Praveen Menon

WELLINGTON (Reuters) – When a New Zealand central bank official spoke in September about the kōtuku, a white heron that features prominently in folklore of the indigenous Māori, the world’s hard-nosed foreign exchange traders took it as a cue to dump the local currency.

Christian Hawkesby the Assistant Governor was challenging financial market’s slang use of “hawks”, “doves”, and other terms to describe monetary policies. She introduced a third bird that requires small, considered steps and continually assesses its environment to make bold decisions.

The nuanced illustration was meant to show how the Reserve Bank of New Zealand (RBNZ) would deftly navigate economic uncertainties https://www.reuters.com/world/asia-pacific/rbnz-comments-dampen-market-expectations-big-rate-hike-2021-09-20 such as the pandemic. This gave traders eager to find out how much interest rates would rise, a reason to buy the currency down to its one-month lowest.

“When we are using Māori and the cultural stories we need to explain those and translate those into English to bring everyone along with us,” Hawkesby told Reuters, acknowledging the challenges of employing indigenous cultural references.

Over the past few years, the RBNZ has undergone an overhaul that puts the country’s Māori heritage and language at the centre of its operations.

Adrian Orr, RBNZ Governor, directed the makeover. It has had bold results in its branding and approach to communication. https://www.reuters.com/article/newzealand-markets-orr/a-tricky-read-nz-central-bank-chief-wrong-foots-markets-idINKCN1RS0NO

The RBNZ’s new stylised logo is inspired by the legend of Tāne Mahuta, the Māori god of the forest, and builds on the narrative of RBNZ as a giant tree that serves as “kaitiaki”, or guardian, of the financial system.

Policy documents are now dotted with visual and linguistic references to Māori folklore, which have perplexed some investors in the New Zealand dollar, the world’s 10th-most traded currency.

“It took me a while to figure what was being said here,” a Sydney-based foreign exchange trader said of the kōtuku example.

BROADER PERSPECTIVES

The changes are part of a drive to elevate Māori culture, language and society in policymaking and promote indigenous perspectives on issues including climate change and sustainability, which has gathered pace under Prime Minister Jacinda Ardern.

For the central bank, that means a greater focus on financial inclusion for Māori, who make up 17% of the 5.1 million population but are under-represented in the economy.

Inequality has contributed to an income gap between Māori and non-Māori and led to poorer education and health outcomes for Māori, who have also been more affected by the economic and health impacts of the pandemic.

“Monetary policy is very much a macro perspective but it does have different distributional impacts, and it’s critical that we recognise them when we take these policy decisions,” said Ganesh Nana, Chair of the New Zealand Productivity Commission.

The change also calls for a better modelling and understanding of the $50 billion “Māori economy”, which includes Māori-owned businesses, customary gift exchanges, assets in Māori entities and in natural resource-based sectors, much of it tied to traditional communities and land ownership.

“What you find is it’s growing rapidly and it’s much bigger and far more diverse than people realise,” Hawkesby said of the Māori economy.

BEYOND OPTICS

RBNZ’s reputation is one of innovation. They pioneered inflation targeting in monetary policies more than 30 years ago. A tool that can be easily used today by all central banks.

Its increased Māori focus comes as more attention is being paid to how indigenous wisdom might help tackle issues including environmental protection.

This week, global leaders are asked to ask for indigenous participation in the climate discussions at this week’s UN COP26 summit in Scotland.

Hawkesby explained that such things as ESG (environmental, social, and governance) investing or the development of green bonds, green investing and socially responsible investments are more common than they used to be.

“Māori culture has hundreds of years of experience and pre-existing language underpinning all of that.”

But the improved institutional profile of Māori culture has faced criticisms from some that the shift is mostly optics.

New art installations in the RBNZ’s Wellington headquarters, including a piece depicting forest god Tāne Mahuta, are designed to connect the bank and the financial markets with the Māori community. Its almost NZ$300,000. (214,000 USD) cost has raised eyebrows.

Māori still find it harder to get employed compared to a New Zealander of European descent. Even in the RBNZ only 4.8% of its staff are Māori.

Hawkesby said the RBNZ was now doing internships with Māori and Pacific Islander students but acknowledged the bank still had “a long way to go” in terms of representation.

Morgan Godfrey, senior lecturer at the Otago Business School and a Māori political commentator, said Māori communities’ and businesses’ struggles to access private capital impeded growth and participation in the wider economy.

“The government is harvesting the low hanging fruit – incorporating te reo Māori (language) into marketing, implementing Māori leadership positions in government organisations. But none of this addresses the structural issues impeding the growth of Māori businesses.”

($1 = 1.3935 New Zealand Dollars)