The Cook Islands government has signed an agreement to secure an $US80m loan from the Asian Development Bank (ADB) to boost its pandemic-hit economy.
The international headquarters of the Asian Development Bank, in Manila, Philippines. Photo: AFP/ Jay Directo
Prime Minister Mark Brown said an initial draw down of $40m is being processed to meet the country's immediate financing needs.
The remaining $40m is precautionary financing which we can be drawn on if needed within the next three years.
Brown said the impacts of Covid-19 on the global economy over the past 18 months have caused much anxiety about long-term growth prospects.
"The reliance on mutual trust and the strengthening of partnerships have become all the more important during this time.
"Accordingly, this continued support from ADB is both welcomed and much appreciated as we look to overcome the current economic downturn and position the Cook Islands economy for a strong recovery."
Describing this past year's economic environment as "complex and uncertain", Brown said many countries around the world experienced uneven impacts from the Covid-19 crisis, and signs of recovery remain fragile internationally.
"This uncertainty is expected to have lasting implications for the development of the Cook Islands.
"Government believes that the recovery from a shock of this magnitude will be protracted, taking at least five years for economic activity to reach levels previously seen, and more so to reach the previous growth trajectory.
"This new loan from ADB is necessary to help us better manage the country's fiscal position during this time and put in place measures to ease labour shortages and support business growth as we reopen the economy."