NZ 3rd for economic freedom


New Zealand has overtaken Australia to 3rd place in the  economic freedom index published by the Wall Street Journal and the Heritage Foundation.

The media release (the link to which is under press releases overview here) says:

The world economy is “moderately free,” with a slight rise in economic liberty leading to a third annual global increase, according to the editors of the 2015 Index of Economic Freedom, released today by The Heritage Foundation and The Wall Street Journal.

The world average score of 60.4 is only one-tenth of a point above the 2014 average, but represents a 2.8-point overall improvement since the inception of the Index in 1995. Thirty-seven countries, including Taiwan, Israel, Poland and Colombia, achieved their highest-ever Index scores. Among the 178 countries ranked, scores improved for 101 countries and declined for 73. Ninety economies, or about half of all nations and territories graded in the Index, provide at least a moderate level of economic freedom for their citizens.

Yet the number of people living in economically “unfree” countries remains high: 4.5 billion, or about 65 percent of the world’s population. More than half live in just two countries: China and India. Twenty-six countries have “repressed” economies (scores below 50), while only five have earned the Index’s designation of “free” (scores above 80).

“The fundamental relationship between economic freedom and prosperity is readily apparent worldwide,” the editors write. “No matter the region, per capita income levels are consistently higher in countries that are economically freer.”

Despite being the only North American economy to improve in the 2015 Index, the United States remained stuck in the 12th spot globally and the second one regionally (behind Canada, which is once again No. 6 globally despite a 1.1-point drop in its score). The 2015 Index reports modest gains in six categories for the U.S., including control of government spending, which outweighed a small decline in business freedom.

Hong Kong and Singapore finished first and second in the rankings for the 21st consecutive year, although only two-tenths of a point separate their overall scores. New Zealand, which logged almost a full-point improvement last year, moved up two slots and reclaimed third place in the rankings, outperforming Australia (4th) and Switzerland (5th).

Chile’s score declined slightly, but it took seventh place. The score for Mauritius, the only Sub-Saharan country to rank among the top 10, declined one-tenth of a point, and it slid from eighth place globally to 10th. Estonia, meanwhile, rode an improved score into the world’s No. 8 slot, while Ireland again finished ninth.

The Most Free

  1. Hong Kong
  2. Singapore
  3. New Zealand
  4. Australia
  5. Switzerland
  6. Canada
  7. Chile
  8. Estonia
  9. Ireland
  10. Mauritius

The Least Free

  1. North Korea
  2. Cuba
  3. Venezuela
  4. Zimbabwe
  5. Eritrea
  6. Equatorial Guinea
  7. Turkmenistan
  8. Iran
  9. Rep. of Congo
  10. Argentina

Launched in 1995, the Index evaluates countries in four broad policy areas that affect economic freedom: rule of law; limited government; regulatory efficiency; and open markets. There are 10 specific categories: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall score. . .

Countries which have more economic freedom are also more prosperous with the social benefits which flow from that.

Oamaru gingerbread house in WSJ


There’s a little piece of Oamaru in the Wall Street Journal:

Hot properties Home Sweet Home is a slide show on gingerbread houses.

One of those featured is magnificent castle crafted by the owners of Oamaru’s  Pen-y-bryn Lodge, about which the WSJ says:

VAST LABYRINTHINE CASTLE | Fairy-tale gorging at its finest! Many tasty turrets; 87 bedrooms, most with partial views of exhausted bakers. Includes marzipan support staff.

More food less carbon


One of the criticisms of carbon emissions’ policy is the impact on agriculture and the need to increase food production.

Trade and Associate Climate Change Minister Tim Groser discusses this in an article published in the Wall Street Journal.

Reducing agricultural emissions cannot be at the expense of food production, however. To feed the world, food production will need to double by 2050. This is the same time frame in which the science tells us global greenhouse gas emissions will need to be halved if we are to limit global warming to two degrees centigrade. Already the food system is struggling to feed the world’s population, and food security will always take priority over climate-change considerations.

Groser says there are commercial reasons for reducing emissions and that the Global Alliance which New Zealand is promoting could find the answer to growing food without growing emissions.

If it doesn’t any attempts to reduce emissions will have to exclude agriculture because the need for food today will always win against the good of the environment tomorrow.

WSJ: NZ taxes itself for sake of being green


Just three weeks after saying our cap and trade rationale is a bunch of hot air, the Wall Street Journal has another opinion piece criticising us for taxing ourselves for the sake of being green.

. . . from an environmental perspective, it doesn’t really matter what New Zealand does. The island nation contributes 0.2% of total global emissions. The amended scheme isn’t expected to reduce even that already-miniscule figure much.

The government is right to be concerned about non-trade barriers which might be put up against our produce if we aren’t seen to be doing something.

But doing something isn’t the same thing as doing good.

That’s the problem with the Kyoto protocol – much of the response to meeting commitments will come at high social and environmental costs for little if any environmental gain.

The intent of the protocol may or may not have been worthy but its effects are much more about looking green than being green.

Hat Tip: Matthew Hooton.

July 8 in history


On July 8:

1497 Vasco de Gama set sail on the first European direct voyage to India. 1889


1889 The first issue of the Wall Street Journal was published.

1933 English comedian and actor Marty Feldman was born.

Feds deliver WSJ barracking to Obama


Federated Farmers President Don Nicolson has not just delivered a barracking to US President Barack Obama, he’s done it in the Wall Street Journal.

The government has to be diplomatic, but Nicolson pulls no punches in an opinion piece headlined Milking Trade Subsidies.

Less than six months into his new administration, President Barack Obama has already managed to spark a trade war with Mexico over trucking. Protectionist measures like quotas on Chinese tires could be on the cards, too. Now, newly expanded milk subsidies also threaten both America’s reputation and its trade leadership.

Last month the U.S. Secretary of Agriculture, Tom Vilsack, implemented the Dairy Export Incentive Program, or DEIP. Under the program, re-authorized by Congress in last year’s Farm Bill, the U.S. Department of Agriculture pays subsidies — euphemistically described as “bonuses” — to cover the difference between American farmers’ cost of production and prevailing international prices.

While DEIP is legal in the U.S., its implementation is a political decision. In the past, annual dairy export DEIP “bonus” values have ranged from about $20 million up to $140 million. While these are miniscule figures for the U.S., the payments distort the international price of dairy products. The first post-DEIP auction price for whole milk powder, conducted earlier this month, fell by 12% — the biggest price reversal since February.

Nicolson explains the negative impact subsidies have on consumers everywhere.

In the U.S., DEIP means American families pay higher taxes to support subsidized dairy farmers, wiping out any savings they might enjoy from lower dairy prices. As in other countries, subsidies effectively shield farmers from true competition. Higher prices always result, and this price increase is passed straight onto consumers. There’s nothing inherently “fair” about any form of subsidy.

Just as relevant, especially given Mr. Obama’s stated desire to improve America’s image abroad, is how unfair this subsidy is to dairy farmers in countries like mine, New Zealand. We’re the world’s second-largest dairy exporter, after the EU and ahead of the U.S. And we’ve reached that market position without any farm subsidies whatsoever.

Nicolson explains how subsidies were dropped in New Zealand in 1985 and while painful at the time, the agricultural sector is stronger now its standing on its own feet and has bettered productivity growth in every other sector in all but two of the last 27 years.

Now programs like DEIP are punishing us for our hard-won success.

Nicolson is justifiably proud that the WSJ accepted his column.

“Writing a letter to President Barack Obama was one thing. Getting wider attention on this most important issue is another.

“That’s why the Wall Street Journal was the logical choice. It’s the trade paper of American commerce and one of the most respected newspapers in the world. It has genuine gravitas with U.S. policy makers.

“It’s an honour and a bit of a coup really that Federated Farmers has had such a topical piece accepted. The timing is ideal, given it coincides with the Cairns Group meeting being attended by U.S. trade representative, Ron Kirk and the World Trade Organisation’s Director-General, Pascal Lamy.

“New Zealand and its farmers are up against a powerful U.S. dairy lobby that’s only interested in keeping its subsidies. Hopefully this opinion piece will give U.S. policy makers time to pause, think and reconsider what folly it really is. . .

“Federated Farmers is acting proactively to protect farm viability and the returns that New Zealand’s dairy farmers receive. Unless subsidies and protectionism is nipped in the bud, history tells us they’ll expand and morph into other areas. 

This more than justifies the subscription Feds charges its members and any farmer who isn’t a member should sign up because of this.

Feds has leapt gumboot deep into the slugde of growing subsidies and need our support to carry on the fight.

Hat Tip: The Bull Pen

A $1b interview


The Wall Street Journel interview with John Key  generated a bit of interest in New Zealand, but mostly by way of the isn’t-it-good-the-world-notices-us reporting.

Bernard Hickey reckons it was worth much more than that and explains how John Key secured a US1bln loan for New Zealand with a newspaper interview.

Hickey’s post explains how ANZ  National secured a $1b bond issue in the USA, it’s worth reading in full so I’ll leave it with this:

It turns out the interview was a crucial factor in the success of the bond issue, the first long term issue by a New Zealand bank since July last year. It is likely to set the tone for more.

Thank you John.

JK for President?


The Wall Street Journal interview with John Key  has been attracting a lot of local interest.

It’s a long time since New Zealand was regarded as a leader in economic policy. Just as interesting as the story are the comments which are generally supportive, even envious and include the offer of a promotion  for John:

Richard McAllum:

A proposal:

1) Amend the Constitution to permit a non-native born POTUS

2) Offer Mr Key whatever he wants.

Hat Tip Anti Dismal and Not PC

Hot air will cost us dearly


Submissions on the review of the Emissions Trading Scheme closed at the end of February and how many farmers got round to expressing their views?

I suspect it was very few of us as individulas so thank goodness for organisations like Federated Farmers and Meat & Wool NZ which will have done full and well considered submissions on our behalf.

Just how necessary this is was brought home at an agri-business discussion group meeting in Wellington on Friday.

Chatham House rules applied so I can’t go into details but we were given a very bleak message about the very real costs and no real benefits of including agriculture in an ETS.

We were also left in no doubt about how strong the green (though not necessarily Green) voice is in policy formation and how important it is for the agricultural lobby to speak up so we’re not all drowned in greenwash.

Apropos of this issue, Lambcut who has joined Roarprawn  discovered that New Zealand’s battle against burps and farts from farm animals has reached the Wall Street Journal. 

It’s headed Mutton Methane: Reducing Flatulence to Reduce Global Warming  and says:

In the U.S., the climate-change wrangle focuses on remaking the energy sector. Globally, however, livestock emissions outweigh emissions from the entire transport sector. Add in emissions from deforestation—which is often a consequence of razing trees for fresh pasture land—the plant and animal world makes up about 40% of global greenhouse-gas emissions.

That will feed in to the growing lobby which wants us all to go vegetarian to save the planet and we can be only slightly reassured by the comments the article engendered, most of which thought it was much ado about nothing but hot air.  Jon Morgan  looks at the comments and notes:

These people missed that the US had a large number of cattle that would benefit from New Zealand’s research. Though agriculture produced 9 per cent of the US’s greenhouse gas emissions, its farm animals were responsible for 19 per cent of the world’s emissions. New Zealand’s livestock produced 0.2 per cent of the world total.

If our research can be applied elsewhere, so much the better but those figures makes the submissions to the ETS review even more important because if agriculture is included in the scheme it would have a huge economic impact, no environemntal gain and all over just .2% of global emissions.

That the issue is on the front page of the Wall Street Journal should serve as a warning because the campaign against meat will grow and we  need facts to counter the emotion of the environmental activisits or the hot air will cost us all dearly.

More melamine contamination


The Wall Street Journal reports that 31 more batches of Chinese milk powder were found to be conaminated with melamine.

The new batches were mostly milk-powder products for adults. A previous round of tests found melamine in 69 batches of infant milk powder.

The new figure brings to at least 100 the number of tested batches of milk powder found to contain melamine. Dozens of brands sold by more than a score of dairy firms, including some of China’s biggest names, have been among those tested.

A Japanese company is recalling custard tarts imported from China which contain tiny amounts of melamine.

The level of contamination posed no risk to health “if (an average adult) keeps eating 428 of them every day for life,” the company said in a statement. The company said it has received no reports of health problems.

And tests in Hong Kong cleared sweets produced by several Western brands and manufactured in China, including Mars, Cadbury and Kraft.

Hat Tip: Inquiring Mind.

San Lu scandal cost Fonterra $139m


The poisoned milk which contaminated infant formula produced by San Lu, in which Fonterra has a 43% stake is one of the reasons this season’s milk payout is lower than expected.

The $139 million loss is only money and to give the company some credit it made this clear when making the announcement today.

Fonterra chairman Henry van der Heyden said: “We are certainly not putting the financial consequences ahead of our primary priority of consumer safety. We are focusing all our efforts on what Fonterra can best do to work with the Chinese authorities and help get safe dairy products to Chinese consumers.”

The $139 million estimate is made up of the cost of recalling products plus Fonterra’s “anticipated loss of San Lu brand value”.

Mr Van der Heyden said: “At yesterday’s board meeting, the directors discussed the San Lu tragedy in depth and were fully supportive of the approach taken to date by Fonterra management and staff.

“Throughout this crisis, Fonterra’s paramount concern has been for the health and safety of Chinese consumers and recalling contaminated product as quickly and effectively as possible in the Chinese environment. The scale of this tragedy has been truly shocking and our heartfelt sympathies go out to all the affected children and their families.”

He described the latest revelations that San Lu management were investigating complaints of sick infants as early as eight months before the San Lu Board and Fonterra were first informed on August 2 as “deeply concerning”.

“That Fonterra was not informed earlier is frankly appalling,” he said.

It is, but Fonterra must also question its own actions and strategy in China.

The poisoned milk as an act of sabotage. But that should not have been unexpected and the company should have taken extra measures to safegaurd the production chain in light of recent quality problems with Chinese products.

 Inquiring Mind has a list from the Financial Times of product recalls in China in the past two years which includes dumplings containing pesticide, toothpaste containing diethylene glycol,  and pet food which poisoned animals.

Fonterra’s first priority now is to do what it can to help the victims of this tragedy.

It then owes it to its customers, its shareholders, its own and New Zealand’s reputation to ensure the very high standards it requires in the production and manufacture of its produce here are maintained in any ventures it undertakes elsewhere.

Other views on this issue: Inquiring Mind  comments on a Wall Street Journal story; Poneke looks at international coverage; Macdoctor says it’s likely further deaths will be supressed; No Minister  sees a political angle and Kiwi Polemicist gives some background information.

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