[Marxism] Laughing all the way to the bank (was accumulation in NZ)

dave brownz davebrownz at yahoo.com
Thu Feb 22 17:24:08 MST 2007


I thought that self professed serious Marxists, on paying their telecom
bills, went beyond superficial impressions to reflect on the deeper structural causes of who profits in the end. 

Of course NZ has some large firms that have overseas interests.
Telecom is the largest, accounting for more than 20% of the
activity on the nzsx. The dairy giant Fonterra isnt far behind.

But do these overseas interests qualify NZ as an imperialist (however minor) country?

Below is  summary of the relative size of FDI in NZ vs NZ FDI.
The $14 Billion of NZ FDI is 10% of NZs GDP.  Most of it is invested in a
few sizable joint ventures. Telecom's 100% ownership of AAPT (the no 3 telecom) in Australia is one.  Fonterra's joint venture with Nestle in Latin America is another. 

But what Rohan overlooks is that Telecom was privatised in 1990 and was then,  and remains today, predominantly owned by foreign capital. It was sold to Bell Atlantic and Ameritech in 1990 for around $4.2 Billion. These firms later sold up, and today the biggest shareholdings are those of institutional investors, typically US pension funds, or private equity funds.

So even if Rohan's phone bill goes into NZ Telecom's pocket, most of the profit (AAPT has not proven very profitable so far)  eventually finds its way to institutional investors in the US and Australia. So next time Rohan
pays the bill maybe he should ponder seriously about who is laughing all the way to the bank. 


Foreign Direct Investment Statistics            

The stock of foreign direct investment (FDI) in New Zealand rose to NZ $64.289 billion (US $42.7 billion) as of March 31, 2004.  That was equivalent to 46.8 percent of New Zealand's GDP. (GDP in the year ending March 31, 2004, was estimated at NZ $137.42 billion using the GDP of NZ $118.09 billion in 1995/96 prices multiplied by a price deflator of 1.146. Source: Statistics New Zealand)

The privatization of many state-owned enterprises and monopolies in the 1990s brought a flood of U.S. investment into New Zealand over a five-year period, 1994-1998. U.S. investment approvals amounted to NZ $8.7 billion during the period, or the second-largest share at 24.8 percent of total foreign investment approved, with Australia taking a 27.5 percent share.

The U.S. share of FDI stock in New Zealand peaked at around 28 percent in 1997 before sliding to 10 percent by March 2003.  

U.S. investment is concentrated in the telecommunications, forestry, transportation, food processing and electronic data processing sectors. Increased U.S. investments are being directed into petroleum refining and distribution, financial services, information technology and biotechnology. 

New Zealand's direct investment abroad was NZ $13.39 billion (US $8.89 billion) as of March 31, 2004, or the equivalent of 10 percent of GDP.  


 
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