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By Trev Pitt

RAROTONGA, Cook Islands (The Cook Islands Herald, Dec. 31) – Foreign business applications for the 2004 calendar year are up over previous years, although it is premature to say just how strong the growth is in outside investors.

According to the Development Investment Board, which has just closed the register on 2004, there were 40 foreign enterprise applications this year compared with 33 in 2003, and 22 in 2002.

Out of those 40 applications, 15 were registered as approved, nine were declined, and 15 instances of deferrals were recorded. The DIB revoked 4 foreign enterprises in 2004.

The increase in applications looks good on the surface but the real story is always what’s behind the stats.

For example, the approvals are actually down on the previous years’ – 24 in 2003 and 18 in 2002.

Does this reflect less interest from outside investors? Or has the DIB simply toughened up its screening process?

It may well be a case of both. In addition, the figures at a glance show huge imbalances in our investment portfolio.

Rarotonga, for instance, represents 33 applications out of the total of 40. Despite the occasional rhetoric of pushing money out to the Outer Islands, there’s no clear solution in how to make them attractive to investors.

Tourism also remains the main sector of interest. Investors are shying away from the potential of others like Marine, Agriculture, and Manufacturing although the Investment Code tries hard to point them there.

Of these main areas for investment, the figures for 2004 show that Tourism attracted 15 foreign enterprise applications, Marine had three, Agriculture two, and Manufacturing only two.

Although foreign business is not exactly flooding into the tourism market, it’s quite clear where the dollars are. This year, five applications were approved, three were declined and eight were deferred.

The deferrals indicate that applications are still ‘alive’ while certain issues are worked out.

The results in the other main sectors are another mixture. Only one of the three foreign enterprise applications in Marine was approved. There were two instances of deferrals.

Both the applications in the Agriculture sector were declined while the Manufacturing sector reveals one approval and one application declined.

These are not exactly earth-shattering figures but a much deeper analysis of the investment figures is now required to give us a better picture, especially when it comes to formulating policy.

However, any new changes in policy are not likely until the DIB gets hold of the final draft of the Tourism Master Plan. So far, the indications are that this draft will be out by mid-January.

January 5, 2005

The Cook Islands Herald:

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