Islands Business - Cook Islands prepares for economic crisis talks in Vanuatu

RAROTONGA, Cook Islands ---- Cook Islands secretary of Heath Tupou Faireka is leading a country delegation to the Pacific Conference on the Human Face of the Global Economic Crisis to be held in Vanuatu this month. Over 200 high level delegates from 16 Pacific island countries are set to gather in Port Vila from 10-12 February to talk about the issues that the poor and vulnerable in the region are facing. The meeting will discuss ways to ease the impact of the crisis especially on vulnerable groups such as women and children. The Cook Islands will share its experience of the crisis and the ways it hopes to counter its effects. Mr Faireka said the country has definitely suffered a decline in economic activity since 2008 with a significant decline in gross domestic product. The revenue generated by the economy, divided up by the population is now much lower. Mr Faireka said while certain data or information is not available to get a clear picture of how households have felt the impact of the crisis, they have relied on some key indicators. Revenue from tourism, the country’s economic base, has declined. There was lower consumer spending in 2008 compared to the previous year (based on value added tax income to government), and since then there has been a lower spend on ‘big ticket’ items such as new homes and businesses being built. A real drop in car sales shows we are not rushing out to buy bigger items anymore – and one of the added reasons for this is the increase in loan interest rates. Mr Faireka said overall several factors have led to the people having reduced purchasing power. While the economy showed strong signs of recovery towards the end of last year, the negative impacts of the crisis seen in Rarotonga are thought to have been much worse on the outer island population. People living in the outer islands sometimes pay twice as much and more for products – from fuel to food – than those in Rarotonga. Mr Faireka said government actions to counter the crisis and help recovery are already underway. Government has provided an extra $1 million for tourism marketing in the hopes of increasing visitor numbers. Last year the hosting of the Pacific Mini Games, the World Youth Netball Championships, and the likes of now growing annual events such as the outrigger canoeing festival Vaka Eiva have helped build revenue said Mr Faireka.