The knack of divining economic and cultural signals gives exporters healthy head start. So it’s little surprise that record numbers of exporters turned out for New Zealand New Thinking export breakfast in Auckland recently. They fronted up to hear the BNZ’s chief economist Tony Alexander and Michael Chilton, director of the Auckland office of Ministry of Foreign Affairs and Trade (MFAT).
Anyone expecting news of relief from the high Kiwi dollar would have been disappointed. Alexander is sticking to his guns that exporters will be fighting strong dollar – albeit with some blips along the way – for the next couple of years. “Don’t expect to see slowdown,” he warned, “until the housing market and retail spending cool off.”
Like it or not, Alexander argues our dollar sits in its rightful place relative to prices for international commodities such as logs. He continues to plug his message that raft of insulating factors will cushion the New Zealand economy for some time to come. These, he says, include low fixed interest rates, backlog of construction spending and high job security. In the past eight years, for example, an extra 348,000 jobs have slashed unemployment from six percent to 3.7 percent.
The tightening labour market means employers must change the way they approach new business. “Companies can no longer get the orders and then find the people to fulfil them,” says Alexander. “Now we need to flick it round: get the people and systems in place first.”
Nor can employers afford any longer to lay off staff during quiet moments with view to picking them up when the workload cranks up again.
Alexander advised exporters to seek natural hedging, keep focusing on ways to boost productivity and get used to the idea of strong dollar.
“The exchange rate is expected to face mild downward pressure possibly late in the year as New Zealand’s growth underperforms growth overseas and with the current account deficit remaining at high levels,” he noted. “But exporters should be wary about getting optimistic over strong fall in the Kiwi dollar.”
Reading the signals and getting used to new stuff was also high on the agenda for MFAT’s Michael Chilton whose diplomatic career encompasses stints in Washington DC, Bangkok, London, Singapore, Kuala Lumpur and Hanoi. Chilton has long puzzled over how to decipher the myriad cultural nuances that can trip up international communications.
“Some things you can’t change,” he says. “If you are handsomely bald that’s just how you look. But impressions count so it pays to be aware of how you come across [through the filter of another culture]: your appearance, body language, clothing and accessories.”
Chilton advises exporters not to surrender their own style but to raise their awareness of other cultural dimensions.
The landmark work by Maastricht University emeritus professor Geert Hofstede provides some vital clues. Hofstede’s studies spell out the keynote cultural differences for 56 countries along series of axes. For New Zealanders, our strikingly strong sense of equality – or low power distance as Hofstede calls it – is in sharp contrast with cultures in other countries such as India, where there is much greater acceptance that power is distributed unequally.
For Kiwis abroad, says Chilton, this may mean re-evaluating not only how we address other people but also how they may wish to address us. “You may be helping to enhance someone else’s status by sticking to your own.”
Class systems, says Chilton, are like set of codes to be figured out. “When Kate Middleton’s mum got caught saying ‘pleased to meet you’ rather than ‘how do you do?’ to the queen that was faux pas in social etiquette.”
So too can be minefield of observations around religion and symbolism: not chattering in cathedrals, wearing white (the colour of death in some East Asian countries) or misusing the number four (it sounds like ‘death’ in Mandarin Chinese). Then there are host of considerations around food and celebrations. In some cultures it is considered lower class to hold your chopsticks too low down. In Thailand it is more impolite to turn down an invitation than it is to accept but not front up: fact that makes event planning somewhat problematic for those not in the know.
“When it comes to cultural values,” says Chilton, “time spent in reconnaissance is seldom wasted.”
•To receive free BNZ Weekly Overview on the New Zealand economy email [email protected] To check out Hofstede’s research see www.geert.hofstede.com
