With
steady growth, rising investment and modern industries, New Zealand
is the new place to do business
everal
events over the past year have conspired to persuade many people that
New Zealand is a worthy choice for doing business or taking a holiday.
For a small country with a small population, a long way from anywhere,
it delivers a strong punch.
In Britain, New Zealand’s image has long been that of a major supplier
of wool, meat and dairy produce. It has also been a favoured destination
for emigrants – the vast majority of its European population has
ancestry in Britain. And then there is the stunning landscape.
But
what is now making the world sit up and take notice is New Zealand’s
rapid shift from being a primary producer to a nation of modern, 21st-century
players in hi-tech, creative industry and services.
Anyone who has seen Lord of the Rings, filmed in New Zealand, could
not fail to be impressed by the dramatic scenery. The film has certainly
been a catalyst for people to travel to the other side of the world
and – since it is part of a trilogy – we’ll be getting
some reminders about those fabulous views again and again.
The events of September 11 have also led to an upsurge in interest.
The country’s reputation for stability, and a clean and safe environment,
where new business is encouraged, is a powerful combination for potential
investors and migrants alike.
On
the economic front, New Zealand is undergoing a period of steady growth
and renewed exploration for oil and gas. The government’s finances
are in good shape and gross domestic product (GDP) is forecast at 2.4
per cent this year, rising to 3.4 per cent in 2003.
The US, Australia and Japan account for about half of New Zealand’s
exports, and while the slowdown in the US economy will have some effect,
Australia’s has proved remarkably resilient. Prospects for Japan’s
beleaguered economy remain poor, but New Zealand is widening its global
markets to drive up exports. This year’s foreign exchange earnings
from tourism are likely to be similar to 2001’s.
Inflation has been consistently low and is expected to be about 2.3
per cent this year, falling to below two per cent in 2003. Huge investments
are being made in oil and gas, in start-up businesses and incubators,
and investor interest is coming from all over the world.
From
primary producer to 21st century player
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Clark
‘What
is emerging is an economy with First World characteristics’
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The
radical restructuring of the economy in the 1990s has proven to be highly
successful. By the end of the decade, New Zealand had one of the highest
growth and lowest inflation rates of any member of the Organisation
for Economic Cooperation and Development (OECD); a reversal of its position
in the 1980s.
Prime minister Helen Clark
says: “The big push by our government has been this economic transformation
– how to develop a more innovative economy that adds value to everything
you do. We are trying to diversify and encourage new and emerging exports
so we are not so exposed to the vagaries of the commodities market,
which we traditionally have been.”
Primary
industries still underpin the economy, but alongside these are a bur-geoning
wine export market, aquaculture, marine design and yacht-building, film
and television, fashion, creative industries and niche manufacturing.
Education services have become a billion-dollar export earner within
a decade alone, and other service industries are also growing.
“Tourism is up there with the biggest of the primary industries
as a huge earner,” says Helen Clark. “It is a very sophisticated
industry now, with a lot of different asp-ects to it – cultural
tourism, wine tourism, adventure tourism and eco-tourism.
“What is emerging is an economy that is getting First World characteristics
with First World living standards. We are making huge strides away from
what once held us back – our over-reliance on commodities,”
she adds.
The
government has set up a venture capital fund to kick-start small businesses
and boost the tourism industry. “We have put $2 million, which
is a lot of money for New Zealand, into a joint venture with the private
sector to encourage people to travel here,” she says. “We
are hoping to get our markets back.”
Lord of the Rings has done much to boost interest. Filmed at some 40
locations, it is the country’s biggest-ever movie production. It
was also largely made in New Zealand studios, says Helen Clark, adding
that many Indian movies are also made here because the mountains are
like the foothills of the Himalayas.
The
prime minister says that in the past, foreign investment tended to be
for acquisitions rather than new development. “We are looking for
green-field investment in targeted sectors. In particular, we are targeting
the following: biotechnology, where we have a real strength and can
expand our capability; ICT (information, communications and technology);
and the creative industries.”
Six major players in the ICT sector are earning nearly as much as New
Zealand’s wool industry. And, in another example of growth, the
wine industry, which was worth $25 million-a-year in exports five years
ago, now earns $400 million a year.
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Anderton
‘The
regions are booming because the heartlands have diverse
industries’
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Minister
for economic development Jim Anderton
says: “The regions are booming because their heartland economy
is based on a very diverse range of industries, and the regions now
know that the government is a genuine partner in their development.”
Helen Clark adds: “There are only
3.8 million of us and we have just got to keep working away at it. A
lot of people say that New Zealand punches above its weight. For a small
country a long way from the major markets, I believe we have an amazing
image. Overwhelmingly, New Zealand’s image is of a country with
no enemies, a lot of friends and some remarkable achievements.”
Helen Clark, who leads the Labour Party in a coalition government, has
been partly responsible for the renewed interest in the country by travelling
the world to get her message across. Her visit to Washington in March
was regarded as a foreign policy triumph that resulted in warmer relations.