I like Brennan McDonald’s assessment, explaining the report in terms of four biases of non-economists. Worth a read.
My reaction, well, there were two. First, let me send you to an earlier post about giving money to exporters. I do understand that a high exchange rate hurts exporters — ce sont mes oignons. The point that all the economists are making, though, is that there are two sides to this issue. Actually, there are a number of other sides to it. When we think of the producers, we should also bear in mind the consumers who benefit from high exchange rates (and the producers who benefits from cheaper input costs). When we think of a high exchange rate, we should remember that someone is buying the kiwi at that rate.
And every time a local council rejects rezoning land for housing, the forex rate ticks upward another notch because limited supply begets higher housing prices begets higher interest rates begets a higher exchange rate (so has it been written, so shall it happen unto us).
My other reaction was to head straight to the Growth and Innovation Framework (pdf). You remember that, don’t you? It was 2003, a few industrial policies ago, and it was only the latest in a line, but it’s the one whose name I can remember. This latest report laments that the government just doesn’t care about the manufacturing sector or exporters, and a history of neglect has led to this sad state of affairs.
New Zealand also needs to improve its export performance (p. 2)
[improved] Value added in hightech manufactures as a share of total gross value added (p. 8)
Under global connectedness, we are supposed to look for ‘exports of high and medium-high technology goods’ (p. 9)
Under indicators about the economic conditions, we want to promote ‘macroeconomic stability’ (p. 9).
And on and on…
I wonder what the overseas market is for old wine in new bottles.