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MORE NEW ZEALAND INFORMATION |
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New Zealand is a self-governing country situated southeast of Australia in the South Pacific Ocean and is a member of the Commonwealth of Nations. It comprises two large islands known as the North Island and South Island and there are numerous smaller islands, including Stewart Island, which is to the south of the South Island. The area of New Zealand is 268,676 sq km (103,736 sq miles). Associated with New Zealand are Ross Dependency (in Antarctica) and the Cook Islands, Niue, and Tokelau (in the Pacific Ocean).
PEOPLE.Nationality: Noun - New Zealander(s). Adjective - New Zealand.Population (1997): est. 3.7 million. Annual growth rate: (1997) 1.1%. Ethnic groups: European 75%, Maori 14.5%, other Polynesian 5.6%. Religions: Anglican 22%, Presbyterian 16%, Roman Catholic 15%. Languages: English, Maori. Education: Years compulsory - ages 6-16. Attendance - 100%. Literacy - 99%. Health (1996): Infant mortality rate - 7.3/1,000. Life expectancy - males 73 yrs., females 79 yrs. Work force (1996): 1.6 million. Services and government - 59%. Industry and commerce - 30.7%. Agriculture and mining - 9.7%. LAND AND RESOURCES.New Zealand is a generally mountainous country with several large regions of plains. Two thirds of the area is between about 200 and 1070 m (about 650 and 3500 ft) above sea level; more than 220 named mountains exceed 2286 m (7500 ft) in height.The North Island has a very irregular coastline, particularly along its northern extremity, the Auckland Peninsula. Near the city of Auckland, the peninsula is only about 10 km (about 6 miles) wide. The principal mountain ranges of the North Island extend along the eastern side. A volcanic range in the northern central region has three active volcanic peaks: Mt. Ruapehu (2797 m/9175 ft), the highest point on the island; Mt. Ngauruhoe (2291 m/7515 ft); and Tongariro (1968 m/6458 ft). Mt. Egmont (2518 m/8260 ft), a solitary, extinct volcanic cone, is situated near the western extremity of the island. The North Island has numerous rivers, most of which arise in the eastern and central mountains. The Waikato River. (435 km/270 miles long), the longest river of New Zealand, flows north out of Lake Taupo (606 sq km/234 sq miles), the largest lake in New Zealand, and empties into the Tasman Sea in the west. Numerous mineral hot springs are found in the Lake Taupo district. The South Island has a more regular coastline than that of North Island; in the southwest, however, the coast is indented by deep fjords. The chief mountain range of South Island is the Southern Alps, a massive uplift extending in a southwest to northeast direction for almost the entire length of the island. Seventeen peaks in the range exceed 3048 m (10,000 ft) in elevation. Mount Cook (3764 m/12,349 ft), the highest point in New Zealand, rises from the center of the range, which also has a number of glaciers. Most of the rivers of the South Island, including the Clutha River (338 km/210 miles long), the longest river of the island, rise in the Southern Alps. The Clutha is formed by the confluence of two branches originating, respectively, in Lake Hawea (124 sq km/48 sq miles) and Lake Wanaka (194 sq km/75 sq miles) and empties into the Pacific Ocean. The largest lake is Lake Te Anau (342 sq km/132 sq miles) in the southern part of the Southern Alps. The Canterbury plains in the east and the Southland plains in the extreme south are the only extensive lowland areas of South Island.
CLIMATE.New Zealand lies within the Temperate Zone; the climate is generally mild and seasonal differences are not great. The northern end of the Auckland Peninsula has the warmest climate; the coldest climate occurs on the southwest slopes of the Southern Alps. Rainfall is generally moderate to abundant and except in a small area in the southern central part of South Island, exceeds 508 mm (20 in) annually. The heaviest rainfall (about 5590 mm/about 220 in) occurs around Milford Sound on the southwest coast of South Island. The average temperature at Auckland varies between 19 deg C (66.2 deg F) in January and 10.6 deg C (51 deg F) in July; the average rainfall is 1245 mm (49 in). In Dunedin, on the southeast coast of South Island, the average January and July temperatures are 14.7 deg C (58.5 deg F) and 4.2 deg C (39.5 deg F), respectively; the annual rainfall is 762 mm (30 in).GEOLOGY.The islands, which emerged late in the Tertiary period, contain a notably complete series of marine sedimentary rocks, some of which date from the early Paleozoic era. Much of the topography of New Zealand has resulted from warping and block faulting. Volcanic action also played a part in the formation of the islands, especially in the North Island, where the process continues to the present time. Geysers and mineral hot springs occur in the volcanic area and earthquakes, although usually minor, are fairly frequent here.NATURAL RESOURCES.The land is the most important resource of New Zealand. It is ideal for crop farming, dairy farming, and the raising of sheep, all of which predominate in the economy. Forest products are also important. Numerous mineral deposits are found throughout the main islands, including coal, gold, pearlite, sand and gravel, limestone, bentonite, clay, dolomite, and magnesite. Great natural-gas fields exist in the North Island and off its southwest coast. Deposits of uranium and thorium are believed to be present on the islands because these minerals have been found in isolated boulders.PLANTS.New Zealand plant life is remarkable in that of the 2000 indigenous species, about 1500 are found nowhere else in the world; examples of such unique plants are the golden Kowhai and the scarlet Pohutukawa. The North Island has predominantly subtropical vegetation, including mangrove swamps in the north. The forest, or so-called bush of the North Island is principally evergreen with dense undergrowth of mosses and ferns. Evergreen trees include the Kauri, Rimu, Kahikatea, and Totara, all of which are excellent timber trees. The only extensive area of native grassland on the North Island is the central volcanic plain. The eastern part of South Island, for the most part, is grassland up to an elevation of about 1525 m (about 5000 ft). Most of the forest is in the west. It is made up principally of native beech and is succeeded by alpine vegetation at high altitudes.ANIMALS.With the exception of two species of bat, no indigenous mammals are native to New Zealand. The first white settlers, who arrived early in the 19th century, found a type of dog and a black rat, both of which had been brought by the Maori (see the Population section below) about 500 years earlier and are now almost extinct. The only wild mammals at present are descended from deer, rabbits, goats, pigs, weasels, ferrets and opossums, all of which were imported. No snakes and few species of annoying insects inhabit New Zealand. The Tuatara, a lizard-like reptile with a vestigial third eye, is believed to be a prehistoric survival.New Zealand has a large population of wild birds, including 23 native species. Among the native species are songbirds, including the Bellbird and Tui, and flightless species, including the Kiwi, Kakapo, Takahe, and Weka. The survival of these flightless birds is attributed to the absence of predatory animals. The sparrow, blackbird, thrush, skylark, magpie, and myna are well-acclimated imported species. New Zealand abounds in a great variety of seabirds and numerous migratory birds. The rivers and lakes have a variety of native edible fish, including whitebait, eel, lamprey and freshwater crustaceans, particularly crayfish. Trout and salmon have been imported. The surrounding ocean waters are the habitat of the snapper, flounder, blue cod, Hapuku, Tarakihi, swordfish, flying fish, shark, and whale, as well as edible shellfish, such as the oyster, mussel, and Toheroa.
POPULATION.Most of the 3.7 million New Zealanders are of British origin. About 14% claim descent from the indigenous Maori population, which is of Polynesian origin. Nearly 75% of the people, including a large majority of the of the Maoris, live In the North Island. In addition, 167,000 Pacific Islanders also live in New Zealand.During the late 1870s, natural increase permanently replaced immigration as the chief contributor to population growth and has accounted for more than 75% of population growth in the 20th century. Nearly 85% of New Zealand's population lives in urban areas, where the service and manufacturing industries are growing rapidly
POPULATION CHARACTERISTICS.The country has an overall population density of about 13 persons per sq km (about 32 per sq miles). Nearly three-quarters of the population (including more than 95% of the Maori) reside in the North Island, however. About 85% of the people live in urban areas and about half of these in the four largest cities and their environs (see Principal Cities section below).Political Divisions. New Zealand is divided into 22 local government regions. In the North Island are Auckland, Bay of Plenty, East Cape, Hawke's Bay, Horowhenua, Manawatu, Northland, Taranaki, Thames Valley, Tongariro, Waikato, Wairarapa, Wanganui, and Wellington; in the South Island, Aorangi, Canterbury, Clutha-Central Otago, Coastal-North Otago, Marlborough, Nelson Bays, Southland, and West Coast.PRINCIPAL CITIES.The capital of New Zealand and the centre of interisland and coastal shipping is Wellington. Other urban centers are Auckland, a seaport and dairy distribution center; Christchurch, the wheat and grain center; Hamilton, a center for dairy farming; and Dunedin, a wool and formerly a gold center.RELIGION AND LANGUAGE.Approximately 73% of the population is Christian. The major denominations are the Church of England, Presbyterian, Roman Catholic, and Methodist. Most of the Maori are members of the Ratana and Ringatu Christian sects. Jews, Hindus, and Confucians constitute small minorities.English is the official language. Most Maori speak Maori, a Polynesian language, and incorporate it to varying degrees of complexity in everyday life but they also learn and speak common English fluently. EDUCATION.Education is free and compulsory for children between the ages of 6 and 15 years, but children may enter school at 5 and continue until they are 19. In some areas, free kindergartens are maintained for children between 3 and 5 years of age. The primary course consists of infant classes during the first two years and six annual grades designated standards 1, 2, 3, and 4 and forms I and II. Free secondary education is available to all children who have completed form II or who have attained the age of 14. The prerequisite for admission to university study is either completion of a 4-year course at an approved secondary school or the passing of the university entrance examination.Secondary schools.Some 400 public and private secondary schools, with approximately 13,500 teachers, are annually attended by some 232,300 students. In addition, about 130,500 students attend vocational schools.Universities and colleges.The university system in New Zealand comprises six separate universities and a university college of agriculture. The seven institutions are the University of Auckland (1882), Waikato University (1964, at Hamilton), the Victoria University of Wellington (1899), Massey University (1926, at Palmerston North), the University of Canterbury (1873, at Christchurch), the University of Otago (1869, at Dunedin), and Lincoln College (1878, near Christchurch), a constituent agricultural college of the University of Canterbury. Under the Universities Act of 1961, a university grants committee advises the government on the needs of university education and research and allocates the grants of money that it recommends for appropriation by the Parliament. The six universities and the agricultural college have a combined annual enrollment in the of about 76,800 students. Several teachers colleges are also in operation, and New Zealand has an extensive adult-education program throughout the country conducted by the National Council of Adult Education.
CULTURE.The earliest cultural tradition in New Zealand was that of the Maori. The literature consisted of history, tales, poems, and myths handed down by oral tradition. The indigenous art of New Zealand was also Maori. European settlers, particularly the English, brought with them their own traditions, colored by an unsettled, expatriate sentiment that was a strong influence on the cultural life of the country until the early 20th century but this has since given way to a more confident, nationalistic spirit.The arts, literature and music were given great stimulus by the Queen Elizabeth II Arts Council of New Zealand, created in October 1963 to foster artistic and cultural undertakings of all kinds and to make them accessible to the public.
LIBRARIES AND MUSEUMS.New Zealand has more than 2000 libraries. The National Library Act of 1965 established the National Library of New Zealand by combining several library systems. The Auckland Public Library contains about 1.2 million volumes, including Maori works. Other leading libraries include the Otago University Library in Dunedin (1.2 million volumes), the Canterbury University Library in Christchurch (1.2 million volumes), the Wellington Public Library (525,000 volumes) and the Dunedin Public Library (520,000 volumes). All government records of permanent value are preserved in the National Archives in Wellington.Art galleries and museums are found in most large cities but the oldest institutions are in Auckland. The Auckland City Art Gallery, founded in 1888, and the Auckland Museum, opened in 1852, contain notable collections and the National Art Gallery (1936), in Wellington, is noted particularly for its Australian and New Zealand paintings. Outstanding natural history and ethnological collections are found in the National Museum, in Wellington; Canterbury Museum, in Christchurch; and Otago Museum, in Dunedin. The newest museum, "Te Papa" (Maori for "our place") opened in Wellington this year.
LITERATURE.Soon after Europeans became aware of New Zealand, the orally-transmitted myths and legends of the Maori were supplemented on a more factual level by accounts of the country given in the writings of the early voyagers, especially Captain James Cook, who visited New Zealand in 1769. Later settlers, including the 19th-century English novelist Samuel Butler, contributed graphic descriptions of pioneer life. On the whole, the early New Zealanders probably felt too geographically remote and too cut off from their cultural tradition to write and until very recent times, Katherine Mansfield, herself an expatriate, was the only New Zealand writer with an international reputation. The economic depression of the 1930s, which was particularly harsh in New Zealand, brought a sense of national identity, and since then poets, short-story writers, and novelists have flourished.ART.Until comparatively recently, the art of the Maori was regarded as having only ethnological value. The settlers first brought little in the way of artistic skills or inclinations. As a consequence, very little feeling for art existed in New Zealand before World War II. Since that time, however, an upsurge of interest in art and in the crafts (especially pottery) has occurred. The art of the Maori, particularly their elaborate painted wood carvings, has been reassessed and has strongly influenced other New Zealand artists.
AGRICULTURE.Modern methods and machinery are used extensively on New Zealand farms and the productivity of the country is consequently among the highest in the world. The land is suited for dairy farming and for raising sheep and beef cattle because winter housing for livestock is unnecessary and grass grows nearly year round. The livestock population of New Zealand includes about 65 million sheep, some 8.1 million head of cattle, 1.3 million goats, and approximately 428,000 pigs. New Zealand ranks second only to Australia in wool production.
FORESTRY AND FISHING.More than half the wood grown is used for timber and about 40% for pulp; about 85% of the sawn wood is pine. Most of the native forests were denuded in the early years of colonization. An extensive reforestation program has utilized imported varieties of fast-growing trees instead of native New Zealand trees, most of which are slow-growing. A stand of a North American species of pine in the Kaingaroa State Forest, reputedly the largest planted forest in the world, is exploited at facilities owned and operated jointly by government and private industry.The most important freshwater and marine species taken are blue grenadier, orange roughy, mackerel, crayfish, lobster, and squid. In the late 1980s the annual fish catch was approximately 430,700 metric tons. Much of the fishing is done by motor trawlers.
MINING.In the 1970s the mineral output of New Zealand increased substantially, as newly discovered deposits of petroleum and natural gas were exploited. Annual output includes coal, 2.1 million metric tons; petroleum, 9.3 million barrels and natural gas, 3.5 billion cu metres (124 billion cu ft). Other minerals produced in significant quantities include gold, silver, limestone, iron ore, bentonite, silica sand, and pumice.
ENERGY.About three-quarters of New Zealand's annual electricity is produced by hydroelectric facilities and most of the rest is generated in plants burning coal or refined petroleum. In addition, underground steam in the North Island is used to produce substantial amounts of electricity. Major hydroelectric facilities are on the Waikato River in the North Island and on the Clutha and Waitaki rivers, in the South Island. New Zealand has an electricity-generating capacity of approximately 7.4 million kW and its annual production totals approximately 27 billion kWh.
CURRENCY AND BANKING.Under the Decimal Currency Act of 1964 a system of decimal currency was introduced in New Zealand in 1967, with the dollar as the monetary unit. The previous basic unit was the New Zealand pound. The New Zealand dollar is divided into 100 cents.In addition to the Reserve Bank of New Zealand (1934), which has the sole power of issue, several commercial banks and trustee savings banks operate.
FOREIGN TRADE.The value of exports for New Zealand totals approximately $8 billion annually. Great Britain, the U.S., Japan, Korea and Australia are important customers. New Zealand is the largest exporter of dairy products in the world and is second only to Australia in the export of wool. Other important exports include kiwi fruit, lamb, mutton, and beef. Chief imports are manufactured goods, heavy machinery, petroleum, chemicals, iron, steel, and textiles. Imports come mainly from Japan, Australia, Korea, Great Britain, and the U.S. New Zealand tariffs are low; manufactured goods are imported into the country free of duty.
TRANSPORTATION AND COMMUNICATIONS.Public transport facilities are good even in remote districts. Ships provide fast overnight service between the North Island and the South Island and along the coasts. The country's principal ports are Auckland, Wellington, Tauranga, and Lyttelton (near Christchurch). Air transport is widely used, with numerous airfields located throughout the country to serve private pilots. Air New Zealand is the leading airline.About 2.3 million telephones are in use. Radios number 3.1 million and New Zealanders have about 978,500 television receivers. More than 30 daily newspapers have a combined circulation exceeding 1 million.
GOVERNMENT.New Zealand has a parliamentary system of government closely patterned on that of the United Kingdom and is a fully independent member of the Commonwealth. It has no written constitution.Executive authority is vested in a cabinet led by the prime minister, who is the leader of the political party or coalition of parties holding the majority of seats in parliament. All cabinet ministers must be members of parliament and are collectively responsible to it. The unicameral parliament (House of Representatives) has 120 seats, five of which currently are reserved for Maoris elected on a separate Maori roll. However, Maoris also may run for, and have been elected to, non-reserved seats. Parliaments are elected for a maximum term of three years, although elections can be called sooner. The judiciary consists of the Court of Appeals, the High Court, and the District Courts. New Zealand law has three principal sources - English common law, certain statutes of the U.K. Parliament enacted before 1947, and statutes of the New Zealand Parliament. In interpreting common law, the courts have been concerned with preserving uniformity with common law as interpreted in the United Kingdom. This uniformity is ensured by the maintenance of the Privy Council in London as the final court of appeal and by judges' practice of following British decisions, even though, technically, they are not bound by them. Local government in New Zealand has only the powers conferred upon it by parliament. The country's 12 regional councils are directly elected, set their own tax rates, and have a chairman elected by their members. Regional council responsibilities include environmental management, regional aspects of civil defence, and transportation planning. The 74 "territorial authorities" - 15 city councils, 58 district councils in rural areas, and one county council for the Chatham Islands - are directly elected, raise local taxes at rates they themselves set, and are headed by popularly elected mayors. The territorial authorities may delegate powers to local community boards. These boards, instituted at the behest either local citizens or territorial authorities, advocate community views but cannot levy taxes, appoint staff, or own property.
Principal Government Officials POLITICAL CONDITIONS .The conservative National Party and left-leaning Labour Party have dominated New Zealand political life since a Labour government came to power in 1935. During 14 years in office, the Labour Party implemented a broad array of social and economic legislation, including comprehensive social security, a large-scale public works program, a 40-hour workweek, a minimum basic wage, and compulsory unionism. The National Party won control of the government in 1949 and adopted many welfare measures instituted by the Labour Party. Except for two brief periods of Labour governments in 1957-60 and 1972-75, National held power until 1984. After regaining control in 1984, the Labour government instituted a series of radical market-oriented reforms in response to New Zealand's mounting external debt. It also enacted anti-nuclear legislation that effectively brought about New Zealand's suspension from the ANZUS security alliance with the United States and Australia.In October 1990, the National Party was again elected, capturing 67 of 97 parliamentary seats in a landslide victory. To the disappointment of some supporters, National continued the economic reforms introduced by Labour. National was narrowly re-elected in November 1993. Two seats each were won by two new opposition parties, the Alliance and New Zealand First. In a simultaneous referendum, New Zealanders changed their electoral system to a form of proportional representation designed to give smaller parties a larger voice in parliament. In the 1996 election, the first under the new "mixed-member-proportional" (MMP) system, the National Party, at 34% (44 Parliament seats) barely edged out Labour (28%-37% seats) as the top party. New Zealand First (13%), with its 17 seats, opted to join National in a coalition government. HEALTH AND WELFARE.All workers, including those on farms, are guaranteed an annual paid vacation. A straight deduction from wages finances social security benefits, which include hospitalization and medical care, children's allowances, unemployment benefits, and pensions for disabled workers, widows, the blind and all persons over the age of 60.POLITICAL PARTIES.The principal political organizations are the Labour party and the National party. The former favors a limited degree of nationalization and strong credit controls. The latter strongly supports free enterprise and opposes state socialism. The Alliance, a third party representing a coalition of centrist, environmentalist, and Maori groups, was formed in 1991.JUDICIARY.The highest court in New Zealand is the Court of Appeal, which exercises appellate jurisdiction only. Decisions of the court are final unless leave is granted to appeal to the Privy Council in Great Britain. The principal trial courts are the High court and the District courts. Justices of the Peace in some cases may try minor criminal charges. Specialized courts determine questions relating to labor disputes, workers' compensation and land valuation in cases of condemnation.HISTORY.The Dutch navigator Abel Janszoon Tasman was the first European to reach New Zealand in 1642. The British explorer Captain James Cook visited the islands in 1769 and took possession of them for Great Britain but nearly 75 years elapsed before the British government recognized his claim.
Moriori and Maori. Early in the 19th century British missionaries and whalers, despite fierce opposition from the Maori, established settlements and trading posts in New Zealand, chiefly among the Bay of Islands on North Island. Systematic immigration began in 1839-40 under the auspices of the New Zealand Co., which had been organized in London.
British Sovereignty. Colonization continued apace during the ensuing decades. Disputes between the newcomers and the Maori over land claims led ultimately to violent Maori uprisings between 1845 and 1848 and between 1860 and 1870. After that date, however, colonial authorities pursued a conciliatory policy that resulted in the establishment of permanent peace between the European and native populations. The discovery of alluvial gold in 1865 caused a new influx of immigrants, many of whom settled down to farming when the deposits of gold were exhausted. Sheep raising and gold mining were the main sources of the country's wealth in the latter part of the 19th century. The introduction of refrigerated ships in 1882 enabled New Zealand to export fresh meat, thus stimulating settlement and more intensive farming in the country.
Parliamentary Government. Large speculative landholdings were broken up under the provisions of a number of statutes that enabled the government to acquire large holdings for subdivision and authorized the purchase of small landholdings on long-term mortgages. In addition, other legislation established minimum rates of pay and provided for the compulsory arbitration and settlement of labor disputes. In 1893 New Zealand became the first country to grant woman suffrage. During this period of liberal-labor dominance the foundation of the social security system was laid.
Early 20th Century. During World War I a coalition of the Reform and Liberal parties governed the country. In the war New Zealand furnished 124,211 men for the British forces, of whom 100,444 served overseas. These troops fought in Egypt and in the Gallipoli, or Dardanelles, campaign of 1915; the Australian and New Zealand Army Corps became known popularly as ANZACs. In 1916 New Zealand units organized as a separate division arrived in France in time for the Battle of the Somme and the Mounted Rifles later served in the campaign in Palestine. The losses of New Zealand in World War I exceeded 16,000 men killed and 40,000 wounded. The collapse of a speculative land boom that had flourished after the war was an important cause of the economic depression from 1921 to 1926. The economic distress was aggravated by the worldwide depression beginning in 1930. In the parliamentary elections of 1935 the Labour party won a majority over the National party, which had been formed in 1931 by a coalition of the Liberal and Reform parties. The new government, under the labor leader Michael Joseph Savage (1872-1940), nationalized parts of the economy and expanded social security.
World War II and Asia. The power of the Labour party came to an end on Nov. 30, 1949, when the National party emerged victorious in general elections. The new government promulgated a program more favorable to private enterprise. In the arena of foreign affairs, New Zealand participated (1950) in the Colombo Plan for Southeast Asia and in 1952 concluded the so-called ANZUS mutual-defence pact with Australia and the U.S. With seven other countries, New Zealand signed the Southeast Asia defence treaty in 1954 ( Southeast Asia Treaty Organisation ). New Zealand forces served with UN forces in Korea, Cyprus, and in other conflicts.
The Later 20th Century. Early in 1972, Holyoake retired and in elections held in November, the Labour party swept back to power and the party leader Norman Eric Kirk became Prime Minister. In January 1973, Kirk met with Prime Minister Gough Whitlam of Australia and pledged closer cooperation between their nations. In the same year New Zealand established diplomatic ties with the People's Republic of China. When Kirk died in 1974, Wallace Rowling succeeded him. In 1975 the National party returned to power under Robert Muldoon; it won re-election by a narrow margin in 1978 and 1981 and tried with limited success to cope with New Zealand's worsening economic problems. The elections of July 1984 returned control of parliament to the Labour party, and party leader David Lange became Prime Minister. After New Zealand banned nuclear vessels from its ports, the U.S. ended its defence commitments. The Labour government won re-election in 1987. Citing ill health, Lange resigned in 1989 and was replaced by Geoffrey Palmer. Internal disputes within the party and the declining popularity of the government caused Palmer to resign in favor of Michael Moore in September 1990. In an October election, fought mainly over economic issues, Labour was ousted by the National party headed by James Bolger. Bolger, now New Zealand's ambassador to the United States, was replaced by Jenny Shipley in 1997 and she became the country's first woman Prime Minister.
ECONOMY.The ongoing regionwide Asian financial crisis, which began in 1997, has created uncertainty and instability in the New Zealand economy.New Zealand enjoys a high level of prosperity based on exports from its efficient agricultural system. Leading agricultural exports include meat, forest products, fruit and vegetables, fish, wool, and dairy products. 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. New Zealand was a direct beneficiary of many of the reforms achieved under the Uruguay Round. New Zealand agriculture, and the dairy sector in particular, have enjoyed many new trade opportunities. Since 1984, government subsidies have been eliminated; import regulations have been liberalized; 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 have cut inflation from an annual rate of more than 18% in 1987 to about 1.6% in 1997. The restructuring and sale of government-owned enterprises has reduced government's role in the economy and permitted the retirement of some public debt. However, the reforms led to economic dislocations with unemployment reaching 11% in 1991. An improving economy brought unemployment down to 6.2% by March 1996, but unemployment remains a significant social concern and has been rising for the past year to 7.7% in June 1998. Economic growth has slowed substantially since an unsustainable peak of over 6% in 1994, in response to tighter monetary policy. At the same time, by early 1998, real GDP growth was approaching 2%, and economists believe that the Asian financial crisis could postpone New Zealand's long-expected economic recovery until perhaps 1999. Business and consumer confidence are trending downward, negatively impacting both business investment and retail sales. New Zealand's exports were hurt by the rapid appreciation of the N.Z. dollar from late 1994 to mid-1997 in response to tight monetary policy. With the loosening of monetary conditions throughout 1997, the N.Z. currency lost all of its gains against the U.S. dollar, boosting exports in the second half of 1997. However, the Asian financial crisis has begun to bite into such key foreign exchange earners as tourism from Asia, forestry exports, and educational services. Dairy and meat exports to Asia also are expected to suffer in 1998, while manufactured products are holding up well. New Zealand commodity exporters are looking to U.S. and European markets to replace lost Asian customers. The current account has been deteriorating substantially in the last few years and is expected to create a downward risk for the N.Z. currency. Prices and access to foreign markets are a constant concern to New Zealand. Exports also have been helped by improving 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 20 million people, and this has provided new opportunities for New Zealand exporters. Australia is now the destination of 19.7% of New Zealand's exports, compared to 14% in 1983. Extending CER to product standardization and taxation policy also is under consideration. U.S. goods and services are increasingly competitive in New Zealand. 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 computers, software, medical equipment, chemicals, sporting goods, and telecommunications and transportation equipment. New Zealand welcomes and encourages foreign investment without discrimination. Approval by its Overseas Investment Commission(OIC) is required for foreign investments over $6.4 million or investments of any size in two specific sectors - commercial fishing and rural land. Foreign investment in commercial fishing is limited to a 25% holding, unless an exemption is granted by the Ministry of Agriculture and Fisheries. While the level of ownership is not restricted for rural land, foreign purchasers are required to demonstrate that the purchase is beneficial to New Zealand. In practice, OIC approval requirements have not been an obstacle for U.S. investors. No performance requirements are attached to foreign direct investment. Full remittance of profits and capital is permitted through normal banking channels. A number of U.S. companies have subsidiary branches in New Zealand. Many companies operate through local agents, and some are in association in joint ventures. The U.S. Government recognized the generally liberal trading environment in New Zealand by signing a bilateral Trade and Investment Framework Agreement in 1992 providing for periodic government-to-government consultations on bilateral and multilateral trade and investment issues and concerns.
NATIONAL SECURITY.New Zealand has three defence policy objectives:1) defend New Zealand against low-level threats; 2) contribute to regional security; and 3) play a part in global security efforts. New Zealand considers its own national defence needs to be modest. New Zealand's 1997 defence budget provides for significant updgrades in equipment over the next five years. New Zealand states it maintains a "credible minimum force" to reassure its neighbours and allies of its commitment to regional stability, although critics maintain that the country's defence forces have fallen below this standard. With a claimed area of direct strategic concern that extends from Australia to Southeast Asia to the South Pacific, and with defence expenditures that total less than 1.4% of GDP, New Zealand necessarily places substantial reliance on its defence relationship with larger countries. Before the ANZUS rift over New Zealand's anti-nuclear legislation, its defence relationship with the U.S. was very important to New Zealand. In recent years, New Zealand has coordinated its defence efforts more closely with Australia New Zealand is an active participant in multilateral peacekeeping. It has taken a leading role in trying to bring peace to Bougainville, brokering a cease-fire and leading the "truce monitoring group" composed of New Zealand, Australia, Fiji, and Vanuatu. New Zealand maintains a contingent in the Sinai Multinational Force and Observers and has contributed to UN peacekeeping operations in Angola, Cambodia, Somalia, and the former Yugoslavia. It has also participated in the Multilateral Interception Force in the Persian Gulf. New Zealand participates in Mutual Assistance Programs (MAP), sharing training facilities and exchanges of personnel, and conducting joint exercises with the Philippines, Thailand, Indonesia, Papua New Guinea, Malaysia, Singapore, Brunei, Fiji, Tonga, and other South Pacific states. In addition to its MAP partners, the country exercises with its Five Power defence Arrangement partners (Australia, the United Kingdom, Malaysia, and Singapore), as well as with Korea. Due to New Zealand's anti-nuclear policy, defence co-operation with the U.S., including training exercises has been significantly restricted since 1986.
FOREIGN RELATIONS.New Zealand's foreign policy is oriented chiefly toward developed democratic nations and emerging Pacific economies. The country's major political parties have generally agreed on the broad outlines of foreign policy, and the current coalition government has been active in multilateral fora on issues of recurring interest to New Zealand: trade liberalization, disarmament, and arms control.New Zealand values the United Nations and its participation in that organization. It also values its participation in the World Trade Organization (WTO); World Bank; International Monetary Fund (IMF); Organization for Economic Cooperation and Development (OECD); International Energy Agency; Asian Development Bank; South Pacific Forum; The Pacific Community; Colombo Plan; Asia Pacific Economic Cooperation (APEC); INTELSAT; and the International Whaling Commission. New Zealand also is an active member of the Commonwealth. Despite the 1985 rupture in the ANZUS alliance, New Zealand has maintained good working relations with the United States and Australia on a broad array of international issues. In the past, New Zealand's geographic isolation and its agricultural economy's general prosperity tended to minimize public interest in world affairs. However, growing global trade and other international economic events have made New Zealanders increasingly aware of their country's dependence on stable overseas markets. New Zealand's economic involvement with Asia has been increasingly important, first through aid, mainly to Southeast Asia, and through expanding trade with the growing economies of Asia. New Zealand is a "dialogue partner" with the Association of South East Asian Nations (ASEAN) and an active participant in APEC. As a charter member of the Colombo Plan, New Zealand has provided Asian countries with technical assistance and capital. It also contributes through the Asian Development Bank and through UN programs. It is a member of the UN Economic and Social Council for Asia and the Pacific. New Zealand has focused its bilateral economic assistance resources on projects in the South Pacific island states. It has taken a special interest in facilitating peace and reconciliation on Bougainville Island I Papua New Guinea. The country's long association with Samoa (formerly known as Western Samoa), reflected in a treaty of friendship signed in 1962, and its close association with Tonga have resulted in a flow of immigrants and visitors under work permit schemes from both countries. New Zealand administers the Tokelau Islands and provides foreign policy and economic support when requested for the freely associated self-governing states of the Cook Islands and Niue. Inhabitants of these areas hold New Zealand citizenship.
In 1947, New Zealand joined Australia, France, the United Kingdom, and the United States to form the South Pacific Commission, a regional body to promote the welfare of the Pacific region. New Zealand has been a leader in the organization. In 1971, New Zealand joined the other independent and self-governing states of the South Pacific to establish the South Pacific Forum, which meets annually at the "heads of government" level.
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