N. Zealand's Identity Crisis

Kiwis have spent much of the 1990s getting closer to Asia. But economic woes have changed a few minds.

At a time when nearby Australia is engrossed in a fierce national debate over whether to sever its constitutional links with mother England, New Zealand is looking hard at its own more recently formed cultural and economic ties with Asia.

In many of this South Pacific nation's business sectors, confidence in Asia's struggling markets is reportedly at its lowest ebb since 1991. The once-crucial market of South Korea, for instance, which until last year took 60 percent of New Zealand's unprocessed logs, has quickly withered away.

As it happens, New Zealand's actual exposure to the five major wounded Asian economies - Indonesia, South Korea, the Philippines, Thailand, and Malaysia - is relatively slight, with only 12 percent of its exports heading into those countries. But the worry is over what happens if the bad news spills over into other parts of a region that buys nearly 40 percent of the country's exports.

Adding urgency to the situation is that the Asian crisis has been widely blamed for creating one of New Zealand's worst-ever budget deficits. As a result, the New York-based Moody's Investors Service this week downgraded the outlook for New Zealand from "stable" to "negative."

In Wellington, the federal capital, Asia ties are becoming a political issue. Just eight months ago, parliamentarians here largely supported moving the country closer to the so-called miracle economies of Asia. Now opposition Labor Party leader Helen Clark accuses her counterparts in the National Party-led government of remaining in "a state of denial" over Asia. Richard Prebble, another opposition figure, speaks ominously of a scene from the movie "Titanic" being played out if the New Zealand ship of state remains too deep in Asian waters.

But New Zealand's foreign affairs minister, Don McKinnon, disagrees. "It is even more important now that we don't turn our backs on our neighbors, or give them reasons to suggest we are just temporary residents in the region who prefer the comforts, the company, and the dialogue with those who live in Europe or North America," he says.

Such optimism is in the spirit of former National Party leader James Bolger, who in 1993 cheerfully described himself as an "Asian prime minister," a declaration that signaled a whirl of official initiatives to encourage his Kiwi subjects to lie down with the Asian tigers.

Today, two-thirds of New Zealand high schools teach Japanese, up from virtually none 10 years ago, while Asia-related undergraduate programs have proliferated at all seven of the country's universities.

For foreign ministers and economists, Bangkok, Kuala Lumpur, and Seoul have become essential stopover destinations, as much so as Paris, London, and New York had been a generation earlier for their predecessors.

A softening of New Zealand's traditionally rigid immigration policies has allowed an unprecedented wave of Asians to settle in the country. Nearly 1 in 10 residents of Auckland, the country's largest population center, describe themselves as being of Asian origin.

However, such shifting demographics have not been universally applauded. According to a survey conducted late last year by Auckland sociologist Paul Spoonley, as much as half of the Asian immigrants to New Zealand may now be thinking of going home or moving to Australia or the United States as a result of an unwelcoming attitude on the part of natives.

But in light of the economic mayhem in their homelands, the new migrants are unlikely to leave, just as the government is unlikely to abandon the region it has so assiduously courted.

"Our place in the Asia-Pacific community has not been won by turning our backs in times of trouble or need," insists Mr. McKinnon.

"We are all in this together," adds Hood Salleh, a Malaysian scholar at Victoria University in Wellington. "It's no longer a case of America here, Britain there, Australia and New Zealand somewhere else ... and it is only together, perhaps, that we can arrive at something novel and dynamic over the coming years."