New Zealand has a modern, developed economy. The country has a high standard of living, ranking 19th on the 2005 Human Development Index and 15th of The Economist’s 2005 world-wide quality-of-life index. Since 1984 successive governments have engaged in major macroeconomic restructuring, transforming New Zealand from a highly protectionist and regulated economy to a liberalised free-trade economy.

During the late 1980s, the New Zealand Government sold a number of major trading enterprises, including its telecommunications company, railway network, a number of radio stations and two financial institutions in a series of asset sales. Although the New Zealand Government continues to own a number of significant businesses, collectively known as State-Owned Enterprises (SOEs), they are operated through arms-length shareholding arrangements as stand-alone businesses that are required to operate profitably, just like any privately owned enterprise.

Unfortunately, due in part to the sudden transition to a market economy, an economic bubble developed in the New Zealand stock market starting in 1984. This burst in October 1987 and the total value of the market halved within a year (it has still to recover this lost value). The effect of this bubble was a period of poor economic growth which lasted until the mid 90s. It also led the government to begin a programme of massive immigration to boost GDP. However, since 1999 New Zealand has enjoyed a period of relatively strong and sustained growth, and contained inflationary pressures.

The current New Zealand government’s economic objectives are centred around moving from being ranked among the lower end of the OECD countries to regaining a higher placing again, pursuing free-trade agreements, “closing the gaps” between ethnic groups, and building a “knowledge economy.” In 2004 it began discussing free trade with China, one of the first countries to do so.

New Zealand is heavily dependent on trade-particularly in agricultural products-to drive growth, and it has been affected by global economic slowdowns and slumps in commodity prices. Since agricultural exports are highly sensitive to currency values and a large percentage of consumer goods are imported, any changes in the value of the New Zealand dollar has a strong impact on the economy. Its primary export industries are agriculture, horticulture, fishing, forestry and information technology. There are also substantial tourism and export education industries. The film and wine industries are considered to be up-and-coming.

Economic Profile

Since 1984 the government of New Zealand has accomplished major economic restructuring, moving an agrarian economy dependent on concessionary British market access toward a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes, broadened and deepened the technological capabilities of the industrial sector, and contained inflationary pressures. Inflation remains among the lowest in the industrial world. Per capita GDP has been moving up toward the levels of the big West European economies. New Zealand’s heavy dependence on trade leaves its growth prospects vulnerable to economic performance in Asia, Europe, and the United States.

New Zealand’s economy has traditionally been based on a foundation of exports from its very efficient agricultural system. Leading agricultural exports include meat, dairy products, forest products, fruit and vegetables, fish, and wool. New Zealand was a direct beneficiary of many of the reforms achieved under the Uruguay Round of trade negotiations, with agriculture in general and the dairy sector in particular enjoying many new trade opportunities. The country has substantial hydroelectric power and sizable reserves of natural gas. Leading manufacturing sectors are food processing, metal fabrication, and wood and paper products. Some manufacturing industries, essentially forms of import substitution, such as car assembly, have completely disappeared.

Microeconomic Reform
Since 1984, government subsidies including for agriculture have been eliminated; import regulations have been liberalised; exchange rates have been freely floated; controls on interest rates, wages, and prices have been removed; and marginal rates of taxation reduced. Tight monetary policy and major efforts to reduce the government budget deficit brought the inflation rate down from an annual rate of more than 18% in 1987. The restructuring and sale of government-owned enterprises in the 1990s reduced government’s role in the economy and permitted the retirement of some public debt.

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 have 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. The large current account deficit, which stood at more than 8% of GDP in 2000, has been a constant source of concern for New Zealand policymakers. The rebound in the export sector is expected to help narrow the deficit to lower levels.

Economic Relations with Trading Partners

New Zealand’s economy has been helped by strong economic relations with Australia. Australia and New Zealand are partners in “Closer Economic Relations” (CER) [4], 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 and 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 has 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, specialized 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% of more of businesses or property worth more than NZUSD 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 U.S. 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.

The first Europeans known to reach New Zealand were led by Abel Janszoon Tasman, who sailed up the west coast of the South and North islands in 1642. He named it Staten Landt, believing it to be part of the land Jacob Le Maire had discovered in 1616 off the coast of Chile. Staten Landt appeared on Tasman’s first maps of New Zealand, but this was changed by Dutch cartographers to Nova Zeelandia, after the Dutch province of Zeeland, some time after Hendrik Brouwer proved the South American land to be an island in 1643. The Latin Nova Zeelandia became Nieuw Zeeland in Dutch.

Lieutenant James Cook subsequently called the archipelago New Zealand, although the names he chose for the North and South islands were rejected, and the main three islands became known as North, Middle and South, with the Middle Island being later called the South Island. Cook began extensive surveys of the islands in 1769, leading to European whaling expeditions and eventually significant European colonisation. From as early as the 1780s, Maori had encounters with European sealers and whalers. Acquisition of muskets by those iwi in close contact with European visitors destabilised the existing balance of power between Maori tribes and there was a temporary but intense period of bloody inter-tribal warfare, known as the Musket Wars, that only ceased when all iwi were so armed.

Concern about the exploitation of Maori by Europeans, Church Missionary Society lobbying and French interest in the region led the British to annex New Zealand by Royal Proclamation in January 1840. To legitimise the British annexation, Lieutenant Governor William Hobson had been dispatched in 1839; he hurriedly negotiated the Treaty of Waitangi with northern iwi on his arrival. The Treaty was signed in February, and in recent years it has come to be seen as the founding document of New Zealand. The Maori translation of the treaty promised the Maori tribes “tino rangatiratanga” would be preserved in return for cedeing kawanatanga, which the English versions translates as “chieftainship” for “sovereignty”; the real meanings are now disputed. Disputes over land sales and sovereignty caused the New Zealand land wars which took place between 1845 and 1872. In 1975 the Treaty of Waitangi Act established the Waitangi Tribunal, charged with hearing claims of Crown violations of the Treaty of Waitangi dating back to 1840. Some Maori tribes and the Moriori never signed the treaty.

Although New Zealand was initially administered as a part of the Australian colony of New South Wales, it became a colony in its own right in 1841. European settlement progressed more rapidly than anyone anticipated, and settlers soon outnumbered Maori. Self-government was granted to the settler population in 1852. The first capital of New Zealand was Kororareka (known today as Russell) but shortly afterwards moved to Auckland. There were political concerns following the discovery of gold in Central Otago in 1861 that the South Island would form a separate colony. So in 1865 the capital was offically moved to the more central city of Wellington. New Zealand was involved in a Constitutional Convention in March 1891 in Sydney, New South Wales, along with the then-colonies of Australia. This was to consider a potential constitution for the proposed federation between the then-British Colonies of Australasia. New Zealand lost interest in joining Australia in a federation following this convention.

New Zealand became an independent dominion on 26 September 1907 by royal proclamation. Full independence was granted by the United Kingdom Parliament with the Statute of Westminster in 1931; it was taken up upon the Statute’s adoption by the New Zealand Parliament in 1947. Since then New Zealand has been a sovereign constitutional monarchy within the Commonwealth of Nations.

The history of New Zealand dates back at least 700 years to when it was discovered and settled by Polynesians. Europeans visited the country in 1642 but it wasn’t until the 1840s onward that it experienced large scale European migrations.

Pre-European contact

New Zealand was originally settled by waves of Polynesians some time between 1000 and 1300 CE, although some evidence suggests earlier settlement. The descendants of these settlers created a distinct culture and became known as the Maori. Separate settlement of the tiny Chatham Islands in the east of New Zealand produced the Moriori people, but it is uncertain whether the Morioris’ ancestors came directly from Polynesia or were mainland Maori who ventured eastward. Some of the Maori (particularly in the North Island), called their new homeland “Aotearoa” (”land of the long white cloud”).

The original settlers were moa hunters. Moa were large flightless birds similar to ostriches and rheas that were pushed to extinction in the 19th century or earlier. Before the coming of humans, the moa were the prey of the harpagornis or Haast’s eagle, the largest bird of prey ever recorded. Harpagornis became extinct along with its prey. The moa-hunters may have merged with later waves of Polynesians who, according to Maori tradition, arrived between 952 and 1150.

New Zealand has no native land mammals, apart from some rare bats. Later Maori largely subsisted by cultivating the kumara, a type of sweet potato, which they had brought with them from Polynesia, and the cabbage tree. Cannibalism, as elsewhere in the Pacific, played a very small part in the diet.

European explorers

The first Europeans known to reach New Zealand were the crew of Dutch explorer Abel Tasman, who arrived with his ships Heemskerck and Zeehaen. Tasman anchored at the northern end of the South Island in December 1642 but sailed northward to Tonga following a clash with local Maori. Tasman sketched sections of the two main islands’ west coasts. Tasman called them Staten Landt and that name appeared on his first maps of the country. Dutch cartographers changed the name to Nova Zeelandia in Latin which became Nieuw Zeeland in Dutch. It was subsequently Anglicised as New Zealand by British naval captain James Cook of the HM Bark Endeavour who visited the islands more than 100 years after Tasman (1769-1770). Cook returned to New Zealand on both of his subsequent voyages.

Whalers and sealers

From the 1790s, the waters around New Zealand were visited by British, French, and American whaling ships, whose crews sometimes came into conflict with Maori inhabitants. The arrival of traders and missionaries in the 1800s and 1810s added to local disputes. The first full-blooded European infant in the territory, Thomas King, was born in 1815 in the Bay of Islands. The initiation of large-scale settlement and land purchases in 1839 by the New Zealand Company, coupled with increasing French interest in the islands, finally prompted the British government to take control of the situation.
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Wellington (Te Whanganui-a-Tara or Poneke) is the capital city of New Zealand, the country’s second-largest urban area and the most populous national capital city in Oceania. Wellington stands at the southern tip of the North Island in the geographical centre of the country.

New Zealand’s major financial institutions are divided between Wellington and Auckland, and some organisations have headquarters in both cities. It is New Zealand’s political centre, housing Parliament and head offices for all government departments and ministries. Wellington is often described as New Zealand’s cultural centre, boasting a world class film and theatre industry, Te Papa (the Museum of New Zealand), the New Zealand Symphony Orchestra and the Royal New Zealand Ballet. Its compact city centre supports an arts scene, café culture and nightlife much larger than most cities of a similar size.

Wellington was named in honour of Arthur Wellesley, the first Duke of Wellington and victor at the Battle of Waterloo. The Duke’s title comes from the town of Wellington in the English county of Somerset.

In the M�?ori language Wellington goes by two names. Te Whanganui-a-Tara refers to Wellington Harbour and means “the great harbour of Tara”. The alternative name P�?neke is often discouraged because of a belief that it is nothing more than a transliteration of the harbour’s former nickname in English, Port Nick, short for Port Nicholson.

Like many cities, Wellington’s urban area extends well beyond the boundaries of a single local authority. Greater Wellington or the Wellington Region means the entire urban area, plus the rural parts of the cities and the Kapiti Coast, and across the Rimutaka Range to the Wairarapa.

History

The Maori who originally settled the Wellington area knew it as Te Upoko o te Ika a Maui, meaning “the head of Maui’s fish”. Legend recounts that Kupe discovered and explored the district in about the 10th century.

European settlement began with the arrival of an advance party of the New Zealand Company on the ship Tory, on 20 September 1839, followed by 150 settlers on the ship Aurora on 22 January 1840. Legend states that the settlers constructed their first homes at “Britannia” (now Petone) on the flat area at the mouth of the Hutt River but when this proved too swampy and flood-prone they transplanted the plans without regard for a more hilly terrain — Wellington has some extremely steep streets running straight up the sides of hills.

Earthquakes

Wellington suffered serious damage in a series of earthquakes in 1848 and from another earthquake in 1855. The 1855 (Wairarapa) earthquake occurred on a fault line to the north or east of Wellington. It ranks as probably the most powerful earthquake in recorded New Zealand history, with an estimated magnitude of at least 8.2 on the Richter scale. It caused vertical movements of 2 to 3 m over a large area, including raising an area of land out of the harbour and turning it into a tidal swamp. Much of this land was subsequently reclaimed and is now part of Wellington’s central business district. For this reason the street named Lambton Quay now runs 100 to 200 m distant from the harbour. Plaques set into the footpath along Lambton Quay indicate the location of the shoreline in 1840 and thus indicate the extent of the uplift and of subsequent reclamation.

The area has high seismic activity even by New Zealand standards, with a major fault line running through the centre of the city and several others nearby. Several hundred more minor fault lines have been identified within the urban area. The inhabitants typically notice several earthquakes every year, particularly in the high-rise office buildings in the city. For many years after the 1855 earthquake, the majority of buildings constructed in Wellington were made entirely from wood. The recently restored (1996) Government Buildings, near the Railway Station and Parliament Buildings, comprise the largest wooden office building in the Southern Hemisphere. While masonry and structural steel have subsequently been used in building construction, especially for office buildings, timber framing remains the primary structural component of almost all residential construction. Residents also place their hopes of survival in good building regulations, which gradually became more stringent in the course of the 20th century.

New Zealand’s Capital

In 1865 Wellington became the capital of New Zealand, replacing Auckland where William Hobson had established his capital in 1840. Parliament first sat in Wellington on 7 July 1862, but the city did not become the official capital for some time. In November 1863 Alfred Domett moved a resolution before Parliament (in Auckland) that “it has become necessary that the seat of government… should be transferred to some suitable locality in Cook Strait.” Apparently there was concern that the southern regions, where the goldfields were located, would form a separate colony. Commissioners from Australia (chosen for their neutral status) pronounced the opinion that Wellington was suitable because of its harbour and central location. Parliament officially sat in Wellington for the first time on 26 July 1865. The population of Wellington was then 4,900 (reference Phillip Temple: Wellington Yesterday).

Government House, the official residence of the Governor-General, stands next to the Basin Reserve. The official residence formerly occupied the site where the Beehive, the Executive Wing of the New Zealand Parliament Buildings, is today. It is sometimes humorously referred to as Helengrad.
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New Zealand or Aotearoa, the Land of the Long White Cloud, is a country of two large islands and many smaller islands in the south-western Pacific Ocean. New Zealand is notable for its isolation, being separated from Australia on the northwest by the Tasman Sea, some 2,000 km wide. The closest neighbours to the north are New Caledonia, Fiji and Tonga. The population of New Zealand is mostly of European descent, with the indigenous Maori as the largest minority. Non-Maori Polynesian and Asian peoples are also significant minorities, especially in the cities.

Elizabeth II is the Queen of New Zealand and is represented in the country by a non-political Governor-General. Political power is held by the Prime Minister who is leader of the Government in the democratically elected Parliament of New Zealand. The monarch’s Realm of New Zealand also includes the Cook Islands and Niue, which are entirely self-governing; Tokelau, which is moving towards self-government, and New Zealand’s claim in Antarctica.

Aotearoa in the native Maori language - is a country in the Southern Pacific consisting of two main islands and a number of small offshore islets. With a population of just under 3.6 million people and a total land area of 27.1 million hectares, the country is characterised by vast unpopulated areas mainly used for the agricultural and forestry industries.

New Zealand is a member of the Commonwealth of States and is politically run as parliamentary democracy under a Mixed Member Proportional Representation government. Its capital is Wellington, located on the southernmost tip of the North Island. Further to the north lies New Zealand’s largest city, Auckland, with a population of one million. The largest city in the South Island is Christchurch.

The plant and animal life are excellent offering opportunities to see the varied birdlife (including kiwis), seals, dolphins and whales. Enjoy the chance to explore two of the richest New-World wine regions on the planet, taste wonderful cuisine, stroll on moody beaches, tramp through the national parks or over alpine passes. Try bungee jumping, caving or whitewater rafting: you can ski or snowboard on world-class slopes, scuba dive in unique colour-filled marine reserves, sail on exciting waters or play on tournament-class golf courses. If that is not your bag, immerse yourself in culture in the museums and galleries of New Zealand’s main cities - Auckland, Christchurch and the capital Wellington. New Zealand’s time as an original, fully fledged tourist haven has come. Long-haul flights are fast-growing and the country’s isolation, once a bane, is now a boon.