New Zealand
New Zealand, an island country, is located in the southwest of the Pacific Ocean. The South Island and the North Island are the two main landmasses in New Zealand and there are also about 600 smaller islands in the country. 268,021 square kilometres (103,500 sq miles) is the total area that the islands cover.
New Zealand is about 600 miles (1,000 km) south of the islands of Tonga, Fiji, and New Caledonia and 1,200 miles (2,000 km) east of Australia.
The tectonic uplift and volcanic eruptions in New Zealand are due to the varied topographic and sharp mountain peaks in the country, such as the Southern Alps.
The capital city of New Zealand is Wellington at the bottom of the North Island, and Auckland is the most populated in the country.
New Zealand is a developed country, ranking highly in international comparisons of national performance, including economic freedom, quality of life, government transparency, education, and civil liberties protections.
The transformation of New Zealand from a protectionist to a liberalized free-trade economy happened during the major economic changes in the 1980s. The national economy is dominated by the service sector. The industrial sector and agriculture follow the service sector.
A big source of revenue in the country has been international tourism. However, that has dried up under Covid-19.
The rank of New Zealand as an advanced market economy is third in the 2018 Index of Economic Freedom and 16th in the 2018 Human Development Index. It has a nominal GDP (Gross Domestic Product) per capita of 36,254 US Dollars, making it a high-income economy.
According to history, extractive industries contribute strongly to the economy of New Zealand. The industries focus on native timber, kauri gum, gold, flax, whaling, and sealing at different times.
Meat and dairy exports to Britain were established in 1882 after the first shipment of refrigerated meat on the Dunedin. The trade helped New Zealand grow strong economically. New Zealanders achieved higher living standards than both Western Europe and Australia in the 1950s and 1960s due to the high demand for agricultural products from the United States and the United Kingdom.
Successive governments rapidly transformed New Zealand into a liberalized free-trade economy from a highly regulated and protected economy by engaging in major macroeconomic restructuring since 1984.
New Zealand depends heavily on international trade, especially agricultural products. 24% of the country’s output is exports. That is why New Zealand is vulnerable to global economic slowdowns and international commodity prices.
In 2014, 55% of the value of all the exports of the country is food products. The second largest earner (7%) was wood.
The main trading partners of New Zealand are Japan ($8.4b), the United States ($17.6b), the European Union ($22.9b), Australia ($26.2b), and China (NZ$27.8b).
New Zealand-China Free Trade Agreement between New Zealand and China was signed on 7 April 2008. This was the first agreement that China signed with a developed country.
The largest sector in the economy is the service sector. Manufacturing and construction and then farming and raw materials follow the sector.
In 2016, tourism supported 7.5% of the total workforce and contributed 5.6% (or $12.9 billion) to the total GDP of New Zealand. That is why it plays a significant role in the country’s economy. The arrival of international visitors was expected to increase at a rate of 5.4% every year. However, Covid-19 negatively affected the tourism sector since it halted the growth of tourism.
$14.1 billion (17.7%) of total exports in the year to June 2018 was from dairy products. Around one-third of the international dairy trade is controlled by Fonterra, which is the largest company in New Zealand. Wine (2.1%), machinery (2.2%), fruit (3.6%), wood and wood products (6.2%), and meat (8.8%) were other exports in 2017-18.
The trend of the wine industry of New Zealand is the same as that of dairy. Over the same period, the number of vineyards doubled and overtook wool exports for the first time in 2007. There has been considerable success in the wine industry during the global pandemic. This because more people import wines from New Zealand.
The business community mainly consists of small operators. 19% of businesses have 1-5 employees and 71% of businesses are sole-traders.
Arts, technology, and media are among the growth industries. New Zealand is popular for digital effects and film production.
The biggest city in Auckland is Auckland. The total population is 5m, but the population of Auckland is 1.5m. Wellington has about 200,000 people while Christchurch has around 400,000 people.