MiiM£J!lfJ&AJifWMi6I&lJ6&MiWMii/;BMi5MiHMMUh R -W&;, Polynesia in Review: Issues and Events, I July I993 to 30 June I994 Reviews of American Samoa and governments?) that the debt will gener­ Tuvalu are not included in this issue. ate such high income that repaying it will be no problem. That is not going THE. COOK ISLANDS, JULY to happen, but it is possible that much 1992 TO JUNE 1994 the biggest and most controversial Political highlights of the two years debt-that for the government-owned under review included debates about hotel known as the Sheraton (because the swelling government debt, highly it is hoped that Sheraton will manage it critical audit reports, the extent of for the government)-might shrink. ministerial travel, and allegations of The loan came from Italy, guaranteed tax fraud and other malpractice in by the Italian government in order to relation to the tax haven (politely promote Italian construction, but the known as the International Finance Italian construction company is now in Centre), which enabled the New liquidation, its president indicted for Zealand National Business Review to Mafia activities, and the Cook Islands earn a bonanza from a three-part series may not be obliged to pay back more advertised with a heading ten inches than they have already paid (although high promising on-the-spot investiga­ this seems to be much more than the tive reporting about "illegal tax rorts, value of what has so far been done). political corruption and [government] Accusations and counteraccusations hotel construction cost blow-outs" in bounce off the empty shell of the hotel, the "Crook Islands." Although these which has only ever accommodated . and.Qtherjssueswere_the.sQurce.of. ..some .escapedprisoners' .. much gossip, more important for most The government also hopes that a voters were the spin-off benefits (or big bonanza will wipe out all debt and costs) of these activities for them per­ leave the Cook Islands floating in sonally. money for decades to come. This is a In the early stages, massive debt possibility, but how realistic is too creates a buoyant economy with more early to know, though not too early for employment than ever before, explain­ the possibility to affect current politics. ing why government debt, in the Cook What is known is that on the sea floor Islands as elsewhere, tends to be around the northern atolls, lie prob­ unpopular in principle but popular in ably the richest deposits of cobalt, practice. Overborrowing is a process manganese, and other minerals, of stealing from one's children and including some rare and very valuable grandchildren, who are left with the ones, so far discovered in the world. obligation to pay back the loans. Nei­ The technology to lift them exists, but ther governments nor voters worry both that and the techniques of pro­ much about that until it is too late, and cessing the material must be refined the Cook Islands is no exception. before exploitation will be economic. The government hopes (don't all Some people feel that is decades away, POLITICAL REVIEWS 139 but other equally knowledgeable peo­ field. Exotic lagoon and reef products ple think the basic breakthrough has also offer potential opportunities. been made and operationalizing it is Many Cook Islanders were imminent. Foreign firms are showing attracted back home by the long eco­ interest, though no one knows whether nomic boom (an average growth in the process will be economic or who gross domestic product of 6.3 percent will get what shares of any benefit, or per year from 1983 to 1993-much what the environmental, social, and higher than any other country in the other consequences will be. Mean­ region). This gave the Cook Islands by while, the possibility influences the far the highest per capita income thinking of the public and the risk­ (US$3900 per year) among Pacific taking behavior of politicians. Islands members of the South Pacific The twin engines of tourism and Forum, with the exception of Nauru. pearl culture generated growth in both The Cook Islands level is now about the economy and employment during eight times that of Tonga and Samoa, the two years under review. Tourism five times that of Papua New Guinea, has been booming at a time when it and double that of Fiji. The academic has been relatively stagnant in most world still regards what it calls the Pacific Islands countries. The political "small, resource-poor" countries of consequences of this gro'lvth (from the Pacific as basket cases that can sur­ 33,882 visitors in 1990 to 52,800 in vive only with massive infusions of for­ 1993 and still growing) are as impor­ eign aid (of which the Cook Islands tant as the economic and social gets relatively little these days, and impacts. The Cook Islands now has which continues to decline as a pro­ nearly three visitors per head of popu­ p()r:tion_Qf g9_veJUment reyenue).Most liiion-, whichis much the high~~t in the of academia still sees Papua New South Pacific (nine times the density of Guinea and Fiji as the only hopeful Fiji and five times the density of prospects, having not yet caught up French Polynesia, which used to have with the fact that in the modern world the highest densities). initiative, skill (such as pearl culture), Cultured pearls now earn much invisibles (such as tax havens and more than all other exports together­ numismatics), and charm (as in tour­ another radical change that has also ism), are much more important than affected the location of wealth. Raro­ things in the ground. tonga used to have a very much higher The attraction to return home was per capita income than the outer reinforced by the economic downturn islands, but now Manihiki, where the in New Zealand and Australia-where pearls are cultured, has vastly higher growth rates averaged about I percent levels-though an amazing amount of per year for the same decade (and it is consumed as alcohol. The largest whence government officials and aca­ new developments are of pearl culture demics talk down to the Cook Islands on the neighboring atolls of Penrhyn about how to create economic (Tongareva) and Suwarrow, with some growth). The downturn in New hope for the other atolls to enter this Zealand and Australia was accentu- 14° THE CONTEMPORARY PACIFIC· SPRING 1995 ated by a considerable loss of average extent of the victory could easily be earning power among the lower skill misunderstood, because had the oppo­ categories where most Cook Islanders sition remained united, the Cook were employed. Many who returned Islands Party would have lost, having brought savings with them, and much won most votes in only 12 of the 25 of that has gone into a boom in home­ seats. Despite all the mayhem in the building. A further incentive was that opposition, and the inadequacies of its the New Zealand government agreed leadership, the Cook Islands Party in 1993 to allow Cook Islanders who won only 54 percent of the votes cast. were receiving old-age pensions in The focus was on leadership more New Zealand to be paid those pen­ than issues, but only two of those on sions in the Cook Islands. These forces center stage were party leaders. Sir led to the biggest increase in popula­ Geoffrey Henry was sitting comfort­ tion in the Cook Islands since the inter­ ably on his throne, and Norman national airport was opened in 1974­ George of the newly formed Alliance the mid-1994 estimate of the national Party was on the other side of the ring population is 22,286. with a baseball bat to knock him off it, All these developments provided a if he could not be dislodged with push­ propitious climate for business, and in ing, tugging, and spitting of fire. The the ten years from 1992 the number of third prima donna was Vincent registered companies nearly trebled Ingram, a sort of Lord High Every­ (from 458 to 1217). thing Else. Although not a candidate With a long period of unprece­ himself this time, he was a prominent dented economic prosperity, more personality in the election-most employment than ever, and more new prominent in areas where the public things ha·ppen.ing rhanever, thIs was was losing liigesurris ofinoney, . the perfect time for any government to though indications are that Mr Ingram go to the polls-especially as the boom was not! As another earlier unsuccess­ was already over, but most voters did ful aspirant to leadership of the Demo­ not realize that, and any awareness of cratic Party, Vincent Ingram headed it had been diluted by a "generous" the two-man breakaway Demo Tumu pay raise, with back pay for the public Party that has cooperated with the service, which is much the largest Cook Islands Party in the past five employer. years. The election of 24 March 1994 Vincent Ingram's power derived resulted in an apparent landslide vic­ from the previous (1989) election, tory for Sir Geoffrey Henry and his when the Cook Islands Party won only Cook Islands Party, increasing its 12 of the then 24 seats and was majority from 18 to 20 of the 25 seats. enabled to govern by the two Demo Of the remaining 5, the Democratic Tumu members agreeing to "gener­ Party won 3 and the Alliance 2. A by­ ally" support it. As their support was election is to be held for the Raka­ never guaranteed, and they declined a hanga seat, but the outcome cannot coalition, they were in a very strong change the overall picture much.