seen as a valued member of the Board. Despite the fact that a seat is virtually guaranteed to us, so that there would be no need to go to the expense of running a campaign for support, we have declined the opportunity – much to the disappointment of many friendly countries who insist that they would value our contribution to the Board’s business.

    As Chair, I found this so inexplicable that I wrote to the Prime Minister with a detailed proposal, showing that we could – by utilising the possibilities of modern electronic communication – meet our responsibilities in this regard at no additional cost; we might even have saved some money since the cost of any travel to Paris as Executive Board members would be met by UNESCO. The proposal was dismissed out of hand.

    To be fair to the Prime Minister, he was no doubt acting on advice. That advice would have come from the Minister for Foreign Affairs, Murray McCully, who has often demonstrated his lack of interest in international engagement.

    The decision was, however, all the more paradoxical given the Prime Minister’s declared intention to seek a seat on the United Nations Security Council in 2014. One might have thought that uppermost in the minds of those voting on candidates for that seat would be the question of which of the contenders had shown itself to be the best UN citizen. Our cavalier disregard of both the opportunities and responsibilities of UNESCO membership cannot be expected to improve our chances.

    As I leave the National Commission, I am proud of what has been achieved, but disappointed at missed opportunities. I can only wish my successor as Chair, my friend Neil Walter, better luck than I have had. The National Commission, and UNESCO itself, deserve it.

    Bryan Gould

    1 November 2011

  • Where’s The Leadership?

    My decision to leave British politics in 1994 and return to New Zealand reflected both the pull of my home country and my failure to convince my colleagues in the British Labour Party that they were embarking on a mistaken course.

    I had become increasingly despairing of the determination of those who eventually became New Labour’s leaders to embrace policies that I believed were fundamentally flawed. Tony Blair, Gordon Brown, and their allies were convinced that Britain’s economic future lay in the financial institutions of the City of London. They were persuaded that the market should not be second-guessed and would always get the right answer.

    They were, as Tony Blair told Rupert Murdoch, “all globalisers now.” They were “intensely relaxed”, as Peter Mandelson notoriously asserted, “about people becoming filthy rich” – with the corollary that they were equally relaxed about widening inequality. They accepted that government should treat economic policy as a largely technical matter of controlling the money supply that could safely be left to supposedly non-political bankers.

    They welcomed the asset bubble and the conspicuous consumption of the rich as evidence that these policies were working. And, though public opinion deterred them from joining the eurozone immediately, they remained convinced that a single European superstate – insulating so-called free-market policies against popular scrutiny – could be imposed on the people of that hugely diverse sub-continent.

    My decision to return to New Zealand was for me and my wife a good one. But it was disappointing to find that New Zealand had abandoned its long-standing commitment to social justice and community and had become the standard-bearer – lauded by The Economist – for the “free-market” policies that were expected to produce a new era of unparalleled prosperity.

    Like everyone else in the developed world, we were constantly assured that there was no alternative, and that the huge wealth amassed by a tiny minority would eventually “trickle down” to provide at least some benefit to the rest of us.

    These simple certainties were, however, stood on their head by the global financial crisis. We learned that asset bubbles would burst, that markets could not be relied on to get the right answers, and that only governments could step up to the plate to save us from disaster.

    But the cheerleaders for (and beneficiaries of) the policies that had produced such a disaster were not to be deterred simply because all experience showed that they had been wrong. So, in the United States, for example, political leaders solemnly assert that – in the general interest – tax cuts for the rich must remain sacrosanct, while the unemployed must fend for themselves.

    In Europe, the architects of the eurozone insist that the Greek people must shoulder the burden of the inevitable meltdown. And, right across the globe, our policy-makers defy all common sense by pushing austerity as the only remedy for recession.

    Our political leaders in New Zealand offer no exception to this sadly defective performance. They, too, plod wearily along the same well-worn track, providing yet one more proof of Einstein’s famous dictum that to go on repeating the same process while expecting a different outcome is the definition of insanity.

    Yet, we have good reason to expect better. This should be a time when New Zealand’s great advantages can be brought to bear. We have the huge benefits of climate and geography, we are politically stable, we have an educated workforce, we provide a safe and welcoming context in which to do business, and we have access to the world’s fastest-growing markets for the products we are uniquely skilled at producing. What more do we want?

    Yet our government continues to give priority to its own finances. All the talk is of financial orthodoxy, of getting the government’s own (perfectly manageable) deficit down. Little attention and even less action is given to our real problems, getting our people back to work and reducing our propensity as a country to borrow from overseas – even though those are the issues that have led to the credit downgrades that we were told had to be avoided at all costs.

    Those who practice what I call “politics by label”, however, judge arguments not by their weight but by their provenance. For such people, facts can be ignored if they appear in the mouths of the wrong people.

    In pointing out what a depressing document is the Treasury’s pre-election forecast (even with the by now obligatory element of over-optimism), I do not merely draw attention to the wasted three years during which we have barely lifted our heads above the recession-imposed parapet.

    What I do is re-affirm the arguments I have made over 35 years in public life. I bemoan the lack of ambition and leadership shown by this and other governments. I regret the failure to understand that economics is no longer (if it ever was) just a matter of the bottom line. It is, as Keynes said, “a behavioural science”; it involves how people lead their lives, how they interact with the natural world, and how they live and work together in society.

    Where can we find the courage to break the shackles of a barren and discredited ideology? Where can we find even a glimmer of new thinking?

    Bryan Gould

    26 October 2011

  • Will He, Won’t He?

    While much of the country is focused on the Rugby World Cup, there is at least one group of people with a quite different contest at the top of their minds.

    With less than six weeks till the general election, the campaign managers for the major parties will be scanning the horizon for opportunities to advance their cause. While much that will be thrown up by the news stories over that period is unpredictable, other events are already well established in the calendar. Plans will be already well advanced to squeeze every last drop of political advantage from each of them.

    That work – as I know from my own experience of election campaign management – will have been going on throughout the World Cup tournament. The Prime Minister’s campaign team, during what John Key laughingly described as an election-free zone, has most reason to feel pleased with what they have achieved over this period.

    The rugby has provided not only a feel-good factor, but also a number of photo opportunities for the Prime Minister to confirm his role as the nation’s cheerleader. Not everything, though, has gone his way.

    The NRL Grand Final did not quite deliver the triumphant climax that the Prime Minister’s trip to Sydney demanded. And there have been difficult moments; the bungled attempt to put words in the mouths of Standard and Poor’s on the credit downgrade did not play well, and the public concern about the apparently ineffectual response to the Rena disaster must be placed on the debit side.

    The government has, not without reason, argued that the Rena is an operational matter, and is the responsibility of the appropriate authorities. The problem is, however, that a Prime Minister who succeeds in basking in the reflected glory of things that go well will sometimes find it difficult to skip away from those things that go badly.

    The campaign team will have been pleased, though, at their success in shifting the blame for the World Cup opening night transport fiasco on to Auckland local government; and they will now without doubt be eyeing up the possibilities presented by what we all hope will be a triumph on Sunday night.

    The stakes here for the campaign team will be high, and warrant a big play. But so will the risks if they get it wrong.

    They will be encouraged by an earlier success in the World Cup scenario. The match against Japan at Waikato Stadium presented an entirely appropriate occasion to recognise – through a minute’s silence – the terrible natural disasters suffered by both countries this year.

    It also allowed the Prime Minister, accompanied by the Japanese Deputy Prime Minister who may or may not have been aware of his supporting role in the drama, to walk on to the field and – having been unable to resist a cheery wave to the crowd as he did so – then be televised standing next to Richie McCaw and the All Blacks as the national anthems were sung. Of such moments are successful election campaigns made.

    But Sunday night is a different proposition altogether. There is, after all, a precedent, and one which will tempt the Prime Minister’s team greatly.

    Many people will remember the 1995 World Cup final in South Africa. The most enduring memory of that occasion is not necessarily Joel Stransky’s drop goal that won the match in extra time, but the appearance of Nelson Mandela, wearing a Springbok shirt, to greet the South African players and wish them well.

    The moment was full of symbolism. Here was the father of the nation, the newly elected President of the whole of South Africa, the man who had represented through a lifetime of sacrifice the ultimately successful struggle against apartheid, wearing a uniform that symbolised for most South Africans the hated minority that had oppressed them for so long.

    It was confirmation of the great generosity of spirit of the man that Nelson Mandela should choose to signal to his supporters in this way that South Africa was now one country – the rainbow nation. Here was one of the greatest men of the century showing huge magnanimity to his former oppressors and leading his new-born country to a new future.

    Does John Key dare to emulate this example? Would the NZRU and the All Black management play ball? Would the television companies cooperate? Is a politician seeking votes quite the same thing as a Head of State celebrating and confirming the birth of a new nation which he had brought into being? Nelson Mandela was after all giving something of himself to the Springboks and his country, not expecting to get some benefit for himself.

    These are the questions the campaign team will be agonising over. There will of course be thousands of supporters wearing the All Black jersey to signify their support on Sunday night. Why shouldn’t the Prime Minister do likewise? But how far can he push it? There will be more than one issue to be decided on Sunday night.

    Bryan Gould

    18 October 2011

  • Is The Mad Butcher Mad?

    The love-in between the Mad Butcher and the Prime Minister, dutifully reported in every detail by complaisant media, is perhaps best described as reciprocal back-scratching – a term that is at least more polite than alternative anatomical allusions that might come to mind.

    But while Sir Peter Leitch might have every reason, in view of favours received, to respond with a typically high-octane endorsement of the Prime Minister, the rest of us might be a little cautious. We might take the view that John Key and his government should be judged by other and more demanding criteria.

    Like, for example, their success or otherwise in managing the economy. We all know, don’t we, that while the rest of the world is struggling, New Zealand is doing pretty well? At least, that is what we are constantly told.

    And it is certainly true that we have good reason to suppose that the deep and intractable problems that afflict others have passed us by. Our main export markets happen to be, after all, two of the most buoyant economies in the world. Our commodity prices have reached record levels. The government’s debt, though constantly offered as the reason for public spending cuts, is – thanks largely to the prudence of the previous government – amongst the lowest in the developed world. Our often-maligned Australian-owned banks are a bastion of stability in a world facing renewed financial meltdown.

    By contrast, other (and major) parts of the world economy are facing really tough times. The Americans are paralysed by political conflict. The eurozone is engaged in a losing battle with debt – a contagion that seems to be spreading like wildfire. And the British are determined to inflict on themselves a home-grown version of austerity that ensures that there is to be no early recovery from recession.

    So, we surely have every reason to expect that our good fortune will be recognised by the credit-rating agencies and that we will show up as one of the bright spots in the OECD.

    So, why have we suffered a credit downgrade? And why do Standard and Poor’s and Fitch seem not to have taken much notice of the government’s feel-good message? They are more concerned with our high external debt, which they say is on track to get worse, not better.

    And if we really are bucking the trend, that should surely show up in the most recent quarterly GDP tables? Yet sadly, the OECD’s second-quarter GDP figures also tell a rather different story. New Zealand recorded a 0.1% growth rate in that quarter – a figure that means that we are out of recession by just about the smallest statistical margin possible.

    But wait, as the TV ads say, there’s more. The figures show that while there are a few OECD members who have done worse than us (and one or two have actually gone backwards), the majority have done significantly better than us.

    The paralysed Americans? They scored double our rate at 0.2%, as did the British, and the eurozone as a whole. European members of the OECD did better still at an average 0.4%. The debt-ridden Italians managed 0.3% and the equally debt-ridden Irish a whopping 1.6%. Our neighbours across the Tasman, on whom we are supposed to be gaining, did 12 times better at 1.2%.

    We are told that we must expect tougher conditions to come. The Prime Minister, using a metaphor that typically places him in a sporting context, assures us that we can expect him to “roll with the punches”; but it is difficult to do that when you are flat on the canvas.

    The story we are told is not, in other words, borne out by the facts. And those facts are most brutally apparent to all those who suffer directly from our failure to make the most of our relative good fortune, but who don’t make it into the media that often.

    Foremost among them are those who go to make up our obstinately high unemployment total – a statistic that not only means a constant drag on our economy and a diminution in our national wealth, but that also represents tens of thousands of wrecked individual lives.

    And sadly, the fastest growing element in the shameful jobless total is young people. Their rising numbers mean that young people now constitute a higher proportion of our unemployed – at 45% – than in any other OECD member country.

    That statistic, coupled with the equally shameful and rising level of child poverty, shows that our failures are not just for here and now; we are building a divided and broken society for a generation and more to come.

    Too many of our younger generation are condemned to a poor start, denied through public service cuts the early childhood education that would give them a chance, suffering poor health through the illnesses and diseases of poverty, unable to afford or qualify for skill training, vainly looking for paid employment in an economy that has already thrown thousands on the scrapheap, taking tragic refuge in drugs, prostitution and crime.

    A constant diet of feel-good stories is all very well; but those who care about our country will want to dig deeper and make their judgments accordingly.

    Bryan Gould

    28 September 2011

    This article was published in the NZ Herald on 3 October.

  • To Sell Or Not To Sell

    It is I suppose inevitable, in the run-up to an election, that any comment on an issue of public interest – like the excessive deference paid by the media to the Prime Minister, or the proposed sale of publicly owned assets – should be seen by party hacks exclusively in terms of the inter-party battle.

    But since it is clear that, on the sale of public assets, concerns extend across voters of all persuasions and include many supporters of the government, I hope that a discussion of that issue will not be seen just as party-political posturing. It is too important for that.

    The first point to make on the issue is that – if we adopt the analogy with a private household often (and usually wrongly) favoured by commentators – an individual who proposed to sell off an income-producing asset so that he could spend the proceeds would be regarded as behaving somewhat imprudently. In this respect at least, the analogy holds and a government is surely no different.

    The point need not be laboured, since it is made forcefully by those who are the most enthusiastic supporters of the proposal. No one can blame the fund managers for salivating at the prospect of a new range of investments that are secure, long-term, virtually inflation-proofed, and guaranteeing a good return.

    But the more they hype the advantages of such investments and proclaim their keenness to get at them, the more they beg the question – wouldn’t those investments be equally valuable and attractive in the hands of those who currently own them?

    And, since the current government says that their top priority is improving their own finances, how do they propose to make good the hole in those finances when they no longer receive the income from the assets they have sold?

    The suspicion must be that the loss of income will in due course be made up by further sales of public assets. And, since the new private owners will be keen to attract yet more capital, the proportion of equity in public and therefore New Zealand hands can be expected to diminish in any case.

    It is of course true that the New Zealand capital market would be improved substantially, at least in the short term, if a major new range of investments became available. But we should surely pause to wonder why our capital market is so small and weak. The answer is that most of what were once New Zealand assets of comparable size and stability have long ago passed (via privatisation) into foreign ownership; and the further sale of what remains in public ownership seems certain to add to that longstanding trend.

    The architects of the proposal have struggled to find any convincing way to allay these obvious fears. It is noteworthy that we hear little now of the so-called “Mum and Dad” investors; they are thought to be all too likely to sell off their shareholdings (perhaps once they have collected the bonus shares) to the highest (which usually means foreign) bidder.

    But the government has nevertheless had some success in finding supporters for its proposal – and not just the obvious candidates in the investment industry. Perhaps the most significant of those who have come out in favour of asset sales have been iwi, who have proclaimed their intention of joining forces in order to invest in this new range of assets.

    The Finance Minister, Bill English, attached such importance to obtaining this endorsement that he went especially to Ngaruawahia to make his case. He might have benefited, however, from listening to the detail of what Tukoroirangi Morgan had to say afterwards.

    The spokesperson for the iwi group was clear as to what Maori aims were. He said that Maori would invest for the long term. He said that they would hold their shares in trust for future generations. He said that they would seek a seat on the board so as to make the most of the influence that their shareholding would give them.

    Most people, I guess, would nod in approval of all of these propositions. But the noteworthy point about them is that they constitute the clearest possible statement of the argument against selling the assets in the first place.

    The advantages to Maori spelt out by Tukoroirangi Morgan are precisely the advantages currently enjoyed by all of us but which the asset sales would deny us. So, the question that must be answered by Mr English is – why is something that is clearly so valuable to Maori (an assessment that he seems happy to endorse when it suits his purpose) thought to be of no consequence or value to all New Zealanders?

    Why have Maori been able to look to a leadership that takes the long view and has a proper sense of its obligations to the common interest and future generations? Why do the rest of us have to make do with a leadership that looks at worst to an ideological prejudice against public ownership and at best to a short-term boost to the balance sheet that will quickly be outweighed by the all-too-familiar burden of paying the profits across the foreign exchanges to overseas owners?

    Bryan Gould

    1 September 2011