Being on the Waikato branch committee of the Institute of Directors, I get a few interesting jobs. One such recent job was to write up some key points for a newsletter, summarising a speech given by Dr. Alan Bollard, Reserve Bank Governor, presented under Chatham House rules. This was not an easy task, so with thanks to the team at RBNZ I wrote:
“The IOD had the pleasure of Dr Alan Bollard speaking at the 20th AGM of the Waikato Branch. For the last ten years, Alan has held the position of Reserve Bank Governor. Previous high level appointments have included Secretary to the Treasury and Chairman of the Commerce Commission.
Alan’s speech was held under Chathman House Rules and was insightful into the workings of the international economy. Ken Williamson introduced Alan, with a reference to his fondness of African quotes, to which Alan replied with a Ugandan quote: never stroke a Porcupine backwards.
Alan had just returned that morning from a meeting of central bankers in Hong Kong, and he gave his views on the current situation in Greece, and the difficulties at an economic and political level facing the country. He also gave some background to the constraints within the Maastricht Treaty that formed the Euro, not even envisaging the exit of a country or the situation that Greece finds itself in now. Before joining the Euro, the Greek Drachma would have fallen dramatically in value, bringing the economy back into a competitive position through exports and tourism – with the Euro this option doesn’t exist, and reduces the options available to it.
Alongside the issues happening in Europe (in particular the PIIGS economies of Portugal, Italy, Ireland, Greece and Spain) was the effects of quantitative easing by both the ECB and US Fed Reserve, which impacts on the value of the NZ Dollar and our export returns. Highlighted were the returns on key commodities that we export, and the impact of the Christchurch rebuild on growth forecasts.
In wrapping up and commenting on NZ’s position relative to the rest of the world, we have a good growth story, transparent government accounts, and low levels of net government debt.”