New Zealand shows how trade and openness to investments can serve local community’s interests
It seems the commitment to kaitiakitanga could produce a balance, where local best interests can be served by trade and investment openness.
David Parker, New Zealand’s newly anointed trade and economy minister, likes to quote Thomas Piketty’s Capital in the Twenty First Century – a clear sign of his political leanings.
Once upon a time, that would have sent shivers down the spines of APEC business leaders who he addressed in Auckland over the weekend during the first 2018 meeting of the APEC Business Advisory Council (ABAC). Instead, Minister Parker met angst and introspection.
So too, did Undersecretary for Foreign Affairs Fletcher Tabuteau, when he talked to ABAC about the need to understand two concepts at the fundamental heart of Maori culture and New Zealand politics: kaitiakitanga, and manaakitanga.
The first basically means the task of guardianship: humans are a part of the web or fabric of life, and the health of a community is reflected in the health of the environment. The second means the obligation to be hospitable, to welcome and to share.
Over the past year, as ABAC business leaders have wrestled with questions over why so many communities across the world have lost faith in globalisation and the multiple benefits of open trade and investment, Piketty’s call for an attack on inequality, and the Maori ideas linked with kaitiakitanga, deserve closer attention.
As books like Janesville, about the Wisconsin hometown of the original General Motors auto plant that was closed in 2008, give a dispiriting glimpse into the tragic impacts of the “great recession”, the huge challenges linked with changing mindsets and reskilling communities after such a collapse, and the inevitable reflex to scapegoat trade and imports, so ABAC’s own 2017 study by the Marshall School at the University of Southern California shows the complex roots of public disillusion with globalisation.
The conclusions of the Marshall School work were clear and sobering – and an important factor behind the uncharacteristic angst and introspection of the business leaders meeting ministers Parker and Tabuteau:
•the growth of the past 20 years that has massively enriched the “top 1 per cent” and left most our middle classes with stagnant incomes and massive job uncertainty, sits at the heart of cancerous political developments;
•businesses and governments have done a terrible job in explaining the net benefits of trade;
•they have failed abysmally to prepare communities for the disruptions that have arisen, and even worse in equipping communities for change;
•they have provided some safety nets, but not the “springboards” needed to restore working people’s confidence in their own and their communities’ futures;
•concrete action is urgently needed to restructure education systems that are no longer fit for purpose;
•claims by business leaders that they care have no credibility as long as they continue to condone the huge inequalities that have opened up over the past decades.
Not so long ago, governments who complained that capital and shareholder interests were too powerful, called on companies to earn a “social licence to operate”, to engage with the communities in which they operate, and to develop a “credible inclusive narrative.” They would have been dismissed as Piketty poodles, and given a quick lecture on fine-sounding corporate social responsibility programmes.
No longer. Community anxieties that have lifted people like Donald Trump to power are only too real and well-founded. So too the eccentric forces that prompted British voters to call for Brexit. So too the shock election victory of New Zealand’s Labour Party in October last year, which brought to power Jacinda Ardern, and her left-leaning cabinet, including Parker and Tabuteau.
Suddenly, the concept of kaitiakitanga sounds like a very sensible starting point, even if it means new policies that force companies to redistribute their profits away from MBA-burnishing executive teams and institutional shareholders, and back into the hands of demoralised grass roots workers.
Not that money is the only problem, of course. Job insecurity and anxiety over technology changes that are slashing jobs and rendering existing skill sets redundant, are also playing a powerful part.
Top business leaders may now be in agreement about an urgent need for corrective action, but that does not mean there is clarity about what that corrective action might be, and whether there is sufficient public trust for even well-meaning responses to win traction.
Of one thing, business leaders are in absolute agreement: whatever truculent automotive workers or steel workers may say, the benefits over the past four decades of increasingly open trade and investment, underpinned by globally efficient supply chains, have been massive and powerfully felt. They have brought more than a billion people out of poverty.
But the challenge of demonstrating this truth will be huge. Even if business voices were believed, the sad reality is that data and pure statistical proofs lack any of the warmth and fuzziness that might change minds.
As yet, ABAC’s business leaders are offering no clear guidance on the best way forward in addressing inequality. Boards still seem reluctant to review the staggering pay packages offered to chief executives, as if the success of a company can be attributed to one smart MBA-trained mind. Surely they can start by better recognising the indispensability of skilled and motivated workforce teams in successful performance, and rethink salaries and work contracts with that in mind?
Surely they must also think afresh about how they earn their “social licence to operate.” Policies for corporate social responsibility – so often subsumed in marketing departments – invariably lack the ring of truth, and contribute little to public trust in their community commitment.
ABAC members have agreed to hold local business dialogues across the region in the coming months to explore how trust in business can be rebuilt, how inequalities can be tempered, how communities can be better prepared to respond and take advantage of the intimidating changes occurring in the workplace, and how the net merits of trade and globalisation can be better recognised. But this is just a first step.
In New Zealand, business leaders saw reasons for optimism. Despite the leftist leanings of the new Ardern administration, their agreement to sign up to the important new 11-member regional trade agreement, the CPTPP, notwithstanding Trump’s noisy withdrawal a year ago, was an important affirmation that solutions to current problems do not sit in xenophobia or protectionism.
It seems the local commitment to kaitiakitanga could produce a balance, where local best interests can be served by trade and investment openness. Long live kaitiakitanga.
David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view.