Like many other South Pacific island nations, the Cook Islands' economic development is hindered by the isolation of the country from foreign markets, the limited size of domestic markets, lack of natural resources, periodic devastation from natural disasters, and inadequate infrastructure. Agriculture and tourism provide the economic base with major exports made up of copra and citrus fruit. Manufacturing activities are limited to fruit processing, clothing, and handicrafts. Trade deficits are offset by remittances from emigrants and by foreign aid, overwhelmingly from New Zealand. In the 1980s and 1990s, the country lived beyond its means, maintaining a bloated public service and accumulating a large foreign debt. Subsequent reforms, including the sale of state assets, the strengthening of economic management, the encouragement of tourism, and a debt restructuring agreement, have rekindled some investment and growth.
The Cook Islands use the New Zealand Dollar, but also issue their own banknotes and coinage, including two varieties of highly unusual $3 banknotes and the triangular $2 coins. Cook Islands money can only be used within the Cook Islands.
There are a handful of ATMs in Rarotonga and two on Aitutaki. There are no ATM facilities on any of the other islands.
Overall, much cheaper than nearby Tahiti, though anything imported will be expensive. This especially applies to fuel and milk. There is no fresh milk made on the islands, and the only fresh milk available is air-freighted from New Zealand daily, and costs around $7.00. Locals generally get by with powdered or UHT milk.
Calling home can cost a bundle, due to the need of having a large satellite dish and related equipment on each sparsely populated island. Don't expect significant savings by Skype-in or VOIP callback, as the rates using these services tend to be the most expensive anywhere in the world. However, some hotels and resorts have free direct Skype connections in addition to a regular telephone number which can be used for reservations.