Economy of the Cook Islands explained

The economy of the Cook Islands is based mainly on tourism, with minor exports made up of tropical and citrus fruit. Manufacturing activities are limited to fruit-processing, clothing and handicrafts.

As in many other South Pacific nations, the Cook Islands's economy is hindered by the country's isolation from foreign markets, lack of natural resources aside from fish, periodic devastation from natural disasters, and inadequate infrastructure.

Trade deficits are made up for by remittances from emigrants and by foreign aid, overwhelmingly from New Zealand. Efforts to exploit tourism potential, encourage offshore banking, and expand the mining and fishing industries have been partially successful in stimulating investment and growth.

Banking and finance

Banks in the Cook Islands are regulated under the Banking Act 2011.[1] Banks must be licensed and are supervised by the Cook Islands Financial Supervisory Commission.[2]

The Cook Islands developed an offshore financial services industry in the early 1980s.[3] Allegations that New Zealand-based companies were using it as a tax haven led to the Winebox Inquiry in New Zealand in the 1990s, and in 2000 it was listed as a tax haven by the OECD.[4] In 2002 it was delisted after it agreed to fiscal transparency and to exchange tax information.[5] [6] Allegations of being a tax haven re-emerged in 2013 following the International Consortium of Investigative Journalists Offshore Leaks.[7] [8] Trusts incorporated in the Cook Islands are used to provide anonymity and asset-protection.[9] The Cook Islands also featured in the Panama Papers,[10] Paradise Papers,[11] [12] and Pandora Papers[13] [14] financial leaks.

Economist Vaine Nooana-Arioka has been executive director of the Bank of the Cook Islands since 2008.[15]

Economic statistics

GDP:
  • Purchasing power parity - $183.2 million (2005 est.)
    GDP - real growth rate: -.05% (2005); -1.2% (2014); -1.7% (2013). Growth in the Cook Islands has slowed due to a lack of infrastructure projects and accommodation capacity constraints in the tourism sector. Cook Islands economic activity is expected to be flat in FY2016; to grow by 0.2% in FY2017. Inflation 1.8% (FY2016); 2.0% (FY2017). Statistics Asian Development Bank
  • GDP - per capita: $17,033 (2022)[16]
  • GDP - composition by sector:
    • Population below poverty line:
  • 28.4% of the population lives below the national poverty line. Statistics 2016 Asian Development Bank
    Household income or consumption by percentage share:
    Inflation rate (consumer prices):
  • 4.2% (2024 est.)[17]
    Labor force:
  • 6,820 (2001)
    Labor force - by occupation:
  • Agriculture 29%, industry 15%, services 56% (1995)
    Unemployment rate: 1.3% (2019)[18]
  • Budget:
    • Industries:
  • Fruit processing, tourism, fishing, clothing, handicrafts
    Industrial production growth rate:
  • 1% (2002)
    Electricity - production:
  • 28 GW·h (2003)
    Electricity - production by source:
    Electricity - consumption:
  • 34.46 GW·h (2005 est)
    Electricity - exports:
  • 0 kW·h (2003)
    Electricity - imports:
  • 0 kW·h (2003)
    Oil consumption:
  • 400oilbbl/d (2003)
    Agriculture - products:
  • Copra, citrus, pineapples, tomatoes, beans, pawpaws, bananas, yams, taro, coffee, pigs, poultry
    Exports:
  • $5.222 million (2005)
    Exports - commodities:
  • Copra, papayas, fresh and canned citrus fruit, coffee; fish; pearls and pearl shells; clothing
    Exports - partners:
  • Australia 34%, Japan 27%, New Zealand 25%, US 8% (2004)
    Imports:
  • $81.04 million (2005)
    Imports - commodities:
  • Foodstuffs, textiles, fuels, timber, capital goods
    Imports - partners:
  • New Zealand 61%, Fiji 19%, US 9%, Australia 6%, Japan 2% (2004)
    Debt - external:
  • $141 million (1996 est.)
    Economic aid - recipient:
  • $13.1 million (1995); note - New Zealand furnishes the greater part
    Currency:
  • 1 New Zealand dollar (NZ$) = 100 cents
    Exchange rates:
  • New Zealand dollars (NZ$) per US$1 - 1.4203 (2005), 1.9451 (January 2000), 1.8886 (1999), 1.8632 (1998), 1.5083 (1997), 1.4543 (1996), 1.5235 (1995)
    Fiscal year:
  • 1 April - 31 March

    Telecommunications

    Telecom Cook Islands Ltd (TCI) is the sole provider of telecommunications in the Cook Islands. TCI is a private company owned by Spark New Zealand Ltd (60%) and the Cook Islands Government (40%). In operation since July 1991, TCI provides local, national and international telecommunications as well as internet access on all islands except Suwarrow. Communications to Suwarrow is via HF radio.

    External links

    Notes and References

    1. Web site: Banking Act 2011 . PACLII . 13 December 2011 . 14 October 2021.
    2. Banking Act 2011, section 17.
    3. Web site: Money trail leads home to New Zealand . Nicky Hager . Stuff . 7 April 2013 . 14 October 2021.
    4. Web site: Towards Global Tax Co-operation . https://web.archive.org/web/20150906031301/http://www.oecd.org/ctp/harmful/2090192.pdf . 2015-09-06 . live . OECD . 2000 . 14 October 2021.
    5. Web site: Cook Islands to co-operate with OECD tax haven work . IRD . 28 March 2002 . 14 October 2021.
    6. Web site: Cook Islands: Cook Islands To Be Removed from OECD List Of "Tax Havens" . Mondaq . 10 June 2002 . 14 October 2021.
    7. Web site: New Zealand Minister says Cook Islands links in alleged tax havens to be investigated . RNZ . 8 April 2013 . 14 October 2021.
    8. Web site: Cooks defends trust regulations amid tax haven debate . RNZ . 9 April 2013 . 14 October 2021.
    9. Web site: Cook Islands, a Paradise of Untouchable Assets . https://ghostarchive.org/archive/20220101/https://www.nytimes.com/2013/12/15/business/international/paradise-of-untouchable-assets.html . 2022-01-01 . limited . New York Times . Leslie Wayne . 14 December 2013 . 14 October 2021.
    10. Web site: Cooks To Investigate Those Named In Panama Papers . Pacific Islands Report . 18 May 2016 . 14 October 2021.
    11. Web site: Files from four Pacific registries in Paradise Papers . RNZ . 6 November 2017 . 14 October 2021.
    12. Web site: Paradise papers: The Cook Islands millionaire who never has to pay his debts . Australian Financial Review . 25 March 2018 . 14 October 2021.
    13. Web site: Major leak of offshore data exposes Raro based Trust company . Cook Islands News . 5 October 2021 . 14 October 2021.
    14. Web site: Cooks defend offshore services industry . Caleb Fotheringham . Cook Islands News . 9 October 2021 . 14 October 2021.
    15. Web site: 2021-10-02. Our Managers. 2021-10-02. https://web.archive.org/web/20211002094358/https://bci.co.ck/about-us/our-managers/. 2021-10-02.
    16. Web site: UNdata record view Per capita GDP at current prices - US dollars . 2024-05-27 . data.un.org.
    17. Web site: Consumer Price Index Cook Islands Statistics Office . 2024-05-27 . en-US.
    18. Web site: 30 May 2024 . Poverty Data: Cook Islands . 2024-05-27 . www.adb.org . en.

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