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Economy of the Cook Islands

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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

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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

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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
  • Agriculture: 78.9%
  • Industry: 9.6%
  • Services: 75.3% (2000)
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
  • Lowest 10%: NA%
  • Highest 10%: NA%
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
  • Revenues: $70.95 million
  • Expenditures: $69.05 million; including capital expenditures of $5.744 million (FY00/01 est.)
Industries
Fruit processing, tourism, fishing, clothing, handicrafts
Industrial production growth rate
1% (2002)
Electricity - production
28 GW·h (2003)
Electricity - production by source
  • Fossil fuel: 100%
  • Hydro: 0%
  • Nuclear: 0%
  • Other: 0% (2001)
Electricity - consumption
34.46 GW·h (2005 est)
Electricity - exports
0 kW·h (2003)
Electricity - imports
0 kW·h (2003)
Oil consumption
400 bbl/d (64 m3/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

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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.

References

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