ADB's Work in the Cook Islands
Weathering Crises Together
The Cook Islands is one of the world’s most remote states. Even travel within the country can be arduous and expensive. But the remoteness is also an asset, making the country a largely unspoiled tourist destination. Tourism is the country’s leading source of revenue, accounting for about 60% of gross domestic product.
Since the Cook Islands joined ADB in 1976, ADB has worked as a partner to build critical infrastructure, helped build resilience, responded to disasters, and supported the government’s policy reforms aimed at spurring economic growth and reducing hardship.
The Cook Islands relies heavily on maritime imports to support its tourism industry and for international and domestic trade. This was put in jeopardy in 2005 when a series of cyclones damaged the Avatiu Port, on the island of Rarotonga, which handles 90% of the country’s imports.
ADB responded with a $2.5 million concessional loan that helped repair the port. Most basic services were restored within a few months of the storms. Then, in 2008, ADB supported the Avatiu Port Development Project, valued at $24 million, to improve the harbor and strengthen the protective breakwater. Completed in 2013, this included climate-proofing features such as the ability to raise the height of the wharf to cope with the half-meter sea level rise expected during its lifetime.
ADB is supporting the Cook Islands to achieve its ambitious target to use 100% renewable energy. With cofinancing from the Global Environment Facility and the European Union, ADB has mobilized almost $23 million for solar power in the remote southern islands of Atiu, Mangaia, Mauke, and Mitiaro. The 2 megawatts of new capacity expected to be installed is equivalent to about 15% of the country’s total power supply. ADB has also secured funding from the Green Climate Fund to scale up this program through the incorporation of battery power storage technology.
Looking ahead, ADB expects to work with partners to support the Cook Islands to connect to a planned new cable between Samoa and French Polynesia. This will dramatically reduce the cost of phone and internet connectivity.
Responding to Shocks and Supporting the Most Vulnerable
In the early years of the partnership, ADB focused on education and the pearl industry. In 1980, the Cook Islands was one of the first ADB members to receive a multi-project loan, a mechanism to efficiently package small projects, which otherwise would not have met criteria for financing due to their size. That was followed by a loan supporting the Cook Islands Development Bank in 1982.
In the mid-1990s, the Cook Islands faced a fiscal crisis. ADB responded in 1996 with the Economic Restructuring Program, supported by a $4.8 million loan. ADB acted as an “honest broker” in the restructuring of the country’s debts through this program, which resulted in more favorable lending arrangements with creditors.
Also in the mid-1990s, the ADB-supported Education Development Project helped train 300 teachers in the country’s primary and secondary schools. It also repaired and built schools, and provided textbooks and teaching aids to libraries, teachers, and students. The wide-ranging project enabled major reforms and modernization including developing a student assessment system, improving subject curricula, and initiating programs for early childhood education, special education, and distance learning.
"The Cook Islands have enjoyed a productive and long-standing relationship with the Asian Development Bank. We have weathered crises together and in more recent years, our partnership has matured, reflecting our development as a country. We continue to appreciate the flexible approach to our country needs."
In early 2005, the Cook Islands was struck by five major cyclones— all with wind speeds of more than 200 kilometers per hour. ADB partnered with the Government of the Cook Islands in the Cyclone Emergency Assistance Project to help rebuild after the devastating storms, with a particular focus on the tourism industry, the mainstay of the economy. By 2009, visitor arrivals had rebounded, and tourist numbers have continued to climb.
As the 2005 cyclone recovery efforts were bearing fruit, the Cook Islands was hit by another major setback—the global financial crisis of 2007–2008. ADB responded with loans totaling $16 million for the Economic Recovery Support Program. The program supported higher public spending on rebuilding and rehabilitating social and economic infrastructure, increased assistance to the country’s most vulnerable communities, and improved government financial management.
The downturn highlighted the need for effective social policies to shelter vulnerable households, especially the elderly, from hardship arising from lower remittances, reduced tourism earnings, and frequent and intense natural disasters. The number of vulnerable households had been growing, especially on the outer islands, as migration to urban centers and overseas broke down the traditional informal support systems that ensured care for the elderly.
To respond to this growing crisis, ADB piloted semi formal professional care services for the elderly and disabled to complement the economic recovery and government budget support projects. A grant of $900,000 funded home care and nursing services, a national consultation on the social welfare review, and the development of a national social protection safety net. One-third of the funds went to trial performance-based schemes to provide home care and nursing services for the elderly and persons with disabilities. Project manager Debbie Ave explains, “Some of our papas and mamas were found to be in an extremely neglected state and left on their own at home. This is why having well-trained, passionate caregivers like those funded by the project is so valuable and important to our communities for the ongoing welfare and care of our elderly and people with disabilities.”
The government sought a $10 million contingent credit from ADB in 2016, which can be drawn down quickly after a natural disaster to support emergency responses and increase the Cook Islands’ resilience.
This is the first contingent credit line that ADB has offered to any member country. The financing complements the Cook Islands’ own efforts to build fiscal buffers and other mechanisms that will help it weather future disasters. An ADB field office opened in 2012 to support ADB’s expanding engagement in the Cook Islands. Looking ahead, the two partners will continue to seek creative and lasting solutions that will strengthen the country’s resilience and achieve sustainable development.
This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.