The Cook Islands’ economy faces many of the development impediments common to other small island states in the Pacific region: relatively limited natural resources, remoteness from major trade and industrial centres, and a diminishing labor force. Despite these constraints, the Cook Islands have developed a successful tourism industry and the government has given high priority to its further growth. The development of the marine resources contained within the Cook Islands’ large Exclusive Economic Zone (EEZ) has also been given priority, including black pearl farming in the northern group of islands. Despite some economic diversification in recent years, development assistance from New Zealand and Australia and remittances from the large number of Cook Islanders living in New Zealand and Australia remain very important to the economy. The GDP in the Cook Islands was US$82 million in 2000 and the country enjoys one of the highest GDPs per capita in the South Pacific region.

Real GDP grew by 3.2% in 2000, led by growth in tourism. Tourism receipts improved by 8% to US$32.3 million as visitor numbers reached a record 64,500. This was partly due to more visitors from the northern hemisphere, reflecting a strong United States dollar, and political instability in the Fiji Islands that prompted tourists to switch destinations. The black pearl industry and the commercial agriculture sector also showed moderate growth rates of 6% and 4%, respectively. A breakdown of GDP by industry is shown in the figure below (Figure 1.1), followed by a table outlining total GNP and GNP per capita .