In Focus

Māori economy –burden or taonga?

Thursday July 12, 2012 Dr Ganesh Nana

 

BERL has estimated the asset base of the Māori economy to be $36.9 billion in 2010.  And for those who think this is all due to Treaty of Waitangi settlements, I’d humbly point out that such settlements have barely reached $2 billion.  This story is bigger than Treaty settlements, much bigger; and not just in quantitative or numerical, terms.    

 

The Māori economy has a broad spread across sectors; but, the latest set of numbers shows the concentration of assets in land and resource-based activities such as farming, fishing, and forestry continues to dominate this economy.  While $36.9 billion sounds large, a larger challenge remains in lifting the returns accruing from these assets.  These returns could be in the form of more skilled, higher waged jobs; higher incomes; exports; or additional Gross Domestic Product. 

 

Whatever the objective, lifting the returns in these sectors we believe lies in the application of innovative techniques in management, processes, and sustainable resource use.  To lift these returns and meet the challenges associated with this, requires courageous leadership to not only see the potential, but to also help remove the obstacles in the way of its realisation.

 

Our CGE modelling suggests a potential gain of an additional 150,000 jobs, or $12 billion annually to GDP should the challenge be accepted and successfully realised.  Conversely there are significant losses if we choose to do nothing now.

 

Māori enterprises need to achieve significant scale (or size) to exploit opportunities.  Unfortunately, one of the common denominators across many of the assets is their small scale.  However, scale can be achieved through strategic collaboration.  This requires leadership, and the ability to make and implement decisions.

 

But, along with small scale and fragmented land holdings, there are unclear governance and management structures and the inability to implement decisions.  Legislative restrictions on ownership are also impeding decision-making.  Legislation needs to change to facilitate this, and our modelling provides the quantitative evidence to spur this.

 

Looking beyond the numbers, there is another aspect of the Māori economy that reinforces my view that realising the potential of Māori enterprises and organisations could deliver much more to the wider New Zealand economy.  This aspect is the time horizon or perspective underpinning the kaupapa of many Māori enterprises.  Many of these enterprises tell me that their timeframe is long-term or intergenerational.

 

Arguably, New Zealand’s economic activities have an essentially short-term outlook.  Other New Zealand businesses (and media) primarily focus on the next OCR announcement or house price index.  Investments need to promise quick returns otherwise they rarely see the light of day.  This is reflected in our poor investment record in research and development, general science, or physical infrastructure and maintenance – all of which generally don’t yield returns until well into the long term.

 

If the longer-term focus of Māori becomes more pervasive and indeed begins to underpin activities across all areas of the New Zealand economy, the better for all.  A long-term perspective, compared to a short-term outlook, can cast a very different light on investment and payment decisions, as well as on the building of partnerships and relationships.  Indeed, it can alter the very nature of one’s business undertakings. And if New Zealand businesses and enterprises begin to highly value the creation of long-term relationships, as opposed to undertaking business transactions with partners and customers, the better for all. 

 

Strategic relationships are likely to be central to the global economy of the next generation.  The ongoing rise of the Asian hemisphere, in contrast to the waning of the North Atlantic hemisphere, will see changes in the way business is undertaken.  A longer-term perspective is definitely going to be a plus in such a world.  That suggests growing Māori enterprises and the Māori economy could well turn out to be the taonga from which we all gain.