U.S. magazine critical of N.Z. economy

Press, 2 October 1979, Page 3

U.S. magazine critical of N.Z. economy

NZPA Belgrade i New Zealand . politicians ) frequently thwart the efforts|< of economic officials to i c right the country's economy, h according to an American 1 (financial magazine. 11 ( The New York-based “In-it stitutional Investor” also (I 'said the New Zealand Government was divided on how(l Ito cope with the recession t [and develop energy re-11 (sources. 1 ( But the Prime Minister ; ((Mr Muldoon) said yester- < (day, “The economic advice 1(: (reject is that offered by they ■Opposition. The story is •! (hopelessly wide of the mark it (possibly because American i bankers are not as close to | the detail of the New Zealand economy as they.once 1 were. ( “The bankers we deal with ■ i in Europe do know' ouri economy and they certainly (i wouldn’t endorse remarks! like that.” . The magazine, in a survey ( of the credit-worthiness of ; 93 countries, quoted an| American banker talking about New Zealand as say-j ing, “The economy is in a 1 tailspin, with extremely high ; inflation, severe unemploy(ment, and a contraction of major export markets.” ( the magazine said: “Some j say economic restructuring j (is' badly needed and will (take a long time to accomj plish but other bankers ( insist that as the cattle. (dairy, and wool centre of; the South Pacific, New Zealand remains basically sound (economically and because of I its political stability is not >

likely to lose its high credit | rating.” New Zealand was eight-' eenth in the magazine’s} credit ratings, which were } topped by the United States,; West Germany, and Switzer-j land. The lowest countries . were Nicaragua, Zaire, and [ Uganda. New Zealand finished} behind the Soviet Union and ahead of three Co'mmon j Market countries, Denmark,} Italy, and Ireland. It was i also ahead of the oil producers, the United Arab Emirates (thirtieth) and Bahrain i t h i r t y-fourth). Gold-rich South Africa was thirtyninth. Australia ranked tenth. The ‘'lnstitutional In-1 vestor” thought New Zea-j land’s relatively high ranking surprising and said it) ■ confirmed some long-held ‘ i prejudices on the part of I international bankers. “Despite its less than rob- I ust economic position and ‘the fact that it does not, have the resources approaching man\ erf those countries that finished fur- } ther down the list, it wound 'up in eighteenth place, a } strong showing. “Bankers have always } demonstrated a partiality towards New Zealand and that result obviously underscores ithe point.” New Zealand was given a credit rating of 7.82, compared with the United States' 9.89 at one end of ithe scale and Uganda’s 0.87; :at the other. The ratings were based on interviews with bankers ■ around the world.