Evolution of Economy
Discuss about the Regional and Local Economic Development.
The world map depicts New Zealand as two islands lying gloriously on the south west part of Pacific Ocean in the Southern hemisphere of the Earth. The geographical territory of the country majorly consists north and south islands with presence of almost six hundred smaller islands and surrounded by sea and oceans. This not only led the country to possess rich biodiversity and natural resources but also made it remote and disconnected from the world. No wonder why the landmass was explored and settled much later by the human race as compared to other places of the world.
Employment opportunities along with the flexibility in citizenship and rights of residence in New Zealand have led to substantial increase in migration of Pacific peoples into the islands. The change in the policies of the government of New Zealand is taken in order to boost the industrial growth and economic development of the country. The history of origin of the nation dates back to approximately700 years. It was the time about 1250-1300 BC when the Polynesians started living in these islands now known as New Zealand. They developed a distinct Maori culture which is found to be the most primitive existence of human race on the rich land masses. The European explorations started around 1642 with Dutch being the first non-natives to find the nation. Later in 1840 a treaty named Treaty of Waitangi was signed between British and Chief of Maori clan to officially declare the nation operative under sovereignty of Britain. Just years later the nation became British Empire’s colony and took 66 years to become a Dominion of present time in 1907. The country is home to rich and diversified ethnic groups all over the world but Europeans who consists of 74% of the total population take higher proportion. Maori follows them by contributing almost14.9% to the population and 11.8% consisted by Asians (Kelsey, 2015). The pacific people are the 4th largest ethnic group to reflect the population of New Zealand that also by 7.4% as per the recent estimates (2013). There was a dearth of skilled labor in the island and this gave rise to talent gaps to combat the situation, During the 1950s immigrants from Denmark, Germany, Switzerland and Austria settles in the islands in to find occupation in specialized fields around this time new Zealand also signed an accord with Netherland that was bilateral in nature to recognize and give shelter to the skilled immigrants.
The existence of these pacific people in new Zealand can be traced back in the ancient time of formation of the country and they mostly origin from different small islands of Pacific Ocean surrounding the nation.
Throwing light on the ancient economic condition of the nation prevalence of subsistence economy is evident prior to the explorations and colonization made by Europeans and British respectively. Existing sub-tribe Hapu was the basis of economic unit. The exploration by various trading ships of France, America, and Britain embarked in 1790 (Rodrik, 2014). The ships loaded with European goods were started being traded with the Maoris to meet their basic need of food, water, shelter. Various metal tools were also exported to the islanders. Initially the settlers derived their food from the Maoris. After the nation became British colony, the existence of self dependent farmers increased. The large-scale agricultural activities transformed the landscape of the country to well nurtured farmland from dense forests. Apart from agriculture, mining was another important economic activity present in that time which is evident in the quarrying of minerals and metals. The discovery of gold in Otego however marked a turning point of the economy of New Zealand as this created a hue and cry worldwide for these precious metals that set the wealth of the nation. This initiated a Gold Rush in 1861 that remarkably changed the economic condition owing to two fold increases in population and fivefold increase in the volume of trade.
Impact of Economy on Pacific People
In 1870 the nation saw its first economic collapse in form of long term depression stemming from larger burden of borrowing toward the end of gold rush in order to conduct various programs and investments targeting public welfare and infrastructural development like rail and roads. The depression led to mass unemployment and huge emigration to Australia.
.However the economy bounced back to boom again in 1890 and the next hit it faced was the Great Depression of 1929 in the post world war global condition. Even though the country is small, it has trading ties with many countries giving UK top position.
A significant setback of the economy took place when the great depression hit the world market. In the year 1929 when the global market had shrunken the economy of New Zealand also went down with it, already the economy was facing troubles post World War I. The relation between the British had become strong over the years and the maximum amount of international trade was being taken place in between Britain and New Zealand (Jeffs, 2015).
Economic development in New Zealand is affected by several internal as well as international factors. Since the establishment in the year 1934, the Reserve Bank is the most important financial institution in the New Zealand economy. Economic growth is referred to as the rate of development and improvement of the national income of a country, which is measured by the yearly percentage rate of change of country's gross domestic product. Development of the economy has its own positive and negative impacts on the lives of the people of New Zealand and pacific.
Over the passage of time the manufacturing of the nation evolved which was mostly confined to local small activities. Large factories produced farm and resource processing including gas conservation, timber processing, aluminum &steel production and so on. The joining of European Union by UK compelled the nation look for substitute for its export, which in later period became the nations like Australia, China, Japan and US. The labor reform of New Zealand brings forth the new turning point that created much debate so as to assess the effect of the reforms focused mostly on removing tax from imports. These led to higher unemployment in the economy hurting domestic producers. 200 onwards the country has been more diverse along with being a string market economy having compact and integrated global connection achieved through international trade. The service sector of the economy consists of 63% of the total GDP indicating dominance of the sector in outlining national economic output.
Some of the positive impacts are: elevated the standard of living among the people of New Zealand and pacific region. Before the advent of the European and the British culture the people of these areas used to trade for their own selves and did not aspire to work and build a civilized society. Legends and storytelling were the fundaments of the early people living in this region. But, there has been an unparalleled improvement in living standards in most parts of the pacific region after the advent of the European culture. Mannerism, social behavior, development of cities and town, improved transportation and increased usage of technology etc. For example, once the facility of a reading light was considered to be a luxury and was only for the rich who could afford the technology of light and electricity, today about 75% of the world has access to electricity in their homes (Scott & Boyd, 2016).
Secondly, poverty is reduced due to the development in the economies. There is a positive relationship between economic growth and the rate of poverty reduction in developing countries. Pacific people have gained trade insights and expertise from the European and British people who had come to this region in order to explore business opportunities. With money flowing in to the economy poverty decrease considerably. During the great depression the economy face challenges and many people were left with negligible resources, however the country stoop up and changed the course of the economic development.
Thirdly, the consistently higher literacy rate prevailing at 99% over the past years shows the remarkable impact of social and economic planning and programs on the pacific people of New Zealand. This further reflects the huge planned investment and good structure of the education system.
Fourthly, Development and improvement of technology and technical infrastructure is another positive impact of economic growth in the pacific region. The money in the deposit of the government of the pacific region has increase with economic development which has enabled large investments in technological infrastructure. There are also several private investors in technology which has enabled decreased rate of electricity, telephone charges. Consumption of internet has increase over the past decade owing to the investment in this sector which has lead to a decreased rate of data. Mobile devices and connectivity has also improved exponentially with the improvement in the economies of New Zealand (Rodrik, 2014).
Some of the negative impacts of the development of the economy are significant in New Zealand. Firstly, environmental depletion and exhaustion of natural resources in the region is one of the most crucial negative impacts of economic development. Economic improvement paves the way towards environmental depletion and this is bound to reduce the sustainable rate of development. For example: the cutting down of the rain forests through deforestation in order to build houses and industries, the over use of fish stocks and pollution is a significant issue which leads to the loss of natural habitat and in turn loss in several species of flora and fauna (Kelsey, 2015).. The bio-diversity exploitation from the construction of new roads, hotels, malls and industrial estates are the impact of economic growth and development. In order to develop and promote urbanization and industrialization he forests and the tress are cut and natural habitat for many flora and fauna has been destroyed which has further led to extinction of various species as well for example moa. Various types of pollution that are being faced by the people of New Zealand is the direct effect of economic development. Air, water and land pollution have a significant impact on the natural balance of any area (Nel, 2015).
With the development of the economy one of the major impacts that have a negative effect on the economy of New Zealand is the increased inequality in the income of the people. Rich people becoming richer and the poor are becoming poorer. The gap in between the rich and the poor is increasing day by day due to the development of the economy. Differences in the income of the people lead to economic incompetence, discouragement of social stability and solidarity and its unfairness to some sections of the society in general. Increased inequality persuades rent seeking behavior, the people with resources concentrate on encouraging results that help them too be more productive. However, improved investments in public health, education and other relevant infrastructure could help reduce this adverse effect of income inequality in New Zealand. Income inequality is a direct outcome of unemployment as of 4 Aug 2011, New Zealand has an unacceptable unemployment rate of 6.5% or 154,000 unemployed (Rashbrooke, 2013).
The overall wellbeing of the pacific people can be assessed based on the economic performance of the nation and its ability to provide good social, political and economic services to its citizen. The statistics revealing the facts of the economic indicators helps get a snapshot of the economy achieving reduced poverty and income inequality, increased health and education services captured through lower morbidity rate and higher literacy rates, higher incomes. Growth of human resource are based on these indicators that collectively conclude whether the national people are contended and living a happy and healthy life having access to services and facilities maintaining standard and quality (Houkamau & Sibley, 2014).
The first and foremost impact on the pacific people residing in New Zealand by the national economy is growing income levels owing to annual GDP growth of 3.5%. Tourismalong with agriculture and horticulture, forestry and fishing have a significant impact on the growth of the economy in New Zealand. The GDP per capita is 39,426.62 USD, which indicates upper income level of the country as whole. The increase in income leads to greater expenditure on basic amenities of life which further makes the lifestyle improved and better over time. It enhances the ability of affording education and improved health services.
The estimated Gini coefficient of 0.32 reflects existence of much lower rate of income inequality that reflects good health of the economy showing lower bias in resource distribution among population. The current death rate in the country is 7.4 deaths/1,000 populations which is much lower compared to other nations of the world. The average life expectancy of the population as whole is 81.46 years higher than average of 60-70 years even in first world countries of world. The reason behind such higher life years is the improved health care service backed by technological advances. A higher literacy rate of 99% reflects the feasibility and accessibility of pacific people to education, which has remained consistent over years.
This has added to the enhanced quality of the human capital. The important issue that the economy of New Zeal land has borne for years from the ancient time is the unemployment, which is still 5.7% of the labor force showing a greater estimate compared to global countries (Rashbrooke, 2013). The social as well as economic impact on the pacific people is rightly captured by the Human development Index value which is close to 0.915. The greater the economic performance the higher is the standard of living in presence of lower inequality and national security.
Even though various inward-looking economic policies and global financial turmoil slowed down the economic efficiency and flexibility of the country it has always managed to bring back the stability adopting significant policies and expanding the sectors that has competitive advantage.
Fairburn, M. (2013). The ideal society and its enemies: Foundations of modern New Zealand society, 1850-1900. Auckland University Press.
Houkamau, C. A., & Sibley, C. G. (2014). Social identity and differences in psychological and economic outcomes for mixed and sole-identified M?ori. International Journal of Intercultural Relations, 40, 113-125.
Jeffs, L. (2015). Financing community: economic development in New Zealand.
Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget Williams Books.
Nel, E. (2015). Evolving regional and local economic development in New Zealand. Local Economy, 30(1), 67-77.
Rashbrooke, M. (Ed.). (2013). Inequality: A New Zealand Crisis. Bridget Williams Books.
Scott, R. J., & Boyd, R. (2016). Collective impact in the Public Sector: the New Zealand Results approach.
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