Islands Business reporter Sera Tikotikovatu-Sefeti has been talking to Pacific Islands ministers and officials at the Forum Economic Ministers Meeting in Vanuatu about their economic priorities and regional opportunities.
Here are excerpts from a conversation with Cook Islands’ Secretary of Finance and Economic Management, Garth Teariki-Anga Henderson.
How is the Cook Islands coping with the increase in prices of fuel, transportation, and food?
We are already seeing fuel price rises. We have been seeing price rises in materials for quite some time.
From the Ministry of Finance’s perspective, we started sending out public information about inflation, what aspects of inflation we can control, what we can’t. I’m just pointing out to people where they expect to see the prices rise and what they can do at the household level in terms of inflation.
Our people are busy, you know, opening our borders. The industry, particularly the tourism industry, accounts for close to 70% of our whole economy. They are hardworking, smart-working entrepreneurs. They are so busy working dealing with the influx of visitors since its opening that the issue of the prices rising is a cause of concern, but not to the extent where they are jumping up and down and crying about it. They are busy working. We have a labour shortage like many countries. Fiji workers are getting posted in NZ. We lost workers in NZ, so labour is a shortage here in our skilled hotel workers. That’s the biggest thing: labour shortage.
The government has already given subsidies and domestic shipping, we have already subsidised. The extent to which we can provide additional subsidies to bring down or manage the cost of inflation is limited, so we are not really looking at anything like that. I think inflation is a temporary thing. Some people are already saying that the inflation is already on its way down, so it sounds really positive.
How is tourism coping with the loss of workers?
We have lost workers, Cook Islanders, who are travelling across to work in freezing conditions. They are working in fruit picking. We have lost some migrant workers from the Philippines and Fiji to New Zealand as well. But you know, nobody wants a career picking fruit. It’s hard. Some people might choose to have a career in meat work, but a lot of them are coming back. They go seasonal and then they come back. We are getting Cook Islanders going out working and coming back with money in their pockets, so that is not a problem.
You know, for the short term, they have to survive. We are not stopping them. It’s the issue of the migrant workers going. You see, businesses have invested in them. A lot of the time and money is used to get the migrant workers out here. We respect human rights, which means we are not going to put impediments to stop migrant workers leaving our labour markets. We are looking at, in fact, Fijian workers coming into the industry. We are looking at getting some Filipinos in as well.
You know, the industry is not waiting for the government to do it; they are doing it themselves. Every now and then they come to the government and say, “Can you ease the process’ and we will do what we can. They are not relying on the government. We have a vibrant, robust entrepreneurial sector, so that’s good. We are spending a lot of time trying to get airline access, so the government is looking at that. So the more fights we can get out of the North American market, the more high-yield tourists we want. That’s what the government is looking at.
Access to climate finance has been a topic of discussion over the last three days; how important is this to Cook Islands?
You know, I said it at the FEMM meeting, access to climate finance is an ongoing saga, it’s difficult. It’s been going on for a decade now. Our main issue now and for most Pacific countries is post-crisis recovery finance. Finance, urgent finance to ensure that we can get our economies back on their feet because if we prolong the type of recovery from crisis, the economic crisis caused by COVID, then we have the issue of economic scarring, depleted cash reserves, loss of workforce, collapse of businesses, and then the requirement for investment to get them back on their feet or to get workers back to work.
Physically, we are in much better shape than our fellow Pacific island countries; we are relatively well-off, have a thriving private sector, and our debt-to-GDP ratio is low; however, we still face some challenges, as do all Pacific Islanders. We still need to keep government expenditure up because the private sector is depleted. Surviving in the short to medium term is more important than continuously chasing after climate change finance that we never seem to be able to get our hands on. Climate change is not going to go away, but in the short term we need crisis recovery finance on good terms and we need grants to get the economy back on its feet. And that’s what we voiced at the regional debt conference in April, and I raised it again in the two sessions yesterday and today.
There is talk of possibly forming a hub in the Pacific in order to access climate finance funds. Would Cook Islands be open to this?
Well, they are working on it now, and I tell you what, it is difficult. We need to try to make every effort to try and gain access to climate finance. If it means putting together a hub, consolidating our small voices to make one loud voice, lobbying, negotiating, compelling, if that is what we have to do, we will do it. But it is not easy because our efforts today have not been as rewarding as all these global announcements have made it out to be. We have got a major infrastructure deficit all across the region, all these international pledges are being made and the pledges almost don’t exist in reality or the obstacles to get to those pledges is insurmountable.