Structure of current debt. Continuing to upgrade tourist facilities and services to attract higher income tourists and improve the tourist experience. 2023 BBC. The overall public sector gross debt on 30th June 2020 was equivalent to NZ$110.8 million, of which 49 percent was direct crown debt (owed by the central government) and 51 percent were loans held on behalf of state-owned enterprises (SOEs). The name "Cook Islands", in honour of Cook, first appeared on a Russian naval chart published by Adam Johann von Krusenstern in the 1820s. [42], Note: The table is ordered from north to south. A former British protectorate which became self-governing in 1965. Improving communications with the undersea cable will be an important advance in allowing access to information resources and flows, which will facilitate private sector activity, including mobile banking and trade flows. Alternative scenarios suggest that there are some vulnerabilities in the debt structure and, should downside risks materialize, the debt ratio could rise rapidly to unsustainable levels. 33. Introduced by the wives of missionaries in the 19th century, the craft grew into a communal activity, which is probably one of the main reasons for its popularity. Cook Islands - Wikipedia The islands are geographically scattered, which raises the per capita cost of delivering essential services. The Cook Islands has an offshore international financial services industry that was established in the 1980s. Agriculture, employing more than one-quarter of the working population, provides the economic base with major exports of copra and citrus fruit. Risks to growth are on the downside. The largest proportion of the debt is held by the ADB (74 percent) and the Export/Import Bank of China (24 percent). Demographics of the Cook Islands - Wikipedia Some inherent risks remain in the banking system that need to be carefully monitored. Improving the laws surrounding the use of land will be important in facilitating the more efficient use of this scarce resource on the main island. [57] The religious distribution is as follows: The various Protestant groups account for 62.8% of the believers, the most followed denomination being the Cook Islands Christian Church with 49.1%. However, there are continual efforts to interest young people in their heritage and some good work is being turned out under the guidance of older carvers. The FSC has a close working relationship with Reserve Bank of New Zealand (RBNZ), and has memorandums of understanding with the RBNZ, the Australian Prudential Regulation Authority (APRA) and the Bank of Papua New Guinea (BPNG). Aliens and citizens Citizenship Te Ara Encyclopedia of New Zealand, "Cook Islands Marae Moana legislation passed", "Cook Islands: Backlash over name change leads to compromise traditional name", "Renewed calls for the Cook Islands to take on indigenous name", "Cook Islands climate: average weather, temperature, precipitation, best time", "An Ecoregion-Based Approach to Protecting Half the Terrestrial Realm", "Cook Islands Ministry of Finance and Economic Management, 2016 Census", "Cook Islands System of Government Information", "Treaty Between the United States of America and the Cook Islands on Friendship and Delimitation of the Maritime Boundary Between the United States of America and the Cook Islands (and Exchange of Notes)", "Agreement on Maritime Delimitation Between the Government of the Cook Islands and the Government of the French Republic", "Chapter XXVI: Disarmament No. The authorities plan to review the revenue regime and continue to work on public financial management (PFM) reforms. The first name given by Europeans was Gente Hermosa (beautiful people) by Spanish explorers to Rakahanga in 1606. The tax amnesty should be reconsidered, as it creates incentives for tax avoidance and makes tax administration more costly and complicated. Renewal fees contribute between 76 and 80 percent to the FSCs annual revenue. But some observers have suggested that imports may be significantly underestimated, which could imply a rising current account deficit. The proximity of many buildings and infrastructure services to the coast on the main island of Rarotonga and the concentration of the economy on tourism reinforce the exposure to natural disaster risk. The aggregate loan-to-deposit ratio has fallen from 100 percent in 2014 to 50 percent in 2018 as credit growth has fallen and deposits continue to expand. The government has also prepared for the possibility of developing the subsea mineral industry, which could provide a boost to income in the long-term. This article is about the demographic features of the population of the Cook Islands, including population density, ethnicity, education level, health of the populace, economic status, religious affiliations and other aspects of the population. The two international banks could count on head offices to provide liquidity in case of natural disasters, but it might be advisable for BCI to have higher reserves on hand for this kind of event. 18. Fifty years later they are renamed after him. The Cook Islands[a] is a self-governing island country in the South Pacific Ocean in free association with New Zealand. [50] In 2023, legislation was passed which legalised homosexuality.[51]. Enhancing tourist development will require sorting out the use of land and other constraints including labor and communications infrastructure. [39], The Cook Islands are in the South Pacific Ocean, north-east of New Zealand, between American Samoa and French Polynesia. In early 2020 the south Pacific country was forced to close its borders to keep Covid . [34] The islands remained a New Zealand dependent territory until the New Zealand Government decided to grant them self-governing status. In terms of currency composition, part of the ADB lending is in SDRs (20 percent of total debt). The Hervey Islands later came to be applied to the entire southern group. Another risk is the large exposure of the government owned bank (BCI) to movements in government balances.17 A third risk arises from natural disasters. Colombia: Policy Strategy for Public Financial Management of Natural Disaster Risk. These islands are geographically positioned both in the Southern and Eastern hemispheres of the Earth. Its unique relationship with New Zealand has helped to bring in considerable technical assistance and education, and PFTAC and other donors have also concentrated on public financial management. to the outer islands) and with the rest of the world. [8] Cook Islanders of non-indigenous descent include other Pacific Island peoples, Papa'a (Europeans), and those of Asian descent. The Cook Islands is a self-governing territory in free association with New Zealand, but it is not an IMF member (Box 1). The Cook Islands have been an active member of the Pacific Community since 1980. The 2021 total marks an 8.5% rise in real terms (i.e. To reduce longer-term vulnerabilities will require further cementing disaster resilience and improving the execution of public investment projects, and carefully monitoring risks in the banking system. The Cook Islands comprise 15 islands split between two island groups, which have carried individual names in indigenous languages including Cook Islands Mori and Pukapukan throughout the time they have been inhabited. The census of 2021 put the total population at 15,040. A mission was requested by the New Zealand authorities to the Cook Islands to focus on policy options for transitioning to high-income status, financial sector stability and regulatory framework, and debt sustainability.1 It evaluated these issues in the context of the medium-term outlook and against the context of a recently developed fiscal framework. Funds are invested and managed in New Zealand and overseas. Under a constant primary balance scenario where the primary balance is kept at the 2019 level throughout the projection period, the debt ratio remains low, falling to 10.5 percent of GDP. Is Cook Islands a poor country? | - CountryReports After a period of slow or negative growth, real GDP has expanded rapidly in recent years. Uncertainty of the Investment Environment. Monetary union with New Zealand has provided monetary and external financial stability. You can help Wikipedia by expanding it. High quality economic statistics are essential to provide a sound foundation for policy analysis. CountryReports 1997 - 2023 - All Rights Reserved. In addition much of the land in Cook Islands is owned by residents in New Zealand. 20. It includes the establishment of a Stabilization Account to accumulate excess cash balances (above four months of operating expenditure) in periods of strong economic growth (nominal growth of 4 percent and above) to be used for additional debt repayments, and to cover operational and capital expenditure during periods of economic contraction (defined as real economic growth lower than 1 percent per year).8 The MTFS also establishes a Sovereign Wealth Fund to capture revenues expected in the future from seabed minerals harvesting, which is an appropriate intergenerational savings vehicle for revenues from an exhaustible natural resource. The fiscal balance moved from a deficit of 8 percent of GDP in FY15 to consistent surpluses in FY16-FY19. He had become prime minister on the retirement of Henry Puna in October 2020, having served as finance minister since 2010. 8; page 10, "Census 2016 - Cook Islands - Ministry of Finance and Economic Management", "UNCTADstat - General Profile: Cook Islands", "2018 Census ethnic group summaries Cook Islands Maori", "Cook Islands to choose new indigenous name and remove any association with British explorer", "Cook Islands government backs name change body", "Development of coral reefs and human settlement: Archaeological research in the Northern Cook Islands and Rarotonga", "East Polynesian Relationships: Settlement Pattern and Time Involved as Indicated by Vocabulary Agreements", 3. The national statistics office has made recent improvements in a range of economic statistics, including a rebasing of GDP, initial balance of payments estimates and improved government financial statistics (GFS) accounting. country comparison to the world (CIA rank, may be based on non-current data): 106. In addition, to preserve its relationship with the European Union the Cook Islands has decided to remove tax advantages for the international financial service industry. While no labor force data are available, a measure of the average wage based on contributions to the Cook Islands Superannuation Fund (Text Figure 2) suggest that wages have risen on average about 8 percent per year from 2015 to 2018.5 Private investment in tourist housing may have increased capacity somewhat, but not sufficiently to ease constraints. The first European contact with the islands took place in 1595 when the Spanish navigator lvaro de Mendaa de Neira sighted the island of Pukapuka, which he named San Bernardo (Saint Bernard). This has been achieved through a combination of higher tax and non-tax revenue (due to improvements in administration), and control of the growth of current expenditure (particularly compensation of employees). Cook Islands - The World Factbook adjusted for inflation and exchange . A downturn in tourism led to an economic downturn that brought external debt to 140 percent of GDP. The government is also investing in essential infrastructure, including an undersea cable that will improve telecommunications capacity significantly, and large water and sanitation projects. Together, these factors determine the capacity for expansion in tourism, as well as for construction and other activities. Each council is headed by a mayor. BCI operates on all islands and channels government subsidies, child benefit and pension payments to beneficiaries, and is responsible for the payment of government salaries. The soft limit of 30 percent of GDP for net debt seems appropriately conservative given the risk of shocks from natural disasters, the narrow base and small size of the economy, and is in line with international experience in terms of ensuring debt sustainability.13, Cook Islands Public Sector Debt Sustainability Analysis (DSA) Baseline Scenario, (in percent of GDP unless otherwise indicated), Cook Islands Public DSA Composition of Public Debt and Alternative Scenarios. [27] However, it did not include Aitutaki. Bank recovery and resolution are more complex for branches than subsidiaries and it is important that the FSC has adequate legislative powers to manage a bank failure in an orderly manner. For nearly a year and a half after the onset of the pandemic, the Cook Islands didn't see a single tourist. Part of the reason is scale, but the higher spreads are also influenced by the land tenure arrangements which make it difficult to use land as collateral.16 Cost of recovery is relatively higher as reflected in the high level of NPLs. In 1901, the New Zealand parliament passed the Cook and other Islands Government Act, demonstrating that the name "Cook Islands" only referred to some of the islands. The Ministry of Finance and Economic Management says the tourism-led economy could fall 4.4 per cent in the 2019/20 financial year with another 5.9 per cent decline in 2020/21. The legal definition of Cook Islands Mori includes Pukapukan.[65]. The banks have an aggregate capital adequacy ratio that is relatively high at around 17 percent, well above the regulatory floor of 10 percent, and the banking system is highly liquid. The Cook Islands became aligned to the United Kingdom in 1890, largely because of the fear of British residents that France might occupy the islands as it already had Tahiti. Thus, with the risk that the international financial services industry may contract, an alternative stable source of funding for the FSC would need to be developed. 25. Asia and Pacific Dept. Realistic medium-term forecasts will improve the credibility of the governments budget as a signal of its fiscal program and help smooth expenditure management. Pacific countries with dispersed island populations and remote locations also received poor services [63, 70, 72]. In 2018 the balances in the Loan Repayment Fund amounted to about 4 percent of GDP and are expected to decline to 2 percent of GDP by 2023. [47] In 1990 the Cook Islands and France signed a treaty that delimited the boundary between the Cook Islands and French Polynesia. The most recent audits that have been completed are for the 2014 fiscal year. With a small population, a rapidly growing economy, and the migration of many younger inhabitants to New Zealand, the Cook Islands faces shortages of both skilled labor and unskilled labor. The last census was carried out in 2021 and the next census will be carried out in 2026. The BBC is not responsible for the content of external sites. The best things to do in the Cook Islands - Lonely Planet Additionally, the economy is supported by foreign aid, largely from New Zealand. Population figures from the 2016 census. While there is a rationale for regulating certain kinds of foreign investment, transparent non-discriminatory rules will work best to attract feasible projects and capital for development in the Cook Islands and help the economy become more diversified. Around 72 percent of the population resides on Rarotongathe main island and hub of commercial activities and tourism. The FSC generates most of its regular revenue from licensing, registration, renewal, and other fees paid by international financial service providers. Given the economy seems to be operating above potential, the near- to medium-term outlook is for slowing growth and higher inflation. Head of state: King Charles III, represented by a King's representative. China has also contributed foreign aid, which has resulted in, among other projects, the Police Headquarters building. The FSC is charged to maintain the soundness of the financial system. The largest non-Protestant denomination are Roman Catholics, followed by the Church of Jesus Christ of Latter-day Saints. Exit clause: the government may breach these rules in the event of a natural disaster and the declaration of a state of emergency, or in the event of a severe economic shock that leads to an expected contraction in GDP of 2 percent or more. During the projection period real growth is expected to average around 4 percent and inflation to remain below 2 percent. They visited, from at least 1826, to obtain water, food, and firewood. Alternative Scenarios. 17. RESULTS REPORT Programme budget 2020-2021 Foreword Executive summary Feature stories Billion targets Budget highlights Outcomes Country reports Dr Tedros Adhanom Ghebreyesus Director-General's foreword On 11 June 1980, the United States signed a treaty with the Cook Islands specifying the maritime border between the Cook Islands and American Samoa and also relinquishing any American claims to Penrhyn, Pukapuka, Manihiki, and Rakahanga. The overall fiscal balance is expected to move into a deficit of 1 percent of GDP reflecting a large ramp-up of capital investment to 12.7 percent of GDP, of which about two-thirds will be financed through grants. The remaining 2 percent of debt is commercial borrowing. and recently received crown appropriations only in fiscal years 2014 and 2015. See for example the IMF and World Bank debt sustainability framework for low income countries (https://www.imf.org/en/Publications/Policy-Papers/Issues/2018/02/14/pp122617guidance-note-on-lic-dsf). Trade deficits are offset by remittances from emigrants and by foreign aid overwhelmingly from New Zealand. A mission was requested by the New Zealand authorities to the Cook Islands to focus on policy options for transitioning to high-income status, financial sector stability and regulatory framework, and debt sustainability.1 It evaluated these issues in the context of the medium-term outlook and against the context of a recently developed fiscal framework. The islands were named after COOK in the 1820s by Russian mapmakers. 6/ The real interest rate contribution is derived from the numerator in footnote 5 as r- (1+g) and the real growth contribution as -g. 7/ The exchange rate contribution is derived from the numerator in footnote 5 asae(1+ r). Cook Islands country brief | Australian Government Department of