New Zealand - Future trends

At the turn of the century there were mixed feelings about the economic future of New Zealand. The country has been quite successful in diversifying its agricultural base, and there is optimism that international trade liberalization will benefit producers who are efficient by world standards. There is an ongoing focus on identifying new niche markets whether they are in new varieties of wine, more exotic varieties of subtropical fruit, or in ostrich feathers. In the manufacturing sector there is ongoing concern about the degree to which New Zealand industries can compete with countries with low labor costs in Asia and elsewhere. Once again, there is some optimism that niche markets will boost manufacturing, with recent examples including carpet weaving and yacht construction. At the same time, there are regular reminders of the problems of global trade liberalization, with factories being closed or relocated to other countries which have lower rates of pay and government subsidies.

Further hope is found in the service sector. In particular, tourism is likely to continue to expand, although to some extent this may depend on the cost of international air travel. If airfares continue to decline in real terms as they have for some years, that will benefit New Zealand, distant as it is from major markets. However, if prices are increased substantially by fuel increases or the impact of global alliances, then New Zealand's tourism future may be more problematic. There have also been some successes in areas of high technology such as the software industry, and if New Zealand manages to fulfill its objective of achieving a "high knowledge" economy there are likely to be many other possibilities.

There are also areas of concern or even pessimism. For some, the socioeconomic inequalities which have increased during the period of economic restructuring are likely to increase under ongoing trade and investment liberalization. The restructuring has driven down wages for unskilled workers while at the same time provided large profits for investors in some sectors. The way in which these issues are resolved will depend on the economic and social policies of the new government.

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