Cover Story
And More Good News
New investment policy encourages more joint-venture schemes.
Cook Islands Development Investment Board¹s Rohan Ellis likens the Cooks to a bright bulb attracting moths. It¹s a fitting description for the island, now a hot spot experiencing a burst of growth.
Biting into a mid-morning sandwich during a deserved break from a drawn out meeting at the Pacific Islands Forum Secretariat in Suva, Ellis says he is optimistic about the progress.
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Reforms in 1995 have resulted in changes in legislations, changes in the way government operates and changes in the mentality of Cook Islanders. Cook Islanders have, says Ellis, realised that they can no longer sit back and allow government to continue the handouts, but to now use available resources wisely and maximise benefits. Tourism arrivals have been a major force behind the boom in business. In terms of purchasing power, there has been a tremendous increase.
Here's another bit of good news - Cook Islands has found a temporary solution to the accommodation shortfall. Ellis said: "As it stands we have approximately 3200 airline seats per week, yet we've only got 2200 beds.
"What we're having to do right now is request Cook Islanders with nice homes to vacate and rent them. So we¹re turning homes into tourist accommodation."We're dealing with families. For instance one big family with five children will have a big family home so the five children will vacate and live with their mum and dad.
"Immediately we've got five new holiday homes. That¹s what¹s happening at the moment.
And how do the families feel about holiday home plan?
"They love it. Most of us have mortgages to pay and with Cook Islanders earning between NZ$800 and NZ$2500 per week in terms of house rentals from tourism; it's fantastic."
This isn't a long-term scenario. As more proper tourist accommodation come on line, there will be less dependence on family lodgings.
Meanwhile, the Cook Islands hosted the second annual Pacific Regional Trade Fair in Rarotonga. Considering that the trade fair concept is still in its infancy, Ellis believes it was a success.
There was a good participation rate by exhibitors from Pacific Islands countries and a high presence of buyers from Pacific rim countries as well as countries from the Pacific Islands region.
The concept behind the trade fair was to create one central point where buyers and sellers could congregate under one roof and do business and be given an opportunity to review a range of products manufactured within the Pacific Islands region.
Response to surveys indicated no negative feedback.
Apart from accommodation, construction is a problem in the Cooks. Construction companies are booked through to next year. In fact, one construction company is booked for the next three years.
Most investments in the Cook Islands are not geared towards big projects, but rather small to medium sized investment projects averaging NZ$2 million to NZ$3 million each.
There are currently two proposals regarding the establishment of a long-line tuna fishing industry. This will see the effective development of a tuna long-line processing plant on Rarotonga with a view to export fresh, chilled products to Asia and the United States.
The Cook Islands new investment policy, which emphasises the creation of investment and business opportunities for indigenous Cook Islanders, is a plus.
"As it stands a foreign investor can earn one hundred percent of beneficial shareholding of a foreign enterprise.
"Whilst we¹re not going to deviate from that clause, more weight will be placed upon the encouragement of more joint-venture partnerships with indigenous Cook Islanders. Given that more and more Cook Islanders have better business skills, better education, have a great appreciation of technological advances and a better access to capital."
The original investment code was drafted in 1977 when the Cook Islands was in the process of developing its private sector. Twenty-odd years down the line Cook Islanders have advanced and the new investment policy will recognise the positive changes.
