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New Zealand ranked first on Forbes annual list of the Best Countries for Business released last week. The article noted that while New Zealand is the smallest economy in their top 10 at $162 billion, it ranked first in four of the 11 metrics examined, including personal freedom and investor protection, as well as a lack of red tape and corruption.
Overall, 141 nations were graded on 11 different factors: property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance.
While the article noted New Zealand’s economy is closely tied to Australia and that both countries held up better during the global financial crisis, our trans-Tasman neighbour ranked 11th this year.
Positives in this year’s survey included New Zealand cutting its corporate tax rate from 30% to 28% and the stock index NZX 50 increasing 24% in the last 12 months. The high dollar and the highest unemployment since 1999 (7.3%) provided a cautionary mention.
“Transparency and stable business climate” were cited as encouragements for entrepreneurship but the article created a minor storm of controversy with a statement that it “leaned on research and published reports from the following organizations: the Central Intelligence Agency, Freedom House, Heritage Foundation, Property Rights Alliance, Transparency International, World Bank and World Economic Forum”.
Several readers sent comments to Forbes noting the difficulty in reporting corruption and alleging Transparency International New Zealand was a secretive organisation which turned away memberships, was primarily funded by the NZ government and run by government bureaucrats with private enterprise conflicts of interest.
"from Christopher Wingate -
They say the great thing about corruption is you get certainty. They also say if you complain about corruption you obviously have never been in the position of being tempted by it. Having said that I wasted $5.5m investing in NZ after coming up against high level corruption followed by incredible systems for mounting a coverup I have ever seen. I would welcome Forbes to referee a discussion with the NZ Government on this subject. http://lawisanass-wingate.blogspot.com.au/2012/10/invest-in-new-zealand-warning.html"