Cook Islands Economy

The Cook Islands has a fragile economy with imports outweighing exports by more than ten times. Without the continued aid program from New Zealand (worth around NZ$15 million a year), the Cook Islands would quickly be bankrupt. The main problem for the economy is high transportation costs, followed by a lethargic population who seem more than happy to rely on handouts from relatives living in New Zealand. Another problem has been that many of the best islanders go overseas to earn their living but, with time, a reversal in lifestyle attitudes might change this.

Tourism is by far the main foreign exchange earner generated by the 60,000 or so tourist arrivals each year. An estimated 80% of the GDP is generated through tourism and services. Other services include the dubious industry of offshore banking, but continued pressure from Australia and New Zealand along with a recent tightening in international money laundering may see an end of this lucrative business for the Cook Islands Black pearls and fruit exports (mostly pawpaw) are the only other major source of income for the islands although revenue from the sale of fishing rights (mostly Tuna) is being promoted to the international market. Several cottage industries are doing well including coconut perfumes and soaps, and the rapidly growing export of Noni juice used as an all round medicinal remedy. Most trade, both imports and exports, is with New Zealand.

Subsistence farming is dominant on the outer islands but on Rarotonga the fertile land is under-utilised. Most locals have access to a family plantations which produce the backbone of local diet. Rarotongan taro, the staple root crop, is of high quality and grows in the low-lying swamps whilst pigs and cows help keep the weeds at bay in the family plantations and are killed for large feasts and family get togethers. Unfortunately, most of what is consumed in every day life comes from tins and packets, with diabetes and obesity a regional concern.



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