Government says a $20 million loan from the Asian Development Bank will go towards assisting individuals and businesses affected by the economic downturn caused by the Covid-19 pandemic.
A loan recently signed by the Government will provide $20 million towards Covid-19 financial assistance for businesses and individuals.
The Government announced on Wednesday it has signed an
agreement with the Asian Development Bank (ADB) to receive a $20 million loan
to assist with the nation’s economic response to the Covid-19 pandemic.
The support, which is part of a $20 billion ADB Covid-19
assistance programme for developing member states, is designed to assist with
government’s Economic Response Plan (ERP).
Launched earlier this year at the onset of the global
pandemic, the government support programme includes wage and training
subsidies, one-off payments for vulnerable individuals, families and businesses,
as well as interest relief for homeowners and loans for businesses.
With no signal from government officials and their New
Zealand counterparts that borders will be opened, a number of economic response
measures have been extended through to the New Year.
The $320 per week wage subsidy has been extended through to
the end of February 2021, and government will be paying out an additional sole
trader grant from 1 January of $2,000. Interest relief payments for businesses
and individuals will also carry through to June 2021.
According to the government estimates, total debt stands at
just over $193 million. That figure does not include the $20 million ADB loan.
Ministry of Finance and Economic Management secretary Garth
Henderson said: “We appreciate the speed at which ADB officials and the Board
have been able to process and approve the loan in a responsive manner.”
“This will go a long way towards sustaining the ERP measures
delivering support to employers, employees and our vulnerable groups.”
Earlier this month, ANZ Bank’s Pacific Economist Kishti Sen
said the nation’s debt level were at sustainable levels. “ … total public debt
as a share of GDP is well below comparable rated sovereigns so there is plenty of wriggle room for the
government,” he told CI News.
According to the ADB, the economy is expected to have shrunk
by seven per cent for the 12-month period ending in June.
The economy is expected to contract a further 15.4 per cent
upon completion of the current financial year.
The ADB estimates tourism-related employment accounts for
approximately 50 per cent of private sector jobs, or a third of the entire
workforce, and a continued economic contraction risks unwinding recent
“ADB is committed to supporting the people of the Cook
Islands as they respond to the impacts of the Covid-19 pandemic,” said ADB
President Masatsugu Asakawa.
“This assistance will enhance the government’s ability to
prevent the pandemic from entering the Cook Islands, manage any possible cases,
and mitigate the negative social, health, and economic impacts caused by the
pandemic on livelihoods and local business, with a special focus on vulnerable
The latest ADB loan follows a $10 million loan and million
dollar grant provided to the Cook Islands in July, as well as ADB grant funds
received during the pandemic in collaboration with UNICEF to procure medical