The government is targeting fisheries and seabed mining as sectors for future economic growth. On the domestic side, capacity constraints could become more binding, which would lead to higher inflation and a sharper slowing in the growth of tourism activity. Although most deposit and lending rates are comparable to New Zealand banks, housing mortgage rates are about 300 to 400 basis points higher. The Hervey Islands later came to be applied to the entire southern group. The remaining 2 percent of debt is commercial borrowing. Subsequent reforms, including the sale of state assets, the strengthening of economic management, the encouragement of tourism, and a debt restructuring agreement, have rekindled investment and growth. IMF Country Report No. 20/269 COOK ISLANDS In real prices December quarter 2020 recorded a value of $85.4 million compared to $95.0 million in September 2020. The Cook Islands has also sought to diversify its sources of economic activity through the establishment of an international financial services industry (especially for international trusts), and also receives revenue from fishing licenses. 30. 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. 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. Cook Islands in: IMF Staff Country Reports Volume 2020 Issue 269 (2020) 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. However, the government needs to continue to focus on improvements in public administration capacity as a key measure in its transition to high income status.11 The 2019/20 Budget priority to raise government salaries to reflect increases in the cost of living and the need to attract returning highly skilled Cook Islanders from overseas is welcome in this regard. Realistic medium-term forecasts will improve the credibility of the governments budget as a signal of its fiscal program and help smooth expenditure management. A recent debt rating report from a major rating agency cited: The vulnerabilities associated with the countrys weak policymaking culture and institutional settings are a key ratings constraint.. 12. The office said "from July through to . [71] The Cook Islands National Museum also exhibits art. That change was off the back of phenomenal growth in tourism, an industry which has . (Accessed on 28 June 2023) Disclaimer. Executive power is exercised by the government, with the Prime Minister as head of government. The Cook Islands are a group of 15 small islands that are spread over 2 million sq. [23] The first recorded landing on Rarotonga by Europeans was in 1814 by the Cumberland; trouble broke out between the sailors and the Islanders and many were killed on both sides. While the Cook Islands could not count on government guarantees from New Zealand, the close political and economic ties help to distinguish the Cook Islands from peers. The Cook Islands also have a high exposure to natural disaster risk due to its geographic location in the South Pacific cyclone belt and the remoteness and low-lying nature of many of its outer islands. Language links are at the top of the page across from the title. Small scale, remoteness, the dispersion of the population in outer islands, and a shortage of skilled and unskilled labor constrain economic growth and diversification. The Cook Islands is a country in "Free Association" with New Zealand, having full control to create its own laws, but New Zealand maintains responsibility for its defense and foreign affairs. Members and employers each contribute 5 percent of the salary, and an implied wage can be estimated from the value total contributions and the number of members. Formerly, male homosexuality was de jure illegal in the Cook Islands and was punishable by a maximum term of seven years imprisonment; however, the law was never enforced. [47] In 1990 the Cook Islands and France signed a treaty that delimited the boundary between the Cook Islands and French Polynesia. 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). The mission team comprised Geoffrey Bannister (APD), Ryota Nakatani (FAD) and Iris Claus (PFTAC). 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. Although the recorded consumer price inflation has been on a declining trend from close to 2 percent year-on-year in 2015 to 0.2 percent in June 2019, mainly because of subdued imported inflation (mostly from New Zealand), there are questions about whether the rental component of housing is appropriately captured, and anecdotally rents are said to have risen very quickly in recent years, to similar levels as in New Zealand.4 There is also evidence of binding capacity constraints emerging in labor markets, particularly in tourism and construction, despite the influx of guest workers from the Philippines and other parts of Asia. Cook Islands - World Health Organization Sources: National authorities; and IMF staff calculations. 5. They are made from the uncurled immature fibre of the coconut palm and are of very high quality. Particularly fine examples of rito hats are worn by women to church. The authorities plan to review the revenue regime and continue to work on public financial management (PFM) reforms. Pedro Fernandes de Queirs, a Portuguese captain at the service of the Spanish Crown, made the first European landing in the islands when he set foot on Rakahanga in 1606, calling the island Gente Hermosa (Beautiful People). The Cook Islands government estimates that the impact of graduation on economic growth will be 0.4 percent of GDP (2018/19 Half-Year Economic and Fiscal Update). 28. The weaving of rito is a speciality of the northern islands, Manihiki, Rakahanga and Penrhyn. The path forward economically will most likely be through the provision of services. Agriculture, the sale of fishing licences to foreign fleets and offshore finance are also key revenue earners. Roles, responsibilities and decision-making processes for dealing with a crisis and the exercise of resolution powers should be agreed among stakeholders and formalized. The Cook Islands National Superannuation Fund (CINSF) is a compulsory superannuation scheme. Among the more important constraints identified by the mission to this process are: Infrastructure needs. Taxing international companies in the Cook Islands will likely lead to the contraction of the international financial services industry with an effect on growth and tax revenues. English and Cook Islands Mori are official languages of the Cook Islands; per the Te Reo Maori Act. National Sustainable Development Plan 2016-2020 2016 - Cook Islands: Second joint national action plan for climate change and disaster risk management 2016-2020 (JNAP II) In the 1820s, Russian Admiral Adam Johann von Krusenstern referred to the southern islands as the "Cook Islands" in his Atlas de l'Ocean Pacifique. The objective in establishing the FSDA was to encourage, promote, and develop the Cook Islands financial services industry to achieve sustained growth, which is economically beneficial, socially responsible and reputable. Although the emphasis on providing services for outer islands and rural communities has been articulated, the actual implementation has varied depending on available resources and support including staffing, political commitment . 1888 - Cook Islands are proclaimed a British protectorate and a single federal parliament is established. There are clear signs that the economy has reached, and is probably exceeding, its potential growth rate. Under a historical scenario, with growth, inflation and the primary balance are at their ten year historical averages, gross debt would rise a little above the baseline, to 17 percent of GDP in 2023. Some key dates in the history of the Cook Islands: 1596 - Spaniard Alvaro de Mendana is the first European to sight the islands. 2. 9/Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year. There are three commercial banks: ANZ Banking Group Limited (ANZ) and Bank of South Pacific (BSP) Limited operate as foreign-owned branches, while the Bank of the Cook Islands (BCI) Limited is owned by the government. An additional domestic bank, Capital Security Bank (CSB), is an onshore commercial bank that specializes in providing trust and wealth management services to international clients. 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. Cook Islands - The World Factbook The Cook Islands Police Service is the police force of the Cook Islands. 22. [24] Henry led the nation until 1978, when he was accused of vote-rigging and resigned. [29][30] In 1901 the islands were included within the boundaries of the Colony of New Zealand by Order in Council[31] under the Colonial Boundaries Act, 1895 of the United Kingdom. Rarotonga is known for its fisherman's gods and staff-gods, Atiu for its wooden seats, Mitiaro, Mauke and Atiu for mace and slab gods and Mangaia for its ceremonial adzes. There are eleven airports in the Cook Islands, including one with a paved runway, Rarotonga International Airport,[62] served by four passenger airlines. country comparison to the world (CIA rank, may be based on non-current data): 106. Most of the debt is medium- and long-term, with the average maturity a little over 12 years, and the average effective interest rate is around 3 percent. Despite rapid economic expansion, credit is falling in absolute terms. 1946 - Legislative Council is established. Structure of current debt. Cook Islands Country Summary Introduction Background Polynesians from Tahiti and Samoa first settled the islands around A.D. 900. 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. Funds are invested and managed in New Zealand and overseas. 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. Under the current baseline scenario, which aims to bring the overall surplus to 1 percent of GDP in FY23, cash reserves in the current and stabilization accounts would rise from 17 percent of GDP in 2017 to 19 percent of GDP in 2023. The 20 Poorest Countries in the World By Garrett Parker Posted on August 8, 2016 Updated on August 3, 2020 Poverty levels in these countries has been rising over the years. [63] The Cook Islands News has been published since 1945, although it was owned by the government until 1989. 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. Macroeconomic and Financial Policies, A. Defence is the responsibility of New Zealand, in consultation with the Cook Islands and at its request. and low debt levels, saw the Cook Islands graduate to OECD high income country status in January 2020. A recent boom in tourist arrivals and large infrastructure projects have raised economic growth significantly, with real GDP expected to have expanded by about 9 percent in FY17/18 (June to June) while recorded inflation remained relatively stable and low. The Cook Islands is a self-governing territory in free association with New Zealand, but it is not an IMF member (Box 1). Land area refers to the total area of a country excluding area under inland water bodies. High quality economic statistics are essential to provide a sound foundation for policy analysis. With an ROE of 15 percent and an ROA of around 1 percent profitability seems adequate compared to advanced country levels, but is low compared to other Pacific island countries. [10] Most Cook Islanders are citizens of New Zealand, but they also have the status of Cook Islands nationals, which is not given to other New Zealand citizens. 32. 2000 - 2020. It is based on a target on net debt as the fiscal anchor, and fiscal responsibility ratios for the fiscal balance, expenditure growth and cash reserves (see Box 2). Fiscal policy has been appropriately tight in response to the economic upswing. 9 Treaty on the Prohibition of Nuclear Weapons", "State Sponsored Homophobia 2016: A world survey of sexual orientation laws: criminalisation, protection and recognition", International Lesbian, Gay, Bisexual, Trans and Intersex Association, "Cook Islands parliament decriminalises homosexuality", "Rarotonga Local Government (Repeal) Bill To Be Tabled, Cook Islands Government", Minister asked to answer queries over abolition of Vaka Councils, "Demographic Yearbook, Population by age, sex and urban/rural residence: latest available year, 20052014", "United Nations Statistics Division Demographic and Social Statistics", "Cook Islands, a Paradise of Untouchable Assets", "Review of Offshore Jurisdictions: Cook Islands", "Research Guides: Pacific Islands Newspapers: Cook Islands", "Late Cooks PM a Free Press Leader: PFF - Solomon Times Online", "Lords of the Dance: Culture of the Cook Islands", "BCA Gallery, Beachcomber Art, Rarotonga Art, Cook Islands Art, Pacifc Art, South Pacific Art", "Ian George Tautai Guiding Pacific Artstautai Guiding Pacific Arts", "Cook Islands Museum and Library Society | Official Website of the Cook Islands Library & Museum Society", "Cook Islands Biodiversity: Rattus rattus Ship Rat", "Cook Islands Biodiversity: Rattus exulans Pacific Rat", "Cook Islands Biodiversity: The Status of Cook Islands Birds 1996", "BirdLife International: Rimatara Lorikeet (Vini kuhlii) at", "Centropyge boylei, Peppermint angelfish", African, Caribbean and Pacific Group of States, Western and Central Pacific Fisheries Commission (WCPFC), tapa ["masi" (Fiji), "ngatu" (Tonga), "siapo" (Smoa), " uha" (Rotuma)], Asian American and Pacific Islander Policy Research Consortium, Australian Institute of Aboriginal and Torres Strait Islander Studies, https://en.wikipedia.org/w/index.php?title=Cook_Islands&oldid=1159571004, English-speaking countries and territories, States and territories established in 1965, Articles containing Cook Islands Mori-language text, Articles containing Penrhyn-language text, Short description is different from Wikidata, Articles containing explicitly cited English-language text, Articles containing potentially dated statements from 2018, All articles containing potentially dated statements, Wikipedia articles in need of updating from June 2020, All Wikipedia articles in need of updating, Articles with unsourced statements from March 2023, Official website different in Wikidata and Wikipedia, Articles with MusicBrainz area identifiers, Creative Commons Attribution-ShareAlike License 4.0, Seven districts lie in more than one region, These combine the regional and the territorial authority levels in one, The national flower of the Cook Islands is the, The Cook Islands have a large non-native population of, The Islands' surrounding waters are the home of the, This page was last edited on 11 June 2023, at 05:29. P. 761. 29 June 2021. The decision to use funds in the stabilization account for debt repayment will be made with reference to a Debt Management Strategy to be developed in 2019. Although Cook Islands has a per-capita income level commensurate with higher income countries, and public administration capacity at a level above most of its peers, because of its remoteness, small size and shortage of skilled labor, capacity in public administration continues to be constrained. 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. The Cook Islands were first settled around AD 1000[19] by Polynesian people who are thought to have migrated from Tahiti,[20] an island 1,154 kilometres (717mi) to the northeast of the main island of Rarotonga. [58] Tourism provides the economic base that makes up approximately 67.5% of GDP. Cambodia Economic Update, April 2016: Improving Macroeconomic and Financial Resilience. The government expects growth to fall to 5 percent in 2019, and to average around 2 percent through 2023, based on continued growth in tourism, private investment in tourism accommodation, and public infrastructure investment (mainly financed by grants). Who was Nahel M, shot by police in Nanterre? 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 financial system comprises about thirty financial entities. 27. In addition much of the land in Cook Islands is owned by residents in New Zealand. Within the MTFS, the government has revised its Fiscal Responsibility Ratios (FRRs). A British Proclamation was issued, stating that the cessions were accepted and the islands declared parts of Her Britannic Majesty's dominions. In addition, as growth in New Zealand and the world economy slow, tourist arrivals are expected to continue to grow albeit at a slower pace, which will also lead to more moderate growth. On Rarotonga, the main commercial galleries are Beachcomber Contemporary Art (Taputapuatea, Avarua) run by Ben & Trevon Bergman,[70] and The Art Studio Gallery (Arorangi) run by Ian and Kay George. Music in the Cook Islands is varied, with Christian songs being quite popular, but traditional dancing and songs in Polynesian languages remain popular. Country context The Cook Islands is a Polynesian country consisting of 15 islands (12 inhabited) with an exclusive . Under a natural disaster scenario, where growth falls by two percentage points below the baseline in 202021 and one percentage point thereafter, and the primary balance goes to a deficit of between 2 and 4 percent during the projection period, gross debt would rise to 35 percent of GDP by 2023. The MOUs should be expanded to include contingency planning and crisis management. 20. He was stripped of his knighthood in 1979. 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. [59][60] According to The New York Times, the Cooks have "laws devised to protect foreigners' assets from legal claims in their home countries", which were apparently crafted specifically to thwart the long arm of American justice; creditors must travel to the Cook Islands and argue their cases under Cooks law, often at prohibitive expense. A fan chart based on historical averages, variances and covariances of the relevant variables presents a band of possible outcomes under the baseline from a low of 11 percent to a high of 24 percent. Mangaia also produces food pounders carved from the heavy calcite found in its extensive limestone caves. 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. It is isolated from foreign markets, and has some inadequate infrastructure; it lacks major natural resources, has limited manufacturing and suffers moderately from natural disasters. Another traditional area of specialization for Cook Islands is international financial services, but this is unlikely to supply income growth going forward. The link was not copied. 16. 31. Background. The following demographic statistics are from the CIA World Factbook, unless otherwise indicated.[5]. Cook Islands 2023: Best Places to Visit - Tripadvisor Using tax and Cook Islands Statistics Offices data, it is estimated that the disappearance of the international financial services industry would lead to a one-off decline in GDP of between 2.1 and 2.6 percent and a decline in tax revenue of about NZ$3.5 to NZ$4.1 million a year, (about 3 percent of total value added tax (VAT), income and withholding taxes collected in 2018). Source: Cook Islands Ministry of Finance & Economic Management, III. The largest proportion of the debt is held by the ADB (74 percent) and the Export/Import Bank of China (24 percent). The total population in Cook Islands is projected at 17,564 or 17.56 thousands people for the year 2020. country Cook Islands Land area (km2) 237 1 Capital Avarua Exclusive economic zone (km2) 1 830 000 1 Government and legal status . With the global financial crisis, a loosening of the fiscal rules and restrictions was implemented to create space to provide economic stimulus and much needed public investments to facilitate economic recovery. Manufacturing activities are limited to fruit processing, clothing, and handicrafts. 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. [citation needed], Since approximately 1989, the Cook Islands have become a location specialising in so-called asset protection trusts, by which investors shelter assets from the reach of creditors and legal authorities. Potential growth is thus limited by current resources, namely the capital stock, including buildings and infrastructure, land, and the pool of potential labor. The BBC is not responsible for the content of external sites. For individual islands named "Cook Island", see, UN recognition of independence in foreign relations, List of resources about traditional arts and culture of Oceania, Toggle Politics and foreign relations subsection. Following recent strong economic performance, the Cook Islands will graduate from Official Development Assistance (ODA) in 2020.2 In July 2017, the OECD agreed to provide the Cook Islands until the end of 2018 to develop gross national income (GNI) data for the last three years that could determine eligibility for graduation to high-income status. 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 FSC is charged to maintain the soundness of the financial system. In March 2019, it was reported there were plans to remove the reference to Captain James Cook in favour of a new Maori name for the islands. 3/ Long-term bond spread over German bonds. The main non-Protestant group are Catholics with 17% of the population. Given its small scale and remoteness, it is unlikely that Cook Islands will be able to integrate into global manufacturing value chains as a way to transition to a higher income economy. 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. At the same time, a stable government, relatively high capacity in public administration, a close association and special relationship with New Zealand, and natural resources for tourism and fishing are assets and present opportunities. The Cook Islands were evaluated by the EU against tax transparency, fair taxation, and the Organization for Economic Cooperation and Developments (OECD) Base Erosion and Profit Shifting (BEPS) project. You can help Wikipedia by expanding it. Members and the employers contribute 5 percent each of employees salaries to the CINSF. Rescuers amputate leg of woman stuck in travelator. Fiscal balance rule: the fiscal balance cannot fall below a deficit of 1.9 percent of GDP. The authorities have worked with donors (including PFTAC) to develop income and balance of payments statistics, along with a rebased GDP (revised up by 10 percent). Moreover, systemically important banks, i.e. adjusted for inflation and exchange . Unlike the net debt target and the fiscal balance rule, this rule is not cast in percent of GDP, which is appropriate since annual GDP can be very volatile. In 2017, the Cook Islands signed the UN Treaty on the Prohibition of Nuclear Weapons.[49]. 39. 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 Church of Jesus Christ of Latter-day Saints, "Census - Cook Islands - Ministry of Finance and Economic Management", "Census 2016 - Cook Islands - Ministry of Finance and Economic Management", "VITAL STATISTICS AND POPULATION ESTIMATES MARCH QUARTER 2020", "UNSD Demographic and Social Statistics", "Demographic Yearbook, Population by age, sex and urban/rural residence: latest available year, 20052014", https://en.wikipedia.org/w/index.php?title=Demographics_of_the_Cook_Islands&oldid=1161318334, Creative Commons Attribution-ShareAlike License 4.0, 2554 years: 37.66% (male 1,595/female 1,634), 5564 years: 15.69% (male 711/female 564), 65 years and over: 14.74% (male 584/female 614), This "Other" group includes smaller Christian denominations, and mostly non-indigenous adherents of, This page was last edited on 22 June 2023, at 00:01. The FSC considers BCI to be systemically important. Atiu, in particular, has a strong tradition of crafts both in carving and local fibre arts such as tapa. Addressing land tenure and land use issues. When visitors arrive in the country, they're often given an 'ei - like a Hawaiian lei garland - made from tropical blossoms as a gesture of welcome. The census of 2021 put the total population at 15,040. The Cook Islands are majority- Protestant, with almost half the population being members of the Reformed Cook Islands Christian Church. Mangaia is the source of many fine adzes carved in a distinctive, idiosyncratic style with the so-called double-k design. Named after Captain Cook, who explored them in 1773, the islands were once autonomous, home to tribes of mixed Polynesian ancestry.