3. Ranking and comparing New Zealand’s FDI regime Chart 7: OECD’s FDI Regulatory Restrictiveness Index (2012) Closed = 1
Open = 0
0.45 0.4 0.35 0.3 0.25 0.2 Non-OECD average
0.15 0.1
OECD average
0
China Saudi Arabia Indonesia Jordan India Japan New Zealand Mexico Malaysia Tunisia Russia Iceland Canada Mongolia Kazakhstan Korea Australia Israel Ukraine Peru Austria United States Brazil Switzerland Kyrgyz Republic Norway Turkey Denmark Poland Chile Morocco Latvia Egypt United Kingdom Sweden Czech Republic South Africa Italy Hungary Slovak Republic France Ireland Lithuania Belgium Greece Argentina Columbia Germany Estonia Spain Finland Netherlands Romania Slovenia Portugal Luxembourg
0.05
Source: OECD FDI Regulatory Restrictiveness Index 2012
New Zealand was the most restrictive in manufacturing, entirely due to its screening regime. Its score for the other three manufacturing categories was zero – the maximum possible for openness. New Zealand’s FDI regime for hotels and restaurants ranked 3rd most restrictive for the same reason. Its score was zero in categories I, III and IV and 0.2 in Category III. Malpass and Wilkinson’s analysis also demonstrated that New Zealand’s score for restrictiveness was no lower in 2012 than in 1997, whereas many other countries had become less restrictive during the same period. This is consistent with other evidence in chart 5 and table 3 of the slippage in New Zealand’s FDI competitiveness.
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The OECD itself provides weak statistical cross-country evidence that the more restrictive a country’s FDI index is, the less FDI it attracts. Malpass and Wilkinson also provided limited statistical evidence of a downward trend in inwards FDI flows for New Zealand between 1993 and 2012. However, other important factors were not controlled for, so those findings are only suggestive. Treasury argues that the OECD’s measure unduly penalises New Zealand by considering economy-wide screening regimes but ignoring the fact that very few applications in New Zealand are rejected.37 Nevertheless, the cost of putting in an application and the negative publicity from high profile cases where political problems have arisen could deter
The Treasury. (23 July 2009). Review of the overseas investment screening regime. Policy document and regulatory impact statement. Wellington: New Zealand Government, 18–19. Retrieved from www.treasury. govt.nz/publications/ informationreleases/ overseasinvestment/ pdfs/oi-cpa-ris-oir.pdf. 37
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