Professor Robert MacCulloch: The World Bank confirms 150 Developing Nations are on Track to overtake NZ....

The World Bank confirms 150 Developing Nations are on Track to overtake NZ, as a succession of National and Labour governments have turned NZ into one of the planet's worst performing economies

If there is one graph that symbolizes the relative economic decline of NZ, I believe that it is the one below. It measures NZ GDP per capita from 1990 to 2022, and compares it with all other nations in our Asia-Pacific region. Its a good comparison, since it controls for the effect of geography, and how the rise of many Asian-Pacific nations should, but haven't, been strongly tied to NZ fortunes (China having become our biggest export partner):


Click to view

The scale is logarithmic for a reason. It gives you a measure of the percentage increases in GDP per capita in NZ compared to other nations. Every single year over this 35 year period, as far I can see from eye-balling the graph, with the exception of 1998-99, NZ's percentage rise in GDP per capita has been way lower than the average. When I was in my 20s in the 1990s, NZ's GDP per capita was about 6 times the average in the Asia-Pacific region. As of 2024, our GDP per capita is only about 2 times the Asia-Pacific average. Give it another decade or two, and there won't be much difference - the rest of Asia will be richer than us. 

What's more, aside from endless political rhetoric from National & Labour, can you tell who was in power in NZ by GDP performance? In fact, during the Key years, from 2008 to 2017, our relative decline accelerated. For the past Labour government, well, don't ask: 

NZ has recorded a drop in GDP per capita of 4.6%, one of the biggest falls in the world, during the past few years, when nearly every other Asia-Pacific country's per capita income has strongly risen. In for the past year, Stats NZ reports our GDP has shrunk by 0.2%. Our economy has contracted in 4 out of the past 7 quarters, recorded 0 per cent growth in one, and small positive increases in two. NZ's GDP has gone nowhere over the past two years. 

The World Bank reports GDP growth numbers for 150 developing countries for 2023-24. Which ones are doing worse than NZ? Argentina, Haiti (war torn), Iraq (war torn), Syria (war torn), Yemen (war torn), Equatorial Guinea (war torn), Sudan (war torn); West Bank and Gaza (war torn).

Our Main Stream Media refuses to put as its leading headline, "NZ is one of World's Worst Performing Economies", since it would make Ardern, Robertson and Hipkins - the leaders of the previous Labour government - look so awfully incompetent. 

But this Blog is not partisan. John Key did as much damage as that lot. In his case, it was what he didn't do, when he had the opportunity, more than what he did do. 

What's most remarkable to me is that a nation brimming with natural resources;

- a nation that never had the energy shock that Europe had when Russia invaded Ukraine, since it was dependent on Russian gas (whereas NZ industry is run from hydro power); 

- a nation that was meant to have succeeded in keeping Covid out;

- a nation with enough food to feed 50 million people (so we export most of it); 

- a nation with zero illegal immigration so suffers none of the problems of Europe & America in that regard;

- a nation with no troubling neighbors with conflicts raging on our borders;

- a nation with a mild climate; 

- and a nation with a largely decent, trust-worthy, friendly and, despite some poor stats, mostly literate & educated citizenry, 

can have been so badly led & managed that our abundant advantages have been wasted.

Sources:
https://openknowledge.worldbank.org/server/api/core/bitstreams/6feb9566-e973-4706-a4e1-b3b82a1a758d/content

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.