Harvard speech, trade top PM’s agenda in US
Prime Minister Jacinda Ardern is travelling to the US for one particular reason, but it has a much broader purpose.
The reason that Ardern is travelling to the United States is to give the Harvard commencement speech, something that she was asked to give many months ago. It is a significant invitation and something that is not given out lightly. Previous speakers are many and varied, including John F Kennedy, Winston Churchill, Angela Merkel and J K Rowling.
The broader reason for the trip, however, is to signal that, once again, New Zealand is open for business.
In September last year, when former prime minister John Key criticised the Government for turning New Zealand into a hermit Kingdom, it stung the Government. In the middle of trying to manage a pandemic as Delta spread throughout the country and Auckland was locked down, Ardern and her ministers thought this unfair.
But, as is often the way with criticism, it stung because it was true. While there were perfectly valid reasons for the closed border, if free movement of people was the criteria, then on any measure New Zealand was a close to a hermit Kingdom and had remained so for about two years.
Now that the borders are open again, and predeparture testing is going to be ditched by July 31, the prime minister is basically hanging out New Zealand’s shingle again and saying: come here to work, play and invest.
It is significant that she will be taking meetings with senior executives from both Microsoft and Amazon Web Services (AWS). AWS – which is the cloud
computing part of Amazon’s business that broadly provides backend web services for companies – received Overseas Investment Act approval for a new $7.5 billion new data centre in Auckland less than a month ago. The fact that it took six months to get approved shows how unhelpfully sticky and dirigiste New Zealand’s foreign investment regime has become.
But now that it has gone through, New Zealand is clearly keen to gin up more of this sort of investment. Ditto, Microsoft. In 2020, the software giant announced that it was also investing in a cloud computing centre in New Zealand.
A key part of the Ardern’s pitch to both of these companies will be to cement relationships and sell New Zealand as a good place to invest. Microsoft’s annual revenues are not much lower than New Zealand’s entire annual gross domestic product, while Amazon’s is double.
For a small country such as New Zealand, even relatively small investment decisions by these firms can be significant.
Ardern will also be joined by executives from Zespri, Fonterra and Silver Fern Farms, pushing the sales pitch for innovative food.
The other trade-related big part of the trip is pushing for tourists. This will be a slow burn. Accordingly, to the International Air Transport Association, international trips in 2021 were only 27% of 2019 pre-pandemic levels. That’s expected to grow to about 69% this year, but international traveller numbers are not expected to reach pre-pandemic levels again until 2024 – at the earliest.
New Zealand is a long (and expensive) flight from just about everywhere, so the Government and Tourism NZ is trying to put it on potential tourist radars now.
Then there is the political engagements: namely, a possible trip to White House and other meetings in Washington.
At a political level, New Zealand’s relationship with the US has been gradually strengthening over the past two decades.