The Crafar Saga: no early solution and an opportunity

The news that there will be an appeal by the NZ-based bidders  against the High Court judgement in relation to the competence criterion as applied to the overseas bid  means that the legal process around the Crafar farms will continue. The potential for the legal questions going on for some time means that the politics of the Crafar sale, and of the wider question of FDI, will continue to be news, an outcome not to the government's liking. It means that any move by government will be swooped upon by Labour, NZ First and the Greens, eager to score points at the expense of a pro-business and pro-FDI party, increasingly out-of-step on this issue with the NZ population.

It adds up to a headache for government, but an opportunity for NZ to think through its position on FDI in a more transparent way. Historically, the policy position has been determined by a closed group of policy-makers and politicians. most wedded to a very orthodox economics. The debate is now widening its audience, and the orthodoxy is no longer so powerful.

My own view is quite clear. FDI is not necessarily bad, and to prevent it may well produce serious adverse effects. It must, however, be managed strategically by any nation-state. Thus, for example, China opened its economy on the basis of joint ventures, and blocked for many years wholly foreign-owned enterprises. Strategic assets - land, infrastructure, utilities etc - should not, in general, be overseas owned. Elsewhere, I am more open to joint ventures and investment. It is perfectly easy to make such regulations clear and operational, so all domestic and external interests are aware of our position. I can hear the chorus - but what about our commitments to the WTO and other nations with which we have bilateral or multilateral arrangements? My response is that nation states can renegotiate any arrangements. No treaty or commitment is, or can be expected to be,  binding for all time.

Let the public debate begin.