Background :
New Zealand (in Maori, Aotearoa, “Land of the Long White Cloud”), independent island country in the South Pacific Ocean, a member of the Commonwealth of Nations, situated about 1,600 km (1,000 mi) south-east of Australia. It comprises two large islands—the North and South islands—separated by the narrow Cook Strait and numerous smaller islands, including Stewart Island to the south of the South Island. The area of New Zealand is 270,534 sq km (104,454 sq mi). Overseas territories governed by New Zealand are the Ross Dependency, in Antarctica, and Tokelau in the Pacific Ocean, to the north of Samoa. The Cook Islands and Niue, also in the Pacific, are self-governing territories in free association with New Zealand. The capital of the country is Wellington, the largest city Auckland; both are located on the North Island.


Economy :
New Zealand’s gross national product was about US$52,248 million in 2002, giving an average income per head of US$13,260. Gross domestic product (GDP) during the same period was about US$58,581 million. Agriculture and the export of wool, meat, and dairy products provided the foundation of New Zealand’s development into a modern economy. Agriculture is still important and traditional products still dominate foreign trade, but the New Zealand economy has undergone profound changes, particularly in the past 20 years. In 1998 agriculture contributed 7 per cent of GDP, compared with 17 per cent from manufacturing, and approximately 67.8 per cent from services. In 1988 tourism became the single largest source of foreign exchange; receipts from 2.04 million visitors a year generated more than US$1,451 million in 1997. In 2001 total government revenue amounted to US$15,266 million, while government expenditure totalled US$14,958 million.

Since the mid-1980s the New Zealand economy has been transformed from one of protectionism and regulation into one of the most deregulated and open economies among the developed nations. The changes were aimed at restoring economic growth, after nearly two decades of stagnation, controlling inflation, and reducing the budget deficit and New Zealand’s heavy public debt. By the mid-1990s several of these objectives appeared to have been achieved, or to be near achievement. Inflation was down to under 2 per cent a year, from more than 11 per cent in the late 1980s. Economic growth was about 6 per cent in 1994, compared with about 2 per cent during the 1980s. Public debt had been reduced from more than 50 per cent of GDP to 38 per cent. The budget had gone from a steady deficit to an operating surplus, but this shift was achieved in part by large cuts in public spending, particularly in New Zealand’s comprehensive welfare state system. Medical care is no longer completely free, the value of pensions has been reduced, and means testing introduced for other benefits. Deregulation and economic reform have also led to an increase in unemployment. In 1998 and 1999 economic growth in New Zealand slumped as a result of the Asian economic crisis.

Language :
English and Maori are the official languages of New Zealand, although the country is predominantly English speaking. Almost all Maori speak English; about 50,000 (12 per cent) are considered fluent Maori speakers. Other Polynesian and European, as well as Asian, languages are spoken by a small percentage of the population.

Religion :
A majority of New Zealanders describe themselves as Christian. The primary denominations are Anglican (18 per cent), Presbyterian (13 per cent), and Roman Catholic (14 per cent). Methodist and other Protestant denominations are also represented. Most Maori are members of the Ratana and Ringatu Christian Churches. Jews, Hindus, and Confucians constitute small minorities. About 26 per cent profess no religious faith.

Energy :
Approximately 58 per cent of New Zealand’s electricity is produced by hydroelectric facilities; the rest is generated in plants burning coal or natural gas, or using geothermal power. Geothermal steam in the volcanic central plateau area of the North Island is becoming an increasingly important power source. There are major hydroelectric facilities on the Waikato River, on the North Island, and on the Clutha and Waitaki rivers, on the South Island. A cable under the Cook Strait carries electricity from the South Island to the more heavily populated North Island. In 1997, New Zealand’s annual electricity output totalled approximately 34.88 billion kWh.

Currency and Banking :
When decimal currency was introduced in New Zealand in 1967, the New Zealand dollar replaced the New Zealand pound as the monetary unit. The New Zealand dollar is divided into 100 cents (NZ$1.42291 equalled US$1; early 2004). The Reserve Bank of New Zealand (founded 1934) is the bank of issue and is responsible for the implementation and formulation of monetary policy. In the early 1990s it was made independent of government control, with a contract to keep inflation below 2 per cent.

The financial system also includes registered commercial banks, merchant banks, regional trustee savings banks (grouped under the Trust Bank), the Post Office Savings Bank (Post Bank), building societies, finance companies, and a stock exchange. The financial sector was dominated by a few state-owned and foreign banks until the early 1980s, when it was deregulated as part of the government’s economic restructuring programme. The sector has since become highly competitive; in 1996 there were 15 registered banks, including several that are foreign-owned.

Commerce and Trade :
New Zealand’s economy is heavily dependent on trade. Until the early 1970s its most important trading partner was the United Kingdom, and meat, cheese, and butter dominated its exports. However, in 1973 the country’s access to its main market was severely curtailed when the United Kingdom joined the European Community (now European Union). New Zealand also had to face increasing protectionism by industrialized countries against its agricultural exports. As a result, it has fundamentally reoriented the direction of its trade and widened the range of its exports. Australia, Japan, and the United States now account for almost half of all trade by value; the United Kingdom about 6 per cent. In addition, trade with other places in the Pacific, such as South Korea, Hong Kong S. A. R., and Taiwan has increased rapidly during the 1990s. In 1996 New Zealand’s exports totalled about US$13,270 million, compared with imports of about US$8,056 million.

Agricultural and fish products account for about 43 per cent of total export earnings; 26 per cent of agricultural exports are now non-traditional products, notably fish, fruit, and vegetables. Official statistics show that non-agricultural exports are also starting to take off; between 1989 and 1994 the volume of non-food manufactured exports grew by 70 per cent. New Zealand’s most significant imports are machinery and manufactured appliances, electrical equipment, vehicles, crude oil, plastics, pharmaceuticals, metals, and chemicals. Until the early 1980s New Zealand’s domestic economy was heavily protected. Since then, most tariffs have been removed and it is now one of the world’s most open economies; about half of manufactured goods imports come into the country free of duty.

Transportation :
Public transport facilities are good even in remote districts. In 2001, New Zealand had about 92,207 km (57,295 mi) of roads and 4,439 km (2,470 mi) of railways operated by New Zealand Rail, which was privatized in 1993. In the mid-1990s there were more than 2.49 million registered vehicles, of which about 1.65 million were passenger cars; there is a ratio of 578 passenger cars per 1,000 people. Ships provide fast services between the North and South islands, and along the coasts. The country’s principal ports are Auckland, Wellington, Tauranga, Lyttelton (near Christchurch), and Port Chalmers (Dunedin). Air transport is widely used, with airfields located throughout the country to serve private pilots. Air New Zealand is the national carrier; in 2001 the government rescued the airline and now has an 83 per cent stake in it.

Communication :
Until the late 1980s most communications services were operated by state-owned organizations. However, in 1991, the Telecom Corporation was privatized. The previous year, pay satellite television had been introduced to supplement Television New Zealand’s two channels, and TV3, the first commercial channel, which was launched in 1989. In 1991 Canterbury Television, New Zealand’s first private regional channel, began transmissions. In the early 1990s New Zealand had about 1.5 million telephone subscribers (in 1997 there were 486 telephones per 1,000 people), and an estimated 4 million radio and 2 million television receivers. There are 28 daily newspapers with a combined circulation of about 1,369,000; the Auckland-based New Zealand Herald is the only paper with a truly national circulation.

Government :
New Zealand is a parliamentary democracy within the Commonwealth of Nations. The head of state is the British monarch. The governor-general is the monarch’s appointed representative in New Zealand. New Zealand’s political and judicial system is closely modelled on that of the United Kingdom. Like the United Kingdom it has no written constitution, and constitutional practice is based on tradition, convention, and precedent.

Population :
New Zealand was one of the last significant land areas suitable for human beings to be settled. The first settlers were Maori, a Polynesian people who arrived about 1,000 years ago. European settlement did not begin until the 1820s, but today approximately 72 per cent of New Zealanders are of European (specifically British) descent. Just over 15 per cent (1996 census, 523,371) of the population is Maori. Another 5.8 per cent comes from other Pacific Ocean islands, notably Samoa, the Cook Islands, Tonga, and Tokelau. Other ethnic groups, particularly Asian, make up the rest of the population.