Major decisions await government after final Economic Taskforce Report released

The final draft may be out, but that could just be the start of a very complex process to follow

The draft of the final report of the Economic Taskforce was sent to Taskforce members on Friday 17 June.
The 46 page report sets out the outcomes, observations, recommendations and specific actions for government and the private sector. When and how the recommendations will be prioritized, costed and implemented is a matter for further discussion.
Below is an extract from the draft report setting out the Executive Summary and lists of specific action for the public and private sectors.
“Background
The purpose of this report is to document the economic outcomes and recommendations that are the result of the 2011 Economic Development Task Force Summit and to provide support to the underlying specific actions to grow the economy that are contained in the matrix appendix attached. We have summarized these economic development principles within the sectors of the Cook Islands economy that the Economic Development Task Force identified as the drivers to renewed or expanded economic growth. Over the first three months of 2011 the Economic Task Force received considerable numbers of submissions from the Public, interacted with Government Ministries and their Business Plans for Budget 2011-2012, met with communities, economic sector focus groups, the Chamber of Commerce, Government Ministries, SOE’s and Agencies, communicated widely through the media and public meetings, formally reporting to Cabinet and culminating in the hosting of the Economic Summit in April 2011. New economic focus groups were set up in Agriculture, Culture and Creative Industries, Natural Resources and Finance.
Our Economy
The transition from subsistence to a sustainable small economy remains in progress today and our efforts must achieve significant growth to reach the parameters of a sustainable economy delivering the outcomes and expectations of our people. By international standards today we fail to achieve the status of economic independence. We must achieve new long term growth in Tourism and Financial Services. We have 30 years of experience in these core industries and we must reinvest in these two sectors. We must also achieve capital expenditure into new and existing Tourism plant and services and we must invest in the marketing of Financial Services just as we are doing in Tourism.
Economic Development Sector
We must invest in national infrastructure and new business projects. We must diversify into new productive revenue producing sectors in Agriculture; Culture, Creative & Tertiary Industries; Marine Resources; and Trade and Enterprise. In doing so we shall maximise our advantage in the modern business world whilst managing our environment and natural resource assets through sustainable practices.
We must simplify the Government public service sector; merge Ministries and Crown Agencies, separating the regulatory functions of Government from the commercial and corporate functions. These commercial business oriented functions should be merged into an Economic Development Corporation and grouped with Public Enterprises under the Investment Corporation as the commercial arm of Government. We must lower the cost of regulating our economy and provision of Government services. We will then achieve the right balance between regulating, protecting and managing our economy, infrastructure investment, central government control & leadership on the one hand and Private sector growth and achieving sustainable economic activity.
Education
Education is the starting point to economic growth and for this strategy to work our Educators must be continuously in touch with our population and must offer relevant life skills in the new economic sectors. The Ministry of Education will be the catalyst to ensure that every youth and every adult can approach a school, an academy, a polytech, a trade school, an institute or a university and be welcomed into a course or school of study. Our education sector will merge and collectively offer agriculture and horticulture; fishing and aquaculture; culture and creativity; marine; trades; engineering; as well as the academic, university and trade streams currently available.
Public Enterprise
CIIC, the Holding Company for all public investments, SOE’s, Crown Entities and Agencies is responsible for their performance. As the Government delivers its commitment to major infrastructure investment it is clear that CIIC as the Public Enterprise institution must accept greater fiscal responsibility for economic policy and its strategic impact on the pace and direction of the economy. Significant change impacting public enterprise and economic development is recommended in this sector
Infrastructure
Our infrastructure investments must be scoped to existing industry and our new economic development sector needs. These should be prioritised, costed and funded in consultation with our Development Partners. Infrastructure investments should also be tendered and built to acceptable international standards with benefits of Private Sector participation, and business growth within the economy. Our institutions must cope with a significant additional investment in public sector assets. CIIC and its subsidiaries will be restructured and resourced to become the appropriate commercial institution that will own the infrastructure investment and operate public enterprise. Our infrastructure investments are overdue and the planning must be implemented and completed as a priority in the 2011-2012 year with the investment plan completed within the 10 year Development Plan.
Renewable Energy
The policy of renewable energy and our focus on energy independence is an economic target supported by the Task Force. Lowering oil purchases; retaining more cash in the economy; using our natural resources of the tropical sun, wind and water as energy source should create wealth locally. This is very viable and achievable given our size and will impact both quickly and significantly towards economic growth. Additionally, this will contribute to our image as a clean and green country.
From our utilities of power generation, to electric motor bikes and cars, lower cc rated vehicles on our roads, to residential and public buildings energy generation and the recycling of cooking oil into bio-fuel are solutions.
Renewable energy is a simple end game, dollars stay here, less dollars sent to oil companies. It is good for the public- private purse - the ultimate buy local campaign.
Population & Workforce
Stabilisation of our downwards trending population is critical to sustainable economic growth. In the same way that our workforce has been mobile and left the country because of lack of opportunities, this mobility could also be leveraged to facilitate the workforce returning as a result of innovative government policy and private sector driven initiatives and opportunities. There will be an increasing range of specific job vacancies that will provide the opportunities for employment, e.g., water, waste and sanitation engineers and tradesmen, drain layers, plumbers, water services, road contractors, renewable energies, doctors, engineers and teachers, and also opportunities in the agriculture, fishing and culture and creative industries.
Incentives are similarly required for the transfer of labour from government service to private sector thus reducing the regulatory overhead of Government plus unlocking resources for business use. Innovative schemes are required within government ministries to offer employees subsidised re-training, secondment to cooperative farms and private sector commercial projects. It is essential that National policies realise the potential of our economy enabling the transition and the refocus of the workforce to private enterprise. Ministries will review their Business Plans in 2011-2012 and incorporate policy to support participation in activities that develop our Economic Development Sectors (EDS). In this manner Government policy will be managed within and across all Ministries, and will contribute positively towards the fundamental principle of refocusing our Economy towards production and private sector performance.
Land
Currently our land resource is under-utilised. There are many opportunities where land can be used for economic development. We must research, identify and quantify these new and innovative uses that unlock our land resources for agriculture, horticulture, tourism and marine business. Government must review its holding of leasehold and crown lands and design mechanisms and schemes which transfer the resource to the landowners and therefore into the private sector. There is the potential for growing revenues and innovating the private sector to expand the economy.
The way forward
National Development plans and past Economic Task Force reviews contain clear pathways for growth that we have simply failed as a nation to implement and action. Our poor record of economic performance over the last 15 years has been a direct result of our ‘laissez faire’ attitude (a doctrine opposing governmental interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights). If there is one thing that must occur as a consequence of the 2011 Economic Development Task Force, it is the urgency to place actions and delivery as the priority over planning and waiting for economic change to happen. In order to mount an effective response to the development needs of the economy, we need targeted, collective action that can stimulate lasting change.
A bold communications strategy should be implemented to ensure broad community engagement in all processes that deliver the economic development that is expected. An in-depth, widely focused, continually updated, informative communication strategy should be managed by OPM and its success should be gauged upon the actions from the ETF report and the number of specific actions taken up by Ministries, Crown Agencies and entities. A fourth quarter 2011 review is proposed by the ETF with this review focusing upon the ability of Ministries to implement policy and economic strategy into their business plans and Ministry operations, plus a review of successful implements or under specific actions to date.
The Task Force urges Government in this report to implement sound economic policy and strategies to invest in actions that sustain our economic future, support our environment and guarantee that our great plans and dreams do become reality.
Sector Report & Specific Actions to implement Economic Growth
We commend to you for a more detailed read the sector report accompanying this summary along with the specific actions to implement economic growth. The specific actions in the appendix are a summary of the outcomes of the Economic Development Task Force and the Economic Summit held in April 2011. For the complete record of Task Force Summit reports we direct you to the main documents ‘Our Economy – Our Future, A Framework for Economic Growth’ and the ‘Specific Actions Matrix’. The detailed documentation including submissions and the record of the Summit are available on the Summit website at http://www.pmoffice.gov.ck/summit/.
Appendix 1 PRIVATE SECTOR INNOVATION
Change the way we do business
Invest in Education & training
Create jobs & opportunities for employee re-education and tertiary education
Through Innovation and Technology offer career pathways & higher wages
Grow our capacities & corporate strengths
Adopt a national communications strategy
Prefer Cook Islands made
Use Cook Island Brands & Made in the Cook Islands
Employ Cook Islanders
Invest in Import Substitution
Invest in Environmental Preservation
Invest in Renewable energy
Develop entrepreneurial skill based partnerships
Include landowners and civil society on Board of Directors
Receptive to public & civil society viewpoint
Adopt economic policies and corporate policies
Stabilise Population and then achieve population growth
Value and improve Health, Education and Social cohesion
Expand the economy into the Pa Enua
Expand into the new Economic Development Sectors
Create Public Private Partnerships
Innovate, Research and Scientific Development
Convert to Renewable Energies
PUBLIC SECTOR INNOVATION
Change the way we think and respond to private sector businesses
Invest in Education & training
Create private sector jobs & business opportunities
Train and re-educate public servants and enrol in tertiary education
Through refining functional responsibility innovate new solutions and technologies to offer career pathways & higher wages
Integrate Economic Task Force recommendations, Government Policy and Specific Actions into Ministry administration
Focus and give priority to expenditure into the domestic economy that invests in private sector economic growth
Grow our capacities & Public Administration strengths & expertise
Adopt a national communications strategy
Prefer Cook Islands made always
Use Cook Island Brands & Made in the Cook Islands
Employ and train Cook Islanders
Invest in Import Substitution
Invest in Environmental Preservation
Convert to & Invest in Renewable energy
Invest in waste management and recycling
Develop resource & skill based partnerships with the Private sector
Include Private Sector, landowners and civil society on Government Boards
Seek out and be receptive to private & civil society viewpoint
Adopt economic policies and efficient principles of administration
Encourage and support Population growth
Contribute positively to a Healthy Educated and Socially cohesive nation
Include the Pa Enua in all Ministry activities & policies
Support economic expansion into the new Economic Development Sectors
Utilise Public Private Partnerships as a means of capacity building
Use Innovation, Research and Scientific Development
Engage Civil Society & Private sector in National Planning & the development and management of the National Sustainable Development Plan
Invite Development Partners to provide strategies into the National Sustainable Development Plan
Change the composition of the National Sustainable Development Commission to include private sector and community representatives thus better representing the economy.”

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