(from left) Southland District Mayor Frana Cardno, Local Government Minister Sandra lee, New Plymouth Mayor Claire Stewart, Prime Minister Helen Clark and Far North Mayor Yvonne Sharp sign an agreement for joint regional development. Photo: ANTHONY PHELPS

A deprivation atlas published last month based on 1996 census figures splashed the Far North with the biggest stain of red, the colour for the most impoverished.

The rating was based on a raft of indicators, from people without a phone, a car or their own home, to dependence on a means-tested benefit, the rate of unemployment, income below a certain level, single-parent families, and educational qualifications. The scenically rich area ran the poverty gambit.

New Zealand's northernmost region is a $5 million sink for unemployment benefits. A further $5.5 million from Government coffers pays its pensions. The area is heavily populated by Maori but sparse in community providers, with only 27,000 ratepayers.

Not a rosy picture from the outside. But at community level there are big moves afoot to repaint the region a new economic hue.

And not in isolation.

First indication last week was when the mayors of Southland (Frana Cardno), New Plymouth (Claire Stewart) and the Far North (Yvonne Sharp) signed an inter-council economic alliance at Parliament in the presence of Prime Minister Helen Clark and Local Government Minister Sandra Lee.

The agreement is part of a plan to link like-minded businesses in the three districts to provide clout in size, strength, expertise and financial unity so that they can springboard into new markets – particularly exports with products that have added value.

Technology is the key. With the Internet, geographical boundaries are tossed out the window.

The Internet will also provide a vehicle for these businesses to do e-procurement – collectively buying raw materials, arranging bank finance and negotiating deals in markets for high-end products in a unified and authoritative manner.

Further district alliances are expected. Ms Sharp mooted the inter-district alliance at a recent mayors' outward bound course in Marlborough after extensive discussion with the Far North Economic Development Trust.

In the past two years the trust has used $100,000 for its think tank, half from Far North District Council and the rest from local business and residents, to create this plan of action.

The council has pledged another $50,000 and the trust has made an application to the new Industry New Zealand for $200,000 to fund a comprehensive analysis of the business community in the region so that it can take a detailed profile of every business and develop a unified front by clustering with like-minded businesses in other areas. The money will also cover strategic development in the region, and a blueprint for other districts is a possibility.

All this is planned by securing close relationships with established business.

New Zealand Post has indicated its support for the clustering concept. It is also behind the people's bank to attract the very businesses the trust is pushing.

Apart from the three council districts agreement, Far North District Council is working closely on a similar strategy with its neighbours in Whangarei and Kaipara.

The trust, formed two years ago, has a charter that half of the trustees must be Maori. It is chaired by consultant Chris Mathews. Other members are Shane Jones, who is chairman of the Potama Trust and the Waitangi Fisheries Commission, Federated Farmers Northland president Ian Walker, and representatives of five iwis from the Northland Muri Whenua – the Ngati Kuri, the Ngati Hahu, The Nga Takoto, Te Rarawa, and Te Aupouru, as well as representation from Nga Puhi, the biggest tribe in the mid-north.

Mr Mathews says that in spite of what people keep saying about New Zealanders, he does not believe that they have lost their sense of economic development.

"But sitting back and waiting for something to happen hasn't worked."

He says the consumer approach to drive prices down is very good for the big population but it does not make sense for the regions because it is product-driven and this reduces the price of labour in areas where it needs to increase.

"We don't want to compete with the Third World," Mr Mathews says. "There is intellectual capital in the regions and it is smart."

Mr Walker says the perception of the Far North is that it is only primary industry-based with its forests and fisheries – that it concentrates on filling ships with product.

"Yes, our plan still relies on the primary sector and we are still committed to it, but things are changing."

He says dairy herds that once numbered 70 cows are now 200 strong and heading toward 1000 strong, with mega-merger talk as pressure is applied to keep New Zealand the lowest-cost dairy producer. Mr Mathews says: "We want to take the primary sector and develop it into high value with niche markets."

The use of technology is integral to plans, not just for linking like businesses. He cannot name names yet but says a big wireless company is interested in "connecting" the Far North.

And companies such as Datacom Systems have been looking at the feasibility of a call centre for the region to which businesses from all over New Zealand can direct their telephone service inquiries.

"Why not have a Silicon Valley here?" Mr Mathews says.

Like Christchurch, he says the Far North also pitched, albeit unsuccessfully, for Motorola to bring its business to the region "to get that one silver bullet" to attract others.

"Success breeds success," Mr Mathews says.

The trust has identified 13 businesses it believes can group with others in other areas of New Zealand to compete in global markets.

They cover cottage industries, from hand-made chocolates to cosmetics and pharmaceuticals, to the primary sector, from fishing to horticulture and farming. Oyster farms and specialty farm parks that have every type of animal for outsourcing production of high quality products such as bratwurst sausages or ostrich steaks or packaged duck and goose, are potential avenues, Mr Walker says.

Calla lilies are an area with much export potential. Cultivating the flowers to particular specifications so they can bought to lay on the pillows of beds in first-class hotel rooms is an example of what the trust is talking about with adding value, Mr Walker says.

There is already support from about 20 growers in the region to form a business cluster, as well as interest from areas as far south as Rodney District and Tauranga, he says.

Undeveloped Maori land in the Far North could be used for flower development by its people.

Mr Walker says New Zealand cannot produce enough flowers to satisfy its export markets, so there is much scope for moving upmarket.

What may interfere with these plans though, he says, are moves toward developing a producer board-type organisation, Flora Fed. It would take a monetary clip on each stem that was sold overseas. Mr Walker is dead against it. He says it is out of step with present trends. Local growers want to compete overseas by sharing product and technical knowledge instead of being part of a wide umbrella group that has a uniform approach to markets.

Mr Jones says Maori must be integral to these proposed plans.

"It is foolhardy to contemplate Maori development in isolation of what is happening," he says.

But he admits the moves are likely to collide with the prevailing Maori approach that he says is more ideological than economic.

He says Maori must realise that capital will not flow to areas that need it most – it goes first to metropolitan areas where business gets more bang for its bucks.

"Action speaks louder than words. Unfortunately Maori actions are entangled with Government."

But having Maori make up half the trust and giving input every inch of the way for the Far North blueprint of economic growth will see change, he is confident.

The trust is confident that one day it will be the template for rural New Zealand and that the government of the day will run with it – even claim it as its own. The trust wouldn't mind.