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Global Players

February 2012

John Key – Prime Minister of New Zealand


“We are a country of pioneers. Whether we came by waka, sailboat or aeroplane, we came with the conviction that we could build a new life in this country.”

— John Key quoted by The Australian


Nearly forty years ago, even before he turned ten, John Key knew what he wanted in life. One day, still clad in a third grader’s half-trouser uniform, he returned from school to his mother’s arms and announced his intentions. Besides wanting to earn a million dollars, the young Key dreamt of becoming the prime minister of his country, New Zealand.

At that time, Ruth, Key’s mother, an Austrian-born Jew, was a single parent. George Key, Ruth’s husband and John’s father, had died a few years back. Ruth lived with John and his two sisters in a state house provided by the government and worked all nights as a cleaner and a porter to make ends meet. For Ruth, who had fled Austria to England as a refugee and later moved to New Zealand with her English husband in search of a better life, John’s words were much more than childish babble. She was the quintessential attentive mother who gave shape to her son’s thoughts and ambitions by setting rules and teaching him to focus. Thanks to these early nudges from his beloved mother, John Key realized both his dreams. A 20-year career in the investment banking industry as a currency trader made Key a multimillionaire. His passion for politics delivered him the country’s top job not just once but twice.

It all began when Ruth, actively interested in politics and a supporter of New Zealand’s Labour Party, forced her children to read the newspapers. She urged her children to have an opinion on political issues and encouraged discussion each night at the dinner table. John took to it naturally, but he had a conservative bent, the polar opposite of his mother’s views. John’s two sisters recall the heated dinner table duels between mother and son. Tongue in cheek, Key even gifted to his mother a rosette of the conservative National Party, Labour’s arch rival, and the party from which Key would be elected as New Zealand’s prime minister in the future.

Just after earning a commerce and accounting degree, Key went on to work with Canterbury International, an apparel maker, where he made himself a name through grit and hard work. One day while watching a business news channel with his wife Bronagh, John told her that he could easily be a foreign exchange trader. As Bronagh taunted him playfully, John threw down the gauntlet, hitting the streets to prove his capability. He started knocking on the doors of investment banks for a job as a foreign currency trader. After much persuasion from the aspiring trader, Elders Merchant Finance, an Australian bank, granted Key a junior level position.

Going forward, there was no looking back for Key. He went on to lead the foreign exchange division of Merrill Lynch in London. When the office was hit by heavy losses resulting from the Russian debt crisis of 1998, many heads rolled. But one of the managers left standing was John Key. Assigned the task of restructuring the organization, he moved in a cool and level manner, earning the nickname “smiling assassin.” Key soon made his millions. His first childhood desire was completed. It was time to pursue the next: to become the prime minister of New Zealand.

When Key landed back in New Zealand he became an active member of the National party, the party he supported all his life. During the late 1990’s, infighting at the top was weakening his party’s hold over power. Finally, the 1999 elections unraveled National’s grasp, and the party lost power to Labour by a huge margin. Still, amidst National’s defeat, five young members including Key were elected to the New Zealand Parliament from the party. In the absence of senior leadership, the ‘hi-five’ challenged the overbearing majority of Labour in the Parliament.

What you find with squash is people can be Jekyll and Hyde. Their characters can change, (but) I don’t remember him ever getting aggressive…

— Chris Wasley, John Key’s team mate in an interview
to The New Zealand Herald

Despite the derision from the senior ruling members, Key refused to be intimidated and pressed the opposition platform for nearly six years. Even during local elections, Key was unrelenting. He stuffed flyers into letter boxes, camped under trees for days, and rode to the grazing grounds of rural New Zealand. These efforts soon earned him the leadership of his party in 2006. Under Key, the National Party won by a landslide in 2008, after three terms of sitting in opposition.

Once in power, Key turned out to be pragmatic and flexible, willing to listen to the opposition and moving the conservative National to the middle ground. “I’m not deeply ideologically driven,” he said in an interview to the Wall Street Journal. Still, Key promoted market-oriented principles and cut corporate taxes to stimulate job creation. In a pioneering move, Key has supported the privatization of a number of state-owned utilities and Air New Zealand, an airline in which the government has a majority stake.

But Key’s government witnessed some major natural disasters in 2011. An earthquake measuring 6.3 on the Richter scale shook Christchurch, killing 185 people. This was New Zealand’s deadliest earthquake in recent memory, costing the country nearly $15 billion in damages. Although unemployment soared to 6.5% in the wake of the disaster, Key’s response to the earthquake was widely lauded. But he was left with his country’s finances in the red and a budget deficit of NZ$18.4 billion, the result of reconstruction spending that followed the earthquake coupled with the big-spending ways of his Labour predecessors. Both Standard & Poor’s and Fitch downgraded New Zealand’s credit rating by one notch in late 2011.

Despite these troubles, New Zealander’s elected John Key as their prime minister for another three year term in November 2011 by a substantial margin. Key has pledged to return the budget to a surplus by 2016. After all, some things never change. At a young age Key knew what he wanted in life. Now, as prime minister of New Zealand, he is no less determined.

 

 

 

 

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