June 22, 2026 • 7 mins
The director of Landfall Strategy Group on his international keynote address: Understanding global geopolitical realities – strategies to weather the uncertainty of the current environment.
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Speaker 1 (00:00):
This morning's a keynote speaker was doctor David Skilling, and
he was talking about the global geopolitical realities around the world.
My goodness, that's a long, long topic to squeeze down
into four or five minutes. But just you were talking
about the geo political unrest around the world. And I
(00:20):
know we've had the Cuban missile crisis. I know we've
had two world wars in the twentieth century. But gee,
the world is an unsettled place at the moment, isn't it.
Speaker 2 (00:28):
It is an unsettled place. And it's not just the
last few months of the last couple of years when
you go back to twenty two Russian invasion of Ukraine,
but the last let's say decade has been a process
of significant geopolitical shocks. And I think it's important to
understand this is not simply random events. You know, you
put these things together. The world is shifting. We're seeing
(00:49):
rivalry between the US and China, between Russia and the
West more broadly, and we should expect these kind of conflicts,
these kind of shocks to continue. We're moving into quite
a different environment. The environment has we've enjoyed its effectively.
Speaker 1 (01:03):
What you said this morning in your address than you normal.
You said that the next decade will be much different
from the past thirty five years, because when you think
about it, almost with a couple of blips along the way,
since the end of World War Two, we've lived in
a reasonably settled sort of world historic extent.
Speaker 2 (01:21):
It hasn't been great power conflict, at least not in
a military sense. We've seen some geopolical skimmishes and some
economic shocks, but it's been a fairly calm, fairly benign period.
And we're moving into world where geopolitical rivalry is central
to the way in which the global system functions. And
the difference now compared to say the Cold War, is China,
(01:42):
the main geoplical protagonist against the West, is deeply, deeply
embedded into the global economy, and so a lot of
this competition between China and the West is going to
play on in terms of economics and trade and capital
and technology, which matters a lot more for business, a
lot more for economies.
Speaker 1 (01:58):
Jijingping now the leader of the free world or slightly
free world in this case.
Speaker 2 (02:02):
Well, I'm not sure there is a single leader of
the free world. Is historically course for US has been that.
But even across the West there is nervous us about
the behavior of the US, the desire to diversify away
from the US. Not to put all of your eggs
in that basket. Countries are looking for independence, for security,
for resilience, and they're looking to hedge into diversify.
Speaker 1 (02:23):
One of the slides you put up in your excellent
presentation was the slow down and the lack of traffic
through the Straight of for Moves. That's stating the obvious.
But the other one was the Sewers Canal.
Speaker 2 (02:33):
Yes, sw it's down about fifty percent and twenty three
when the hoofies started loobbing missiles into the run up
to the Sewez Canal because of the conflict between Israel
and Hamas you know, the missiles aren't going through as often,
but it's kind of hard to get insurance when you're
passing through that straight So those shipping movements are down
fifty percent. A lot of ships are going through the
Southern through South Africa, so you know, these things endure.
(02:56):
Even when the shooting stops in the straight of four Moves,
we shouldn't expect it's going to go back to pre February.
You know, these things have a habit for persisting for
some time.
Speaker 1 (03:05):
So does Donald Trump stand for de globalization. It's one
of the things you said was you don't believe in
de globalization.
Speaker 2 (03:13):
Yeah, but the US, and it's the largest economy in
the world by a margin, but it's circa fifteen percent
of world trade. So the US is becoming more inward looking.
It is going to impose tarrifs. It's not simply about
mister Trump. This is a shift in US policy or wady.
I don't think both tariffs are going to be reduced markedly,
but no one else has followed the US off that cliff.
I mean, no one else is really imposing significant tariffs.
World trade growth, particularly across emerging markets, is growing very
(03:36):
very strongly, and traders like water, you put up barriers
and it kind of flows around. So I don't think
that there's any particular evidence to say we're moving into
a world of deglobalization. It's just going to look different.
Speaker 1 (03:46):
You talked about this new normal, and you said sustained
fiscal deficits are expected for advance for most advanced economies
over the next thirty years and beyond.
Speaker 2 (03:57):
The numbers are terrifying. You look at the US, you
look at Europe, Japan. You know the line is up
into the right. These deficits are and levels of debt
are increasing, and from military spending to an aging population
to industrial policy, there are many, many claims on the
government balance sheet and so this is going to become
a major source of economic and physical risk. But politically
there's no way around that. Governments can't cut spending or
(04:18):
raise taxes. But it means that in one of the
implications of the New Zealand, who's pretty well disciplined on
the stuff, is a cost of borrowing is going to increase.
Speaker 1 (04:26):
Well, you're saying inflation higher for longer. It's going to
be more difficult in the future for central banks right
around the world to cut rates. So the days the
days of interest rates are two or three percent in
some economies and we got there for a while enduring
the beginning of COVID. Are those days costs?
Speaker 2 (04:44):
Yeah? I mean the last thirty five years economically has
been an unusual pairer has been by nine period. New Zealand,
as you said, was a leader in that. But two
percent or sub two percent inflation with modest rates. That
world is in the rear view, and so I often
say that economics is down through of geopolitics. Is a
geopolitical shift in matter major implications for interest rates, for inflation,
for deficits. We are, from a business perspective, moving into
(05:06):
a very very different operating environment.
Speaker 1 (05:08):
Another point you made, because you made so many good points,
you're saying tariffs will outlast Donald Trump. Now what happens
if I don't know, Gavin Newsom or someone gets in
and the dams get the White House. I thought they
were anti tariffs.
Speaker 2 (05:21):
Well, nobody's anti tariff in the US anymore. I mean,
if you look at Hillary Clinton that in twenty sixteen
she kind of disowned the TPP, which is one of
the things that she'd initially supported. You look at Biden
after Trump won, he didn't remove any of mister Trump's tariffs,
And I don't think there's a political constituency to remove terror.
They might change on the margin, but tariffs are going
to be an enduring feature. Among other reasons, the government
(05:41):
in the US needs the money. Tariffs are now a
major source of fiscal revenue. If you don't get it
from tariff, you need to find another way. Of getting
that money.
Speaker 1 (05:48):
So where does this leave little old New Zealand at
the bottom of the South Pacific as a trading nation,
egg exporting nation.
Speaker 2 (05:55):
I think realities there's more constraints on market access, particularly
into the US, perhaps more broadly over time, there's more
geopolitical risk on accessing key markets, notably China. We should
expect more episodes of supply chain disruption and we'd so fuel, fertilizer,
things like that higher cost cap. Also, the growth is okay,
global trade is okay. It's not that the world is
heading off a cliff, but we've got more risks, more disruptions,
(06:16):
more things to navigate around. It's a world that can
There are many opportunities, but we can't be blindly accessing
these opportunities. We need to be quite thoughtful and quite
deliberate about how to position for those.
Speaker 1 (06:27):
Did I pick you up right when you said New
Zealand exports are at fifty l lows as a proportion
of GDP. What happened to the export boom? Or did
I just misread you or did you misspeak?
Speaker 2 (06:38):
No? Trump No, So exports GDP are roughly twenty six
twenty seven percent of GDP, which is about what you
saw in the mid nineteen seventies. Haven't gone up and
down with commodity prices. But if you draw it, you
can draw it essentially a straight line. Over the last
fifty years, nothing very much has changed, and that matters
for a small economy. Exports, of which a primary sector
is the major contributor, matters a huge amount for proctivity growth.
(06:59):
And we haven't done as a country a good job
of growing that year in the way that you see
across every other single small advance economy.
Speaker 1 (07:07):
Okay, you are the keynote speaker this morning, doctor David
Skilling is with us. What's your background?
Speaker 2 (07:13):
New Zealand Treasury McKenzie are ran a think tank in
New Zealand for a while, lived in Singapore for eleven
years now, lived in Europe. So policy economics, geopolitics from
a range of different global perspectives, and still keep my hand.
Speaker 1 (07:26):
In or Dr David. You're a policy wont.
Speaker 2 (07:31):
I am a flo well policy wont, but with some
some commercial reality sense as well well.
Speaker 1 (07:36):
I really enjoyed your keynote address this morning. Thank you
very much.
Speaker 2 (07:39):
It was wonderful pleasure. Thanks.
Speaker 1 (07:40):
Here we go, doctor David Skilling,
This morning's a keynote speaker was doctor David Skilling, and
he was talking about the global geopolitical realities around the world.
My goodness, that's a long, long topic to squeeze down
into four or five minutes. But just you were talking
about the geo political unrest around the world. And I
(00:20):
know we've had the Cuban missile crisis. I know we've
had two world wars in the twentieth century. But gee,
the world is an unsettled place at the moment, isn't it.
Speaker 2 (00:28):
It is an unsettled place. And it's not just the
last few months of the last couple of years when
you go back to twenty two Russian invasion of Ukraine,
but the last let's say decade has been a process
of significant geopolitical shocks. And I think it's important to
understand this is not simply random events. You know, you
put these things together. The world is shifting. We're seeing
(00:49):
rivalry between the US and China, between Russia and the
West more broadly, and we should expect these kind of conflicts,
these kind of shocks to continue. We're moving into quite
a different environment. The environment has we've enjoyed its effectively.
Speaker 1 (01:03):
What you said this morning in your address than you normal.
You said that the next decade will be much different
from the past thirty five years, because when you think
about it, almost with a couple of blips along the way,
since the end of World War Two, we've lived in
a reasonably settled sort of world historic extent.
Speaker 2 (01:21):
It hasn't been great power conflict, at least not in
a military sense. We've seen some geopolical skimmishes and some
economic shocks, but it's been a fairly calm, fairly benign period.
And we're moving into world where geopolitical rivalry is central
to the way in which the global system functions. And
the difference now compared to say the Cold War, is China,
(01:42):
the main geoplical protagonist against the West, is deeply, deeply
embedded into the global economy, and so a lot of
this competition between China and the West is going to
play on in terms of economics and trade and capital
and technology, which matters a lot more for business, a
lot more for economies.
Speaker 1 (01:58):
Jijingping now the leader of the free world or slightly
free world in this case.
Speaker 2 (02:02):
Well, I'm not sure there is a single leader of
the free world. Is historically course for US has been that.
But even across the West there is nervous us about
the behavior of the US, the desire to diversify away
from the US. Not to put all of your eggs
in that basket. Countries are looking for independence, for security,
for resilience, and they're looking to hedge into diversify.
Speaker 1 (02:23):
One of the slides you put up in your excellent
presentation was the slow down and the lack of traffic
through the Straight of for Moves. That's stating the obvious.
But the other one was the Sewers Canal.
Speaker 2 (02:33):
Yes, sw it's down about fifty percent and twenty three
when the hoofies started loobbing missiles into the run up
to the Sewez Canal because of the conflict between Israel
and Hamas you know, the missiles aren't going through as often,
but it's kind of hard to get insurance when you're
passing through that straight So those shipping movements are down
fifty percent. A lot of ships are going through the
Southern through South Africa, so you know, these things endure.
(02:56):
Even when the shooting stops in the straight of four Moves,
we shouldn't expect it's going to go back to pre February.
You know, these things have a habit for persisting for
some time.
Speaker 1 (03:05):
So does Donald Trump stand for de globalization. It's one
of the things you said was you don't believe in
de globalization.
Speaker 2 (03:13):
Yeah, but the US, and it's the largest economy in
the world by a margin, but it's circa fifteen percent
of world trade. So the US is becoming more inward looking.
It is going to impose tarrifs. It's not simply about
mister Trump. This is a shift in US policy or wady.
I don't think both tariffs are going to be reduced markedly,
but no one else has followed the US off that cliff.
I mean, no one else is really imposing significant tariffs.
World trade growth, particularly across emerging markets, is growing very
(03:36):
very strongly, and traders like water, you put up barriers
and it kind of flows around. So I don't think
that there's any particular evidence to say we're moving into
a world of deglobalization. It's just going to look different.
Speaker 1 (03:46):
You talked about this new normal, and you said sustained
fiscal deficits are expected for advance for most advanced economies
over the next thirty years and beyond.
Speaker 2 (03:57):
The numbers are terrifying. You look at the US, you
look at Europe, Japan. You know the line is up
into the right. These deficits are and levels of debt
are increasing, and from military spending to an aging population
to industrial policy, there are many, many claims on the
government balance sheet and so this is going to become
a major source of economic and physical risk. But politically
there's no way around that. Governments can't cut spending or
(04:18):
raise taxes. But it means that in one of the
implications of the New Zealand, who's pretty well disciplined on
the stuff, is a cost of borrowing is going to increase.
Speaker 1 (04:26):
Well, you're saying inflation higher for longer. It's going to
be more difficult in the future for central banks right
around the world to cut rates. So the days the
days of interest rates are two or three percent in
some economies and we got there for a while enduring
the beginning of COVID. Are those days costs?
Speaker 2 (04:44):
Yeah? I mean the last thirty five years economically has
been an unusual pairer has been by nine period. New Zealand,
as you said, was a leader in that. But two
percent or sub two percent inflation with modest rates. That
world is in the rear view, and so I often
say that economics is down through of geopolitics. Is a
geopolitical shift in matter major implications for interest rates, for inflation,
for deficits. We are, from a business perspective, moving into
(05:06):
a very very different operating environment.
Speaker 1 (05:08):
Another point you made, because you made so many good points,
you're saying tariffs will outlast Donald Trump. Now what happens
if I don't know, Gavin Newsom or someone gets in
and the dams get the White House. I thought they
were anti tariffs.
Speaker 2 (05:21):
Well, nobody's anti tariff in the US anymore. I mean,
if you look at Hillary Clinton that in twenty sixteen
she kind of disowned the TPP, which is one of
the things that she'd initially supported. You look at Biden
after Trump won, he didn't remove any of mister Trump's tariffs,
And I don't think there's a political constituency to remove terror.
They might change on the margin, but tariffs are going
to be an enduring feature. Among other reasons, the government
(05:41):
in the US needs the money. Tariffs are now a
major source of fiscal revenue. If you don't get it
from tariff, you need to find another way. Of getting
that money.
Speaker 1 (05:48):
So where does this leave little old New Zealand at
the bottom of the South Pacific as a trading nation,
egg exporting nation.
Speaker 2 (05:55):
I think realities there's more constraints on market access, particularly
into the US, perhaps more broadly over time, there's more
geopolitical risk on accessing key markets, notably China. We should
expect more episodes of supply chain disruption and we'd so fuel, fertilizer,
things like that higher cost cap. Also, the growth is okay,
global trade is okay. It's not that the world is
heading off a cliff, but we've got more risks, more disruptions,
(06:16):
more things to navigate around. It's a world that can
There are many opportunities, but we can't be blindly accessing
these opportunities. We need to be quite thoughtful and quite
deliberate about how to position for those.
Speaker 1 (06:27):
Did I pick you up right when you said New
Zealand exports are at fifty l lows as a proportion
of GDP. What happened to the export boom? Or did
I just misread you or did you misspeak?
Speaker 2 (06:38):
No? Trump No, So exports GDP are roughly twenty six
twenty seven percent of GDP, which is about what you
saw in the mid nineteen seventies. Haven't gone up and
down with commodity prices. But if you draw it, you
can draw it essentially a straight line. Over the last
fifty years, nothing very much has changed, and that matters
for a small economy. Exports, of which a primary sector
is the major contributor, matters a huge amount for proctivity growth.
(06:59):
And we haven't done as a country a good job
of growing that year in the way that you see
across every other single small advance economy.
Speaker 1 (07:07):
Okay, you are the keynote speaker this morning, doctor David
Skilling is with us. What's your background?
Speaker 2 (07:13):
New Zealand Treasury McKenzie are ran a think tank in
New Zealand for a while, lived in Singapore for eleven
years now, lived in Europe. So policy economics, geopolitics from
a range of different global perspectives, and still keep my hand.
Speaker 1 (07:26):
In or Dr David. You're a policy wont.
Speaker 2 (07:31):
I am a flo well policy wont, but with some
some commercial reality sense as well well.
Speaker 1 (07:36):
I really enjoyed your keynote address this morning. Thank you
very much.
Speaker 2 (07:39):
It was wonderful pleasure. Thanks.
Speaker 1 (07:40):
Here we go, doctor David Skilling,
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