How and why we have got to be where we are now

This, the first of three chats with Sir Paul which he did exclusivly for the NZManufacturer Magazine back in July 2011.  He  covers "How and Why we have got to be Where we are now". In the next two, he will project the pathway to a sustainable and environmentally benign future and finally, reveal additional opportunities and challenges he has discerned for Kiwi manufacturers, following his sojourn in the halls of academe in Oxbridge, UK and his forthcoming visit to China.  Originally published in th

Starting with the post-WW2 era, can you set the scene for "How and Why we have got to be Where we are" please?

In 1950 New Zealand's per capita GDP was amongst the world's highest. It was a prosperity built on "processed grass", with high prices for agricultural products and guaranteed British markets.

Throughout the 1950s our prosperity ranked at about 90 percent of the United States. This period saw major investment in infrastructure with the building of hydroelectric dams, bridges, road sealing and a large stock of state housing. But New Zealand's was a highly regulated economy with import controls and tariff barriers, fixed exchange rates, control of bank interest rates and capital controls.

Were there any early signs of what was to come?

Although our prosperity continued into the 1960s, warning bells rang. In 1966 wool prices collapsed, the exchange rate was devalued, and by the end of the 1960s, Britain was signalling its intention to join the European Economic Community. That joining in 1973 probably represented the greatest jolt to the New Zealand economy in its 130-year history.

From then on New Zealand had to look to new markets and new trading relationships. Despite market diversification, and despite continuing, albeit limited, economic growth, our relative position grew weaker. 1973 marks the beginning of a long slide in our per capita GDP relative to both the United States and Australia.

Was New Zealand an isolated case and were we too slow in responding?  

​You can read Sir Paul's answer to this and more questions by going to

The Sir Paul Callaghan Series The 1st of 3 Articles