Aid boost expected for Cooks

The Cook Islands, which John Key will visit today, proclaimed itself a "recession-free oasis" in a recent marketing campaign after discovering it was benefiting from an increase in tourist numbers despite the global economic downturn.

Tourism makes up about 50 per cent of the Cooks' GDP of about $300 million, and most tourists are Kiwis.

While countries such as Niue are struggling to recover from Cyclone Heta in 2004, the Cook Islands' recovery from a series of cyclones in 2005 was relatively quick.

With a population of about 19,000, the Cooks got $15 million in aidfrom New Zealand last year -more than Tonga and Samoa, which have much bigger populations.

Prime Minister John Key is expected to announce an increase to that aid after meeting his Cook Islands counterpart, Jim Marurai, today.

Much of the increase is expected to be focused on helping the private sector develop to boost the economy, or at least stave off some of the impacts of the recession.

That economy is less reliant on remittances from workers abroad.

However, a lot of the economic benefits of tourism are centred on the two main islands - Rarotonga and Aitutaki - leaving outlying islands in a poorer state.

Part of the new aid is expected to be focused on funding a programme being developed to support small and medium-sized enterprises.

The aid is likely to be in the form of grants or loans to businesses to help them through the downturn.

The Cook Islands also has a growing marine export base, including tuna and black pearls.

Aid for infrastructure is also likely, and will be focused on Aitutaki and Rarotonga. Major projects for the next two years include harbour development, power and water supply, and cyclone shelters.

Like Niue, the Cook Islands are self-governing in free association with New Zealand, giving Wellington special responsibilities for them.