The tiny nation of the Cook Islands is set to become the first among the Pacific islands to graduate to “developed” status, in a move that some government officials are calling their “worst-case scenario.”
About 99.99 percent of the nation’s territory is made up of ocean, with its 15 islands spread out over an area of nearly 2 million square kilometers.
The Cook Islands has a free-association agreement with New Zealand, meaning that it is self-governing, but its residents are entitled to New Zealand citizenship, receive NZ$25 million (US$17.72 million) in aid per annum and are expected to share common values.
In the last decade the Cook Islands has made substantial progress in becoming financially independent with the Asian Development Bank recording six straight years of economic growth.
More than 150,000 tourists visited the islands last year attracted by airfares subsidized by the government and the nation has also earned increased revenue through better management of the fisheries sector.
This progress has resulted in the tiny nation qualifying to move from “developing” to “developed” status, however, the government is not celebrating.
Cook Islands Foreign Affairs Secretary Tepaeru Herrmann said the change in status was concerning.
“We have decided as a government that we are going to prepare for the worst-case scenario, which is we do graduate next year,” she said.
“Some of our concerns is that moving from a mid-income to a high-income country does not take into account our constant vulnerability to natural disasters and climate change. Even though we have a strong economy at the moment it would take one cyclone of a certain magnitude that could potentially set us back a number of years,” she said.
Half of the Cook Islands’ population lives on the main island of Rarotonga, with the rest scattered around a vast area. Some atolls are home to fewer than 100 people who continue to live traditional lives based on fishing and subsistence farming.
“Some of these islands, their contact with the outside world can be every two to three months when the ship gets up there to drop off supplies, this is very much the other side of Cook Islands that the OECD [Organisation for Economic Co-operation and Development] and the rest of the world don’t see,” Herrmann said.
Cook Islands Minister of Finance Mark Brown said the news that the Cook Islands were on the cusp of graduating to developed status had been met with a mixed response by islanders, with some celebrating the substantial achievement, but many concerned about how the new status would affect the country’s ability to access aid.
Brown said the change meant it was likely his nation would no longer be eligible for UN funding and discussions were already underway with major regional donors such as Australia and New Zealand to address what continued support they would be able to offer.
Herrmann said initial talks with the New Zealand government have so far been positive and she did not expect any funding cuts in the immediate future.
“Although we are now considered a prosperous nation the cost on a per capita basis is very high for basic infrastructure like airstrips, ports and medical and education facilities, we have to replicate these services on all these islands even though some of them have tiny populations,” Brown said. “This impending status is something we should celebrate, but it essentially means that development assistance we have had in the past will no longer be available to us, so we need to think of different ways to do business and engage on the international stage.”
Although the Cook Islands would not officially be declared a developed country until the end of next year, Hermann said the government had begun reaching out to bilateral partners around the world to establish partnerships of mutual benefit, rather than aid dependence.
“Through my eyes the Cook Islands looks very much as it did 34 years ago, and that is probably not what someone would typically consider developed,” Hermann said.
“Most of our revenue is generated on the main tourist island of Rarotonga, so we are very much exploring avenues to help generate enterprise on the other islands but some of these are flat atolls and the options are very limited,” she said.
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