Construction workers from Landholdings Ltd demolishing part of the Vaka Shed to make way for the upcoming construction work on Empire Bridge. AL WILLIAMS/21082507
For yonks we have gone around in circles talking about diversifying our economy, lessening our reliance on tourism receipts, investing in agricultural enterprises, foreign investment and guess what, the clamour for change has fallen on deaf ears, writes Te Tuhi Kelly, Leader of the Progressive Party of the Cook Islands.
I have been thinking about the economic impact of Covid-19
on the Cook Islands and whilst there has been some statistics regarding
commodity prices recovering in the first quarter of 2021 and continuing on
throughout the year according to the World Bank, this is heavily contingent on
progress in containing the Covid-19 pandemic.
“Energy prices are expected to average more than one-third
higher this year than in 2020, with oil averaging $56 a barrel. Metal prices
are expected to climb 30 per cent; and agricultural prices are forecast to rise
almost 14 per cent,” says the World Bank.
The forecast goes on to say that all commodity prices are
now above pre-pandemic levels. Therefore, emerging evidence is confirming that
food insecurity is increasing and a number of countries are facing growing
levels of food insecurity and this will continue through 2021 and 2022.
Globally food commodity markets are well supplied, however Covid-19 has
impacted local labour and food markets around the world, with the disruption to
supply chains, reduced incomes and intensifying food and nutrition security
that were in evidence before the pandemic.
What that suggests is that the Cook Islands may well be
faced with rising commodity prices through 2021 and for the foreseeable future.
In other words, the cost to the consumer will be higher, because these have to
be passed on, as someone has to pay. From this we are able to make some
inferences as to what this means for us as a small island nation, tucked away
in the Pacific Ocean. Separated by thousands of kilometres (kms) from mainland
countries and dozens of kms from each island that makes up the Cook Islands.
Throw into the mix the transport and freight costs of getting supplies,
services, goods and people to these remote islands firstly from mainland
countries and then ex-Raro and you can see the dilemma we are facing.
We will be on a hiding to nothing because everything that we
currently enjoy will increase in price, it’s a no brainer. We currently pay
competitive prices for some of our goods as compared to say NZ, but that
honeymoon will soon be a thing of the past if prices rise prohibitively.
The Government and people will be faced with a situation
beyond their control as regards to supply, it has always been this way and it
will always be that way. We do not have control over these price rises. What we
do have is control over whether we buy or not, secondly whether in fact we need
to buy and thirdly where we can source at affordable prices. We as a nation
will also be faced with a situation where people will leave for greener
pastures and it may end up in a flood to NZ or Australia. This is the bleak
future we face if we don’t get a handle on our economic sustainability and do
something about prices, do something about supply sources, do something about
keeping people here.
It is not a time for the Government to batten down the
hatches and hide under a rock till things get back onto an even keel. Money
begets money, frugality creates austerity and public unrest and people need to
have confidence in the decision-making process. For yonks we have gone around
in circles talking about diversifying our economy, lessening our reliance on
tourism receipts, investing in agricultural enterprises, foreign investment and
guess what, the clamour for change has fallen on deaf ears. Because tourism was
the cash cow and all else was put into the too hard basket. Covid-19 has put
paid to that.
Tens of millions of dollars of food is imported by the local
supermarket into the country and this has accelerated to place us in a complete
reliance on this. BTIB and its food import substitution is a farce, because
nothing is, has or will be coming out of that Agency without proper leadership
and the will to innovate, initiate and succeed. When the price crisis hits and
it will, the Government needs to spend on innovation and initiate a whole of
people approach to lifting us out of penury.
The Pa Enua has had millions of tax dollars spent on
seemingly political favours, look at Manihiki and Atiu for starters, this has
to stop. Did they need upgraded and sealed roads and airport, what happened to
local innovation and those millions could and should have been spent on a coral
or rock crusher to allow the locals to maintain their sealed roads and provide
work and the money going into the community. It’s not as though they are
travelling at 100km an hour, is it? Those millions could have been spent on
turning the Pa Enua into a food bowl and thus negating to some extent the
reliance on the supermarket imports. The money could have been used to
subsidise freight costs of food grown locally and sent to Rarotonga. Instead,
the money appeared to be used for election campaigns.
We need to be subsidising education for our top scholars in
fields such as researchers, medicine, dentistry, engineering, IT, management,
law, business, investment and bonding them. Our technical people need an
apprenticeship scheme to turn out IT Techs, mechanics, plumbers, electricians,
catering, entertainment, tourism, web development, and agricultural workers.
If we don’t innovate, we stagnate, if we stagnate, we die as
a nation of paupers, constantly begging for the financial crumbs off the global