Report on Cook Islands economy suggested

Press, Volume CXII, Issue 33067, 7 November 1972, Page 34

Report on Cook Islands economy suggested

(tiew Zealand Press Association) WELLINGTON, November 6. A United Nations official has called for a report on the Cook Islands economy, particularly in relation to New Zealand aid.

Two experts on international trade, economics and tariffs should be appointed — one by the New Zealand Governments, the other by the Cook Islands Government — to present all the relevant facts, says Mr C. B. Langendorf, the United Nations senior economic adviser to the Cook Islands Government, writing in the “Cook Island News.”

“It is important that the people of the Cook Islands and New Zealand realise that gross-aid figures do not give the whole truth,” says Mr Langendorf.

"From New Zealand sources, it has more than once been pointed out that New Zealand aid to the Cook Islands has an important internal political aspect,” he says. “It might cause irreparable damage if, in the election campaign in New Zealand, the Opposition party — in particular if it should later come to power — accuses the present Government of being extravagant with the taxpayers’ money on aid to the Cooks.” “BEST SOLUTION” Mr Langendorf says he believes the present arrangement of the Cook Islands’ close ties with New Zealand is the best solution — at least for the foreseeable future. “New Zealand is not the donor country, nor is the Cook Islands the receiving party to the extent that is commonly believed. There is actually a matter of giving and taking which is overlooked by those who count only cash transactions,” he says.

"For example. New Zealand can and does recruft a considerable proportion of the ablest and best educated people in the Cook Islands.” NZ GOODS PROTECTED And in the Cook Islands there is not only free access for New Zealand products, but these products are, as a rule, forcefully protected, he says. “New Zealand producers can — and not seldom do — charge 20 to 80 per cent higher prices than producers in other countries — without the risk of losing the market.”

Because 98 per cent of Cook Islands exports go to New Zealand, the islands earn virtually no foreign currency and have to rely on foreign currency allocated by New Zealand, says Mr Langendorf. Although canned citrus Juice is given price protection

in New Zealand, bananas, citrus fruit, copra and coconuts receive none — or less than 3 per cent. The situation which arises from the lack of reciprocity is very unfair, he adds. "During a three-year period of soaring prices, there has surely been price protection for New Zealand producers (as seen from our heavily increased import prices), whereas the Cook Islands growers have, on an average, had to accept reduced producer prices. “It seems that the most practicable solution would be that New Zealand give — beside the general aid packet —a sum perhaps $500,000 a year in lieu of being able to protect the prices of Cook Islands produce as forcefully as the Cook Islands protect New Zealand produce.

“In particular, I think that New Zealand should find a way—there are many alternatives to guarantee the northern group producers who are lacking sound production alternatives— a minimum of say $7O per ton for their copra. “The matter is of importance even to foreign countries. Developing countries should understand why New Zealand has special responsibilities to the Cook Islands, and rich donor countries should learn that the Cook Islands—judged on a net-aid basis—are not so affluent as the figures of gross aid might indicate.” To present a comprehensive, truthful picture, two experts on internal trade, economics and tariffs should be appointed, Mr Langendorf says.