Rio Tinto | Minerals and Metals for the world

Mining towards a better world
Campaigners campaign vigorously against global corporations - but how valid are their arguments? Rio Tinto chairman Paul Skinner takes up the cudgels.´

Many people have strong views on globalization and trade liberalization, and I'm no exception. My views are based on reasoning, and on personal experience. I'll start with an example from New Zealand in the 1980s: at the time I was CEO of Shell's business there.

The New Zealand economy had a history of slow growth, given a small home market, and long distances to other markets. Under successive governments, the economy had built up heavy regulation, tariffs, subsidies and debt. Then everything changed: a radical Labour government – under David Lange – decided on rapid deregulation, removing all the controls.

Such action takes time to yield benefits. So New Zealand missed out on the late 1980s global economic boom. But in the early 1990s, when many other economies were struggling, New Zealand saw its GDP growth rate quadruple, from an average of 0.9 per cent between 1986 and 1990 to 3.9 per cent between 1991 and 1995. And exports as a percentage of GDP rose from 26 to 30 between the two periods. Without those structural changes I really wonder where New Zealand would be today.

So I begin by highlighting three points:

Freedom of trade is fundamental to economic wellbeing – which, in turn, is a crucial path to higher standards of living for all, through better education and healthcare.
International corporations have a positive role to play in the overall effort to deliver the benefits of globalization and world trade to everyone.



Mining towards a better world Campaigners campaign vigorously against global corporations - but how valid are their arguments? Rio Tinto chairman Paul Skinner takes up the cudgels.´ Many people have strong views on globalization and trade liberalization, and I'm no exception. My views are based on reasoning, and on personal experience. I'll start with an example from New Zealand in the 1980s: at the time I was CEO of Shell's business there. The New Zealand economy had a history of slow growth, given a small home market, and long distances to other markets. Under successive governments, the economy had built up heavy regulation, tariffs, subsidies and debt. Then everything changed: a radical Labour government – under David Lange – decided on rapid deregulation, removing all the controls. Such action takes time to yield benefits. So New Zealand missed out on the late 1980s global economic boom. But in the early 1990s, when many other economies were struggling, New Zealand saw its GDP growth rate quadruple, from an average of 0.9 per cent between 1986 and 1990 to 3.9 per cent between 1991 and 1995. And exports as a percentage of GDP rose from 26 to 30 between the two periods. Without those structural changes I really wonder where New Zealand would be today. So I begin by highlighting three points: Freedom of trade is fundamental to economic wellbeing – which, in turn, is a crucial path to higher standards of living for all, through better education and healthcare. Globalization, when it is responsibly undertaken and managed, is benign rather than malign. International corporations have a positive role to play in the overall effort to deliver the benefits of globalization and world trade to everyone.
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Review is published by Rio Tinto, 6 St James' Square, London SW1Y 4LD, England Telephone +44 (0)20 7930 2399 Editor: Cherry DeGeer