Economic history of New Zealand
By the 20th century, it had become one of the most globalized economies in the world, relying heavily on international trade with developed countries including Australia, Canada, China, European Union, the United States, Japan, and South Korea.
[4] The economy of New Zealand has been listed as seventh in the world for Social Progression, a societal tracker that watches areas such as Basic Human Needs, Foundations of Wellbeing, and the level of Opportunity provided to its residents.
[7] Undeterred by the current account deficit problems, the difference on external goods and service has typically shown positive gains in the economy.
However, for the first half of the decade debt-driven spending had driven growth and this, in turn, caused the central bank to continuously raise its key rate from 2004–2008, at which point it was among the highest in the OCED.
New Zealand remains focused on expanding its free trade network as a top foreign policy priority as they were one of the earliest backing parties for the Trans Pacific Partnership and the second country to ratify it.
The Maori were Polynesian tribes that had built perennial establishments and exploited the natural resources of the land in order to provide themselves with a way of life.
[9] It was not until the Europeans arrived bringing with them new technologies, ideas, plants, animals, and sources of capital that economic growth was seen in the New Zealand lands again.
[9] The Maori were keen to trade with the new arrivals and typically bartered with potatoes, corn, and flax for weapons, alcohol, tobacco and most importantly – European tools and products.
Towns and settlements sprung up and flourished near these quarrying sites and they gave the economy a temporary boost as resources were used up and the locals benefited from the business they received.
This boom in the economy allowed Dunedin to become the richest of the New Zealand cities by 1880s, but the citizens soon found they would need another source of capital as the mineral quarrying was largely depleted by the end of the century.
New Zealand began to produce and export staple goods at a rapid pace and it helped shape society as well as establish a tone for economic growth, none of which would have happened without the invention of refrigeration in 1882.
One of the first measures the new central bank took was to give itself the ability to implement its own economic agenda as it saw fit and quickly took strides to better defend the economy and people from the world markets.
The Reserve Bank's primary role during this time was to implement and handle the effects of the fluctuations in government spending as the inflation rates remained low through the end of the 1960s.
The loss of wool in 1966 and the depression of dairy and meat prices meant that change had to happen fast if the economy was to still operate at a functioning level.
New Zealand Prime Minister Sir Robert Muldoon was the face behind the Think Big strategy that was implemented during his time at the head of the National party.
Massive industrial plants were built on New Zealand's natural gas reserves and a wide variety of new products for export such as ammonia, urea fertilizer, methanol, and petrol were produced.
New Zealand relied heavily on privatization to help with its reform period by selling off telecommunications, airlines, computing services, government printing offices, and many others.
[10] Despite these improvements, the country remained stagnant on the international income ranking level due to higher interest rates stemming from an unwillingness to save.
[24] The stock market continues to show strong growth as well, rising 22% in 2017, held up by the economy growing at a rate that is above its long-term trend.
[25] Strong economic performance in the near term would greatly benefit New Zealand, but demand from government spending could be weaker than projected if the implementation of policy is slower than expected.
