It will be a very long time before we beat our record of 7 million arrivals in a year and, asks Rod Oram, why would we want to?
Opinion: All being well our international border will be fully open again by October, depending on how Covid-19 tracks in the meantime, the Prime Minister announced yesterday.
But given the many and profound ways the pandemic continues to change lives, economies and societies – for better and for worse, here and abroad – there’s no knowing yet what that means for international travel in and out of New Zealand.
Only one thing is certain. It will be a long time before we beat our record of 7.03 million arrivals in a year, which we set in the year ended March 2019. Of those, 3.9m were overseas visitors and 3.1m were returning NZ residents, so great is our love of travel abroad.
Arrivals and departures across the NZ border
Come April 10, our border will have been all-but closed for two years. In that time only 225,000 people have arrived – not the 14 million or so who might have if Covid had not upended our lives.
Being so suddenly cut off from family, friends and others overseas was brutal. Abundant virtual communications was a partial relief but no substitute. We’ll never catch up the time and experiences we’ve lost, although being able to meet again will help heal some of the hurt.
The pandemic has had far wider impact on society, here and abroad. Positive aspects include examples of solidarity and caring. Negative ones include the rise of disinformation and distrust, of anger and exacerbated inequalities.
“We can’t ignore the warning signs that social cohesion is under threat in Aotearoa New Zealand,” said Koi Tū: The Centre for Informed Futures at the University of Auckland, when it released a report on the subject in December. The Centre is led by Sir Peter Gluckman, a former Chief Science Adviser to the Prime Minister.
The picture is even more complex and uncertain abroad. On the positive side, as the Brookings Institute in the US said in its April 2021 report How Covid-19 changed the world:
“The COVID-19 pandemic changed the relationship between the market economy, state, and society in the G-7 countries and beyond. While economies collapsed due to the shutdown of broad swathes of the economy, the state and civil society have gained new significance in protecting people from the pandemic’s effects. This dramatic shift has recalibrated the public’s perception of the role of markets, government, and society in response to the worldwide shock.”
Thanks to our successful response to Covid-19, we've learnt some of those lessons over the past two years. But we've yet to apply them with conviction and speed to our urgent economic, environmental and social challenges. Rectifying them our our greatest opportunities for progress.
Conversely, on the negative side, Brookings identified the deep social upheavals afflicting countries. These are viciously dividing people and making progress on any issue next to impossible. We're seeing the same damaging dynamics at work here, albeit less deeply. But we're not immune. We could exacerbate these ills if we don't find ways to bring people together.
Such social factors matter hugely. They will determine how well all countries respond to their post-pandemic challenges. For example, the more cohesive a country is, the better it will reconfigure its economy and thus the more resources it will have to achieve social progress.
When the Prime Minister announced on Thursday the government’s timetable for reopening the border, she spoke of a “recovery where our focus is on creating higher wage jobs through lifting our productivity, growing our skills and investing in our innovation. It is a future where the environmental challenge of climate change is matched by the economic opportunities of low emissions technology and regenerative agriculture.”
She set a very high bar: “In fact, when we look back in 20 years’ time at this period in our country’s history, I don’t want people to just see Covid. I want them to see an economy and country that was fundamentally repositioned to become more sustainable and resilient and taking on the challenges of poverty, inequality, climate change and mental health, problems the world is grappling with.
“These are challenges I know we can tackle head on – because we already are.” She referred, for example, to increases in infrastructure spending and skills training.
Those are the right goals, of course. But the government is still far short of laying even just the groundwork for them, let alone actively helping our whole-of-society progress on them.
It’s true our economy has weathered the pandemic better than many others have. The cost so far has run to many tens of billions of dollars, not just from absent tourists and workers but also from lost export opportunities and some other activity.
Yet, despite continuing strains and dislocations, the economy is proving adaptable and resilient. Companies and their staff have shown great innovation. I reported on some examples in this series of profiles during the first lockdown. Billions of dollars of government support for them have been vital too.
Yet, business and government acknowledge there’s no way the economy will return to its pre-pandemic state. Nor would they want it to, given its inability to deliver higher skills and wages, more homes, greater sophistication and cleaner environment -- in other words, to contribute to deep sustainability in all senses of the word, economic and ecological, social and cultural.
So, now comes the hard part. Business, government and wider society have to work together to reinvent the economy so it can deliver on all of those. Almost every aspect of the economy is in play but here are three of the biggest transformations we need. Each is vital for its own sake. But crucially each will help spur far wider, beneficial change.
► Climate: We built our old value economy on abundant but highly polluting fossil fuels. To avoid the resulting climate and ecological catastrophe, we have to create a net zero emissions economy in less than thirty years. The next crucial step on that journey is our emissions reduction plan, which the government is due to deliver at the end of May.
If we're serious about slashing emissions and building a zero emissions economy we'll need to attract a lot of expertise and capital from abroad to help us. An open border and the right incentives to bring people and money here are essential.
► Workers: We built our old low value economy on a relatively low wage, low skill workforce. When we ran out of New Zealanders to employ so poorly, we became overly reliant on temporary migrant workers and immigrants. With the border reopening, many employers will be tempted to revert to that old model.
But it won’t work. Labour markets in many countries have changed dramatically in favour of the workers. This week, for example, the jobless rate in the eurozone hit a record low of 7 percent, with youth unemployment also at an all-time low of 14.9 percent. Consequently, eurozone businesses are experiencing unprecedented labour shortages.
Eurozone businesses facing unprecedented labour shortages
► Tourists: We built a low value tourism sector on abundant international tourists, thanks to the plunging cost of long haul flights over recent decades. But productivity in tourism (measured by GDP generated per hour worked) was lower than the average for the economy. Thus each new job in tourism made us on average poorer as a country. And the fast-rising tide of tourists was a strain on many communities and their environments that hosted them.
Pre-pandemic, some leaders in the tourism sector were already working on reinventing it, as I described in this 2020 column. Now those ideas are catching on across the sector and are beginning to reshape attitudes and strategies.
We’re far from alone in this. Some other high intensity tourist destinations are also planning very different post-pandemic strategies, with Kyoto as one example, while Switzerland’s new national tourism strategy sees long haul travellers being a smaller share of its business.
So, with massive transformations like these three in play - indeed, the reshaping of our entire economy and society - it will be a long time before we break our record for border crossings. But that’s a sign of economic progress not of post-pandemic stagnation.
