Billionaires are buckling down on boltholes on our shores, but can New Zealand’s small island nation actually sustain its inhabitants and the world’s elite alive if disaster were to strike? In part two of our series, we chat with a sustainability professor.
The end of the world is nigh. At least, that’s what some believe.
Major global events that have undergone upset after upset - from Donald Trump being elected the 45th US president, to the Best Picture mix-up at the Oscars held yesterday – has led some to think Earth is on the verge of a social, political or environmental collapse, or more controversially, that we’re living in a computer simulation.
In response to this, those in the tech sector with money and finesse have been purchasing property in isolated places across the globe to escape to.
Publications like The New Yorker have reported New Zealand is a fan favourite in the face of potential disasters due to its remoteness, with its nearest neighbouring country, Australia, sitting at a comfortable 2,011km away.
Among the fans is prominent tech investor and Donald Trump donor Peter Thiel, who called New Zealand a “utopia” in 2011 and owns a $13.5 million, 193-hectare lifestyle block in Wanaka.
Last week, we picked economist Dr Eric Crampton’s brains on New Zealand’s eligibility as a safe bunker for the world’s elite.
His assessment of New Zealand being a bolthole was that it’s great in some circumstances, like a zombie invasion, but not reliable across the board for every type of apocalyptic scenario.
In fact, he said the best bolthole often isn’t the most isolated place in the world, but the wealthiest place in the world due to international trading.
But if you had masses of money, he said it’d be wise to invest in land in New Zealand – and in the Caymans, in Canada and in Sweden.
However, another key question is whether New Zealand could sustain its 4.5 million inhabitants in the face of a disaster, as well as a kaching of rich people.
The pros and cons of doomsday immigrants
Despite having no obligation to live in the country, Thiel was granted New Zealand residency in 2011 due to "exceptional" abilities in entrepreneurship and philanthropy.
Notably, he invested $1 million into the Christchurch earthquake appeal, as well as $4 million into Xero.
Assistant vice chancellor of sustainability at Victoria University Marjan van den Belt says if wealthy businesspeople are coming to New Zealand to build bunkers for themselves, their investments are adding to short-term GDP.
However, she says their presence may decrease other values that will help New Zealand transition to a sustainable future, such as equality, wealth distribution and peace.
“If money is power – the power to buy land and eco-systems – then that creates inequality in who has access to eco-systems and the many services people receive from eco-systems,” she says.
“Are we taking a socially inclusive approach to the inevitable transition, or are we sticking with an exclusive approach and hoping the market will save the day?”
She says there are some social enterprises and large companies operating within New Zealand that have the right approach by both helping society and operating a business.
These include the likes of the Ākina Foundation, the Edmund Hillary Fellowship and Pomegranate Kitchen, she says, as well as bigger companies moving towards ‘for purpose’ rather than ‘for profit’, such as Air New Zealand and Z Energy.
Van den Belt says it’s important that the foreigners who bunker down here share values that actually benefit Kiwis, as well as help them move New Zealand towards a more sustainable and resilient society.
I’d be more interested in evidence that a ‘doomsday immigrant’ shares – or improves – New Zealand values and want to invest and apply their skills to share the bounty.
“The proven ability to make money in the current economic system isn’t a guarantee that there is an inclination to transition toward shared power and co-creative solutions,” she says.
A different view of ‘wealth’
In order for New Zealand to prepare itself for a sustainable future, van den Belt says there might have to be a change in the way the nation looks at resilience.
The economy shouldn’t be the only factor considered of value, she says. Instead, eco-systems like natural capital (such as soil, air and water) and the benefits people receive from them should be considered the bedrock of a healthy society.
“The Government needs to take a more holistic view of resilience. New Zealand is doing quite well looking at resilience from a localised, natural disaster perspective,” she says.
The devastating earthquakes that hit Christchurch in 2011 are an example of this.
“Now we need to upscale this resilience thinking beyond local, short term to national, long term transitioning. The benefits are potentially huge, but it will need a different metric than navel gazing on ‘economic growth’.”
A real-world example of this is Iceland, which faced an economic meltdown in 2008 when the recession hit.
The small European country had built its wealth through high-risk banking investments by wealthy businesspeople.
But when the effects of the recession found its way to its shores, Iceland’s biggest banks failed, the stock market crashed, and investments worth nine times as much the country’s annual economic production disappeared within one week.
Instead of following the recommendations of Wall Street to absorb private debt of bankers, Iceland’s Government instead opted to follow the wishes of its citizens.
With 93 percent of citizens voting to invest in rebuilding the economy instead of cutting government budgets and sending that money to bankers, the people had spoken.
The government doubled down on its strong social protection system, investing in programmes that allowed people to maintain food, jobs, housing and healthcare in the wake of a crisis.
Another radical step was writing off homeowners’ debt that was above 110 percent of the property value, and offering money to those who were poor to help reduce mortgage repayments.
After predictions that Iceland would fall apart, it didn’t – and neither did its people. Iceland still ranked highly in the UN Happiness Report in 2012, scoring as number one in the world in “gross national happiness” and “the happy index” in the middle of an economic disaster.
As well as this, Iceland’s economy grew three percent and unemployment fell below five percent that same year.
Van den Belt says countries that invest in social and human capital instead of economic capital tend to bounce back from disasters faster, as demonstrated by Iceland.
The land of the long white cloud, cows and sheep
So, if the world did come to a grinding halt via a political disaster, nuclear war, or sentient robots rising to kill us all, is New Zealand ready to cut itself off from the rest of the world and sustainably live off the land, livestock and natural resources?
It depends. Van den Belt says her hypothesis would be yes, for a short period of time.
However, she says in the wake of a crisis, New Zealand may end up wrecking its ecosystems even faster that it currently is doing.
“Therefore, my answer would have to be no, we are not prepared to transition into a sustainable society. We don’t have the institutions at this point in time."
To use business language: We are consuming our natural capital beyond its principal rather than living of the interest.
Currently, statistics show New Zealand’s affluent population is at risk of leaving an ecological footprint larger than its carrying capacity. In 2008, New Zealand’s footprint was measured at 7.7 hectares per person, the sixth highest in the world.
The global average was 2.7 hectares, with the United States’ at 9.4 hectares and China’s at 2.1 hectares.
Van den Belt says New Zealand is still within its carrying capacity, but at some point in the future the pressure on its eco-systems will prove too much.
“Unless we start to grow wellbeing and include non-monetary values as part of a healthy economy, we have to tackle our addiction to economic growth. We can’t continue to materially grow our way out of a situation of unsustainable growth.”
In order for New Zealand to truly be self-sufficient, she says companies that are for-purpose should be invested in, while companies that aren’t should be pushed aside.
As well as this, she says the economic paradigm needs to be updated to “Capitalism 3.0”.
“If New Zealand is prepared and has invested in sustainability and resilience, the shock will be less than if New Zealanders keep being in denial and addicted to economic growth.”
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