Improved investor

confidence in Cooks

TOURISM, finance and marine resources lead in attracting foreign invest ments to the Cooks - and more outside money is coming in, thanks to improved investor confidence in the country.

January to March this year saw new cap ital 51,047 million come in, compared to $864,000 during the same peri od last year. Peanuts to some countries, big bucks to the Cooks, which has limited nat ural resources and a tiny population of 16,500. The United States invests more money in the Cook Islands than any other country and this is further bolstered by a strong US dollar.

Development Investment Board boss Rohan Ellis says “a huge input” of money comes from the financial sector which broadly represents offshore banks, interna tional companies, and internet casino’s reg istering in the Cook Islands.” This saw $3,683 million enter the Cooks here between July and September last year when San Dunes Race and Sports Book internet

casino registered there.

Casino of the South Pacific reg iste r e d about two

years ago. Two other applications are being processed by DIB.

Five percent of the internet casinos net winnings go to government. Ellis says pre cautionary measures are in place, which include allowing government auditors to “get in there and check their books to ensure that the 5 per cent of net winnings match royalties paid to government.”

A regionally competitive tax regime and legislative reforms which makes the Cooks “ an easier place to do business “ puts us ahead of other Pacific islands in attracting overseas investment - given our small total population and limited natural resource base says Ellis.

He added those legislative changes have “improved the country’s reputation as a good investment location.”

Ellis says the exodus of 3,000 people has “drastically reduced purchasing power here, the development of new businesses and expansion of existing businesses is meagre at the moment.”

“So foreign investment is even more important to us with the development of new projects, which lead to increased job opportunities.”

Ellis’ emmigration estimate is conserva tive. The number of people who fled the economic recession years of 1995 - 1998 is closer to 5,000.

With the general election set for June 16, Ellis doesn’t believe a possible change of government will greatly affect investor con fidence. “The Cook Islands is traditionally regarded as a politically stable country”.

He says all political parties have a sound understanding of the benefits of foreign investment to the Cooks.

Total capital investment which entered the country during the June 1997 - July 98 financial year amounted to $3,199 million.

That was outdone between July to September 1998 with investments totalling $4,902 million. Major contributor to the second quarter increase was from the regis tration of the San Dunes Race and Sports Book internet casino. The last quarter saw a boom - just over $35 million in direct for eign investment which included the sale and projected completion expenditure of the Vaimaanga Hotel. Excluding the hotel sale, $980,107 entered the country.

Ellis says they look forward to “contin ued growth during the next financial year ■