Mike Moore has held the posts of New Zealand Prime Minister in 1990, leader of the NZ Labor Party, minister of a wide range of portfolios; NZ MP for nearly 30 years; Director General of the World Trade Organisation in 1999-2002, and commissioner of various international bodies. He served for nearly 30 years in the NZ parliament and has written nine books. Moore is well qualified to speak on recent world events and the outlook.

I attended and the following in italics are my notes of some of what he said (I don’t guarantee 100% accuracy since they were hastily taken).  What impressed me and others was his holistic approach – economic, human rights, justice including social justice, the rule of law – and his noting that these are all tied together.  He stressed continually that he is a social democrat who had over a long period in national and international roles come to these views. Implicit in what he said was a strong Christian commitment to social justice and achieving the Millennium Development Goals in the third world.  His leadership of the World Trade Organisation and the experience of that came through.

Mr Moore:

“In looking at recent events we should also take in a broader vision.  We have completed six decades of unprecedented growth.  This would not have happened with closed markets.  It is important that in the present circumstance we do not lose our nerve.  The genius of democratic capitalism is its ability to re-arrange itself when problems occur.

“I believe society will recover.  Why? Because we have learnt.  No one is talking about balancing the books.  There is little talk of protectionism as in the thirties.  There is cohesion in what is being done, and out of this destructive chaos new business will emerge.

“The virtues of global open markets – reinforced by  the WTO – have been very successful.  Could things get worse in the current situation?  Only if we are nuts!!.  My worry: G20 members say “we will not go protectionist”, and then they go home and do the opposite.

“There is a slight worry with WTO rules.  There is a difference between your bound tariff and your applied tariff which may be several orders of magnitude lower.  Many countries can increase applied tariffs without breaking WTO obligations.  Therefore it can spin out of control but I don’t think it will. 

“We don’t know what will work and why.  But we do know protectionism can make things worse.  And we do know we are all in this together. In the main governments are doing sensible things, and in the main resisting protectionist actions.

“Therefore don’t surrender the benefits of democratic capitalism which brings with it social justice etc.  He was dismissive of anti-globalisation calls, and referred to the benefits of brand names.  They carry with them reputations which people can rely upon for quality and they trust them. For example, Coca Cola is something you can drink anywhere in the Third World safely.

“We need to create free markets, and with them property rights, human rights and democracy – all of which are part of free markets.

 “A key element of all of this is trust and this is interlinked with credit which comes from the Latin credo = I believe.   In poor countries, the  economy is often driven underground, because of excess licencing or approvals which may require bribes to procure, or the potential to be beaten up if you operate outside the law, leaving so many vulnerable.  He gave the illustration of a bakery in Egypt requiring 500 licence-steps to operate.  It is therefore simpler to operate from the back street.  As a result, in the Third World so many transactions and commerce take place outside the law.  In New Delhi, there are 500,000 bicycle rickshaws, but only 99,000 licences.

“There is now a huge number of mobile phones in India along with low-cost computers being made available to the poor. It is global brands that can move into these markets that are doing this. He never thought he would be patting Avon on the back but there are 600,000 Avon ladies in India – and they fund their businesses through micro loans.

 “Four billion people will have opportunities to see profound change.  This creates ownership which leads to property rights to people, which gives rise to a safer world.

 “I came into politics with simple beliefs… people need something to own and something to pass on.  Unless we leave that incentive, then they become prey to extremists (i.e. they have someone to blame and then someone to hate).

 “Our job is to find a way to help them.

“It is easy to shrug our shoulders at evil events such as the Glasgow airport bombing or arson in Victoria but there are also positives, e.g. Mandela, the Berlin Wall, Timor.”

He reminisced about his time as Director-General of the WTO: “I was trying to get Cambodia into the WTO.  Why would they want it? When I flew into Phnom Penh, there were very few lights. These turned out to be from cyber computers being used by the kids.  I thought these kids can do it and they deserve a chance. It convinced me that I was doing the right thing.”

Some points he made in question time:

• Referring to the Global Financial Crises (GFC), he cited Keynes and  the savings paradox and related the Japanese experience over the last decade in trying to get people to spend.  They tried free vouchers that would expire, but they couldn’t get them to spend.  Japan lost a decade in its economy.  However he is confident Western economies will spend.
  

• In the GFC, the real poor will sustain themselves.
  

• He is not concerned about deflation.
  

• (On being questioned about whether companies will now be reluctant to invest in the Third World because of the GFC) he said companies should develop business plans that work in good times as well as bad.  If a plan to invest in the third world is ok, then directors should have the courage to invest.  And indeed given the growth rates in these countries it could pay off both company-wise and globally.
  

• (On competition): Competition can do great things.  It can elbow out corruption.  As well as this, when a country is heavily licenced and regulated, the big companies can navigate the system.  If you open it up, it gives the small guy a chance.
  

• Our Western model is not a show of imperialism.  It is one of an honourable public sector, with property and other legal rights, justice and human rights.  It is not perfect but it is ok, and can be progressively improved.  That is what is has to offer.
  

• He was very critical of the EU Common Agricultural Policy and US agricultural protectionism in their adverse impact on 3^rd world economies and indeed Australia and NZ. “You can pay money to farmers if you like, but not to produce things”.
  

He emphasised that he was not in favour of “no regulation”.  He is for regulation that is transparent.  The WTO which he headed is about transparent rules to make it work. “I am a social democrat.  I am for prudent regulation”.