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Background Information about Cook Islands

Author: IFAD

Description:

Economic Background
The Cook Islands’ GDP was estimated at USD242.6m in 2010 and its per capita income ranks one of the highest amongst the PICs (USD 10,281). Over the last three decades, the economic growth rate has been strongly influenced by growth in the tourism sector. Nevertheless, the growth rate was negative in 2007-09 and remained low in 2010 due to the global recession. The estimated population in 2011 was just over 20,000 which is expected to have increased at its natural rate of 1%. However, the annual net out-migration at 0.4% can potentially affect Cook Islands labour force which is based on a small population size. Many people from the outer islands are leaving for better jobs and quality of services to the city and overseas (New Zealand and Australia). The main island (Rarotonga) supports about 75% of the total population. The services share of GDP was 85% while agriculture contributed only about 5% of national income in 2010. With limited manufacturing base, the contribution of services must be heavily discounted in light of the imports of the raw materials and final outputs used for domestic consumption and tourism. It is not surprising that about 70% of the households in the Cooks are engaged in agricultural activities either for subsistence, commercial, or for both. The Cook Islands’ major exports are copra, papaya, fresh fruits, canned fruit, coffee, fish, pearls, pearl shells and clothing.

Baseline Poverty Analysis
Recent analysis of poverty in the rural Cooks is unavailable. However, according to the MDG report (2012), the 2005-2006 HIES data suggest that around 28% of population lived below the national basic needs poverty line, which has increased over two-fold since Abbott’s (2007) initial assessment of 12% made with the 1993 HIES data. The Government does not regard poverty as a problem because per capita income is regionally high, entry to New Zealand is unrestricted and a high share (70%) of population is in the working age group. Consequently, poverty reduction has not featured prominently in government plans and policies. The Cook Islands also has a high literacy rate and close to 90%-95% of all 6-14 year old children are attending school.

There is gender parity in primary and secondary education and the number of women employed in the non-agricultural sector has increased steadily since 1990 from 36% to 45% in 2005. Important gender issues remain (share in parliament has declined from 8% in 2000 to 4% in 2010 and income equality resulting from lack of opportunities and inequitable in pay in the formal sector had deteriorated). Women comprised 45% of the total labour force in 2011 while employment to population ratio was about 63% in 2008. About 25% of the parliamentary seats are occupied by women IFAD (2011).

The report states that just 2% of population was in food poverty in 2006 presumably with a higher prevalence of poverty in outer and remote islands. Data from the 2006 HIES indicate that close to 15% and 20% of the population in Northern and Southern Cooks depend on self-employment and 21% and 46% of population in these communities produce for their own use. Unemployment rate is about 10% in both these areas. Food and household operations expenditure of these areas fall below 30% of the Raratongans. Of the aggregate, these two outer regions spend just about 21% of incomes on food. Data also show that the average annual expenditure of female headed households is less in these communities but most of these household heads were educated. Education status is high in the Cook Islands with adult literacy and school enrolment rates of 95%. The youth make-up about 19% of population and their literacy in 2010 was 99%. HIV prevalence in the youth age remained zero in 2010, MDG report (2012). With migration of youths from rural to urban and overseas, pressure on youth unemployment is low in the Cook Islands.

Agriculture and Rural Development
Agriculture is mostly subsistence and is a source of food, income and livelihoods. However, the Cook Islands' export selected agricultural produce. Total exports for 2011 were USD 3.0 million largely driven by fresh or chilled fish (61%), noni juice (16%) and pearls (9.3%). However, food imports accounted for about 30% of total imports in 2010, FAO (2012). Imports were valued at USD 106.5 million well above exports in 2011. Data show that in 2008, 23% of total exports were food beverage and tobacco. In the review period 2005-2009, FAOSTAT (2012) shows that both, rural population and those involved in agriculture, declined by 17%. Due to high dependence on the external sector, there is an urgent need to adopt import substitution policies. This will however, require better production, higher quality, food safety, hygiene standards and better packaging, FAO (2012). The potential for agriculture is restricted due to labour constraints, limited agricultural land, inadequate infrastructure, weak market linkages, high transport costs and foreign competition. In addition, the Cooks Islands are particularly vulnerable to natural disasters such as droughts and floods. Fishery is strategically important for the outer islands but extreme weather conditions can harm marine production. The fishing industry (like in FSM and Vanuatu) is undermined by lower returns, mostly restricted to licensing fees. Natural vegetation ranges from typical coastal scrub to littoral and rain forests but there are no serious logging activities in the Cook Islands. Almost 92% of the households keep livestock (mostly pigs) for food security and cultural obligations. While there is self-sufficiency in pork and eggs, these are uncompetitive export products. Pearl farming and marine based tourism activities are an important segment of agriculture in the Cooks. Production of tomatoes, vegetables, coconuts, fresh fruits and sweet potatoes increased but fish production has shown a significant decline (69%) in 2009 relative to 2005. 

Investing in the Rural Poor
Cook Islands: Investing in the Rural Poor, IFAD's Rural sector performance assessment (RSP).  This publication may be found here.

Rural Development Indicators
Composite data about the Cook Islands may be found here.



Language:  English (United Kingdom)
Development Themes: Agriculture Food Security & Nutrition
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