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Notes from (Another) Small Island

90

As you probably know, New Zealand is one of those small countries quite incapable of independent existence according to the wisdom of British unionists, since it is similar in population and economy to Scotland. Having lived in Wellington for the last nine years I can bear witness to the incredible survival of this remote nation, still somehow struggling on, more than 70 years after separating from the protective bosom of the British Empire.

When I say remote I mean at the very ends of the Earth. If you think Scotland is on the outer fringes of civilisation, consider this: NZ has only one neighbouring country of any economic significance – Australia – and that is a three or four hour flight away. Imagine if Scotland lay in the Atlantic ocean with no other land until you got to Morocco, and then the next nearest economy of any scale was Brazil. That is how remote New Zealand is. And yet it has a per capita GDP only slightly below Scotland’s. A miracle, I’m sure you’ll agree.

Isolation does have an impact on economic performance, however. Tourism, as it is for Scotland, is one of NZ’s biggest industries. Around 3.5 million visitors came to NZ in 2016, and tourism generated nearly $13 billion (£7.2 billion). Scotland, with a few more people on its doorstep, welcomed some 14 million tourists the same year, who contributed about £11 billion. It’s a long way to come to NZ so once you get here you clearly spend a bit more per head than weekenders in Scotland, but all the same, if that’s one of its biggest industries how does NZ manage?

It must be something really valuable, like oil or gas? Ah, no. In 2006 NZ produced about 25,000 barrels of oil. UK production (90% of which is Scottish) was about 9,000 times greater (around 220 million barrels). But as we know from unionist experts oil and gas are practically worthless and actually some kind of curse, so perhaps that’s not a fair comparison.

Instead of the black stuff New Zealand makes do with white gold – milk. Around 20% of all exports are made up of milk, butter or cheese, and dairy accounts for 45% of all agricultural production. I’m sure the sages in Westminster warned Scotland about risky over-reliance on one commodity, but no single product in Scotland accounts for such a large chunk of the economy, not even financial services. Surely New Zealand’s lop-sided economy is on the brink of disaster, much as it has been throughout its entire history of economic growth despite risky over-reliance on wool, or lamb, or milk? Strangely, no.

Talking of financial services, it is axiomatic that all the banks and insurance companies would flee an independent Scotland leaving it destitute. Financial and insurance services here in NZ contribute a similar chunk of the economy as in Scotland – $14 billion which is fractionally more than Scotland’s £7 billion. However, most of the banks and insurance companies here are Australian owned. So even if the companies are not home-owned it seems that the business is still here and generates just as much money. Impossible for a small independent country according to the Great British know-it-all, but there you have it.

There are many other interesting ways of comparing Scotland and New Zealand. From time to time I’ll add further thoughts here as they occur. But perhaps it’s worth concluding with a comparison of measures that aren’t just economic. Despite redefining ‘middle-of-nowhere’, and suffering its fair share of the common ailments of developed nations such as inequality and housing bubbles, New Zealand consistently scores higher than the UK in quality of life indices, such as the Economist Intelligence Unit’s Where To Be Born index, and the OECD’s evaluation of life satisfaction in its Regional Well-Being surveys. Perhaps the question on the next independence referendum should be: “Would you rather be Scottish and happy, or British and miserable?”

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