Niue's remoteness, as well as cultural and linguistic differences between
its Polynesian inhabitants and those of the rest of the Cook Islands, have
caused it to be separately administered. The population of the island continues
to drop (from a peak of 5,200 in 1966 to about 2,100 in 2004), with substantial
emigration to New Zealand, 2,400 km to the southwest.
European involvement in Niue began in 1774 with Captain James Cook's
sighting (landing was refused) of what he named "Savage Island".
The 1911 Encyclopedia Britannica wrote, "The. natives are keen
traders, and though uncouth in manners when compared with their nearest
neighbours, the Tongans and Samoans, are friendly to Europeans. Their hostility
to Captain Cook in 1774, which earned from him the name of Savage for the
island, was due to their fear of foreign disease, a fear that has since
been justified. The population (4079 in 1901) is slightly decreasing. The
natives are all Christians, and the majority have learned to read and write,
and to speak a little English, under the tuition of the London Missionary
Society. They wear European clothes. The island became a British
protectorate on the 20th of April 1900, and was made a dependency of New
Zealand in October 1900, the native government, of an elected " king "
and a council of headmen, being maintained. In 1900 there were thirteen
Europeans on the island. The exports are copra, fungus and straw hats,
which the women plait very cleverly."
Briefly a protectorate, the UK's involvement was passed on in 1901 when
New Zealand annexed the island. Independence in the form of self-government
was granted by the New Zealand parliament in the 1974 constitution. Niue
is fully responsible for internal affairs. New Zealand retains responsibility
for external affairs and defense; however, these responsibilities confer
no rights of control and are only exercised at the request of the Government
The economy suffers from the typical Pacific island problems of geographic
isolation, few resources, and a small population. Government expenditures
regularly exceed revenues, and the shortfall is made up by critically needed
grants from New Zealand that are used to pay wages to public employees.
Niue has cut government expenditures by reducing the public service by
almost half. The agricultural sector consists mainly of subsistence gardening,
although some cash crops are grown for export. Industry consists primarily
of small factories to process passion fruit, lime oil, honey, and coconut
cream. The sale of postage stamps to foreign collectors is an important
source of revenue.
The island in recent years has suffered a serious loss of population
because of migration of Niueans to New Zealand. Efforts to increase GDP
include the promotion of tourism and a financial services industry, although
former Premier Lakatani announced in February 2002 that Niue will shut
down the offshore banking industry. Economic aid from New Zealand in 2002
was about $2.6 million.
In January of 2004, Niue was hit by the fierce tropical storm Cyclone
Heta which killed two people and did extensive damage to the entire island.
While in the process of rebuilding, Niue has been dependent on foreign