1. In your position as Director of Economic Planning at the Ministry of Finance and Economic Management, how would you describe the current macroeconomic outlook for the Cook Islands?
Despite the global energy crisis, which is particularly challenging for a small, open economy dependent on imported fuel, the Cook Islands’ outlook is very promising. Following a strong post-pandemic recovery in 2023, the economy expanded sharply, growing 7.2% in real terms in 2024 (14.7% in nominal terms, taking GDP to $684.2 million), according to Cook Islands Statistics Office figures.
Looking ahead, growth is expected to moderate as the economy approaches capacity limits, transitioning into a more sustainable, gradual expansion phase—MFEM forecasts growth of around 2.9% in 2026, with GDP projected to reach $748.6 million in 2025/26. However, significant opportunities remain, most notably in seabed minerals. The Cook Islands possess highly valuable polymetallic nodules rich in manganese and cobalt, both of which the International Energy Agency identifies as critical minerals for the global energy transition. Demand for these minerals is expected to rise sharply in the coming decades, driven by decarbonization, electrification and battery technologies—meaning the world’s clean-energy ambitions depend on securing these inputs responsibly and at scale.
Importantly, the country has the potential not only to extract these resources but also to participate in higher-value processing, potentially in partnership with countries like Australia. This could multiply the economic value of these resources several times over and significantly increase national income. We are equally clear that this must be done responsibly, and our approach is science-led and evidence-based. The Cook Islands has invested in years of independent baseline research and environmental monitoring of its marine environment, and any decision on development will be governed by that evidence rather than by commercial pressure. It is also worth placing this in a global context: minerals such as cobalt, nickel and manganese are essential inputs for the batteries, grids and clean-energy technologies the world needs to decarbonize, and securing them responsibly is itself part of the climate solution. Our aim is to demonstrate that a small island state can develop these resources to the highest environmental and scientific standards, protecting the long-term health of the ocean while contributing to the global energy transition.
2. What are the key trends shaping growth, inflation, and overall economic resilience in a small and remote island economy?
A central trend is the structural pressure that could keep global energy prices elevated over the coming decades, driven by geopolitical tensions and rising demand, including from energy-intensive technologies like artificial intelligence. For a country that imports all its fuel, this presents a structural challenge.
The strategic response is to develop sectors that benefit from those same global dynamics, particularly critical minerals. These resources are directly linked to clean energy technologies, meaning that as energy prices rise, so too does the value of these exports. This creates a natural hedge for the economy.
At the same time, the Cook Islands are investing heavily in renewable energy, especially solar, along with improvements in energy efficiency and infrastructure. These efforts will reduce dependence on imports, strengthen resilience, and support long-term sustainability.
3. From a policy perspective, what are the main economic planning priorities to support sustainable long-term growth?
One of the key priorities is designing an optimal framework for resource development, particularly for critical minerals. We are drawing inspiration from the Norwegian model, which emphasizes public shareholding rather than relying heavily on royalties or profit taxes. This approach aligns the interests of investors and the state, ensuring that both benefit from success.
Another major initiative is the establishment of a Sovereign Wealth Fund. This will allow us to manage resource revenues responsibly, insulating them from political cycles and ensuring that wealth is preserved and distributed across generations. The long-term vision is to channel these funds into pensions and education, thereby strengthening social outcomes and human capital.
In parallel, we are focusing on economic diversification. Beyond seabed mining, key growth sectors include financial services and the digital economy, particularly attracting digital nomads and remote professionals. These sectors can grow without placing additional strain on the environment and can significantly boost income levels.
4. Energy prices are a major concern globally. How do fluctuations in international energy markets impact the Cook Islands’ energy and fiscal planning?
Because the Cook Islands import 100% of their fuel, global energy price fluctuations have a direct and significant impact. In response, we are implementing both short-term and long-term strategies.
In the short term, policies such as free public transport aim to reduce fuel consumption and ease cost pressures. In the medium term, we are accelerating the integration of renewable energy, particularly solar, into the national grid, with support from international partners.
Over the long term, we are developing a comprehensive Energy Efficiency Act. This framework will promote energy-saving practices across households, businesses, and infrastructure, aligning the country with international standards and making it more attractive for investment.
5. What opportunities do you see for accelerating the energy transition in the Pacific?
Solar energy presents the greatest opportunity, given the region’s natural conditions. Technological advancements, especially in battery storage and monitoring systems, have significantly improved the viability of solar solutions.
A key lesson from past efforts is the importance of tailoring energy systems to local conditions. Smaller islands, for example, may benefit more from decentralized solutions rather than a single centralized grid.
Digital monitoring and AI-driven diagnostics are also transformative, allowing systems to be managed remotely and efficiently, an essential advantage for geographically dispersed island communities.
6. How do external shocks from major economies affect stability, and how can the Cook Islands mitigate these risks?
Small open economies are inherently vulnerable to external shocks because they are price takers. The most effective tools for mitigating these risks are energy efficiency and a well-managed Sovereign Wealth Fund.
The latter, in particular, acts as a stabilization mechanism. By saving and investing resource revenues abroad, the country can draw on these funds during periods of crisis.
7. How is the Ministry leveraging data and digital tools to improve economic forecasting and policymaking?
Digitalization is a top priority. We are working to integrate data across all sectors of the economy, which will significantly enhance forecasting accuracy and policy effectiveness.
With support from international partners and academic institutions, we are incorporating advanced methodologies, including AI-based forecasting models. Improved data not only leads to better decisions but also enhances transparency, efficiency, and accessibility of government services.
8. Which sectors beyond tourism hold the greatest potential for long-term growth?
Three sectors stand out: seabed mining, financial services, and the digital economy, particularly digital nomads.
Seabed mining will likely generate substantial initial income without requiring large-scale domestic labor. Financial services will grow alongside rising incomes and investment. Meanwhile, attracting remote professionals can boost economic activity with minimal environmental impact.
Tourism will remain important, but it will not be the primary driver of future growth.
9. What message would you like to share with Los Angeles Times readers about the Cook Islands?
The Cook Islands are inherently resilient. As a Pacific nation, we have long adapted to natural shocks and constraints, which has shaped a pragmatic and forward-looking society.
Today, we are combining that resilience with a clear economic strategy, diversifying our economy, integrating more deeply with the Asia-Pacific region, and investing in long-term stability through a Sovereign Wealth Fund.
By managing our resources responsibly and investing in education and future generations, we aim to build an economy that is not only prosperous but also sustainable and resilient in the face of global challenges.
.png)
