Cook Islands
Country Report
The Cook Islands, named after Captain James Cook who landed in 1773, became a British protectorate in 1888 and was later annexed by proclamation in 1900. The Cook Islands was first included within the boundaries of New Zealand in 1901, and in 1965, residents chose self-government in free association with New Zealand. The Cook Islands’ economy relies on tourism, fisheries, and foreign aid. More recently a growing offshore financial sector exposed the country to vulnerabilities which the government has addressed with legislation and regulations for the oversight of all banks and financial institutions, and with enforcement measures. The Cook Islands continues to face challenges with the emigration of skilled workers, government deficits, inadequate infrastructure, and natural resource depletion. The Cook Islands is expected to graduate to the high-income threshold set by the World Bank, which will limit the country’s access to Official Development Assistance under OECD guidelines.
Location
Land Mass
236.7 km2
Official Languages
English, Maori
Population
17,518
Head of State
Henry Puna
Capital
Avarua
Status
Associated State of New Zealand
Economy
Like many other South Pacific island nations, the Cook Islands’ economic development is hindered by the isolation of the country from foreign markets, the limited size of domestic markets, lack of natural resources, periodic devastation from natural disasters, and inadequate infrastructure. Agriculture, employing more than one-quarter of the working population, provides the economic base with major exports of copra and citrus fruit. Black pearls are the Cook Islands’ leading export. Manufacturing activities are limited to fruit processing, clothing, and handicrafts. Trade deficits are offset by remittances from emigrants and by foreign aid overwhelmingly from New Zealand. In the 1980s and 1990s, the country became overextended, maintaining a bloated public service and accumulating a large foreign debt. Subsequent reforms, including the sale of state assets, the strengthening of economic management, the encouragement of tourism, and a debt restructuring agreement, have rekindled investment and growth. The government is targeting fisheries and seabed mining as sectors for future economic growth.