New Zealand - Overview of economy

Throughout the 20th century, New Zealand has been considered to be a nation of primary production, with exports being predominated by meat, wool, dairy products, timber, and fish. However, by 1999 agricultural exports had declined to about half of all exports, and less than 10 percent of the workforce were employed in agriculture. Nevertheless, agriculture remains an important

element in the economy and there have been ongoing moves to diversify the agricultural base. In recent years, horticulture has become more important; significant exports include apples, citrus fruit, kiwifruit, stone fruit, squash, and many other products. Wine production has increased rapidly in the last 2 decades, and New Zealand's reputation for its wines is growing.

Traditional sectors of agriculture still have great potential. With the devaluation of New Zealand's currency in recent years, producers of dairy products, meats, and wool have found their products very competitive on the world market and have increased their incomes substantially. Further, it is expected that as international trade tariffs decline, New Zealand will gain access to markets in which its products will be even more competitive.

Manufacturing has increased dramatically since World War II. With a comparative advantage in food processing, this sector led the post-war manufacturing boom. With the protectionism of the 1950s and 1960s (i.e. high tariffs/taxes on imports), manufacturing diversified into many areas of import substitution , including textiles and footwear, home appliances, furniture, machine construction, automobile assembly, and many others. Following an economic restructuring program that began in 1984 with the election of a new government, some of these industries were exposed to increased international competition with the progressive reduction of tariffs. Some have done well, others have declined, and one has disappeared (the automobile assembly industry).

Most industrialized countries have had the greatest growth in services in the late 20th century. By 1998 in New Zealand, services accounted for 69 percent of gross domestic product (GDP) and fully 65 percent of wage and salary employment. Important sectors include government services such as general administration, education, and health. In the private sector , major growth areas have been tourism and specialized services in business advice, real estate, computing, and telecommunications. Tourism is often seen as the industry of the future, and New Zealand has experienced a steady increase in visitor numbers and an expansion of tourist infrastructure . Financial services have been especially affected by deregulation after 1984, and much of that sector has been acquired by foreign corporations.