3 posts tagged “rich–poor gap”

Since India has been extremely kind to me—the people here are amazing—I owe it to this nation to bust a few stereotypes.
   First, the food. It is excellent and in two days I have had no problems with my tummy. ‘Delhi belly’ is a cruel stereotype that I was given by some friends prior to my departure, though I knew instinctively it was cobblers. The same rule applies here as everywhere else: if you are careful about what you stick in your mouth, you are fine. People do know that in rural areas things can be tougher. Nevertheless, I can make this conclusion: Indian food is fab and way better than expat Indian restaurants.
   Secondly, this is certainly not a backward country, and anyone who has read books such as The World Is Flat would know that. Here I am, surfing on wifi, and at speeds and with connectivity better than what I might find in other parts of the world, and that includes New Zealand. There is a rich–poor gap and that does mean some poverty but that also generates invention. I saw booksellers yesterday with used books alongside new ones; we should be copying some of the recycling efforts that Indians undertake every day.
   If your impression of an Indian car park is old colonial hand-me-downs, think again: the Daewoo Lacetti (Chevrolet Optra) is newer than what many countries sell, including Australia and New Zealand:

Chevrolet Optra facelift

We’ve ended January 2008 here in New Zealand with 10 murders. The government is saying this is an anomaly, but is it?
   Crime has been rising in New Zealand steadily since I have been observing the numbers and for older New Zealanders, the latest figures are a disgust.
   I am not overly surprised, given the rising gap between rich and poor, suggesting a mismanagement of the economy and an absence of jobs, while values and education have suffered at the same time.
   Those older New Zealanders who can remember back to the 1950s remember a country with roughly half the population and 18 convictions for murder between 1951 and 1957.
   I realize actual murders and successful convictions are different, but assuming that there were a couple of murders in this period that didn’t lead to a conviction, then we’re still looking at 20 over a seven-year period from January 1951 to December 1957.
   That’s roughly three per annum. If there’s double the population now, then we should expect statistics to show that there are six per annum for 2008.
   Remember that medical science wasn’t as advanced, so if we adjust for that, then maybe this estimate isn’t actually that far off.
   In this election year, I wouldn’t buy any party line that says things are all right. I wouldn’t even buy policies that talk about tougher sentencing. Because neither of these address the root problem.
   We need policies in New Zealand that say: we will address this rich–poor gap.
   How? Well, how about recognizing what’s going on instead of kowtowing to multinational corporations operating here?
   Since the end of Muldoonism, New Zealand has become the poster boy of the technocracy, doing everything that the economic experts said should work: privatization, free markets, the ending of tariffs.
   Ask yourself, even in the last five years, can you afford more or less of the things you want in your life? I don’t care if you are a student or a wage-earner or even a small business boss. The answer is probably no.
   When will we wake up and realize that these policies have driven a wedge between the rich and poor in a nation that once prided itself on being a fair, just, middle-class country?
   Since Labour sold off so many state assets in the 1980s, something National continued doing in the 1990s, we now have a lot of things in the hands of foreign corporations.
   Now, if these corporations were running these assets more efficiently, logically the government should be able to increase its tax take, which leads to more money for hospitals, schools and social services.
   But the idea of being a private corporation that spreads its activities across different countries is the ability to minimize the tax you pay, by writing some of it off with the operations you have in other places.
   So the opposite has happened. Meanwhile, these corporations have shed staff so the people who used to work there wound up on the dole, and there’s less money to pay out.
   The rich in cahoots with the big companies have done well while everyone else has suffered.
   To make up the shortfall in government coffers, the Labour Government introduced Lotto and basically became the biggest attraction for gamblers. Now we are reporting a rise in calls to gambling helplines.
   The other idea behind liberalizing our markets was so New Zealanders could go and compete globally. But how were we expected to make that leap? Even the richest New Zealanders of the 1980s didn’t survive the decade in good financial shape.
   We need to innovate and create and start new businesses but the support, as any entrepreneur will tell you, is not there.
   Yet New Zealand is a place of great, novel ideas that often stay dormant, unless that Kiwi goes offshore and has a foreign company become interested.
   I have repeated this example many times: if TradeMe was really that successful, it would have bought Fairfax, not the other way around.
   The solution must be to have New Zealanders own New Zealand businesses, so that New Zealanders have jobs and taxes and profits stay in New Zealand.
   This is not about putting the barriers back up. The multinationals have embedded themselves too much into New Zealand.
   We can only hope to create global businesses that do for us what the multinationals have done here. We also need to encourage entrepreneurship at the small- to medium-sized business level so that everyone can have a chance to get his or her idea off the ground, beating the world. We are still blessed with a fairly good internet infrastructure that can become a useful tool for New Zealanders. 
   We need to consider tax policies that help the poor and penalize the sources for the inequity in New Zealand. The next government needs to play, essentially, Robin Hood. It needs to create policies for the middle class of New Zealand and what makes them happy wage-earners or self-employed business people, because that is where the majority of the tax will come from. ‘Teach a man to fish and he will eat for life.’ Time to stop handing the fish out and pretending it was a conjuror’s trick. (It was only cool when Jesus Christ did it with the 5,000, anyway.)
   And while I am a globalist at heart, this economy is too small at this point to allow technocratic policies to have free reign, without someone seeing to the interests of the Kiwis that need the most help. I want to see food banks disappear in five years because everyone has a job.
   An innovative government that might create new businesses itself can be a useful agent in the business community. In the 1970s and 1980s, New Zealand’s dual-fuel natural gas infrastructure is still a dream for most countries. Yet a huge percentage of the nation’s cars ran on natural gas back then, able to fill up at the majority of stations across New Zealand.
   Government participation in a modernized Keynesian model could just work in 2008 and one only needs to look at Singapore and Malaysia for nearby adaptations of the very policies New Zealand had only 30 years ago.
   No one can claim they are paupers, and Malaysia itself did find, in 1997, that the technocratic way of thinking didn’t work for them. Having a strong man as a prime minister worked in its favour as Dr Mahathir bin Mohamad was able to say what he thought of the corporations wreaking havoc on his country’s financial markets.
   And with relatively little corruption in New Zealand, government innovation is not a bad idea, provided these state enterprises do not get overmanned to the levels they were at in years past.
   Remember, Absolut, the people who make the vodka, is a government-owned enterprise. No one seems to urge the Swedish Government to divest for the sake of the technocracy.
   Then, those who might find themselves in similar situations to the 10 murderers won’t suffer from envy, depression or rage.
   In the 1950s, New Zealand had about nine people unemployed. In the 2010s, we should be looking at 18. Full employment is key and the policies we are following now—policies which Labour and National predict they will essentially follow—won’t lead to any change in our rising crime rate or the widening gap between rich and poor, which neither party has even mentioned in the lead-up to the 2008 elections.

Anita Roddick was an inspirational lady. Here are some quotations from her last interview in The Daily Telegraph.

On the US wealth divide
It’s a society that is absolutely separate, it’s a gated community living next door to a society that is impoverished, a gated community living next to ghetto—you see that all the time and it will happen here—the two poles of our society.
   Everything is here for the wealthy. You can hide your money away in tax havens, you can find ways of making more money.

The global credit crunch in the US
It's like that fresh flesh: I want it now, you know I can’t work for it, I can’t be an apprentice, I can’t look up to it. And people are living longer. The elderly don’t want kids in their home. Everybody’s staying at home and there’s not a work ethic that I’m seeing. There’s got to be more creative ways of finding jobs and getting skilled or finding jobs that are worthwhile and you don't have to be skilled for.

B-school
This notion that to be in business you've got to go to a business school: it’s crap. Because business schools only shape you to be a very efficient person working in a very traditional system—but the most exciting things are what’s being done untraditionally.

L’Oréal and the Body Shop
I’m thrilled with it, absolutely bloody thrilled with it. I think they’re going to do amazing things. I think they’ll be able to—with the research companies that they’ve bought—not the product companies—of completely eliminating animal testing in the future. It will not be part of the industry. Because they're doing cell culture testing—they’re making their own cells and their own skin. Every ingredient, every food product will be tested.
   For me it’s been a wonderful gift because a company that is a strong understanding brand bought it. The alternative was that a group of financiers would come in and asset strip it—they wouldn't give a toss for anything.

Outsourcing
We’re not a manufacturing country anymore. But I think you get people to understand the story behind what they buy—to make that one jump and say what's the real cost of something, if everybody got another 25pc for the garment they made then you wouldn’t get this big social dilemma.
   I remember going to a sweatshop area in Nicaragua, and it was quite a modern factory but there was no place to eat or have half an hour off. And the women were walking some 3 miles to work every day. And I walked back with them, and they were living in cardboard huts. One woman said to me, whatever you do tell them all that we want to do is move from slavery to poverty. They were forced to take contraceptive pills, they were thrown out if they had a grey hair and this is nothing compared to what goes on in Bangladesh.

The futility of “marketing”
We never had a marketing department for 20 odd years. Every year we were getting awards for our marketing, and we didn’t know what it was. The minute we brought in marketing as a traditional thinking—cover your trucks with messages, environment human rights etc, went out the door.
   We had an enormous amount of humour. I remember on Mother’s Day we had a message saying ‘God couldn't be everywhere so he created mothers’. We were doing really quirky things that got people engaged.

   There’s more on Dame Anita Roddick, DBE today in Lucire, along with a related op-ed from yours truly about her leadership.