Finland and New Zealand

So there is talk of comparing New Zealand to Finland.  Fine, I still think this is as pointless as comparing us to Australia – but not to worry.

The plus of comparing us to Finland rather than Australia is that Finland is a small open economy more in our mold.  However, they are also significantly closer to market – so any thoughts that we can become like Finland have to be tempered by this fact.

Deep down I don’t believe in government oriented “transformational change”.  If anything, if the rest of the world is busily trying to compete in making information technology and manufactured goods then it is doubly good that we stick to our comparative advantage of making food – because it will become relatively more valuable (just look at our current terms of trade).

However, I have to take issue with this attack on using Finland as an area to compare us to.  Given both parties accept that we should arbitrarily compare ourselves to other countries (which I don’t) the current unemployment rate is not a fair figure to look at – instead we should keep an eye on PPP adjusted GDP per capita.  Finish people are, on average, 30% more wealthy than we are.  So the “final goal” associated with copying Finland seems to be the same goal that the current government is suggesting – magically increase incomes by 30%.

1 reply

Trackbacks & Pingbacks

  1. […] « Finland and New Zealand […]

Comments are closed.