Many Americans would recognize New Zealand’s dramatic landscape from Peter Jackson’s Lord of the Rings trilogy, and more recently, The Hobbit – especially the idyllic free country known as The Shire, a place that survives the turmoil around it by remaining courageously true to its principles.
Perhaps even more dramatic than New Zealand’s physical landscape, however, is its economic landscape. With a rank of the 4th freest nation in the world according to the 2013 Index of Economic Freedom, produced by The Heritage Foundation and The Wall Street Journal, the country has one of the most efficient entrepreneurial environments on the globe.
New Zealand’s currency and business optimism are on the rise, with new home construction expanding to the highest levels since the Christchurch earthquakes and the trade surplus rising to its highest level since 1991.
The nation’s economy was affected by the global recession, but economic growth has continued at an average rate of 2 percent per year—impressive, considering by some forecasts that means New Zealand would grow faster than Japan, the United Kingdom, and Canada.
“New Zealand’s employment rate is very high in comparison to other countries, with over three-quarters of all New Zealanders aged 20 to 64 in work,” said Prime Minister John Key in a speech to parliament this week.
Before Key’s speech Tuesday, some New Zealanders were calling for a shift away from the successful policies of freedom toward those advocated by U.S. President Barack Obama. New Zealand Herald columnist Mai Chen writes,
When a man called Barack Hussein Obama was elected for a second term as President of the United States, and used his inaugural speech to talk about individuals being happy, and being led by the Government to be happy, we can be confident that he has his finger on the pulse of an international trend.
Translation: the government should do more (intervene in the economy and abridge individual choice) in order to ensure happiness (rather than the “pursuit of happiness” in America’s Declaration of Independence).
Another popular New Zealand news website asked readers “how to fix the economy,” and some of the responses they published included recommendations like, “Provide for a liveable minimum income for each person or family to ensure everyone in New Zealand is able to live with dignity.” Another citizen wrote, “We need to tax investment property appreciation and close loopholes for anyone owning a business.”
Fortunately for the people ofNew Zealand, the governing party is not heeding these calls. Instead, the prime minister outlined a continued pro-growth, pro-free market agenda, including several policy prescriptions the United States might do well to consider:
- Reducing deficits and debt:New Zealand will “return to an operating surplus in 2014-15[,] then start to reduce debt as a proportion of GDP.”
- Expanding free trade: “The Government will this year continue to pursue high-quality trade agreements to ensure improved market access for New Zealand’s goods and services.”
- Developing energy resources:New Zealand will “continue to encourage development ofNew Zealand’s rich oil, gas and mineral resources.”
Instead of giving in to pressure for more spending, heightened protectionism, and restrictive environmental rules, New Zealandhas renewed its commitment to the principles of freedom outlined in the 2013 Index. Instead of seeking to follow the “pulse of the international trend,”New Zealand has remained economically competitive by conserving the economic deregulation of the 1980s and 1990s.
Much like the idyllic Shire that was filmed there, New Zealand is an example of a nation that weathered a time of global uncertainty by preserving its principles: economic freedom and entrepreneurship.