Backbencher

The colonies of Australia and New Zealand, though under British monarchical rule, managed to persist economically through three distinct influences: home market, the realignment of trade relations in the late 20th century, and the tradition of state activism.

Much of the early industries of New Zealand developed around an isolated lifestyle such as whaling and sealing, later extractive industries such as flax, kauri and gold exporting became important resources. Generally the economic principles of New Zealand emphasized exports and relied on a planned economy. Was it the New Zealand miracle? Not really. New Zealand has a long history of state intervention and by 1984 the Labour government had gone Neo-conservative, becoming a laboratory of free markets and privatization. Eventually New Zealand developed the freezing works and the cooperative dairies. New Zealand, however, is not rich in raw materials and thus lacks a potent domestic market. Recent developments in the New Zealand market include horticulture, kiwifruit, viticulture, and hydroelectric development.

In Australia, the emphasis lies in winter wheat and mining, particularly gemstones such as opals and sapphires. The manufacturing potential of Australia is also low. Like New Zealand, Australia has a limited domestic market. Overall both island nations are unlike the U.S. with a great portion of the industry being extractive. Both nations are not mature avoid the reliance and ties to Europe, trying to develop the Pacific Rim.

I think it is interesting that even though dependent on the British monarchy, Australia and New Zealand managed to create an economy independent of the crown. While New Zealand did have some problems with government support, their creation of an export-dominated economy helped put them on the map. I think that in the next few years, the reliance on the Australia and New Zealand economies will grow with in the United States. It is an interesting proposition to think that the United States, once a British colony, has been providing a national market for Australian and New Zealand goods. What is a concern however is how the gross national product (GNP) holds up when they begin to have such a strong export situation. Can New Zealand and Australia manage to maintain the globalized world?