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OpEdNews Op Eds    H4'ed 3/15/11

New Zealand: Experiencing a Second World Country

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Obviously there is both an upside and a downside to living in New Zealand. All developed and developing countries are forced to operate under the same global capitalist system, which is under near absolute control of multinational corporations, via the WTO, the Global Agreement on Tariff and Trade (GATT) and other free trade treaties and the draconian financial policies enforced by the World Bank and International Monetary Fund. New Zealand is no exception and has many of the major economic and social problems other developed countries are experiencing. In a few areas, New Zealand has adopted some of the worst features of global capitalism, which results in uniquely negative consequences for the New Zealand public. However, for the most part, Kiwis retain their commitment to the "democratic socialism" they brought here from Europe. This, in my view, results in a society and culture that tends to be far more humane than is found in the US.

Nevertheless, as a capitalist industrialized nation, New Zealand shares a number of pernicious social problems found in all modern capitalist countries:

  • Worsening income equality -- only 9% of Kiwis have incomes above $70,000 ($53,000 in US dollars), whereas nearly one third earn less than $14,000 ($10,5000 US).
  • Irrational and blind adherence to a continuous economic growth paradigm. In a small country like New Zealand, this has much more serious impact, in terms of toxic soil and water contamination and habitat destruction due to mining and aggressive dairy expansion. Over the past two decades, the majority of New Zealand's picturesque waterways have become unsuitable for swimming owing to farm effluent and fertilizer run-off.
  • Slow uptake of renewable energy production (owing to nonexistent finance capital or government subsidies)
  • Slow uptake of growth management (sprawl prevention strategies) essential to the development of cost effective public transportation and food and water security.
  • Slow uptake of the food miles concept, owing to an economy that is totally reliant on tourism and exports (that sells dairy products, lamb and beef to China to survive).
  • Heavy mainstream media emphasize on stereotypical female roles, resulting in massive pressure on New Zealand women to look young, thin and sexually attractive. Fortunately cosmetic surgery is still much less common here than in the US -- there simply aren't enough Kiwis who can afford it.
  • Massive household debt (150% of disposable income -- largely owing to chronic low wages).
  • Factory shut-downs and movement of well-paid union and manufacturing jobs to overseas sweat shops.
  • Diets which are excessively dependent on foreign food imports, as opposed to more sustainable reliance on locally and regionally produced food in season.
  • Factory farming of pigs and chickens, which have to be fed antibiotics daily, as the cramped quarters cause a large number of animals to be diseased. Owing to heavy, sustained Green Party lobbying, sow stalls have been banned as of 2015. Nevertheless, thanks to the high prevalence of battery hen operations in New Zealand (and constant exposure of chickens to feces), a high proportion of fresh chicken sold in supermarkets is contaminated with salmonella and/or campylobacter (which, contrary to popular misconception isn't destroyed by freezing but not cooking). Both organisms cause food poisoning in humans. New Zealand enjoys the highest per capita incidence of campylobacter infection in the world.
Battery hens
Battery hens
(Image by Scoop)
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An Early Laboratory for Neoliberal Reforms

Overall I have enjoyed numerous lifestyle advantages living in New Zealand. There are a few notable exceptions, of course, beyond the emotional isolation of being separated from my family and American friends. Most relate, either directly or indirectly, to the role New Zealand played in the 1980s as the Chile of the South Pacific -- that is as a "laboratory" for the neoliberal reforms subsequently implemented by Ronald Reagan and Margaret Thatcher.

Theoretically neoliberalism is a "market-driven" approach to economic and social policy that stresses the efficiency of private enterprise by opposing any government regulation of corporate abuses or any government role in providing public services other than defense and law enforcement. In practice, neoliberal policies have been universally pro-corporate and anti-free market, promoting vast amounts of legislation (tax law, government contracts, and direct corporate bail-outs) that favor large corporations at the expense of both small business and ordinary citizens.

The University of Chicago is usually credited as the birthplace (in the 1960s) for neoliberalism and Milton Friedman as its father. A frequently overlooked aspect of the 1973 CIA-sponsored coup in Chile was the direct role University of Chicago economists played in advising Chilean dictator Augusto Pinochet on the draconian neoliberal economic and social policies enacted by his brutal regime. New Zealand played a similar role in the early eighties, by (voluntarily?) trying out neoliberal reforms that were later adopted by Ronald Reagan and Margaret Thatcher.

New Zealand: a Second World Country

A relatively poor, second world country, New Zealand presently ranks 22nd in GDP for OECD countries. Americans are always struck by the high cost of living here relative to wages and salaries. Professionals earn far less -- a sacrifice most American and British doctors, teachers and managers are happy to make for New Zealand's "lifestyle" advantages. Although average income is much lower in New Zealand than in most of the developed world, the cost of basic necessities is just as high -- and at times much higher, in the case of gasoline, home energy costs, "export" fish and meats, and fresh vegetables. Central heating is virtually non-existent -- in part because so few people can afford it. Just so no one has any illusions about our climate, the New Zealand winter is relatively short. However except for the far north, it gets just as cold here as in London, Washington D.C. or New York City.

In New Zealand They Call It Rogernomics

In part New Zealand's relative loss of wealth (in 1975 it was 10th in per capita GDP) relates largely to a 1980s policy decision in Britain, which was always the main importer of New Zealand lamb and dairy products, to favor EU over Commonwealth trading partners. However many New Zealand economists also blame draconian reforms implemented by Minister of Finance Roger Douglas in the mid-eighties. "Rogernomics," as it's known, was directly responsible for the institutionalization of a large and steady wealth transfer (as profits and dividends) to overseas corporations. This in turn has led to a large, chronic accounts deficit (negative balance of trade) that is directly or indirectly responsible for other major economic problems.

It's only with the 2008 economic collapse and the non-existent US recovery that American analysts are beginning to appreciate the devastating impact that "Reaganomics" (the Reagan-Bush neoliberal agenda continued by Bill Clinton and Bush Jr.) had on US manufacturing and thus the overall economy. In a country 1/60th the size of the US, the damage was much more immediate and harder to conceal.

In brief, the policies introduced by Minister of Finance Sir Roger Douglas in the 1980s included the rapid elimination of import tariffs protecting New Zealand agricultural producers and manufacturers, rapid privatization of state owned industries, which for the most part ended up under foreign ownership; stringent anti-union legislation, similar to the American National Labor Relations Act; and substantial cuts in the public service social welfare benefits.

With the abolition of import controls New Zealand companies struggled to compete against lower cost imported goods, resulting in multiple plant closures -- mainly meat and dairy processing plants and clothing, footwear and textiles factories. This resulted in massive layoffs and a decade of unrelenting hardship for communities that relied on these industries, as well as a loss of the skilled labor force that staffed them. The 1984 reforms also heralded in seven years of continuous economic stagnation, during which the New Zealand economy shrank by 1% in contrast with an average 20% growth in other OECD countries.

The Mass Exodus of Generations X and Y

The most enduring harm stemming from the 1984 reforms is the staggering loss of human capital that continues to this day. At present approximately one million native New Zealanders -- representing one quarter New Zealand's current population of four million -- live overseas.

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I am a 63 year old American child and adolescent psychiatrist and political refugee in New Zealand. I have just published a young adult novel THE BATTLE FOR TOMORROW (which won a NABE Pinnacle Achievement Award) about a 16 year old girl who (more...)
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