Regions and Countries

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p. 36 of 47 BACK | NEXT Developing Asia and the Pacific The global economy Newly industrialized economies Central Asian republics, Azerbaijan and Mongolia People’s Republic of China Southeast Asia South Asia The Pacific Cook Islands Fiji Islands Kiribati Marshall Islands Federated States of Micronesia Nauru Papua New Guinea Samoa Solomon Islands Tonga Tuvalu Vanuatu

Cook Islands

Economic performance

The Cook Islands’ real GDP recorded positive growth of 3.2 percent in FY2000 (ending 30 June). Growth in tourist numbers continued. The black pearl industry showed growth of 6.0 percent, as did the commercial agriculture sector at 4.0 percent. Inflation in 2000 was 2.0 percent, compared with 1.4 percent in FY1999. Despite a trade deficit equivalent to 53.0 percent of GDP, the current account ran a surplus of 5.9 percent of GDP because of increased tourism.

Domestic policies: The budget was in surplus by New Zealand (NZ)$2.3 million in FY2000. Tax revenues increased by 15.3 percent, reflecting improved trading conditions and settlement of large tax assessments. Government expenditure increased by 7.5 percent because of increased spending on education, health, welfare, cultural development, environmental protection, and the prioritizing of debt reserves. Government debt stood at 74.5 percent of GDP in FY2000, with the Government indicating that it will be allocating NZ$1 million each financial year to future debt repayment. The money supply has accelerated in line with the recent economic recovery. The principal policy issue for the Cook Islands remains that of completing the economic restructuring program (which was begun in 1996) and consolidating its achievements. For private sector development, areas requiring government attention include tariff reform, privatization, an appropriate regulatory framework, and review of laws and regulations affecting the operation of markets for labor and transport services. In view of a high incidence of noncommunicable diseases, particularly diabetes and hypertension, public awareness programs have been put in place.

ADB operations

Operational strategy: ADB’s operational strategy for the Cook Islands is to continue the ongoing reform process, as the country moves into a phase of consolidation, by providing timely and focused technical assistance on matters where in-country expertise is unavailable. ADB also aims to provide enabling environments for private sector growth. Loans and technical assistance grants will strengthen in-country capacities to sustain essential infrastructure and services. A medium-term objective is to establish effective regulatory and management frameworks in key sectors that may be shifted to private control or management. Initiatives will be taken to improve services in the outer island communities.

Policy dialogue: Policy dialogue with the Government focused on private sector-led development, including enhanced participation of the private sector in providing public utilities and the need to retain a high degree of fiscal discipline in a period of strong economic growth. The policy agenda included debt management and the need to prioritize and minimize perceived requirements for increased public sector expenditure.

Loans and technical assistance: No loans were approved in 2000. ADB approved two advisory technical assistance grants totaling $280,000 to prepare the Cook Islands’ economic report and review its pension and insurance schemes.

Project implementation: Since joining ADB in 1976, the Cook Islands has received 11 loans, of which 2 were active at the end of 2000. Contract awards totaled $610,000, bringing the cumulative figure to $24.6 million. The contract award ratio was 18.4 percent, lower than the ADB-wide average of 21 percent. Disbursements during the year totaled $390,000, bringing cumulative disbursements to $22.2 million. The disbursement ratio was 28.4 percent, higher than the ADB-wide average of 20.5 percent.

ADB’s portfolio performance in the Cook Islands was satisfactory in terms of implementation progress and achieving development objectives. The Cook Islands complied with the submission of audited project accounts and financial statements, and environmental and social covenants.

   

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