Economy of New Zealand

Dependent upon overseas trading, New Zealand main exports are agricultural, meat, wool, fruits and vegetables, and dairy products. The country has targeted niche markets over the years and has increased exportation in the industries of horticulture, fishing, manufacturing, forestry, and tourism. All of these industries have become more significant to New Zealand’s economy whose largest trade markets are with Australia, Japan, and the United States.

In the past 20 years, the government of New Zealand transformed the country from an agrarian economy, which was dependent upon British market access to a more industrialized, free market economy that can compete globally. A free market economy is one in which businesses and consumers make their own choices about what they will purchase and what to produce. The manufacturing industries such as food processing, fabrication of metals, and wood and paper products are still strong for New Zealand’s economy; however, manufacturing in the country has declining in recent years. The country has a substantial amount of hydroelectric power and considerable reserves of natural gas.

Currency

The New Zealand currency is the dollar. Sometimes it is noted as NZ$ to differentiate it from other dollar-based currencies. Informally, New Zealanders refer to the currency as the Kiwi Dollar. Until 1967, the British pound was used as the currency of New Zealand. When the country began to use decimals with the currency, the pound was replaced by the dollar.

In 1967, bank notes were introduced by the Reserve Bank of New Zealand. The bills were available in denominations of one, two, five, ten, twenty, fifty, and one-hundred dollars. In 1983, the fifty dollar note was added. In 1991, the one and two dollar notes were revoked. The Queen, Elizabeth II, had her portrait featured on the first two series of notes. The reverse sides of all notes portrayed the native plants and birds of New Zealand.

Coins were also introduced at this time and were available in denominations of one-cent, two-cents, five-cents, ten-cents, twenty-cents, and fifty-cents. The one and two-cent coins stopped being minted in 1987 and through a process called Swedish Rounding, all cash transactions were rounded to the nearest five-cents. In 2005, the Reserve Bank also opted to stop producing and using the five-cent coins which became effective in October 2006.

Interestingly, the bank notes produced in New Zealand are made of plastic polymer since 1999. At first, the choice not to use traditional paper notes was met with suspicion by the public. However, once the people had discovered running the notes through the washing machine caused little damage, they began to be grateful for the change. Additionally, security has increased because counterfeiting the notes is next to impossible.  People can distinguish the difference immediately between a fake and real note.

Employment

As of 2007, New Zealand is experiencing labor shortages. They have a record-low unemployment rate of 3. 8%. According to the New Zealand Government, the challenge for country’s economy is improving productivity