### sstlive.co.nz Last updated 05:00 21/02/2010
Epoch-defining insight … and the govt missed it
By Rod Oram – Sunday Star Times
Opinion: Rip, shit and bust is a classic strategy, seductive to many corporates and countries. It often looks good in the short term. Exponents exploit abundance such as natural resources, cheap labour or lax regulation to make quick profits.
Yet in their careless haste, they sow the seeds of their own destruction. They over-exploit their present opportunity and under-invest in their future. In due course, the enterprise or nation goes bust.
Take an oil and gas producer such as the UK. For 40 years it has lived high on the hog of cheap fuel and lavish royalties from the North Sea. Now both are dwindling fast, it has a crippling hole in government revenues, energy policy and industrial strategy.
Or take investment banks in the US and Europe and finance companies in New Zealand. They profited by scoffing at feeble regulations over the past decade. Now their heavy losses are borne not by their shareholders but by savers and taxpayers.
Not all disasters are purely financial. Exponents can also blight the land they exploit, as colonial foresters did here or plantation farmers are today in the Amazon and Indonesia.
Yet, this is exactly the economic strategy our government is proposing for New Zealand.
Yes, the government understands our natural resources are the key to our prosperity. But it can only see how to flog them harder, not nurture them smarter.
Post by Elizabeth Kerr