Economy of New Zealand
New Zealand's economy has been helped by strong economic relations with Australia. Australia and New Zealand are partners in "Closer Economic Relations" (CER), which allows for free trade in goods and most services. Since 1990, CER has created a single market of more than 22 million people, and this has provided new opportunities for New Zealand exporters. Australia is now the destination of 19% of New Zealand's exports, compared to 14% in 1983. Both sides also have agreed to consider extending CER to product standardization and taxation policy. New Zealand initiated a free trade agreement with Singapore in September 2000 which was extended in 2005 to include Chile and Brunei and is now known as the P4 agreement. New Zealand is seeking other bilateral/regional trade agreements in the Pacific area.
U.S. goods and services have been competitive in New Zealand, though the strong U.S. dollar created challenges for U.S. exporters in 2001. The market-led economy offers many opportunities for U.S. exporters and investors. Investment opportunities exist in chemicals, food preparation, finance, tourism, and forest products, as well as in franchising. The best sales prospects are for medical equipment, information technology, and consumer goods. On the agricultural side, the best prospects are for fresh fruit, snack foods, specialised grocery items (eg. organic foods), and soybean meal. A number of U.S. companies have subsidiary branches in New Zealand. Many operate through local agents, with some joint venture associations. The American Chamber of Commerce is active in New Zealand, with its main office in Auckland and a branch committee in Wellington.
New Zealand welcomes and encourages foreign investment without discrimination. The Overseas Investment Commission (OIC) must give consent to foreign investments that would control 25% or more of businesses or property worth more than NZ$50 million. Restrictions and approval requirements also apply to certain investments in land and in the commercial fishing industry. In practice, OIC approval requirements have not hindered investment. OIC consent is based on a national interest determination, but no performance requirements are attached to foreign direct investment after consent is given. Full remittance of profits and capital is permitted through normal banking channels.
This free investment by foreign capital has also been criticised. Groups like Campaign Against Foreign Control of Aotearoa (CAFCA) consider that New Zealand's economy is substantially overseas-owned, noting that direct ownership of New Zealand companies by foreign parties increased from $9.7 billion in 1989 to $83 billion in 2007 (an over 700% increase), while 41% of the New Zealand sharemarket valuation is now overseas-owned, compared to 19% in 1989. Around 7% of all New Zealand agriculturally productive land is also foreign-owned. CAFCA considers that the effect of such takeovers has generally been negative in terms of jobs and wages.[1]
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Recent trends
Economic growth, which had slowed in 1997 and 1998 due to the negative effects of the Asian financial crisis and two successive years of drought, rebounded in 1999. A low New Zealand dollar, favourable weather, and high commodity prices boosted exports, and the economy is estimated to have grown by 2.5% in 2000. Growth resumed at a higher level from 2001 onwards due primarily to the lower value of the New Zealand dollar which made exports more competitive. The return of substantial economic growth led the unemployment rate to drop from 7.8% in 1999 to 3.4% in late 2005, the lowest rate in nearly 20 years.
However, the large current account deficit, which stood at more than 6.5% of GDP in 2000, has been a constant source of concern for New Zealand policymakers and has now hit 9% to date as of March 2006.[citation needed] The rebound in the export sector is expected to help narrow the deficit to lower levels, but the budget deficit continues to increase as of 2005, especially due to increases in the value of the New Zealand dollar in the 2007-2008 period.
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Other indicators
Industrial Production Growth Rate: 5.9% (2004)
Household income or consumption by percentage share:
- Lowest 10%: 0.3%
- Highest 10%: 29.8% (1991)
Agriculture - Products: wheat, barley, potatoes, pulses, fruits, vegetables; wool, beef, dairy products; fish
Exports - commodities: dairy products, meat, wood and wood products, fish, machinery
Imports - commodities: machinery and equipment, vehicles and aircraft, petroleum, electronics, textiles, plastics
Electricity:
- Electricity - consumption: 34.88 TWh (2001)
- Electricity - production: 38.39 TWh (2004)
- Electricity - exports: 0 kWh (2001)
- Electricity - imports: 0 kWh (2001)
Electricity - Production by source:
- Fossil Fuel: 31.6%
- Hydro: 57.8%
- Nuclear: 0%
- Other: 10.7% (2001)
Oil:
- Oil - production: 42,160 barrel/day (6,703 m³/d) 2001
- Oil - consumption: 132,700 barrel/day (21,100 m³/d) 2001
- Oil - exports: 30,220 barrel/day (4,800 m³/d) 2001
- Oil - imports: 119,700 barrel/day (19,000 m³/d) 2001
- Oil - proved reserves: 89.62 million barrel (14,250,000 m³) January 2002
Exchange rates:
New Zealand Dollars (NZ$) per US$1 - 1.3869 (2005), 1.5248 (2004), 1.9071 (2003), 2.1622 (2002), 2.3788 (2001), 2.2012 (2000), 1.8886 (1999), 1.8632 (1998), 1.5083 (1997), 1.4543 (1996), 1.5235 (1995)
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See also
- Communications in New Zealand
- Energy in New Zealand
- Transport in New Zealand
- Reserve Bank of New Zealand
- New Zealand Electricity Market
- Economy of Oceania
- New Zealand Ministry of Economic Development
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References
- ^ a b c Matt McCarten: Foreign owners muscle in as New Zealand sells off all its assets - The New Zealand Herald, Sunday 14 January 2007
- ^ New Zealand’s productivity performance and prospects - Drew, Aaron; Bulletin, Reserve Bank of New Zealand. Vol.70, No. 1. Accessed 2008-02-10.
- ^ "CIA - The World Fact Book -- New Zealand", CIA. Retrieved on 2007-11-28.
- ^ a b Unemployment at record low as job growth surges - The New Zealand Herald, Thursday 07 February 2008
- ^ Phil Goff (11 December 2006). Succeeding in a Globalised World: The New Zealand Experience.
- ^ Revolt of the Guinea Pigs - Time, Monday 12 December 1949
- ^ Survey ranks NZ in top six for economic freedom - The New Zealand Herald, Wednesday 16 January 2008
- ^ Corporate Overview (from the Tourism New Zealand corporate website. Retrieved 2007-09-30)
- Harcourt, T. (2005). Closer Economic Relations. Australian Trade Commission Website
- This article contains material from the CIA World Factbook (2005 edition) which, as a US government publication, is in the public domain.
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External links
- OECD's New Zealand country Web site and OECD Economic Survey of New Zealand
- Ministry of Economic Development Web site
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