Economic life on the Antarctic Rim

While New Zealand is often described as one of the economies on the Pacific Rim - by implication part of the fast-growing Pacific region in contrast to a supposedly sclerotic European economy - and is accordingly a member of APEC, the Pacific is a vast geographic region covering over a third of the surface of the earth. A country can be located on the Pacific Rim yet still be very remote from the centres of global economic activity.

I can't recall exactly the first time that I heard New Zealand described as being on the "Antarctic Rim" but think it was while I was still working at the Treasury in the mid 1990s. It is a description with some telling implications and points to the importance for New Zealand of having excellent international transport links.

As a history graduate and someone who was very impressed with Professor Geoffrey Blainey's book "The Tyranny of Distance: How Distance Shaped Australia's History", the phrase Antarctic Rim is one that has stayed with me and it is encouraging to read that economists are increasingly taking account of geography in their theoretical research.

The phrase was used by Professor Wolfgang Kasper in an address to the New Zealand Economic Association on 27 June 2002 in which he discussed New Zealand's economic growth record in the context of advances in growth theory. He does not think that New Zealand's remoteness has been holding New Zealand back.

A measure of the remoteness of fellow Antarctic Rim country Australia from an economic perspective is contained in a number of papers published by the Australian Treasury including:

"Measuring recent trends in Australia’s economic remoteness" UPDATED by Robert Ewing and Bryn Battersby (March 2005)

"International Trade Performance: The Gravity of Australia’s Remoteness" UPDATED by Bryn Battersby and Robert Ewing (June 2005)

The New Zealand Treasury has also touched on the issue in its series of working papers including:

"Economic Geography - Key Concepts" UPDATED by Sarah Box (2000)

"Geography, Trade and Growth: Problems and Possibilities for the New Zealand Economy" UPDATED by Philip McCann (2003)

"Global Connectedness and Bilateral Economic Linkages - Which Countries?" UPDATED by Jim Rose and Wayne Stevens (2004)

The gravity model of international trade - taking into account distance and market size - would seem to have applicability when it comes to examining international air passenger transport but I have yet to track down any academic studies using the model for this purpose. One such paper that focuses on air cargo is:

"Infrastructure, Competition Regimes and Air Transport Costs: Cross Country Evidence" by Alejandro Micco and Tomás Serebrisk (2004)

I suspect that it would make for some interesting further econometric research provided that care is taken with the data sets used.