Reports & Media

Media release: Government needs to open New Zealand to investment, not close it

Wellington (7 November 2017): As Prime Minister Jacinda Ardern, Foreign Minister Winston Peters and Trade Minister David Parker head for the APEC meeting and the East Asia Summit, The New Zealand Initiative welcomes the Government’s commitment to free trade agreements.

But the think tank warns that New Zealand will likely fall further behind as a destination for foreign investment (FDI) if the Government pursues its policy intentions.

Commenting on New Zealand’s trade and investment policy, the Initiative’s Executive Director Dr Oliver Hartwich said: “We have had a lot of political theatre on foreign investors in our housing market. And though New Zealand was, until now, relatively open to foreign investment in that area, in general we are now the most closed economy in the developed world as far as foreign direct investment is concerned.”

Dr Hartwich points out that in the OECD’s latest Foreign Direct Investment Restrictiveness Index, New Zealand came out last. No other advanced economy is as difficult to navigate for international investors as New Zealand. Only some developing economies are worse than New Zealand.

“Of all economies surveyed, only the Philippines, Saudi Arabia, Myanmar, China, Indonesia and Jordan are more restricted on FDI than New Zealand. And even Morocco, Cambodia and Vietnam have a more open FDI regime than New Zealand,” said Dr Hartwich.

“If we do not liberalise our FDI regime, New Zealanders will miss out on business opportunities. Every study shows that openness to FDI is important to create trade links, open new markets and get access to international value chains.”

“If the Prime Minister needs any inspiration on FDI, perhaps she could talk to her APEC hosts in Vietnam. Since the mid-1980s, the Vietnamese have reduced FDI barriers dramatically. They are now more open than New Zealand. At the same time, they have lifted inward investment from little more than zero percent of GDP to more than 50 percent of GDP,” said Dr Hartwich. “This is how you create growth, jobs and opportunity.”
 

Read more:
The New Zealand Initiative has previously documented the poor state of FDI regulations in a series of reports:
Open for Business: Removing the barriers to foreign investment, Dr Bryce Wilkinson 
Capital Doldrums: How globalisation is bypassing New Zealand, Dr Bryce Wilkinson
New Zealand's Global Links: Foreign Ownership and the Status of New Zealand's Net International Investment, Dr Bryce Wilkinson

ENDS

Dr Bryce Wilkinson and Dr Oliver Hartwich are available for interviews, please contact:

Linda Heerink, Communications Officer
The New Zealand Initiative
Phone: +64 4 494 9109
Mobile: +64 21 172 8036
Email: linda.heerink@nzinitiative.org.nz   

Appendix: The FDI Regulatory Restrictiveness Index (FDI Index) measures statutory restrictions on foreign direct investment. A value of ‘0’ represents an open economy; a value of ‘1’ is a closed economy. Negative changes between 1997 and 2016 are an improvement (and vice versa). Source: http://www.oecd.org/investment/fdiindex.htm  
 

Non-OECD economies