Countries and Regions

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p. 2 of 9 BACK | NEXT I. Development Situation A. Recent Political and Social Developments B. Economic Assessment and Outlook C. Implications for the Country Strategy and Program II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Lending Level

Country Strategy and Program Update 2002-2004: Cook Islands : I. Development Situation

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A. Recent Political and Social Developments

1. The coalition government that was formed in late 1999 is consolidating its policy of stabilizing the administration as a means of steadying the country on a path of solid economic growth. The Government has established four overarching goals to capture the essence of promoting the interests and welfare of "people first," and contribute to a framework for socio-economic development:

1. maintaining macroeconomic stability to sustain private sector growth and put additional resources into the growth sectors: marine resources, tourism, agriculture, and offshore financial services;
2. empowering people of the outer islands by advancing the principles of good governance, including decentralized administrative infrastructure and improved management systems;
3. advancing social justice through equal access to basic services such as health, education, law and order, welfare, and reduction of interisland disparities; and
4. protecting the country's security and promoting national interests abroad by working actively with the international community.

2. The solidarity of the coalition government has been settled by a legal decision, which determined the outcome of a long-running dispute on the election results in the island of Pukapuka in favor of the Government. With the support of two independent members of parliament, the Government has an assured two-thirds majority that is required to effect constitutional change. Mayoral elections were held in the outer islands during April 2001, marking another step in the increased empowerment of island councils.

3. The Cook Islands recently celebrated a centenary of ties with New Zealand, which have been captured in a Joint Centenary Declaration between the two countries. If requested, New Zealand will continue to provide assistance in matters such as foreign affairs, defense, and security. Cook Islanders retain New Zealand citizenship.

4. The Government has indicated its intention to increase social cohesiveness, particularly by giving attention to education (by addressing issues raised in the recent education sector review), human resources (by establishing a stand-alone human resources development agency), health (by addressing issues raised in the recent health sector review), police, internal affairs (by concentrating on initiatives that benefit the family at home and youth enterprise, and by clarifying the benefits of social welfare), environment (with an improved legislative framework, and by increasing the capacity of the Environment Service), superannuation (by establishing a national superannuation scheme), and by protecting landowners against unfair land arrangements.

5. The minimum wage was recently raised to NZ$4.0 per hour, and is not now categorized by age group. Taxes on alcohol and tobacco were increased to contribute to the cost of treatment and effects of diseases. Additional assistance has been provided for the elderly, and an improved facility was established to provide treatment in mental health cases.

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