Economists Say Immigration is Key to Ending New Zealand Recession

By Phil Mercer

Sydney
13 May 2009

Some economists warn that New Zealand will suffer if it cuts
immigration because of the recession. As unemployment rises, there is
growing pressure on the government to reduce its intake of skilled
workers, imitating decisions made across the Tasman Sea in Australia.

Unemployment in New Zealand is at a six-year high and stands at five
percent. The economy slipped into recession last year, well before many
other developed countries, and the chances of a speedy recovery appear
slim.

The International Monetary Fund expects the New Zealand economy to shrink by two percent this year.

Unions: scale back immigration program

Trade
unions argue that in such dismal economic times the government in
Wellington should reduce the level of skilled migration to protect
local workers, especially in hard-hit industries such as construction.

Union
officials think New Zealand should follow Australia's example and scale
back its immigration program. Canberra cut migration levels by almost
15 percent because of the global economic slump.

Some economists, however, think this is a short-sighted view.

British
economist Philippe Legrain says New Zealand needs to prepare now for
economic recovery by keeping immigration strong. He says that new
migrants are a lifeline to the world economy and a "launch pad" for
recovery.

"Different people, with different experience,
different ideas, different perspectives sparking off each other can
create new solutions to problems, can help to innovate and it is
precisely in a recession that businesses need to innovate in order to
be prepared for the recovery," he said.

Some migrants complain they are being overlooked

Some well qualified migrants complain that they are being overlooked when applying for suitable positions in New Zealand.

Enoch,
who arrived from Rwanda in 2002 armed with two university degrees and
the ability to speak four languages, says it took him two years to find
work.

He thinks companies in New Zealand are too ready to dismiss overseas qualifications and experience.

"When
you have work experience that can be transferred to businesses here is
what matters and sometime some employers do not look closely to the CVs
to find what is really your experience and what you can do for their
businesses," he said.

PM resists calls to scale back immigration

So far, New Zealand's conservative
Prime Minister John Key seems likely to resists calls to scale back
immigration. Mr. Key says that skilled foreign workers will help the
country of just over four million people to eventually recover from its
recession.

The largest groups of migrants settling in New Zealand come from Britain, China and Australia, followed by Samoa and India.