We’re only just beginning to understand the vast political ramifications of the coronavirus, both here and around the world, writes Colin James.
What comes after Covid-19? Not business as usual. The global virus is a disjunctive shock and such a shock sets up a chain reaction that changes the order of things.
That there is a viral pandemic is not a surprise. Sars in 2003, Mers in 2012 and Ebola in 2014-15 telegraphed warnings. It was Covid-19’s timing, origin, nature and spread that could not be known, not that something like it was likely.
Expect more viral pandemics. Also, possibly worse, an antibiotic-resistant bacterial pandemic looms. The thinning of ecosystems may be a factor. The globalisation of people through migration and tourism helps the spread.
Covid-19’s immediate damage is to human lives: illness and death. Anaesthetising the economy to save lives does collateral damage to the livelihoods of those who live though the crisis and survive. Some firms will not survive it.
But will the lockdown be just four weeks? Or six, eight or more? Or one or two repeats if the virus regains virility after visiting Africa or the Middle East? And how long or how often can the economy be anaesthetised before causing serious hardship to everyday mums, dads and kids?
The front page of the Wall Street Journal, October 10, 2008
Even when the national economy is free to get back in business, there will be reverberations because foreign economies on which we depend for supplies and export earnings, not least in education, are being damaged.
And that pandemic-triggered global economic shock might be compounded by a convulsion in the international finance system. The most recent disjunctive shock came out of that system when, in 2007-08, opaque collateralised debt obligations unravelled and banks, insurance companies and ‘investors’ became bankrupt or corporate welfare beneficiaries.
Did we go back to business as usual after that shock? No. Ultra-low or negative interest rates, lavish money printing by central banks have palliated economies, not fully cured them.
Stagnant wages and inequalities of distribution of corporate welfare have brought about populist regimes in the United States and United Kingdom and fuelled populist and extremist parties across wealthy democracies (except ours, so far).
Have we learnt from the 2007-08 debacle? Not about risky lending, it seems. Since 2008 global debt – personal, government and corporate – has gone on climbing to an all-time high of more than 320% of global GDP in late 2019, from around 180% in 2006. According to the OECD, non-financial corporate bond debt was $US13.5 trillion in late 2019, double the 2009 level in real terms. In 2019 51% of new investment-grade bond lending to corporates was rated BBB, the lowest investment rating, and 25% of all bond lending to corporates was non-investment-grade – “junk”.
Economists say debt is OK if backed by assets. But highly leveraged loans may turn out not to be backed by assets if Covid-19 lockdowns push the tide out too far. Can governments and central banks sustain another prolonged massive rescue in the vein of the GFC?
Finance minister Grant Robertson makes an exit at the conclusion of a Covid-19 financial response package announcement (Photo by Hagen Hopkins/Getty Images)
New Zealand starts this process in a good position. Grant Robertson could more than double net government debt to 40%-50% of GDP and still not be near the debt levels many rich-economy governments start from. But, over time, pumping up government debt weighs on already highly indebted households and firms. So does unemployment, which could top 10% as a result of this crisis.
From high government debt and unemployment levels in 1990-92, we got back down to a comfort zone by the mid-2000s. That gave us fiscal leeway to respond to the severely costly Canterbury earthquakes.
But in the 1990s and 2000s global trade and tourism were expanding, China was on the rise and measured, mainstream parties ran rich-country governments. Since 2016 Donald Trump has set out to pull apart that rules-based international trading order. And there is Boris Johnson’s little England project.
There are more risks to weigh, including governments’ likely nationalistic reaction to Covid-19’s disruption of complex international supply chains and exports. The golden age of hyperglobalisation is over.
International business as usual was already looking less ‘usual’ in 2019. The pandemic’s impact and aftermath will compound that shift. More risks: another pandemic in five years or so – and water shortages with famines (India? China?), climate events and heightened potential for conflict as a result. Plus, possibly, digital disasters.
Such events will be local. But they will also be global, bringing home the profound Covid-19 message: that global interdependency is not dead.
Even Trump’s transactional United States and Xi Jinping’s mercantilist China need international interaction for their citizens’ material prosperity. Travel might not recover to 2019 levels but it is not likely to die, however much Covid-19 is wrecking tourism and airlines right now.
Don’t expect global solutions and institutions to command action on future pandemics, as a former Swedish prime minister, Carl Bildt, urged last week. Nation-states are not ready yet to hand over sovereignty.
But there is scope for ‘coalitions of the willing’ such as groups of nations committed to pro-climate-action tariff adjustments – and to zero tariffs for virus-fighting equipment and medicine – in which our Trade and Economic deputy secretary Vangelis Vitalis has been a prime mover.
Such coalitions provide a glimmer of opportunity to begin genuinely building a positive global framework. That will, however, be within a readjustment of the global balance.
China’s rigid autocracy stifled talk of an epidemic and arguably turned the epidemic into pandemic. But former United States assistant secretary of state for Asia Kurt Campbell points to Chinese internal lockdowns, followed by material assistance to Italy and other nations to fight Covid-19, as potentially giving Xi an edge to claim leadership in changing global systems and governance to China’s advantage.
Xi wants to restore the China which thought itself the centre of the world – at the very time that Trump’s self-absorption and tantrums have been undermining the United States’ 75-year claim to be global leader (as it was in the fight against Ebola).
And this challenge comes when the economic order and orthodoxies established under that United States leadership are increasingly debated and questioned – even in such decidedly capitalist publications as the Economist and the Financial Times. Last week, writing in the FT, Klaus Schwab, head of the market-liberal World Economic Forum, condemned companies which focused tightly on shareholder returns instead of wider ‘stakeholder’ benefits.
There is no new orthodoxy sitting on a United States shelf as Milton Friedman’s was when the Bretton Woods monetary system collapsed in the early 1970s. But Xi would claim there is one on his shelf. That doesn’t mean China’s distorted capitalism is the next orthodoxy. But it does underline that the 500-year ascendancy, then dominance, of ‘western’ thinking, from humanism to neoliberalism, is under challenge.
The coronavirus disjunctive shock will kick along this refashioning of global activity, leadership and thinking. It will pose huge questions and opportunities for New Zealand. When Jacinda Ardern’s government and officials get through the mind-bendingly difficult immediate challenge, they will find those huge questions on their plates.
It will not be business as usual.
Jacinda Ardern on TVNZ, and on Madeleine Chapman’s new book
Jacinda Ardern on TVNZ, and on Madeleine Chapman’s new book
An extract from Jacinda Ardern: A New Kind of Leader, the brand new biography of the prime minister by Madeleine Chapman, formerly of this parish.
Out today, Madeleine’s biography of the prime minister is magnificent. We cracked up. We had a wee cry. We’ve never read a political biography like it. Tomorrow we’ll have an essay from Mad. Today, an extract – on Ardern in high school, featuring extreme earnestness and Juicies and school uniform politics.
– Catherine Woulfe, books editor
In 1987, Jacinda’s parents announced the family was moving. To the big city? No, to Morrinsville.
Morrinsville wasn’t a metropolis, but it was bigger and broader than Murupara – more of a microcosm of the country as a whole, with wealth and poverty close neighbours. Families that owned large, successful dairy farms lived around the corner from recently arrived refugees. The largest, fanciest establishment was the Morrinsville Golf Club, which shared a border with the Ardern family home. The house – a Lockwood design, constructed without nails – had been built by Jacinda’s grandfather.
To earn pocket money, Jacinda kept the family fruit stall stocked. Golfers heading down the fairway over the back fence could buy an apple for 20 cents, slotting their coins into the honesty box. Beyond the green, Mount Te Aroha sat in the distance, snow on its peak.
In Morrinsville, there was poverty, but it was not so explicit as it had been in Murupara. Still, Jacinda had developed a keen eye for unfairness and at Morrinsville Intermediate she found a way to channel her energy: the Student Council.
At meetings held in the staffroom, young council members, aged between eleven and thirteen, aired their concerns about the inflating price of Juicies, the frozen drink snack, or their scepticism over safety concerns that prohibited them from riding their bikes the last 50 metres to school. The issues were presented seriously enough, but the earnestness of the young council members’ delivery masked the fact that most students applied to the council for one reason and one reason only: to get out of class for a period.
Except, that is, for the council president, Jacinda Ardern. Jacinda genuinely saw herself as the voice of her peers, representing them in a democratic system, a concept that had almost certainly never crossed her peers’ minds. Once the half-hearted Juicie complaints had been voiced, Jacinda got down to business. Having done some independent research into local charities and their funding situations, she proposed (read: decided) which one to support with the funds raised from the school’s next mufti day. Her fellow council members nodded along to her proposal in solemn agreement. Jacinda was very good at being in charge.
Jacinda Ardern walks to the house to declare a State of National Emergency (Photo by Hagen Hopkins/Getty Images)
Jacinda’s interest in student politics from a young age didn’t appear to be the work of overzealous parents, and the sentiments she conveyed weren’t parroted: they were genuine. Even as a 12-year-old, Jacinda had a spontaneous and genuine interest in advocacy.
At Morrinsville College, four years later, the issues were somewhat more substantial. The Board of Trustees had to weigh up the matter of shorts: for girls, that is. Jacinda, now 17 and the sole student representative on the Board, argued passionately for girls to have the option of wearing shorts. As it stood, the uniform was skirts for the girls, shorts or pants for the boys, and collared shirts for everyone. Jacinda seemed to be on a mission to overhaul the uniform entirely, having successfully argued the previous year for a redesign of the shirts. Staff wanted students to tuck their shirts in and the students didn’t want to. So Jacinda had put a proposal to the Board for new shirts to be introduced that were designed to be worn untucked. She convinced them and oversaw the change.
The Board, mostly men, were used to having a student representative present at meetings, but never before had that student been so vocal or so effective. It was strange. Jacinda would come to the meetings, held outside school hours, with notes prepared, and argue at length about numerous issues. She was animated and engaged the entire time. It was almost like she wanted to be there. That wasn’t just unusual for a girl from Morrinsville in the 90s, it was weird for any kid, anywhere.
Beyond her success in Board meetings, Jacinda excelled in a year group that was particularly high-achieving. She wasn’t Head Girl; that was Virginia Dawson, who, after stints at Oxfam and UNICEF, is now the Head of Development Co-operation at the New Zealand Embassy in Myanmar. Jacinda chose instead to focus her efforts on being the student representative. She knew that was where the power to make real change lay. Years later, we would see an echo of this, when – as a 30-something MP – she insisted on numerous occasions that she did not want to be prime minister because she believed she could have more impact as a minister instead.
Morrinsville is a dairy farming town. It proudly claims to have the most cows per hectare in the world. At its busiest, the town’s Fonterra factory processes over one million litres of milk per day. Two hours south of Auckland and a nondescript left turn off State Highway 1, the road narrows on the way to Morrinsville. Mobile phone coverage drops out but eventually returns. In her 2008 maiden speech to parliament, refuting claims that she was “radical”, Jacinda said: “My answer to that is very simple. I’m from Morrinsville. Where I come from, a radical is someone who chooses to drive a Toyota rather than a Holden or a Ford.”
In Morrinsville, Ross Ardern was one of two local officers, before working in Hamilton as a detective. Jacinda’s mother, Laurell, worked in the Morrinsville College cafeteria. She had given up a job in office administration to raise Jacinda and Louise. According to students at Morrinsville College at the time, no culinary favourswere afforded the Ardern sisters despite their connection to cafeteria staff.
Jacinda began at Morrinsville College in 1994. It was the only local choice for secondary schooling, though some of the wealthier parents sent their kids to schools in Hamilton, 30 kilometres away. At Morrinsville College, each year group had between 70 and 100 students: essentially every teenager in the town went there. The make-up of the student population mirrored that of Morrinsville as a whole: largely Pākehā, with a growing Māori population, a strong Indian community through the farming industry, a number of Cambodian refugee families who had been placed there upon arrival in New Zealand, and, according to students and staff there at the time, not a single Pacific Islander.
Everyone knew everyone in Morrinsville. And they knew who your family was. For Jacinda, that meant she and Louise were seen as a pair. Louise was considered a bit “cooler” than Jacinda, which roughly translates as “less earnestly enthusiastic about student politics”. Since then, Louise has managed, quite impressively, to go largely unremarked upon in the New Zealand media. Although she’s the only sibling of the prime minister with the greatest name recognition around the world, Louise Ardern remains an enigma.
Jacinda might not have been cool, but she wasn’t uncool, an important distinction that many former classmates are quick to make. She did lots of things that teenagers would deem uncool. She was the Board of Trustees student representative for not one year but two, a feat never before seen and never repeated. She participated in debating. She entered, and won, speech competitions. She didn’t drink alcohol. A decade later Jacinda would be known as the cool, young politician who could engage thousands of followers on social media and was a DJ on the side, but at school, by all definitions she was a nerd. A successful and well-liked nerd, but a nerd nonetheless.
If her fellow students remember her at all, they describe her as “nice”, which is damning with faint praise. For a lot of people, being referred to as “nice” equates to being considered boring. And maybe she was a bit. There are people who went to Morrinsville College in the same year as Jacinda who have no distinct memories of her at all. Unsurprisingly, it’s the staff who remember her the most: since she was a student representative, debater and speech-giver, they heard the most from Jacinda while she was at school. And of all the staff, no one was more instrumental in Jacinda’s life than Gregor Fountain.
Mr Fountain began teaching at Morrinsville College in 1995 as a 22-year-old. Fresh out of teachers’ college in Christchurch, after growing up in Wellington, he took a step into the rural unknown in moving to Morrinsville. Students remember him for his interactive style as a social studies and history teacher. He often made the class re-enact historical moments instead of simply reading about them. When teaching a class about Gandhi, he dressed up as the Indian activist, an approach that perhaps wouldn’t fly so well in 2020 as it did in 1995, but was nonetheless effective. He was interested in local politics and activism and was proudly liberal in an overwhelmingly conservative school. Barely older than the students he was teaching, and bringing with him his liberal “city” sensibilities and enthusiasm, Mr Fountain was an immediate hit. And particularly with 14-year-old Jacinda Ardern.
Not only did Mr Fountain have similar interests to politically engaged students, he had a lot of knowledge he was willing to pass on to any students who showed an appetite for it. Speaking to Mark Sainsbury shortly before the 2017 election, Ardern recalled that Mr Fountain had taught her “to question the basis of all my opinions. Why do you think that? Where did it come from? He was my teacher when I found out how to think.”
Mr Fountain taught general history but also made a point of teaching a fuller version of New Zealand’s history. In New Zealand, as in other colonised countries, the history most often taught is that of the colonisers. In this version, adventurous Captain Cook discovered New Zealand and a treaty was signed with the indigenous Māori people (The Treaty of Waitangi/Te Tiriti o Waitangi) so that Europeans and Māori could live peacefully alongside each other. The more accurate but less commonly conveyed history is full of conflict and violence and the attempted genocide of the New Zealand Wars that were waged between Māori and Europeans for ownership of the land. Mr Fountain introduced both versions to his students, and some, like Jacinda, were hooked.
It was timely. In 1995, the Crown formally apologised to Waikato-Tainui as part of a Deed of Settlement for the lands that were unjustly confiscated during the New Zealand Wars. Jacinda was 15 at the time and in Mr Fountain’s history class: she wanted to know more. Years later, Mr Fountain recalled her searching for guidance and understanding of the region and country she lived in. “She was someone who was looking for and developing a set of values to guide her. I remember having a conversation with her about the Tainui settlement … and thinking she was someone a bit different. She really wanted to get her head around the whole thing.”
When Gregor Fountain left Morrinsville College, Jacinda still had one more year of schooling left, but he maintains that he already knew Jacinda would go far. “I absolutely thought she was someone who would change the world.”
Jacinda Ardern and her newborn daughter Neve (supplied)
A decade later, as a member of parliament, Jacinda would be criticised for being a “career politician”, meaning she had only ever worked in politics and never as a “regular” New Zealander. It remains a fair comparison: many politicians had full careers in other professions before going into politics. It overlooks one thing though. While Jacinda never worked outside politics as an adult, as a teenager she had the most Kiwi of jobs imaginable: working the Friday night shift at the local fish’n’chip shop. After school on Friday, while her classmates were getting drunk in a field somewhere, Jacinda worked the busiest shift of the week at the Golden Kiwi.
The Golden Kiwi, technically a takeaway shop, specialised in the national food of fried fish and chips. The shop opened in 1963 and was owned by the Covich family. Thirty years later, son Grant, who still runs the business today, gave 14-year-old Jacinda a job, after she dropped off her CV with her mum. The Golden Kiwi harks back to days of old in its refusal to refurbish. Long after most fish’n’chip shops became exclusively takeaway, the Morrinsville shop kept its original wire seating, chequered cloths and table service. It was young Jacinda’s job to take orders, serve food to diners, and wrap orders for the takeaway customers. Acutely aware of her daughter’s inexperience, Laurell bought half a head of cabbage and instructed Jacinda to practise wrapping it at home.
Working at a fish’n’chip shop has come to serve Jacinda well, for in New Zealand nothing says “of the people” more than having served the people deep-fried food wrapped in newspaper.
Jacinda’s school years in Morrinsville stand out not for how extraordinary she was, but rather for the opposite. She did well academically but wasn’t considered a genius, worked part-time for a local establishment, and, according to virtually everyone in Morrinsville when asked about her, “never put a foot wrong”.
The author, right, and her book
Flick through her school yearbooks and Jacinda’s name features heavily. Debate team, speech competition winner, writing competition runner up, science competition winner. There’s a Board of Trustees rep blurb featuring a headshot of Jacinda wearing sunglasses and blonde streaks in her hair. Not cool, but not uncool.
The one surprising entry is Jacinda’s inclusion in a senior basketball team photo. Were it revealed that prime minister Jacinda Ardern was also a star athlete in her youth, not many people would question it, such is her reputation for overachievement. But sports seemed to be her equaliser. Perhaps her ability to deftly coordinate the many viewpoints of the student body as a Board of Trustees representative came at the expense of her ability to deftly coordinate her own limbs. The basketball team was a social one, and some doubles work with Louise on the badminton court wasn’t exactly reminiscent of Venus and Serena. But she played with full enthusiasm and earnestness, and would go on to be a vocal supporter of increasing girls’ participation in sports. Enthusiasm and earnestness, two qualities so often frowned upon by the desperately nonchalant New Zealand psyche, and two that Jacinda displayed in spades even as a teenager.
At a Board of Trustees meeting in 1998, 17-year-old Jacinda argued on behalf of Morrinsville College students that girls should be allowed to wear shorts if they wanted to. She herself was happy to wear a skirt, but that was beside the point. Jacinda was the voice of the students and she took her role seriously. If that was the change the people wanted, she would work hard for it. After a number of long Board meetings, she convinced the parent and staff representatives of a traditional rural college to change the school uniform for the second time in two years. Jacinda never did wear shorts to school, but visit Morrinsville College today and you’ll see a number of girls do.
At the end of 1998, as Jacinda and her classmates packed up their lockers and prepared for the real world, everyone voted on a list of character titles and predictions. Funniest, best dressed, friendliest, best couple. Not every student received an accolade and only three predictions were made. Jeremy Habgood was predicted to be the first to become a millionaire. The most likely to succeed was Head Girl Virginia Dawson.
And most likely to become prime minister? Jacinda Ardern, of course.
Jacinda Ardern: A New Kind of Leader, by Madeleine Chapman (Black Inc Books, $40) is usually available from Unity Books. For now, we recommend buying it as an ebook.