According to the classical geopolitical thinking of Sir Halford Mackinder, New Zealand is located in what is called the ‘outer crescent,’ a peripheral zone located very far from the ‘heartland’ (the core the Eurasian landmass).
Correspondingly, the vast distance that separates the various territories found in such an insular position from the world’s center of geopolitical gravity means they can only be reached, controlled and/or conquered through formidable sea power projection capabilities.
In fact,
in the grand scheme of things, human presence in New Zealand is fairly recent.
The Maori people – the island’s original inhabitants– arrived there nearly a
millennium ago. The first Europeans did so centuries later and, in the 19th
century – during the zenith of Great Britain as the first truly global maritime
empire – it became an English settler colony.
Actually,
it was (and still is) arguably the remotest Commonwealth realm and, ever since,
the country’s economic vitality – a matter of national security – has relied on
access to international markets for both imports and exports, something only
blue-water navies can effectively guarantee. This explains the country’s
historically close geopolitical alignment with both London and Washington.
There are of course cultural, social, and linguistic common denominators that
also enable intimate ties with the mightiest countries of the Anglosphere.
Moreover,
the country’s distant location means it has been well-shielded from the direct
fallout of the major military conflicts that haven place throughout the so called
‘rimland’ (Eastern Europe, the Balkans, the Levant, the Persian Gulf, Central
Asia and Southeast Asia). However, it lacks the critical mass to influence the
course of global affairs in a decisive way. According to data provided by both
the CIA World Factbook and the International Monetary Fund:
New
Zealand’s territory covers almost 265,000 square kilometers, which means its
extension is smaller than that of Italy.
Its
population (4.5 million people) is comparable to that of countries like Costa
Rica (4.9 million) or Ireland (5 million) or, for that matter, US states like
Louisiana (4.6 million) or Kentucky (4.4 million).
The
Australasian nation’s GDP (210 billion USD) makes it the world’s 51st largest
economy, behind Singapore (372 billion USD), Chile (295 billion USD), and
Portugal (239 billion USD).
On the
other hand, New Zealand is a prosperous country with high living standards,
thanks to its relatively secure location, optimal weather conditions that favor
agricultural production and the access to international trade enabled by the
island nation’s natural harbors. Its GDP per capita (39,000 USD) is higher than
those of European countries like Spain (38,400) and Italy (38,200). To a
certain extent, this explains why Wellington has adopted a position of ‘benign
neglect’ when it comes to geopolitical affairs. After all, there is no need to
get actively involved in such complex –and sometimes even dangerous – games
when essential needs are reasonably well-covered.
Another
factor that explains New Zealand’s relative isolation is of course its
geographical position. Its closest neighbor – Australia – is not exactly
contiguous. In fact, a distance of slightly more than 1,300 miles separates
Auckland (the most populated metropolis in New Zealand) from Sydney (the very
core of the Australian heartland). In contrast, the Channel Tunnel that links
the UK with France has a length of only 31 miles.
However,
New Zealand’s geostrategic environment is changing due to a combination of
ongoing phenomena like rising military tensions in East Asia, the increasing
global geoeconomic struggle between the US and China, regional territorial
disputes, evolving geopolitical alignments in the Pacific Basin, the growing
profile of India as a geopolitical player, Japan’s strategic anxieties, and the
wave of technological disruption unleashed by the Fourth Industrial Revolution,
amongst others. Plus, as a result of Brexit as a process that is redefining
transatlantic relations, the UK and the US might forge even closer ties in several
fields, something which entails implications for New Zealand’s national
interests. In short, a threshold of transition is in the horizon.
Therefore,
Wellington cannot afford to ignore these realities, which present both
dangerous challenges and valuable opportunities. Even though New Zealand’s
national power is not enough to alter the outcome in any meaningful way, it has
to find a way to adapt, especially if it does not want to eventually find
itself relegated to a disadvantageous position.
After
all, New Zealand has protected its fiercely independent streak and preserved
its unique identity, even when facing the might of stronger nations. For
instance, it declined to join Australia in the late 19th century, it invaded
German Samoa – a German protectorate in the South Pacific – when WW1 broke out
and it has banned the presence of ships carrying nuclear weapons in both its
ports and territorial waters. Needless to say, the latter – although militarily
inconsequential in the grand scheme of things – was an outspoken political and
diplomatic statement of national sovereignty vis-à-vis the US.
Right
now, NZ can harness changing circumstances in a favorable manner. For this
purpose, it must be borne in mind that national states behave a lot like living
organisms. If they do not adapt to their surroundings effectively, they well be
left in a perilous situation. If inertia prevails, then New Zealand might
eventually become a food supplier, a satellite of external powers, or even a
contested geopolitical battlefield.
There is
a growing sense of situational awareness about the ramifications derived from
the aforementioned structural shifts, but Wellington still has not formulated a
comprehensive grand strategy to navigate through these uncharted waters. If New
Zealand wants to be the master of its own fate, then its intended destination
must also be clear.
Hence,
in order to envisage what a sound grand strategy for NZ might look like in the
following decades, the experience of countries like Switzerland, Israel, and
South Korea can be instructive. They have all managed to thrive and prosper as
sovereign nations, despite being small states located in dangerous
neighborhoods. In order to craft an assertive policy of multidimensional
proactive engagement, the following courses of action will have to be
considered.
Upgrading
New Zealand’s economic profile
Owing to
its geographical circumstances, NZ is a naturally competitive producer and
exporter of agricultural goods like wine, fruit, meat, cereals, honey, and
dairy products, all of which are demanded by the consuming markets in the
Asia-Pacific region. In fact, three of New Zealand’s top four trade partners –
China, Australia and Japan – are located there.
Moreover,
Wellington is negotiating deals to diversify its external trade, through both
bilateral and multilateral frameworks. In this pursuit, approaching India,
Japan, the ASEAN bloc and the Latin American countries which belong to the
Pacific Alliance (Colombia, Chile, Mexico and Peru) can be instrumental. This
is necessary in order to avoid a disproportionate degree of economic
overdependence, a dangerous condition in times of geopolitical turmoil.
Furthermore,
New Zealand has managed to modernize its economy. For instance, it has become a
referent when it comes to renewable energy, a priority in terms of national
security. Nevertheless, the country needs to be well-prepared for its
participation in the leading sectors of the so-called Fourth Industrial
Revolution. This does not mean it has to forget about its primary economic
activities. As the cases of Switzerland and Israel illustrate, a prosperous
agricultural dynamism can coexist with the development of high-tech productive
sectors. Besides, another enlightening example is South Korea, a state that, in
a matter of decades – during the height of the Cold War no less – went from
being a backwater to a world-class industrial powerhouse.
This
transition requires measures like 1) the implementation of industrial policies
designed to foster new comparative advantages; 2) the encouragement of start-up
companies; 3) a strong support for research and development projects; 4) an
increasing investment of resources in higher education, particularly in
academic disciplines related to STEM; 5) the retention and attraction of
competitive human capital; and 6) the establishment of long-term public-private
partnerships. It is essential to highlight that, in the era of ‘mindfacturing’,
knowledge is a critical ingredient. Therefore, in these processes, New Zealand’s
prestigious universities will have a role to play.
Based on
its remote geographic position, one of the key sectors that can be developed in
New Zealand is aerospace, whose strategic importance derives from its military,
commercial, and scientific applications. In fact, New Zealand has already
entered the space race thanks to the recent construction – in the Mahia
Peninsula – of the facility known as ‘Launch Complex 1,’ a spaceport operated
by the US-NZ company Rocket Lab, which offers private spaceflights. In the near
future, New Zealand’s natural advantage will constitute an opportunity to open
more sites like this and to launch its own space program.
On the
other hand, New Zealand’s potential when it comes to untapped oil and gas
resources needs to be explored. Hydrocarbons are more than commodities that can
be bought and sold for profit. Above all, they still represent strategic
geoeconomic assets whose control entails power.
Promoting
New Zealand as a financial hub
As an
open economy, the natural ability of New Zealand to participate in
international trade and its maritime orientation entail the potential to become
an attractive regional financial platform, especially as the Pacific Basin is
becoming the world’s center of geoeconomic gravity. Moreover, its legislation
favors the development of offshore finance and – thanks to its British heritage
– it also offers rule of law and respect for the sanctity of private property,
all of which are conditions that encourage financial dynamism. Besides, New
Zealand’s national character can be described as cosmopolitan. Another factor
whose contribution can be helpful is the country’s openness to fintech
innovations, including blockchain.
Furthermore,
NZ is mostly safe from hostile military actions and, as a country that belongs
to the Commonwealth, it has access to Anglo-American financial circuits.
Nevertheless, it can also forge close ties to emerging Asian financial and
monetary systems. For instance, New Zealand has joined the Asian Infrastructure
Investment Bank (AIIB), a multilateral financial framework headed by China, a
move that is strategically pertinent. After all, it is profitable to make
business with the world’s second-largest economy through projects that foster
continental interconnectedness.
However,
both possibilities are not mutually exclusive and Wellington could even one day
act as a broker whose credibility is respected by all relevant players,
regardless of their geopolitical alignments. Reaching this balance can be
tricky, but it is a must when one cannot afford to alienate competing sides.
For this pursuit, the example set by the role Switzerland has played in Europe
–even in times of systemic turmoil – is instructive. It is a small country
(whose geopolitical reality shields it from the external aggression of
surrounding powers) that has harnessed its conditions to preserve its
independence, protect its monetary sovereignty, nourish its distinctive
identity and strengthen its national power in diplomacy and finance. As such,
it can negotiate with countries whose agendas are dissimilar.
Likewise,
the New Zealand dollar (NZD) is regarded as a hard currency. According to the
SWIFT network, the NZD is the world’s 18th most-used currency, judging by its
proportional share of global payments. This puts it ahead the Mexican Peso and
its Chilean namesake, both issued by countries whose economies are considerably
larger than that of New Zealand.
Last but
not least, other indicators of financial development (like depth of financial
markets or access to financial institutions) reflect New Zealand’s competitive
potential in this respect. For example, according to a study published by the
IMF back in 2016, when it comes measuring the efficiency of financial
institutions in several jurisdictions from all over the world, NZ is in the
second best position, ahead of Japan, Australia, Singapore, Macau, Luxemburg,
and even Switzerland itself (all of which are seen as prestigious in the realm
of international finance).
The
quest for Lebensraum in Antarctica
The
Arctic is becoming a contested geopolitical battleground due to the fact
several great powers are struggling to reach a dominant position there. In
fact, it is foreseeable that something similar will unfold in Antarctica as its
ice sheets melt. The resulting improvement of weather conditions there will be
a structural game-changer that could facilitate the development of
infrastructure and logistical chains that will enable a more permanent human
presence in close proximity to the South Pole, which entails the potential to
undertake military, scientific and economic activities. Hence, New Zealand is
strategically positioned to access the frozen continent, the only major landmass
on Earth still uninhabited by humans.
It is
merely a matter of time before the Antarctic Treaty is rendered obsolete by the
geopolitical race to controls its resources. Actually, it is believed
Antarctica’s promising potential could offer vast deposits of metals like gold,
silver, copper, iron, titanium, nickel, manganese, cobalt, zinc and uranium,
along with hydrocarbons. Hence, the prospect of mining operations there is
likely to be conceivable in the near future. Accordingly, the active presence
of great powers in Antarctic territory will be a fact on the ground sooner or
later.
This
context provides a valuable window of opportunity for Wellington to seek
Lebensraum in Antarctica. It must be borne in mind that, thanks to its presence
in Antarctic territory through the Ross Dependency, New Zealand is a Polar
claimant, but its foothold there is relatively modest. The Scott base – a
research facility operated by the state agency known as ‘Antarctica New
Zealand’ – is a visible sign of Wellington’s national interest in the
southernmost corner of the world. However, the protection of those interests
requires a stronger presence. After all, exploration and extractive activities
–along with their defense – demand a solid expeditionary reach.
Such
drive would also represent an incentive for the quantitative and qualitative
improvement of New Zealand’s power projection capabilities, especially when it
comes to both sea and air power. The task goes beyond deterring illegal
fishing. Actually, an army that is suitable for peacekeeping tasks, disaster
relief, and limited deployments in support of military allies in specific
operational theatres – like Vietnam, the Falklands, Afghanistan and Iraq – can
be regarded as already in-place; but that alone will not suffice. A more robust
defense capability will be needed.
Of
course, strong collaborative partnerships would be instrumental to achieve
this. Hence, Wellington needs to harness its preferential access to US military
hardware but it can also resort to other countries – like Israel – whose
military-industrial complexes manufacture state-of-the-art weaponry. Moreover,
NZ would have to formulate an operational doctrine suitable for mobilizations
in circumpolar regions. For this endeavor, the expertise of countries like Norway,
Chile, and Canada could be more than helpful. Likewise, the fact that Australia
– New Zealand’s closest ally – is also interested in Antarctica represents a
formidable force multiplier.
Additionally,
the implementation of this plan would strengthen national morale by promoting
the idea of New Zealand can act as an assertive South Pacific regional power
whose interests should not be disregarded by other relevant stakeholders.
Hedging
geopolitical bets
For
several reasons – including historical, cultural, and linguistic ties – New
Zealand has been consistently allied with the Anglosphere. Its troops fought in
the Boer War, WW1 (including the Gallipoli campaign), WW2, and conflicts that
took place during the Cold War on the side of Atlanticist powers. It is also a
NATO extra-regional partner (along with countries like Australia, Colombia,
Japan and South Korea, amongst others). Moreover, New Zealand is a full member
of the Five Eyes system, an intelligence-sharing alliance that also includes
the US, the UK, Canada, and Australia.
Nonetheless,
Wellington is not aligned with the Anglosphere only because of a shared
heritage or merely out of nostalgia. There are more pragmatic considerations at
play. Since its lifelines depend on freedom of navigation, its geopolitical
allegiance ultimately lies with the maritime power able to defend open sea
lanes. That role was once played by Great Britain and nowadays the United
States – the world’s leading sea power – is responsible for providing that
service.
Likewise,
New Zealand’s location represents a formidable defensive position. In general,
Australasia is mostly safe from hostile military mobilizations and Australia is
a neighbor that can be both a strategic partner and also a valuable buffer
state that provides protection from external threats. However, the prospect of
a Japanese invasion during WW2 was regarded as a plausible scenario. Actually,
the conquest or the subjugation of both Australia and New Zealand were
considered as part of Imperial Japan’s ambitious geostrategic plan (the
so-called ‘Greater Asia Co-Prosperity Sphere’). Plus, it must be borne in mind
that powerful geopolitical forces can flow through conduits like energy, trade,
cyberspace, finance, demography and even ‘soft power.’ There are many ways to control countries
aside from kinetic military actions.
On the
other hand, the favorable externalities that New Zealand has enjoyed for
generations must not be taken for granted, especially now that the
international liberal order that prevailed for several decades after WW2 is
withering. For instance, although China is certainly an emerging power, it
still lacks a powerful navy, yet Beijing can potentially become a far-reaching
sea power in the not-so-distant future.
Accordingly,
from Wellington’s perspective, it makes sense to be pragmatic toward China. The
best course of action would be to avoid either passive accommodation or openly
confrontational attitudes. In fact, in this context, Wellington needs to
minimize the prospect of being harshly dragged by an increasingly intense
vortex of geostrategic competition that could end up swallowing unprepared
nations.
Likewise,
New Zealand cannot afford to defy the US. After all, the American navy is still
the guarantor of global maritime security. Moreover, if Wellington distances
itself too much from Washington, the case of Australian Prime Minister Gough
Whitlam – presumably removed from office as a result of the covert efforts
undertaken by both the CIA and the MI6 – must be borne in mind as a powerful
example that such move could be reckless, at least for the time being.
Hence,
New Zealand must find a way to navigate through the changing balance of power
in order to handle the underlying tension between its economic interests when
it comes to bilateral trade with Asia and its close geopolitical collaboration
with the US and its maritime allies. NZ does not have to take sides, but a
sense of strategic balance must be found. This is a must for national states
facing potentially overpowering asymmetric challenges.
The
simultaneous formal membership of NZ in both Atlanticist structures and the
AIIB (which can be understood as a financial vector of China’s global
geopolitical agenda) is a sign that New Zealand’s increasing sense of strategic
clarity about the fact that protecting its own national security entails the
need to acquire leverage.
Furthermore,
there may be new opportunities ahead. For example, once Britain disengages
itself from the European Union, there will be a powerful incentive for London
to seek closer ties to both the United States and members of the Commonwealth
like Canada, Australia, and New Zealand. This could lead to the creation of a
trade bloc amongst the most prominent countries of the Anglosphere.
However,
thinking that Wellington will eventually have to side with either Washington or
Beijing as a junior partner is a false dilemma, especially considering it has
cards to play in order to strengthen its position. For instance, Israel is a
firm US ally when it comes to diplomacy, geopolitics, intelligence and military
affairs but – as an independent state that pursues its own national interests
in the long run – it has also invested a great deal of effort and resources in
the development of a constructive relation with both Russia and China, in case
Jerusalem eventually needs the support of the Eurasian behemoths one day.
A way
for New Zealand to enhance its geopolitical standing is to court Japan and
India. Both countries are regional powers that are worried about the prospect
of Chinese regional hegemony. However, both Delhi and Tokyo are aware they
cannot rely 100% on US support. Thus, they have to fortify their national power
– including its military capabilities – as autonomous stakeholders whose
interests cannot be overlooked by other heavyweight players. That makes them
ideal partners for an assertive and confident New Zealand, one that’s able to
handle the strong gravitational pull of foreign powers.
Conclusion
A major
turning point is coming for New Zealand and the country will be exposed to
systemic geopolitical drivers beyond its control. If Wellington does not want
its fate to be decided by others – at the expense of its own national interests
– then the country will have to readjust its long-term grand strategy in order
to avoid existential risks and use opportunities to advance its agenda.
This
requires some counterintuitive thinking in order to find feasible ways to
strengthen the country’s national power in several fields, including
geopolitics, trade, economics, finance, diplomacy, technology, and defense. The
key imperative is that New Zealand needs to reach a convenient position that is
suitable for what is to come. Hence, a conceptual notion of multidimensional
proactive engagement can represent an appropriate strategic compass.