But this transition is treated as a magically vague happening and not explained for strong political reasons.
New Zealanders do not want to hear that India and China are their economic masters.
It would be political suicide for the Governments to fully explain the implications of this ‘transition.’ To enlighten the electorate that Australia and New Zealand have been reduced to a quarry for booming Jamshedpur steel furnaces would make any chances of reelection impossible.
Blind to reality
New Zealanders are not ready to take on the reality that the US is no longer our obvious choice for snuggling up to in a new Asia Pacific.
With Uncle Sam looking increasingly senile, how long can New Zealand and Australia unquestioningly endorse American policies?
New Zealand is a largely obedient ally of the US. I do not belittle that in the unhinged lefty sense. If it were not for the US, New Zealand would have predated its Asian destiny by many decades.
New Zealand will forever be grateful and culturally identify more with her North American cousins than with its Asian mates. But the faltering economy of the US and its ditzy expeditions in the Middle East has exposed a shrunken dog with a deafening bark.
The US economy has proved shockingly fragile. The myriad of reasons given as to why it cannot shake the unrelenting string of crisis are unconvincing.
Few are brave enough to talk of the elephant in the room. The US does not produce, it consumes.
A bizarre model
Australia and New Zealand have enthusiastically taken up this model. About 25 years ago, the manufacturing sector accounted for 20% of Australia’s GDP, down to about 10% today. Only one in 20 Australians are involved or connected with the manufacturing sector.
Our economies are overwhelmingly service based. We have become latte servers and pizza deliverers. We serve one another in a closed loop with the assistance of coffee machines and pizza ovens, all made almost exclusively in China or India.
This is of course globalisation, in which you are rewarded for your competitiveness, not your country club.
As a leftist, I take an eccentric view. I believe that globalisation has been more beneficial to countries that have been excluded from the world’s economic engine, strongly tempered with the West taking advantage of the sickening reality of child labour exploitation and the virtual non-existence of labour law implementation.
The West could not have seen the writing on the wall how India and other Asian giants have risen to the challenge. They have embraced globalisation with rabid enthusiasm.
A&NZ nonplussed
This has left countries like Australia, who dreamt that their products were infinitely superior and would find new massive markets, looking nonplussed. They never dreamt that they would become the market.
Australia’s economic position can now be equated with pre-independence India.
Mahatma Gandhi led huge rallies, burnt Manchester-woven clothes made from Indian raw cotton. He saw that the paralysis of the Indian economy stemmed from India exporting raw materials to be processed in England, and then insultingly imported back into India for purchase by the British masters.
Not unlike Australia exporting raw materials like coal that is then used to make steel in India that is then imported into Australia at a massive added value.
Australia’s economy rests treacherously on this model.
Almost 90% of diamonds from Australia’s Kimberley mine find their way to Indian traders who polish the stones in centres like Surat, adding a massive value to a resource that was sold in Australia at a fraction of its final Mumbai or Sydney showroom price.
Australasia has all but resigned to the idea that it cannot compete in manufacturing. The countries are still a force in innovation but I feel this century will be characterised by India and China shedding their well deserved nicknames of copycats and show the world they have a also have a strong creative spirit with future ground breaking research and development.
Emerging giants
This new Indian innovative spirit may break Australia’s back. If an Asian laboratory, with huge budgets, searching to solve over reliance on Australian resources finds a steel substitute, Australia will be banished to an economic wilderness. The demand for coal and steel manufacturing would plummet.
In an age of wind turbines and Macbooks, the whole process of steel manufacturing seems medieval crude and is begging to be replaced by a new competitive material.
With these future prospects, New Zealand must decide if it should keep snuggling up to Uncle Sam and be a detached quarry or partner with India and become once more competitive.
Roy Lange is a New Zealander based in Melbourne, Australia.
