Meeting the Covid challenge: Mark Brown suggests the need for enduring relationships and transformative partnerships to build a better future for the Cook Islands.

AuthorBrown, Mark

We are one full year on from what has been the most impactful, far-reaching and challenging event of the past decade. Covid-19 has created social havoc worldwide, and devastating loss of life in most countries. No economy has been unaffected. No country has been spared.

I am pleased to be the first prime minister of a foreign country to be received by the New Zealand government on official business since this time last year. I am prime minister of a small, isolated island nation, once bustling with tourism, which made up 65 per cent of its GDP, and performing as one of the strongest growing economies of the Pacific region for the past decade. I am part of a leadership which, from the very start of this global pandemic, has chosen the health, safety and well-being of our population over economic gain, maintaining a 'Covid-free Cook Islands' status to this day.

We are a government fortunate enough to be in a strong fiscal position to offer significant, continuous targeted financial interventions carrying our residents and businesses over a full year of economic strife through our comprehensive Economic Response Programme. All this, while at the same time progressing critical milestone gains towards the safe re-opening of our borders to New Zealand, in the hope of an economic lifeline to our people. Given our narrow economic base and the ease with which our people can travel and live in New Zealand and Australia, I am staring in the face of the very real probability of mass de-population of my people in a post-pandemic context.

Our working age population has begun leaving our shores in search of more certain economic opportunities. With such a small resident working population of 14,569, every single Cook Islander counts. We estimate 300 left our shores for New Zealand in March and others will follow if nothing changes. If we project this for a year at the same rate, it will equate to 24 per cent of the Cook Islands' labour workforce. Transposed to the New Zealand context, that would equate to an exodus of 936,000 working-age New Zealanders before the year's end.

The three factors of production that are required building blocks of an economy--land (and the danger of our people and businesses losing property to banks), labour (with the out-migration) and the availability of capital are all under threat. It is the reality of the impact of economic strife in our specific context: a narrowly based economy, limited alternatives for instant economic diversification and a reality beyond our immediate control. Simply put, we cannot withstand another shock to our economy or our people; business as usual is no longer a choice.

It is not my intention to discount the impacts everybody has gone through individually and collectively in navigating the challenges of Covid-19; indeed Covid-19 did not discriminate. Never have these sentiments been more necessary, as we seek to understand what the future holds for each of our countries, our people and our business communities, in what we now must regard as a fresh innovative opportunity to be agile, to pivot from the current pathway and to reframe our economy in ways that underpin a better future.

Context setting

A number of key defining factors held the Cook Islands in good stead for continued growth prior to Covid, while a number of constraints will have to be avoided or overcome should we pivot in our approach to growth. Our successes have been:

* a strong private sector led economy since the mid-1990s;

* growth in real GDP of 27.2 per cent over five years from 2015 to 2019;

* corresponding low levels of inflation over the same period; and

* a government holding a strong financial position considered fiscally responsible with the accumulation of healthy reserves and low national debt.

With such a strong performing economy and fiscal position, our...

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