New Zealand : economic reforms, 1984-1991

When international trade barriers to New Zealand"s largely agricultural exports rose sharply in the 1970"s, New Zealand"s first response was an unsuccessful regime of interventionist economic policies. In the 1980"s a privatization scheme and microeconomic reforms were attempted throughout the economy, along with an anti-inflationary strategy. Fiscal stabilization, however, lagged behind. The real exchange rate declined, followed by retrenchment in the traded sector, particularly in agriculture and manufacturing. By 1991, the still ongoing reforms successfully stabilized prices, wages, and interest rates, and increased efficiency and competitiveness in both the public and private sectors. Fiscal balance and growth in output and employment, on the other hand, are not yet successfully achieved. Also, the benefits of the reform process have been felt unevenly by various levels and segments of society. (Author abstract, modified)