ADB's Work in the Cook Islands

Consisting of 15 small islands scattered over 1.8 million square kilometers of ocean, the Cook Islands has an economy largely driven by tourism. Its nationals have open access to work and reside in Australia and New Zealand. The free migration agreements provide Cook islanders with a higher degree of economic security, and highly influence the structure of the national economy.

ADB is assisting the Cook Islands to respond to the coronavirus disease (COVID-19) pandemic, support economic recovery, and promote private sector investment. ADB’s COVID-19 Emergency Response Project mobilizes resources to support the country’s health response. ADB also provided $20 million in budget support for the COVID-19 Active Response and Expenditure Support Program to help the government sustain employment and livelihoods. ADB is complementing these initiatives with technical support on economic modelling and strategic advice to the Ministry of Finance.

To date, ADB has committed 59 public sector loans, grants, and technical assistance totaling $221.9 million to the Cook Islands. Cumulative loan and grant disbursements to Cook Islands amount to $155.3 million. These were financed by regular and concessional ordinary capital resources, and other special funds. ADB’s ongoing sovereign portfolio in the Cook Islands includes 4 loans worth $99.7 million.

Through a $2 million grant from the Japan Fund for Prosperous and Resilient Asia and the Pacific, ADB will help prepare the Cook Islands for the safe reopening of its borders and resumption of tourism. The project will help ensure that its airport and health systems are ready to support a safe travel zone.

In December 2021, ADB committed an $80 million policy-based loan that includes a $40 million precautionary financing option that allows for partial withdrawal if tourism does not rebound as forecast. The precautionary financing option is designed to address risks such as COVID-19 outbreaks causing the reclosure of the travel corridor by providing heightened flexibility. A two-way quarantine-free travel between the Cook Islands and New Zealand opened on 13 January 2022.

The Cook Islands is prone to extreme weather events, and tropical cyclones in particular. The third phase of an ADB disaster resilience program for Pacific developing member countries (DMCs) will provide a $20 million disaster contingent financing grant for early recovery and reconstruction activities following disasters caused by natural hazards or health emergencies.

Boardwalk in Muri, Rarotonga. Muri is the island most popular with tourists for swimming, snorkeling, and boating because the lagoon is the broadest and most profound. Photo: ADB

Operational Challenges. The Cook Islands requires to upgrade infrastructure to meet tourism needs and ensure environmental sustainability. These needs have been prioritized over the next 10 years through its National Infrastructure Investment Plan. However, capacity constraints affect infrastructure development and the long-term sustainability of assets.

Since the country is not a member of the International Monetary Fund (IMF), the government and its development partners do not benefit from the IMF’s macroeconomic monitoring. ADB will continue to provide macroeconomic surveillance, assessments, and policy advice, and support the government’s efforts to improve its medium-term fiscal outlook. ADB’s continued technical assistance support to public sector management, private sector development, broadening of financial services, promotion of renewable energy and energy efficiency, climate change, gender, safeguards, is critical.

Knowledge Work

ADB brings added value beyond project financing. It acts as a knowledge broker, engaging in regional issues such as climate change, oceans, renewable energy, economic management, and capacity development. The presence of an ADB office in Rarotonga enables it to engage in national issues, and to play a key role in regional cooperation, integration, and development partner coordination.

ADB has supported economic policy reforms through technical assistance and continues to support the Ministry of Finance with economic modeling, strategic planning, and fiscal monitoring. For example, ADB peer reviewed the 2021 public expenditure and financial accountability assessment to identify reform priorities. In addition to supporting economic management, ADB provided loan financing for the Manatua deep-sea cable that catalyzed telecommunication reforms.

  ADB Projects in the Cook Islands Project data sheets for loans, grants, TAs