People are getting angry, John

01:45, Apr 22 2012
Prime Minister John key inspects an honour guard at the Merdeka Palace in Jakarta during his state visit to Indonesia.
STATESMAN: Prime Minister John key inspects an honour guard at the Merdeka Palace in Jakarta during his state visit to Indonesia.

Politicians grow taller when they travel abroad. That is why they go so often. Last week John Key's photo was plastered across huge posters in Jakarta, sharing equal billing with the president of Indonesia. They don't treat him like that in Hokitika.

How irritating that the travelling press kept asking questions about irrelevancies back home. Key was there to talk about the splendid future that the two great nations of Indonesia and New Zealand could forge together. The rat pack wanted to talk about pokies.

Back home, though, Key turned straight back into the Pokies Prime Minister. And also, with his decision to sell the Crafar farms to the Chinese, the automatic leader of the Tenants-in-Your-Own- Country Party. From statesman to Mister Unpopular, just like that. How come?

The Crafar decision was predictable. Key's Government doesn't want to say no to China. The case for the sale, however, remained weak even when sexed up to take account of the legal challenge by Michael Fay and the Kiwi bidders. And the fact is that New Zealand didn't need to kowtow to the Chinese on this issue. Small countries don't always have to say yes to their big-country patrons.

The Crafar farms had gone bust and were badly run down. Any competent Kiwi farmer would rapidly return them to productive wealth. So that meant the decision on their sale had to be based on a comparison of the Chinese offer with a likely New Zealand one, as the court had ordered. The detailed examination by the Overseas Investment Office is surprisingly feeble, despite the dreary blather from Cabinet ministers.

The Kiwi buyers would increase output and exports. The Chinese buyer has no farming expertise and would rely on New Zealand experts in Landcorp to run the farm. The Chinese buyer has no expertise in dairy marketing and offers no great extra benefit for our dairy sales in China. So the main benefits of Chinese ownership were at the margins: a bit of agricultural training, the return of some Maori land, and a bit of extra environmental protection.


Even these benefits tended to be guesses. The study compared the Chinese bid with an expected or typical New Zealand one. This is a hypothetical beast and not the one offered by Fay and his fellow yeomen. We don't know what Fay would do. The extra Chinese contribution claimed in the report lies somewhere between $12 million and $16m. These figures are soft and speculative and, in any case, are peanuts in the wider scheme of things.

The report is careful to note that saying no to China would not cut across our obligations under the free trade agreement. Sensitive land is exempt from the FTA. Every case is decided on its merits and cannot be compared with any other. Above all, the law says it is a "privilege" to be allowed to buy it. In other words, the Chinese had no right to assume the Crafar farms were in the bag.

Of course, the law is one thing and politics are another. The Chinese had brought pressure to bear, and Key's statement that they hadn't lobbied him personally is irrelevant. An official from the Chinese embassy in Wellington had made the position clear.

The visit of the Chinese VIP Jia Qinglin, fourth in line to the throne, also mattered. The alleged fact that he didn't raise the issue during formal talks is neither here nor there. He had made himself plain in newspaper op-ed pieces timed to coincide with the visit. The crucial sentences amid the diplomatic flannel said that China "encouraged" New Zealand investment and "hoped" that New Zealand would "facilitate" Chinese investment here. In other words, "Sell us the farms". And this raises the question of how the mice of the world should deal with the elephants. There is a theory, a variant of the "realist" view of international relations, that small countries must just obey big ones. But, except sometimes in wartime, things are not so simple. New Zealand has had many disagreements with its American patron during their long history together. Trade issues in particular have caused plenty of arguments over the years. But we didn't have to cave in whenever Uncle Sam happened to frown. The same goes with the Emperor.

New Zealand has been a friend to China for 40 years now. It established diplomatic ties before it was fashionable or even sanctioned by the West. We linked up with China before Nixon invented ping-pong diplomacy. China has always emphasised the friendliness of our ties and their two-way nature. The negotiations over the free trade agreement explicitly recognised that sometimes the countries' interests would diverge. China itself makes it very hard for foreigners to buy its farmland. No doubt the Chinese would be irritated if they didn't get the Crafar farms. They would get over it.

New Zealand, after all, isn't the only country worried about selling farmland to foreigners. The Chinese have been buying vast tracts of it in Latin America, and there has been a political backlash. Both Brazil and Argentina have changed the law to restrict farm sales.

In all this there is no room for xenophobia. Racism is always contemptible and New Zealand's justified reluctance to sell its farms overseas must never be tainted by prejudice. And it doesn't need to be.

Key could have avoided popular odium, and done the right thing, by refusing to sell the farms. He could win another twin victory by giving away the pokies deal. Opposition has spread very wide. Of course, you can see why he liked the idea and tried to sell it to the casino. Key is the minister of tourism and seems convinced that a new convention centre would provide many jobs and earn heaps of foreign exchange. His government hasn't got any spare cash, and would get the centre free. Also, politicians like to leave monuments, just as they like to stride the world stage. But the deal would ruin a lot more lives and it requires changing the law to suit the interests of a casino. These are both bad things, and they outweigh the claimed benefit.

Of course Key wants to get all the nasty stuff out of the way early in his term, and is desperate to please the business lobby. By the time of the next election, he no doubt hopes the convention centre would be visible and the ruined lives would not. But the people are getting angry, John, and they don't seem to swallow things so easily as before. Perhaps it's time to play the statesman at home.

Sunday Star Times