Feeling the Pinch


Welcome Mat May Get Bigger

All of us who grew up before the war are immigrants in time, immigrants from an earlier world, living in an age essentially different from anything we knew before.

- Margaret Mead

The following article is from August 2000 and is already outdated.  For the current status of immigration rules and needs, see the page following this one (Being Especially Thorough) and also Shifting Migrant Goalposts (located on a page near the end of this section).  I've left the intervening articles to help illustrate the seesaw potential migrants must ride.  In a country as small as New Zealand, perhaps this is to be expected - or not.  Nevertheless, it makes the role of migrant more difficult...

"Rules May in Fact Be a Little Too Tight..."

Immigration Minister Lianne Dalziel is considering loosening immigration criteria for business people and investors into New Zealand.

Ms Dalziel said she was taking her concerns to Finance Minister Michael Cullen and Economic Development Minister Jim Anderton and intended also to get officials to review the policy for business immigrants.  She questioned whether current policy was producing the best economic benefits for the country.

"I am not convinced that it is," she said, stressing her position was personal and not government policy at this stage.  "I think we could improve the business investment opportunities for migrants to New Zealand, and the rules around business migration may in fact be a little too tight."

At the moment a business investor with so-called "passive" investment plans has to invest at least $1 million, and that monetary threshold increases in lockstep with the applicant's age.  "It's quite a significant initial investment.  There are a lot of people who would make an initial investment before deciding to move to New Zealand, and then once they have moved, they bring a lot more, so maybe that threshold could be too high."

Ms Dalziel said officials would review business policy once they had completed their evaluation of humanitarian and general immigrations rules.  In terms of general category immigration, she was also interested in allowing in people who had significant skills, built up over time, but who might not hold any formal qualifications.

"That to me is the biggest gap in the general skills category."

She was also keeping tabs on an immigration policy that came into effect in March, under which an applicant could get a 6-month work permit if they were within 5 points of the required points threshold for residency.  There was some evidence of delays in the permits.

Ms Dalziel said the timing for approvals for immigrants would improve under another new rule that will take effect from 4 September.  Under the change, immigration applicants who hold a degree or trade qualification from a set list of universities and polytechnics around the world, would no longer have to have their qualifications assessed by the New Zealand Qualifications Authority.  The Immigration Service and NZQA are also to sign an agreement for NZQA to make assessments of other qualifications not on the list, within 8 weeks.

The Government has rolled over the previous administration's immigration target of 38,000, but applications are now running ahead of that target so the points system has been adjusted for the first time in 3 years.  Now 25 points are required instead of 24. - NZPA

Source: The Evening Post 11 August 2000

Or Smaller...

A Layer of People We Can't Afford to Lose

How quickly things change.  Just a year ago the country was having a bout of anxiety over the "brain drain".  This week we learn that interest in migration to New Zealand has risen so much that the Government has decided to raise the barrier.  From January 1, the largest category of applicants for permanent residence, those with skills in demand here, will need 25 points, rather than 24, to be accepted.

The increase does not sound significant but it is said it will block a "layer of people".  Is this really wise?  The Immigration Minister, Lianne Dalziel, says interest in New Zealand has been rising for the past year and particularly since September 11.  Britain remains the leading source of expressions of interest, but inquiries from Americans have increased since September, she says, although that has yet to show up in applications.  The minister fears that too many will meet the present criteria.  Therefore, she will raise the bar.

This is typical of the stop-go, ad hoc policy that seems always to have governed our immigration.  One minute we wail at the loss of youth and talent, the next we are raising the drawbridge at the first sign of a reverse flow.  And oddly, we are raising it only against the migrants we most need - those in the general skills category.  The other grounds for acceptance - family ties or humanitarian considerations - have not been made more stringent.  A hard-luck story may get you in, a skill to offer may not.

The truth is there are not legions of people pressing at New Zealand's borders, not with readily employable qualifications and capital anyway.  If we are finding an upsurge in such applicants since the terrorism in the United States, why in the world are we discouraging any of them?

This country's location is not normally an advantage in the market for skilled migration.  If the tragic events of September 11 have turned our location into an attraction, we should be taking full advantage while we can.

It is unlikely that the opportunity will last long.  The terrorism wrought on New York and Washington, underlined by the anthrax circulated subsequently, will not be quickly forgotten.  But international law enforcement and intelligence agencies will retain the lessons much longer than the American public at large.

And as the efforts of those agencies restore a sense of security in the United States, Britain and other advanced countries, the flight to distant corners of the globe will tail off.  It might take another three months, it might take six.  It is unlikely New Zealand will be receiving a continuing wave of frightened migrants a year from now.  More likely, we will be lamenting the brain drain once more.

Would it hurt for the Government to exceed its annual immigration target this year by more than the 10% it tolerates?  The Government knows that more often than not the intake falls well short of the target.  And too often there is a net migration loss.  New settlers frequently find opportunities in this thinly populated country to be more limited than they expected, and they move on.

The country sorely needs a population policy based on sensible calculations of the number of people it could comfortably contain without spoiling its environment and lifestyle.  In the 1950s, official projections contemplated that by the turn of the century the population would be perhaps twice the number it actually reached.

For long periods of economic stagnation in the 1970s and 1980s, the number hardly rose.  Then, as the economy boomed in the mid 1990s, so for a year or two did immigration.  In fact, it is hard to know which caused which.  Immigrants generate economic activity far in excess of the costs they may present temporarily to education and welfare systems.  Sadly the mid-1990s inflow was stemmed by short-sighted, not to say racist, political instincts.

Now, there seems to be another opportunity to give the population a boost.  This is not the time for knee-jerk mechanistic administration.  This is an opportunity to welcome people.  There is plenty of room for more, and that will be true for many years yet.

Source: New Zealand Herald 28 November 2001

Wanted: Quality Migrants

Australian Immigration Minister Phil Ruddock is unhappy at the number of Kiwis migrating to his fair land who weren't born here.  He says the number of migrants from places such as the Philippines, Iraq, Sri Lanka and Pakistan using New Zealand as a launch pad to settle in Australia has risen 9-fold in the past decade.  More than 31,000 people using New Zealand passports migrated to Australia in 1999; the number coming this way was just 5,208.

He doesn't propose visas for Kiwis or a cap on migrant numbers.  Prime Minister Helen Clark is pleased to hear it but acknowledges this may be a matter on which the governments never fully agree.

Mr Ruddock will discuss the issue with his Kiwi counterpart, Lianne Dalziel, in March.  What Australia isn't conceding, however, is its unease at the number of Pacific Islanders and refugees who fulfil their 3-year residency requirement in New Zealand after arriving here on the grounds of family reunification - and then leave for Sydney.  In reality, it's the quality - not the quantity - of immigrants that Australia's understandably worried about.

Source: The Evening Post Monday 4 December 2000

People from the Philippines, Iraq, Sri Lanka and Pakistan inherently lack "quality?"  Perhaps "quality" as it's used here should be defined?

Kiwis Our Poor Relations

by John Masanauskas

A former New Zealand prime minister once joked the migration of his citizens to Australia increased the IQ of both countries.  But a study shows the joke is on NZ.  Australians are far more productive and earn much more than their Kiwi cousins.  This is intriguing, because both nations enjoyed the same level of income for most of the 20th century, according to a report by the Centre for Independent Studies.  The study, Why is Australia So Much Richer than New Zealand?, was written by Phil Rennie, an analyst for the CIS NZ policy unit.

It revealed Australia's GDP was $41,760 a head compared with NZ's $31,668.  A leading hand on a major construction site earned up to $73,000 in Australia compared with $48,000 in NZ, the study said.  Senior Australian accountants fetched up to $183,000, at least $50,000 more than NZ counterparts.

Mr Rennie ruled out laziness as the reason for NZ falling behind.  "Australians don't necessarily work harder than New Zealanders, but they do work more effectively," he said.  "Every hour they do produces an extra 37% of output."  Australia was more productive because its companies had invested more money in machinery and technology than NZ.  "Prosperity does not come by accident," Mr Rennie said.  "Australia has a stronger political consensus around policies for growth, which contributes to investor confidence."

Source: news.com.au 7 December 2007

Whoa.  Kiwis apparently lack "quality" as well?  Maybe this will help explain the difference...

The Secrets of Intangible Wealth

The greatest thing in this world is not so much where we are, but in what direction we are moving.

- Oliver Wendell Holmes

by Ronald Bailey

For once the World Bank says something smart about the real causes of prosperity...

A Mexican migrant to the US is 5 times more productive than one who stays home.  Why is that?

The answer is not the obvious one: This country has more machinery or tools or natural resources.  Instead, according to some remarkable but largely ignored research - by the World Bank, of all places - it is because the average American has access to over $418,000 in intangible wealth, while the stay-at-home Mexican's intangible wealth is just $34,000.

But what is intangible wealth, and how on earth is it measured?  And what does it mean for the world's people - poor and rich?  That's where the story gets even more interesting.

Two years ago the World Bank's environmental economics department set out to assess the relative contributions of various kinds of capital to economic development.  Its study, Where is the Wealth of Nations?: Measuring Capital for the 21st Century, began by defining natural capital as the sum of nonrenewable resources (including oil, natural gas, coal and mineral resources), cropland, pasture land, forested areas and protected areas.  Produced, or built, capital is what many of us think of when we think of capital: the sum of machinery, equipment, and structures (including infrastructure) and urban land.

But once the value of all these are added up, the economists found something big was still missing: the vast majority of world's wealth!  If one simply adds up the current value of a country's natural resources and produced, or built, capital, there's no way that can account for that country's level of income.  The rest is the result of "intangible" factors - such as

bulletTrust among people in a society
bulletAn efficient judicial system
bulletClear property rights
bulletEffective government

This intangible capital also boosts the productivity of labour and results in higher total wealth.  In fact, the World Bank finds, "Human capital and the value of institutions (as measured by rule of law) constitute the largest share of wealth in virtually all countries."  Once one takes into account all of the world's natural resources and produced capital, 80% of the wealth of rich countries and 60% of the wealth of poor countries is of this intangible type.  The bottom line: "Rich countries are largely rich because of the skills of their populations and the quality of the institutions supporting economic activity."

What the World Bank economists have brilliantly done is quantify the intangible value of education and social institutions.  According to their regression analyses, for example, the rule of law explains 57% of countries' intangible capital.  Education accounts for 36%.  The rule-of-law index was devised using several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organisations.  The latter include civil society groups (Freedom House), political and business risk-rating agencies (Economist Intelligence Unit) and think tanks (International Budget Project Open Budget Index).

Switzerland scores 99.5 out of 100 on the rule-of-law index and the US hits 91.8.  By contrast, Nigeria's score is a pitiful 5.8; Burundi's 4.3; and Ethiopia's 16.4.  The members of the Organization for Economic Cooperation and Development (OECD) - 30 wealthy developed countries - have an average score of 90, while sub-Saharan Africa's is a dismal 28.  The natural wealth in rich countries like the US is a tiny proportion of their overall wealth - typically 1% to 3% - yet they derive more value from what they have.  Cropland, pastures and forests are more valuable in rich countries because they can be combined with other capital like machinery and strong property rights to produce more value.  Machinery, buildings, roads and so forth account for 17% of the rich countries' total wealth.

Overall, the average per capita wealth in the rich OECD countries is $440,000, consisting of $10,000 in natural capital, $76,000 in produced capital, and a whopping $354,000 in intangible capital.  Switzerland has the highest per capita wealth, at $648,000.  The US is 4th at $513,000.

By comparison, the World Bank study finds that total wealth for the low income countries averages $7,216 per person.  That consists of $2,075 in natural capital, $1,150 in produced capital and $3,991 in intangible capital.  The countries with the lowest per capita wealth are Ethiopia ($1,965), Nigeria ($2,748), and Burundi ($2,859).  In fact, some countries are so badly run, that they actually have negative intangible capital.  Through rampant corruption and failing school systems, Nigeria and the Democratic Republic of the Congo are destroying their intangible capital and ensuring that their people will be poorer in the future.

In the US, according to the World Bank study, natural capital is $15,000 per person, produced capital is $80,000 and intangible capital is $418,000.  And thus, considering common measure used to compare countries, its annual purchasing power parity GDP per capita is $43,800.  By contrast, oil-rich Mexico's total natural capital per person is $8,500 ($6,000 due to oil), produced capital is $19,000 and intangible capita is $34,500 - a total of $62,000 per person.  Yet its GDP per capita is $10,700.  When a Mexican, or for that matter, a South Asian or African, walks across our border, they gain immediate access to intangible capital worth $418,000 per person.  Who wouldn't walk across the border in such circumstances?

The World Bank study bolsters the deep insights of the late development economist Peter Bauer.  In his brilliant 1972 book Dissent on Development, Bauer wrote: "If all conditions for development other than capital are present, capital will soon be generated locally or will be available ... from abroad. ... If, however, the conditions for development are not present, then aid ... will be necessarily unproductive and therefore ineffective.  Thus, if the mainsprings of development are present, material progress will occur even without foreign aid.  If they are absent, it will not occur even with aid."

The World Bank's pathbreaking Where is the Wealth of Nations? convincingly demonstrates that the "mainsprings of development" are the rule of law and a good school system.  The big question that its researchers don't answer is: How can the people of the developing world rid themselves of the kleptocrats who loot their countries and keep them poor?

Ronald Bailey is Reason's science correspondent.

Source: reason.com 5 October 2007

Why NZ Needs to Encourage More Immigrants

by Bob Matthew

Much has been said in recent weeks about the departure of young New Zealanders and the need to attract expatriate Kiwis back to New Zealand.  This discussion brings to mind the flip side of the emigration issue: what are we going to do to attract quality immigrants?

Migration flows in the 1970s and 1980s showed the link between the strength of the economy and the impact on people's movement.  During that time the country had a significant net outflow of people.  Young, skilled New Zealanders were leaving because they saw greater economic rewards overseas.  In the early 1990s this situation reversed itself, as the economic reforms progressively led to higher rewards for skill and effort, stronger economic growth, lower unemployment, and a more dynamic economy.

Immigrants brought experience, technological know how and linkages to overseas markets, and the benefits of this were felt throughout the country.  The attraction of New Zealand at that time was essentially a vote of confidence in the state of the economy.

Our modest population of 3.8 million and our remoteness are natural disadvantages in a world that is fast integrating.  However, in addition to other policies that could improve our overall economic position, sound immigration policies have much to offer.

The argument for immigration is about widening our skill base, adding diversity and challenging entrenched ideas.  Liberal immigration increases the quality of a community's human resources and economic and social development.  We should set a target of between 30,000 and 40,000 quality immigrants each year.  An increase in population of, say, 350,000 over 10 years would not unduly strain our community resources.

We should investigate the notion of charging an entrance fee for at least part of the annual intake.  Immigrants who meet established criteria would be paying for the privilege of gaining entry to a stable country and the right to benefit from earlier public investment in our infrastructure.

In order to attract those people who can make the greatest contribution to the country, we need to improve the business environment.  We need to encourage enterprise, reduce compliance costs on business and lower taxes overall, all of which will promote a stronger and more diversified export base.

There is much to be said for the critical mass of a bigger population.  It can give a country an air of confidence and purpose, heighten international standing and make it possible for government to spend adequate amounts on core services.  Generally, bigger economies are stronger and more diversified.

Australia's immigration policy has boosted that country's economic performance and provided it with a more vibrant society.  With 19 million people Australia exudes confidence and genuine patriotism.  About 80,000 people arrive in Australia each year, and by 2050 its population is expected to reach 25 million.  How big will the gap between our two countries be then?

New Zealand, on the other hand, runs the risk of slipping backward.  Our location in the world means our policies and economic performance need to be that much better just to keep up.  Our performance in the early 1990s showed what we can achieve.

With the right conditions New Zealand could again become an attractive location for people and investment initiatives.  More immigration and the return of expatriate New Zealanders would materially contribute to building growth opportunities.

In all this the big question is whether our leaders really understand the nature of the challenge and are prepared to adopt solutions that will reverse the current slide toward mediocrity.

Bob Matthew writes as part of a series of fortnightly columns by members of the Business Roundtable.

Source: The Dominion Monday 15 October 2000

Older Migrants Seen As Solution

Pensioners might hold a key to reviving New Zealand's economy, an immigration impact paper says.

The paper by Victoria University's associate professor of health economics, Ken Buckingham, has made a case for immigration restrictions to be relaxed so that people aged 65 to 69 years can immigrate more easily.

If New Zealand could attract 5,000 older, financially independent immigrants each year, there would be $764 million in spin-offs to the economy, he says.

The paper shows that the costs to the public sector of giving residency rights to elderly people would be outweighed so long as they had modest pensions.  "The tax they pay would exceed the costs of their health care and the other public services they are likely to use."

The paper assumes that older immigrants would have pensions from overseas worth on average $30,000 a year, and would buy houses and cars in New Zealand.

Source: The Dominion Tuesday 17 October 2000

It's hard for me to believe there aren't loads of qualified people applying for residency in New Zealand.  When we told our friends in the US what we intended to do, we had dozens of people tell us they'd love to immigrate to New Zealand but they didn't qualify: they were too old, didn't have enough cash, or lacked sufficient acceptable qualifications.  Never mind that they were productive, mature, self-disciplined and reliable.  Immigrants are subject to much higher standards than that established for any Kiwis.

To come into New Zealand as Business Investment Migrants, we had to possess either advanced certification or proof we had worked in our profession as owner of a business for many years or as someone else's employee for many more years.  We had to prove the money we were investing in New Zealand was earned, not inherited nor ill-gotten.  We had to produce proof that we had no criminal record, that we were young enough, healthy enough, and had good enough credit to be considered.  We were interviewed, x-rayed, and physically examined not once, but 3 times.  Many New Zealand citizens would find their current circumstances would not allow them to qualify for entry today.  We made it only by a hair's breadth.  We figure today our residency ultimately cost us more than $1 million.  That's too much.

I think an international Trade Nationalities Board could be set up whereby families could be matched against each other on points systems.  A family living in the country you wanted to go to who had the same number of points you did and who wanted to immigrate to your country would be allowed to trade nationalities with you.  You would move to their country and they would move to yours.  That way, everyone who wanted could try living in another country - or several.  I think both countries (and families) involved in the shift would benefit.  The shift could be for an initial trial term at first if desired, although that may be more difficult to administer.

For more articles on immigration, emigration, undocumented workers, overstayers, how to get in: NZ and Australia, costs, H1-B workers, scams, and quality of life please click the "Up" button below to take you to the Index page for this Immigration section.

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