Since the 2008 global economic recession, the New Zealand government was seeking the effective and efficient policies to stimulate the economy to wake up. Considering the big economic success was got from the mining industry by our neighbor- Australia. The New Zealand government also wants to enact a mining development policy to motive the productivity and the GDP. However, most of New Zealanders do not think a mining strategy is an advisable motivator to help New Zealand to achieve economic recovery, but to put it to a more dangerous situation since the mining policy will destroy New Zealand’s environment and the clean-green reputation on the world, which the traditional exportations rely on. On the other hand, the opponents think New Zealand can use technology to get a balance between the environment and the mining. This essay will use productivity theory, GDP concept and other relative economic theories to discuss both of the two opposite views.
The productivity is a key element to determine the standard of living. So how to improve the productivity is the critical factor to develop the economy. There are four elements to compose the productivity: physical capital, human capital, natural resources and technological knowledge. The productivity plays a positive effect on the gross domestic product (GDP), which is a measure of a country’s expenditure and income in a certain period to reflect the situation of the economy. Normally, GDP consists four parts: consumption, investment, government purchase and net export (exports minus import).
Nowadays, New Zealand faces a serious productivity problem which is the loss of the quantity of labor due to the relative low GDP to other advanced countries. The recent survey shows that there are about 53,200 New Zealanders moved to Australia last year (Weir, 2012). And more and more Australian companies come to New Zealand universities to recruit employees to meet the needs of human capital. The loss of high skilled people plays a significant negative impact on the New Zealand economy. The productivity of New Zealand is undermined by the outflow of human capital.
To solve the problem of the productivity and promote GDP, the government advocates exploiting more nature resources. From the GDP aspect, more job opportunities will be provided, the unemployment rate will decrease. Also the amount of government purchase will surge as lots of mining equipment and relative facilities required by mining engineering. In additional, this will impact the importation of GDP, because the intensive mining activates will produce more raw materials to reduce the amount of importation. Furthermore, there can be an impact on the exportation if New Zealand can exploit sufficient mineral materials. Because rest of mineral minerals will be exported to the other countries, this provides a valuable foreign income to New Zealand. As a result, the net export will increase. From the productivity aspect, as the increase of the GDP, more high human capital resources will be attracted to New Zealand as the increasing GDP represents a higher level of living. In addition, the exploitation of the nature resources enforces the country’s productivity. The country’s productivity and GDP closely interrelate to each other and each one make a significant positive impact on one another.
Considering the economic benefits mentioned as above, some people support the government’s mining strategy as long as the strategy can make a balance between the environment and mining. There is no question that mining will impact the environment, but it is not a disaster to the environment. Actually, the area affected is small, less than 0.1 per cent of land in New Zealand used for mining. And that area is much less than the requirement of 33 per cent by the highest conserving biodiversity protection law of OECD (Bohannan, 2011). The most efficient way to balance the comfits...