The Tonga New Zealand Business Association (TNZBA) would like the NZ government and business to support its proposal for the JOVE joint venture scheme – and the New Zealand Pacific Business Council (NZPBC) has spoken up in support.
NZPBC Auckland based chair Gilbert Ullrich says the JOVE scheme is reminiscent of the Pacific Islands Industrial Development Scheme started by NZ in the 1970s, and which caused successful ventures still in operation.
The JOVE proposal could get on the agenda when Tongan Prime Minister Dr Fred Sevele visits New Zealand in mid May.
NZ Minister of Foreign Affairs and Trade, Murray McCully, in his May 1 2009 speech announcing Government’s “ sustainable economic growth mandate” against which the NZAID and the JOVE scheme can be evaluated said “getting better value for money will call for more co-operation, more teamwork, more creativity, and more focus”.
Earlier, Mr Ullrich told Mr McCully of his support for the JOVE scheme, and NZPBC’s wish that New Zealand increase its commitment to support sustainable economic development projects through NZAID and other government and business agencies.
An April RSE investment seminar, based on the Recognized Seasonal Employment scheme in the Hawkes Bay, is an indicator that seasonal workers in Marlborough and other regions could play a role in developing the sort of joint ventures the JOVE scheme anticipates.
Pousima Afeaki, Nuku’alofa, Tonga Islands based chair of the Tonga New Zealand Business Association (TNZBA) has already won some support from the NZ Pacific Business Council, which has circulated the JOVE proposal for comment.
The Tongan proposal is that a scheme be established to encourage New Zealand companies to set up joint-ventures in the Pacific, beginning with the Kingdom of Tonga as the pilot.
Afeaki, a commerce graduate from Victoria University of Wellington, former staff member of the Commerce Commission, financial journalist and now a Tongatapu farmer and trader received the Afeaki matapule title in 2008, which assigns him leadership obligations.
The TNZBA says the peoples of New Zealand and the Pacific Islands will mutually benefit from an increase in understanding of cultural similarities and differences through the process of working together in JVs.
For the Pacific Islands, the urgent need is to create jobs through investment in the private-sector. Pacific Island countries do not have money or expertise to do so on their own. TNZBA say the cost is social unrest resulting from the inability to create enough jobs for young and aspiring populations.
In the March 2009 background to the JV-encouragement (JOVE) scheme, the TNZBA said part of New Zealand’s aid to assist developing Pacific Islands is aimed at developing sustainable economic growth. This includes helping the private-sectors in Pacific Island countries to grow and create jobs.
The JOVE proposal “aims to provide an effective way for New Zealand to help the private-sectors of Pacific Island countries grow and create jobs”.
McCully’s sustainable economic growth mandate for NZAID
Foreign minister McCully said on 1 May NZAID’s revised mandate “will now require a clear focus on sustainable economic growth as the means by which we seek to improve the lives of our poorer neighbours.”
Objective measures like trade and tourism statistics will be used as the indicators of success or failure over time.
That will require us to pay more than lip service to our support for the fledgling private sectors in developing Pacific nations, through micro-financing schemes and other initiatives that create opportunities for enterprise Mr McCully said.
NZAID’s amended mandate “will specify a clearer focus in our own Pacific region, with a greater percentage of the budget being allocated within the region”.
The mandate, approved by the Cabinet, will be published “so that everyone can be absolutely clear about the instructions from the Cabinet to MFAT and NZAID”.
Mr McCully wants “to align aid policy with trade policy within our region”.
For that reason, he and Trade Minister Tim Groser have adopted a joint strategy, along with their Australian counterparts, designed to “achieve sustainable economic growth in the Pacific through an alignment of trade and aid policies”.
They met jointly with those Australian counterparts a few weeks ago and will host a meeting of Pacific trade ministers in the coming weeks in order to make progress.
Mr McCully said in his May 1 speech to the NZ Institute of International Affairs in Wellington “Our aid dollars have done little to build sustainable economies providing employment prospects and the promise of a brighter future.”
Depopulation has continued at an alarming rate in parts of Polynesia.
Our billion-dollar export trade into the Pacific “has been reciprocated by imports from Pacific nations so miserly that they should be a source of national embarrassment”.
Air and shipping services – the arteries for trade and tourism – are under threat and in decline said Mr McCully.
“Substantial sums of aid monies are fed into unproductive bureaucracies – a classic example of mistaking activity for achievement. Yet when real and genuine challenges have arisen, as with the need to commence the re-building of downtown Nuku’alofa in Tonga following the November 2006 riots, we were missing in action”.
Compare JOVE and NZAID’s amended mandate
TNZBA’s Afeaki said in the JOVE proposal “the private sectors of developing Pacific Island countries do not have access to sufficient funding or expertise to make use of the opportunities that exist in areas such as agriculture, fishing, processing of agricultural and marine products, processing of forestry resources, tourism and hospitality”.
New Zealand companies have world-class experience in all of these areas. If offered the right incentives, New Zealand companies would invest in joint-venture operations in the Pacific TNZBA says.
Incentives under the JOVE scheme could include a combination of cash/direct and non-cash/indirect incentives.
Cash/direct incentives could include a contribution towards the cost of a feasibility study conducted by a New Zealand company into setting up a JV in the Pacific.
Non-cash/indirect incentives could include:
- accelerated depreciation charges in New Zealand for investment/capital costs of the JV;
- credit in New Zealand for tax paid on JV profits in the Pacific;
- JV losses able to be written off in New Zealand as well as in the Pacific;
- R&D costs able to be written off in New Zealand as well as in the Pacific.
New Zealand Trade & Enterprise and the NZ-Pacific Business Council would be able to conduct research into the type and combination of incentives which would encourage New Zealand companies to invest in JVs in the Pacific says TNZBA. The former Pacific Islands Industrial Development Scheme was administered by an NZTE predecessor, the Department of Trade and Industry.
Incentives under the JOVE scheme could include a combination of cash/direct and non-cash/indirect incentives.
Cash/direct incentives could include a contribution towards the cost of a feasibility study conducted by a New Zealand company into setting up a JV in the Pacific.
Non-cash/indirect incentives could include:
- accelerated depreciation charges in New Zealand for investment/capital costs of the JV;
- credit in New Zealand for tax paid on JV profits in the Pacific;
- JV losses able to be written off in New Zealand as well as in the Pacific;
- R&D costs able to be written off in New Zealand as well as in the Pacific.
TNZBA says New Zealand Trade & Enterprise and the NZ-Pacific Business Council would be able to conduct research into the type and combination of incentives which would encourage New Zealand companies to invest in JVs in the Pacific.
For the Pacific Islands, the benefits from JVs with New Zealand companies would include:
- improved access to funding;
- improved access to expertise;
- development of products for export and for import-substitution;
- widen access to overseas markets;
- creation of jobs.
For New Zealand, the benefits would include:
- initial supply of goods and services to set up JV operations;
- ongoing supply of goods and services to the JV operations;
- maintaining and increasing preference for New Zealand goods and services in the Pacific;
- increase trading opportunities for New Zealand;
- repatriated profits.
New Zealand Trade & Enterprise has developed some advisory materials for New Zealand businesses looking at setting up JVs in other countries. TNZBA suggest New Zealand Trade & Enterprise could administer the JOVE scheme in the Pacific through its network of Trade Commissioners, and through the New Zealand High Commissions/Embassies in Pacific Island countries where there are no Trade Commissioners.
In Tonga, the New Zealand High Commission and TNZBA could be the initial contact point for New Zealand companies looking for JV partners under the JOVE scheme. TNZBA is very happy to assist New Zealand companies to find and establish relationships with the right partners Pousima Afeaki says.
Build on what is there already
Sydney based Jim Willett, a specialist in small business development who has worked in the Pacific since the 1970s, recommends building on what is there already. There will be many answers depending on the individual situations of each business. Some may include a JV approach.
He suggests identification of a successful development model “and I only know of one, Kokonut Pacific http://www.kokonutpacific.com.au/” and copy it.
The Tongan national example on the kokonut website features the coconut business run by Afeaki.
By Anthony Haas, This e-mail address is being protected from spambots. You need JavaScript enabled to view it
NZPBC Auckland based chair Gilbert Ullrich says the JOVE scheme is reminiscent of the Pacific Islands Industrial Development Scheme started by NZ in the 1970s, and which caused successful ventures still in operation.
The JOVE proposal could get on the agenda when Tongan Prime Minister Dr Fred Sevele visits New Zealand in mid May.
NZ Minister of Foreign Affairs and Trade, Murray McCully, in his May 1 2009 speech announcing Government’s “ sustainable economic growth mandate” against which the NZAID and the JOVE scheme can be evaluated said “getting better value for money will call for more co-operation, more teamwork, more creativity, and more focus”.
Earlier, Mr Ullrich told Mr McCully of his support for the JOVE scheme, and NZPBC’s wish that New Zealand increase its commitment to support sustainable economic development projects through NZAID and other government and business agencies.
An April RSE investment seminar, based on the Recognized Seasonal Employment scheme in the Hawkes Bay, is an indicator that seasonal workers in Marlborough and other regions could play a role in developing the sort of joint ventures the JOVE scheme anticipates.
Pousima Afeaki, Nuku’alofa, Tonga Islands based chair of the Tonga New Zealand Business Association (TNZBA) has already won some support from the NZ Pacific Business Council, which has circulated the JOVE proposal for comment.
The Tongan proposal is that a scheme be established to encourage New Zealand companies to set up joint-ventures in the Pacific, beginning with the Kingdom of Tonga as the pilot.
Afeaki, a commerce graduate from Victoria University of Wellington, former staff member of the Commerce Commission, financial journalist and now a Tongatapu farmer and trader received the Afeaki matapule title in 2008, which assigns him leadership obligations.
The TNZBA says the peoples of New Zealand and the Pacific Islands will mutually benefit from an increase in understanding of cultural similarities and differences through the process of working together in JVs.
For the Pacific Islands, the urgent need is to create jobs through investment in the private-sector. Pacific Island countries do not have money or expertise to do so on their own. TNZBA say the cost is social unrest resulting from the inability to create enough jobs for young and aspiring populations.
In the March 2009 background to the JV-encouragement (JOVE) scheme, the TNZBA said part of New Zealand’s aid to assist developing Pacific Islands is aimed at developing sustainable economic growth. This includes helping the private-sectors in Pacific Island countries to grow and create jobs.
The JOVE proposal “aims to provide an effective way for New Zealand to help the private-sectors of Pacific Island countries grow and create jobs”.
McCully’s sustainable economic growth mandate for NZAID
Foreign minister McCully said on 1 May NZAID’s revised mandate “will now require a clear focus on sustainable economic growth as the means by which we seek to improve the lives of our poorer neighbours.”
Objective measures like trade and tourism statistics will be used as the indicators of success or failure over time.
That will require us to pay more than lip service to our support for the fledgling private sectors in developing Pacific nations, through micro-financing schemes and other initiatives that create opportunities for enterprise Mr McCully said.
NZAID’s amended mandate “will specify a clearer focus in our own Pacific region, with a greater percentage of the budget being allocated within the region”.
The mandate, approved by the Cabinet, will be published “so that everyone can be absolutely clear about the instructions from the Cabinet to MFAT and NZAID”.
Mr McCully wants “to align aid policy with trade policy within our region”.
For that reason, he and Trade Minister Tim Groser have adopted a joint strategy, along with their Australian counterparts, designed to “achieve sustainable economic growth in the Pacific through an alignment of trade and aid policies”.
They met jointly with those Australian counterparts a few weeks ago and will host a meeting of Pacific trade ministers in the coming weeks in order to make progress.
Mr McCully said in his May 1 speech to the NZ Institute of International Affairs in Wellington “Our aid dollars have done little to build sustainable economies providing employment prospects and the promise of a brighter future.”
Depopulation has continued at an alarming rate in parts of Polynesia.
Our billion-dollar export trade into the Pacific “has been reciprocated by imports from Pacific nations so miserly that they should be a source of national embarrassment”.
Air and shipping services – the arteries for trade and tourism – are under threat and in decline said Mr McCully.
“Substantial sums of aid monies are fed into unproductive bureaucracies – a classic example of mistaking activity for achievement. Yet when real and genuine challenges have arisen, as with the need to commence the re-building of downtown Nuku’alofa in Tonga following the November 2006 riots, we were missing in action”.
Compare JOVE and NZAID’s amended mandate
TNZBA’s Afeaki said in the JOVE proposal “the private sectors of developing Pacific Island countries do not have access to sufficient funding or expertise to make use of the opportunities that exist in areas such as agriculture, fishing, processing of agricultural and marine products, processing of forestry resources, tourism and hospitality”.
New Zealand companies have world-class experience in all of these areas. If offered the right incentives, New Zealand companies would invest in joint-venture operations in the Pacific TNZBA says.
Incentives under the JOVE scheme could include a combination of cash/direct and non-cash/indirect incentives.
Cash/direct incentives could include a contribution towards the cost of a feasibility study conducted by a New Zealand company into setting up a JV in the Pacific.
Non-cash/indirect incentives could include:
- accelerated depreciation charges in New Zealand for investment/capital costs of the JV;
- credit in New Zealand for tax paid on JV profits in the Pacific;
- JV losses able to be written off in New Zealand as well as in the Pacific;
- R&D costs able to be written off in New Zealand as well as in the Pacific.
New Zealand Trade & Enterprise and the NZ-Pacific Business Council would be able to conduct research into the type and combination of incentives which would encourage New Zealand companies to invest in JVs in the Pacific says TNZBA. The former Pacific Islands Industrial Development Scheme was administered by an NZTE predecessor, the Department of Trade and Industry.
Incentives under the JOVE scheme could include a combination of cash/direct and non-cash/indirect incentives.
Cash/direct incentives could include a contribution towards the cost of a feasibility study conducted by a New Zealand company into setting up a JV in the Pacific.
Non-cash/indirect incentives could include:
- accelerated depreciation charges in New Zealand for investment/capital costs of the JV;
- credit in New Zealand for tax paid on JV profits in the Pacific;
- JV losses able to be written off in New Zealand as well as in the Pacific;
- R&D costs able to be written off in New Zealand as well as in the Pacific.
TNZBA says New Zealand Trade & Enterprise and the NZ-Pacific Business Council would be able to conduct research into the type and combination of incentives which would encourage New Zealand companies to invest in JVs in the Pacific.
For the Pacific Islands, the benefits from JVs with New Zealand companies would include:
- improved access to funding;
- improved access to expertise;
- development of products for export and for import-substitution;
- widen access to overseas markets;
- creation of jobs.
For New Zealand, the benefits would include:
- initial supply of goods and services to set up JV operations;
- ongoing supply of goods and services to the JV operations;
- maintaining and increasing preference for New Zealand goods and services in the Pacific;
- increase trading opportunities for New Zealand;
- repatriated profits.
New Zealand Trade & Enterprise has developed some advisory materials for New Zealand businesses looking at setting up JVs in other countries. TNZBA suggest New Zealand Trade & Enterprise could administer the JOVE scheme in the Pacific through its network of Trade Commissioners, and through the New Zealand High Commissions/Embassies in Pacific Island countries where there are no Trade Commissioners.
In Tonga, the New Zealand High Commission and TNZBA could be the initial contact point for New Zealand companies looking for JV partners under the JOVE scheme. TNZBA is very happy to assist New Zealand companies to find and establish relationships with the right partners Pousima Afeaki says.
Build on what is there already
Sydney based Jim Willett, a specialist in small business development who has worked in the Pacific since the 1970s, recommends building on what is there already. There will be many answers depending on the individual situations of each business. Some may include a JV approach.
He suggests identification of a successful development model “and I only know of one, Kokonut Pacific http://www.kokonutpacific.com.au/” and copy it.
The Tongan national example on the kokonut website features the coconut business run by Afeaki.
By Anthony Haas, This e-mail address is being protected from spambots. You need JavaScript enabled to view it