New Zealand Aid Programmes – Helping the Pacific Prosper

Listener: 1 September 1, 2012

New Zealand ran out of farmland in the mid-1950s. Of course, it has always been limited, but the opportunities to create new farms ran out and the existing ones were getting bigger, so the job opportunities on them did not increase. Countries short of farmland used to acquire more by conquest (or settlement; 19th-century Britain colonised lands like New Zealand to defeat – perhaps only temporarily – Malthus’s dire predictions of population overwhelming food resources). Seventy years ago, the war aims of Germany and Japan included conquering others’ lands to feed their populations. They learnt – as we all have – that it is cheaper and fairer to do this by international trade. Despite knowing the limitations of free trade, economists can be passionate about it because it is an alternative to war. New Zealand is no exception.

A hundred years ago we had imperial ambitions in the Pacific. Today we trade instead, including in products we can produce ourselves. Tonga, 2000 km to our northeast, is not so tropical it cannot produce a variety of temperate vegetables that look healthy and attractive in the Talamahu market in its capital, Nuku‘alofa. Some are exported to countries such as Japan and New Zealand. The catch is phytosanitary controls. If that word seems too complicated, how about “fruit flies” (although there are other pests)? Such controls need not only occur for international trade. If foot-and-mouth disease ever breaks out in one of our islands, restrictions across Cook Strait will be slapped down faster than a government backdown on increasing class sizes.

We saw the effort earlier this year when one tiny fruit fly in Auckland caused millions of dollars of effort to eliminate it and any of its mates. Less prominently, we had to give assurances to some of our export markets that our products were unaffected. And don’t forget the decades-long negotiations with the Australians to get them to abandon their embargo on our apples because we had a bacterial disease, fireblight, that they didn’t have. What they were really doing was protecting their apple producers from foreign competition. The Pacific has between 22 and 50 fruit fly species; three to five are in Tonga. Shouldn’t we follow the Australian example and exclude all Tongan imports to look after our own producers? Our approach has been exactly the opposite.

Our Pacific aid programmes help Pacific nations to manage the phytosanitary risks, including providing facilities to sterilise their exports from the threatened bugs. If we can’t find a solution, the fruit and veges can’t come. And if a product does slip through and arrives with an infection – watermelon with a fungal disease was a recent example – our border controls come into full force. But why undermine our producers (although, of course, among the 39 horticultural products Tonga could send us are tropicals we can’t easily grow)? The international trade answer is that we can use our horticultural land for other purposes that, ultimately, give a higher return – perhaps dairy farms or export flowers. We also have development commitments to Pacific nations. We want them to prosper. Those living there may be welcome to come to New Zealand, but we don’t want them pushed out by grotty living circumstances.

Sadly, some – especially among the young – are unemployed. I was reminded of the consequences in Nuku‘alofa, which had riots in 2006. Some larrikins joined a serious political protest about the degree of democracy in Tonga. Somehow fires were started and buildings burnt down. There was looting, including by families who should have known better; if they were identified they were prosecuted – neighbours were often keen to help the police. There were also tales of community solidarity and bravery; Chinese traders were targeted – neighbours stood between them and the hooligans. Six years later, there are vacant lots in Nuku‘alofa’s central business district, yet to be rebuilt on. It was not war, but the empty sections are a grim reminder of how unemployed youth with little investment in an economy can wreck it. Hopefully, our importing from the Pacific (and spending as tourists there) more creates more jobs for the young, thereby promoting peace.