New Zealand has a modern, developed economy. The country has a high standard of living, ranking 19th on the 2005 Human Development Index and 15th of The Economist’s 2005 world-wide quality-of-life index. Since 1984 successive governments have engaged in major macroeconomic restructuring, transforming New Zealand from a highly protectionist and regulated economy to a liberalised free-trade economy.

During the late 1980s, the New Zealand Government sold a number of major trading enterprises, including its telecommunications company, railway network, a number of radio stations and two financial institutions in a series of asset sales. Although the New Zealand Government continues to own a number of significant businesses, collectively known as State-Owned Enterprises (SOEs), they are operated through arms-length shareholding arrangements as stand-alone businesses that are required to operate profitably, just like any privately owned enterprise.

Unfortunately, due in part to the sudden transition to a market economy, an economic bubble developed in the New Zealand stock market starting in 1984. This burst in October 1987 and the total value of the market halved within a year (it has still to recover this lost value). The effect of this bubble was a period of poor economic growth which lasted until the mid 90s. It also led the government to begin a programme of massive immigration to boost GDP. However, since 1999 New Zealand has enjoyed a period of relatively strong and sustained growth, and contained inflationary pressures.

The current New Zealand government’s economic objectives are centred around moving from being ranked among the lower end of the OECD countries to regaining a higher placing again, pursuing free-trade agreements, “closing the gaps” between ethnic groups, and building a “knowledge economy.” In 2004 it began discussing free trade with China, one of the first countries to do so.

New Zealand is heavily dependent on trade-particularly in agricultural products-to drive growth, and it has been affected by global economic slowdowns and slumps in commodity prices. Since agricultural exports are highly sensitive to currency values and a large percentage of consumer goods are imported, any changes in the value of the New Zealand dollar has a strong impact on the economy. Its primary export industries are agriculture, horticulture, fishing, forestry and information technology. There are also substantial tourism and export education industries. The film and wine industries are considered to be up-and-coming.