Ross Wilson Speech on Globalisation to Hui Taumata 2005

Globalisation is not a new phenomenon. As an example, colonialism was, and is, a manifestation of that process. Economic globalisation has been ongoing and is now driven at a faster pace by new technologies and the mobility of international capital.

In this context I am going to primarily address my comments to the urgent need to develop our people and skills as the basis of successful enterprise.

As the "Developing Assets" paper notes "the biggest asset of Maori with untapped potential is the value of our human capital" and this is very much the case in the context of developing enterprise.

Before I look forward I think it is important to recall, so we may learn from, the impacts of globalisation on Maori workers over the past 20 years.

We all know that it is workers and our families who have taken the brunt of the measures taken in the 80s and 90s to expose our economy to the forces of globalisation.

A Treasury Paper states that 90% of New Zealanders were worse off in 1996 than they were in 1981.

With the removal of tariff protections and State Sector restructuring it was Maori workers who were disproportionately impacted in textile, clothing, footwear, car assembly, meat works, forestry and railways.

By December 1991, the Maori unemployment rate had risen to 26% and was 27.4% in 1992. It is currently 8.9%, but that is still more than twice the overall rate of 3.6%.

So Maori whanau have been burnt, disproportionately, in recent history by the forces of globalisation, and the legacy lingers.

It is important that we learn from this and develop our strategies for addressing this inevitable process.

One option of course is the creation of a new international economic order - to a global sustainable development model that incorporates social, environmental and cultural dimensions and recognises the rights of sovereign countries and peoples.

In fact the CTU is part of an international trade union confederation representing more than 155 million workers which is trying to achieve change in the current structure and rules of international financial institutions.

But we accept that this is not likely to happen any time soon and that we have to develop strategies in Aotearoa NZ that take account of the opportunities and threats that the current globalisation model provides.

In some sectors there is a real urgency, and none more so than in manufacturing with the emergence of China.

The impact of China on all countries, including ours, is going to be immense over the coming years, whether or not we have a free trade agreement.

It is estimated that even developing countries like Bangladesh and Indonesia will each lose up to a million manufacturing jobs to cheaper labour options in China.

While it is true that a Free Trade Agreement with China may open up large opportunities, in the primary production and processing sector in particular, we must be careful not to just "talk up" those gains while "talking down" the potential losses in manufacturing and other sectors.

The manufacturing sector employs 292,600 compared with agriculture and forestry with 143,700 workers. The proposal through a NZ-China FTA to accelerate economic integration with China sends a worrying message to New Zealand manufacturers.

There may be some that find new markets in China. Food manufacturing is a possibility. But for those manufacturers who survived the restructuring of the 1980s and 90s, the decline in the skill base, the removal of tariffs and the competition from cheap imports so far the message seems to be "look at what Interlock is doing" which is to shut up shop and relocate production to China.

The CTU has long been convinced that an important part of the solution is to move our products and services up the value chain so we aren't competing on price, but on Kiwi innovation and skill into higher value products which China can't match.

A vital building block for a higher value, higher income economy are the skills of our people, and this is unquestionably one of the key investments we can make as a nation.

I strongly endorse the view of Dominion Post Business Editor Bernard Hickey who, in a weekly comment column headlined "The price of Roger's biggest mistake", described the current skills shortage as the price of the failure of Roger Douglas to see skills development as an investment rather than a cost; a failure which was continued by the Governments of the 1990s.

And that failure was compounded by the low wage strategies of the 1990s which opened up an average 25% differential between here and Australia and has seen thousands of our skilled workers moving off across the Tasman, many of them Maori.

And if we look at the situation of Maori workers here we see, in the Department of Labour's report to this hui, that 65% of employed Maori work in semi-skilled or elementary skilled occupations.

That is a vulnerable place to be in the labour market of the 21st century.

So an important part of developing Maori enterprise is developing the skill base of the workforce.

- From the Statistics NZ report we see that the largest increase in the Maori working age population between now and 2021 will be in the 40 to 64 age group. That group are already of working age now which emphasises the vital importance of work-based training and lifelong learning.

- Although the Maori workforce of 2021 will be younger than the general population, the largest increase in the number of Maori aged between 15 and 24 years will occur before 2011. The next six years will therefore be crucial in developing the skills of this group.

Against this background I would put forward several propositions for discussion:

1. Given the disproportionate negative impacts of the1980s and 90s on Maori, including the experience of jobless families, there is a strong case for a substantial education and training initiative which not only engages rangatahi leaving the school system on the need to gain relevant skills, but also promoting learning for older pakeke. This may include workplace based programmes which focus on literacy and numeracy deficiencies, and desirably extend into communities. There are already some good models for such initiatives.

Such initiatives need to be supported by Maori leaders at all levels. The growth culture research by the Growth & Innovation Advisory Board has shown that the key influencers are workmates and whanau. The CTU is already developing an adult education process of engagement to engage workers on productivity issues as part of the tri-partite Productivity Taskforce which began its work this week. The CTU Runanga held an economic development hui last week for Maori union leaders and delegates and there was strong support for a similar programme based on tikanga Maori which reaches out to Maori workers.

2. On a related point I suggest that the stimulus paper doesn't go far enough in only promoting entrepreneurial small business operators. Innovation can, and does, come from workers and the vital importance of this should be recognised and developed as a key contributor to more productive workplaces.

3. In looking at the growth opportunities for Maori enterprise in the global economies, and the attitudes of New Zealanders to "growth", it is crucial that we pay very careful attention to the extensive growth culture research undertaken by the Growth & Innovation Advisory Board. It showed that people distrust a top-down agenda, distrust big business, and are seeking quality of life outcomes for all, both environmentally and socially, not just economic growth.

Many Maori are suspicious of an economic model that treats the world as a market place where every service is a commodity to be bought and sold and ethics, morality, spirituality and social justice have no role.

The growth culture research shows that those values are also shared by the majority of New Zealanders, and that provides a strong platform of public support for many of the current and emerging Maori businesses.

The CTU vision is that Maori economic development will be a crucial dimension to a sustainable development model which ensures that Aotearoa New Zealand has a unique place in a globalised world.

There is no doubt that there are unique opportunities for Maori business in international niche markets based on "Maori brands", but the fact that Maori business is still primarily based in primary production should not be lost sight of.

Finally, just a few words on trade agreements.

NZ is, of course, a trading nation. Access to overseas markets is vital.

As a small country our best hopes lie with the international multi-lateral trading system (preferably with fairer WTO rules), but with the failure (so far) of the Doha round, there has been a flurry of anxiety about being excluded from larger country bi-laterals or regional agreements. The fear is that we will be locked out of trading blocs and lose trading access.

So we are engaged in trying to get bi-lateral agreements with countries like the USA and China.

We may have to do it but the concern is that bi-laterals can too easily become unilaterals; with the outcome a new form of colonialism.

So monitoring and engaging with MFAT on trade negotiations is a significant part of our work these days at the CTU, because of the huge potential impact, both positive and negative, they can have on our domestic economy.

There is no doubt that this should be, and probably already is, an important focus for Maori business, and the MFAT processes of consultation are much more open than they ever used to be.

And we have some lingering legacies from past negotiations where access for agriculture overrode every other consideration. For example, where the Treaty of Waitangi is protected in the services agreement (GATS), the protection that has been 'reserved' for Maori only covers 'individuals and organisations engaged in a commercial or industrial undertaking'.

For the NZCTU, any analysis of the relative merits of a trade agreement or closer economic partnership must be based on empirically sound research, properly conducted net benefit analysis, and include consideration of:

- employment effects in New Zealand;
- adherence to core labour standards;
- the contribution any proposed agreement will make to sustainable economic development in NZ;
- the impact on public and social services;
- the extent to which the agreement is based on principles which will advance equitable trading relations between countries;
- Treaty of Waitangi.

So we are seeking an Aotearoa/New Zealand approach to globalisation that is based on sound sustainable development principles.

Ross Wilson
President
NZ Council of Trade Unions
March 1, 2005