Jean Pierre de Raad, chief executive of the NZ Institute of Economic Research (NZIER), warns New Zealand voters who opposed overseas investments of the limiting effects of their opposition on the economy.
A recent poll showed that 75 per cent of voters want more stringent regulations and only 8 per cent think that regulations need to be lightened.
The voters have raised concern over the projected sale of Crafar family dairy farms to a Hong Kong-based company, and New Zealand Farming Systems Uruguay to Olam, a Singapore-based company.
However, Pierre de Raad has warned that any move away from "an open investment regime" could be "limiting New Zealand's growth potential, and investors and credit agencies would react accordingly."
With the New Zealand’s economy moving at a slow pace, the nation must seek growth from the investments in foreign funds, Pierre de Raad said. Suppressing such an effort is nothing but restricting the expansion of the economy.
If foreign investments are capped, then the borrowing rate from within the economy will increase, which would “cast affect on the pockets of the habitants, and also on the growth of the economy," he added.
The nation would also be kept away from information and capital in foreign lands, he added. The NZIER economist team touts itself as the largest outside of the Government.
The Overseas Investment Act has been appraised by Finance Minister Bill English, but no judgments have been given yet, Prime Minister John Key announced.
