Source: Asia Development Bank
News Release | 7 July 2020
MANILA, PHILIPPINES (7 July 2020) — The Government of the Cook Islands have drawn down on a NZ$15.7 million ($10.3 million) policy-based loan from the Asian Development Bank’s (ADB) Disaster Resilience Program (Phase 2) to help finance the government’s response to the coronavirus disease (COVID-19) pandemic.
The second phase of the contingent disaster financing (CDF) program for the Cook Islands was approved in December 2019 to help manage the country’s fiscal risk from disasters triggered by natural hazards. The program provides a timely and reliable source of post-disaster financing to enable rapid decision making and implementation of priority actions. This will reduce the indirect economic and social cost of direct physical losses.
ADB’s Board extended the scope of CDF programs on 13 April to include health-related emergencies, allowing for the release of funds in response to COVID-19.
“The Cook Islands is among the tourism-dependent South Pacific economies that are bearing the brunt of the COVID-19 pandemic,” said ADB Director General for the Pacific Leah Gutierrez. “The loan for the Cook Islands will help the economy in the face of the collapse in tourism and respond to emerging challenges.”
The Cook Islands’ economy is experiencing a huge downturn. The closure of all ports to any arrivals has put a stop to the tourism industry, which the Cook Islands’ Ministry of Finance and Economic Management estimates makes up 65% of the country’s economic activity. The COVID-19 pandemic directly impacts trade flows, while also affecting construction activity.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.