Cook Islands

WITH around 18,000 people, the Cook Islands suffers from the typical Pacific problem; not enough people to sustain ventures that must rely on a local market. In fact, the Cooks have experienced overall popula tion decline as many of their citizens ex ercise their right to unhindered migration to New Zealand.

Tourism is the most attractive area of investment, especially since airline serv ices have improved: Air New Zealand and Hawaiin Airlines have now been joined by Cook Islands International (operated by Ansett) services from Sydney. Apart from the Rarotongan Hotel, built in 1977, there is a great deal of budget accommodation available on Rarotonga. There is also a good airfield on Aitutaki which offers the prospect of tourist investment on that is land. Government policy has been to pro mote “controlled tourism” to limit the impact on traditional life; the other inhib iting factor is that almost all supplies have to be imported and are thus expensive.

The fishing industry is still at the fledgling stage, though the resources within the country’s economic zone are considered to be substantial.

The New Zealand dollar is Cook Is lands’ legal currency, the main trading

bank is the National Bank of New Zealand and the nation depends for most of its trade and aid on New Zealand. In 1984 the trade deficit was $NZ29.7 million, largely funded by aid. About a third of the na tion’s budget is also supplied by New Zea land cash grants.

The fact that the NZ dollar is consid

ered to be greatly over-valued has ham pered export trade to markets other than New Zealand. The production from the Cooks’ three garment factories accounted for 41 per cent of exports in 1984, with co pra, pawpaw and bananas being the other major items: apart from the clothing com panies, manufacturing is limited to fruit canning and handicrafts.

The Cook Islands has also established an offshore financial centre. So far there is one trust company operating there, with a ►

Despite their isolation, the Cook Islands have healthy links with markets.

◄ few firms of lawyers or accountants. Most companies that have set up in the Vanuatu finance centre have kept a watch on what is happening in Rarotonga, but the latter is hampered by its paucity of finance or ganisations and poor communications.

The planned offshore banking centre in Nukualofa, rumours that Fiji is planning a similar move and company tax changes announced in New Zealand all throw doubt on whether the offshore operation in the Cooks will ever become significant.

Gross domestic product per head of population is about SNZI6OO, which is high by South Pacific standards.