The economy

Economic system

An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...

 of the Cook Islands

Cook Islands

The Cook Islands is a self-governing parliamentary democracy in the South Pacific Ocean in free association with New Zealand...

, as in many other South Pacific

Polynesia

Polynesia is a subregion of Oceania, made up of over 1,000 islands scattered over the central and southern Pacific Ocean. The indigenous people who inhabit the islands of Polynesia are termed Polynesians and they share many similar traits including language, culture and beliefs...

 island nations, is hindered by the isolation of the country from foreign markets, lack of natural resources, periodic devastation from natural disasters, and inadequate infrastructure

Infrastructure

Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

.

Agriculture provides the economic base with major exports made up of copra

Copra

Copra is the dried meat, or kernel, of the coconut. Coconut oil extracted from it has made copra an important agricultural commodity for many coconut-producing countries. It also yields coconut cake which is mainly used as feed for livestock.-Production:...

 and citrus fruit. Manufacturing activities are limited to fruit-processing, clothing, and handicrafts.

Trade deficits are made up for by remittances from emigrants and by foreign aid, overwhelmingly from New Zealand

New Zealand

New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...

. Efforts to exploit tourism potential, encourage offshore banking, and expand the mining and fishing industries have been partially successful in stimulating investment and growth.

Banking and finance

The Cook Islands

Cook Islands

The Cook Islands is a self-governing parliamentary democracy in the South Pacific Ocean in free association with New Zealand...

 has "Home Rule" with respect to banking, similar to Guernsey

Guernsey

Guernsey, officially the Bailiwick of Guernsey is a British Crown dependency in the English Channel off the coast of Normandy.The Bailiwick, as a governing entity, embraces not only all 10 parishes on the Island of Guernsey, but also the islands of Herm, Jethou, Burhou, and Lihou and their islet...

, Jersey

Jersey

Jersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...

 and the Isle of Man

Isle of Man

The Isle of Man , otherwise known simply as Mann , is a self-governing British Crown Dependency, located in the Irish Sea between the islands of Great Britain and Ireland, within the British Isles. The head of state is Queen Elizabeth II, who holds the title of Lord of Mann. The Lord of Mann is...

.

This "Home Rule" banking confuses New Zealanders on vacation in the Cooks. Cook automated teller machine

Automated teller machine

An automated teller machine or automatic teller machine, also known as a Cashpoint , cash machine or sometimes a hole in the wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public...

s often fail to fully disclose the fact that the Cooks are not part of the New Zealand banking system, thus legally requiring banks to charge the same fees for withdrawing or transferring money as if the person was in Australia or the EU. The New Zealand dollar is the official currency of the Cook Islands, adding to the confusion. Cook Islanders are NZ citizens.

The banking and incorporation laws of the Cook Islands make it an important centre for setting up companies that are involved in global trade.

Economic statistics

GDP:

Purchasing power parity - $183.2 million (2005 est.)

GDP - real growth rate: 0.1% (2005 estimate)
GDP - per capita: $9 100 (2005 estimate)
GDP - composition by sector:

• Agriculture: 15.1%
• Industry: 9.6%
• Services: 75.3% (2000)

Population below poverty line:

NA%

Household income or consumption by percentage share:

• Lowest 10%: NA%
• Highest 10%: NA%

Inflation rate (consumer prices):

2.1% (2005 est.)

Labor force:

6,820 (2001)

Labor force - by occupation:

Agriculture 29%, industry 15%, services 56% (1995)

Unemployment rate: 13.1% (2005)
Budget:

• Revenues: $70.95 million
• Expenditures: $69.05 million; including capital expenditures of $5.744 million (FY00/01 est.)

Industries:

Fruit processing, tourism, fishing, clothing, handicrafts

Industrial production growth rate:

1% (2002)

Electricity - production:

28 GW·h (2003)

Electricity - production by source:

• Fossil fuel: 100%
• Hydro: 0%
• Nuclear: 0%
• Other: 0% (2001)

Electricity - consumption:

34.46 GW·h (2005 est)

Electricity - exports:

0 kW·h (2003)

Electricity - imports:

0 kW·h (2003)

Oil consumption:

400 oilbbl/d (2003)

Agriculture - products:

Copra

Copra

Copra is the dried meat, or kernel, of the coconut. Coconut oil extracted from it has made copra an important agricultural commodity for many coconut-producing countries. It also yields coconut cake which is mainly used as feed for livestock.-Production:...

, citrus

Citrus

Citrus is a common term and genus of flowering plants in the rue family, Rutaceae. Citrus is believed to have originated in the part of Southeast Asia bordered by Northeastern India, Myanmar and the Yunnan province of China...

, pineapple

Pineapple

Pineapple is the common name for a tropical plant and its edible fruit, which is actually a multiple fruit consisting of coalesced berries. It was given the name pineapple due to its resemblance to a pine cone. The pineapple is by far the most economically important plant in the Bromeliaceae...

s, tomato

Tomato

The word "tomato" may refer to the plant or the edible, typically red, fruit which it bears. Originating in South America, the tomato was spread around the world following the Spanish colonization of the Americas, and its many varieties are now widely grown, often in greenhouses in cooler...

es, bean

Bean

Bean is a common name for large plant seeds of several genera of the family Fabaceae used for human food or animal feed....

s, pawpaw

Papaya

The papaya , papaw, or pawpaw is the fruit of the plant Carica papaya, the sole species in the genus Carica of the plant family Caricaceae...

s, banana

Banana

Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....

s, yams

Yam (vegetable)

Yam is the common name for some species in the genus Dioscorea . These are perennial herbaceous vines cultivated for the consumption of their starchy tubers in Africa, Asia, Latin America and Oceania...

, taro

Taro

Taro is a common name for the corms and tubers of several plants in the family Araceae . Of these, Colocasia esculenta is the most widely cultivated, and is the subject of this article. More specifically, this article describes the 'dasheen' form of taro; another variety is called eddoe.Taro is...

, coffee

Coffee

Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...

, pig

Pig

A pig is any of the animals in the genus Sus, within the Suidae family of even-toed ungulates. Pigs include the domestic pig, its ancestor the wild boar, and several other wild relatives...

s, poultry

Poultry

Poultry are domesticated birds kept by humans for the purpose of producing eggs, meat, and/or feathers. These most typically are members of the superorder Galloanserae , especially the order Galliformes and the family Anatidae , commonly known as "waterfowl"...

Exports:

$5.222 million (2005)

Exports - commodities:

Copra, papayas, fresh and canned citrus fruit, coffee; fish; pearls and pearl shells; clothing

Exports - partners:

Australia 34%, Japan 27%, New Zealand 25%, US 8% (2004)

Imports:

$81.04 million (2005)

Imports - commodities:

Foodstuffs, textiles, fuels, timber, capital goods

Imports - partners:

New Zealand 61%, Fiji 19%, US 9%, Australia 6%, Japan 2% (2004)

Debt - external:

$141 million (1996 est.)

Economic aid - recipient:

$13.1 million (1995); note - New Zealand furnishes the greater part

Currency:

1 New Zealand dollar (NZ$) = 100 cents

Exchange rates:

New Zealand dollars (NZ$) per US$1 - 1.4203 (2005), 1.9451 (January 2000), 1.8886 (1999), 1.8632 (1998), 1.5083 (1997), 1.4543 (1996), 1.5235 (1995)

Fiscal year:

1 April–31 March

Telecommunications

Telecom Cook Islands Ltd (TCI) is the sole provider of telecommunications in the Cook Islands. TCI is a private company owned by Telecom New Zealand

Telecom New Zealand

Telecom New Zealand is a New Zealand-wide communications service provider , providing fixed line telephone services, a mobile network, an internet service provider , a major ICT provider to NZ businesses , and a wholesale network infrastructure provider to other NZ CSPs...

 (TNZ) Ltd (60%) and the Cook Islands Government (40%). In operation since July 1991, TCI provides local, national and international telecommunications as well as internet access on all islands except Suwarrow. Communications to Suwarrow is via HF radio.