In defence of foreign investment - NZIER Insight 17
August 10, 2010
Globalisation does not rest easily with all. Recent public and political outcries over foreign investment in our farms and manufacturing plants attest to this. A recent TV3 poll indicates that over three-quarters of Kiwis want overseas investment rules tightened, and the Prime Minister is concerned about “the risk that New Zealanders become tenants in their own land” (NZPA 9 August 2010).
But restricting overseas investors’ access to the NZ economy, or certain sectors in it, is a damaging policy prescription. It would increase our country risk premium, causing borrowing costs to rise for households, firms and the government.