Originally settled by Polynesian emigrants from surrounding island groups, the Tokelau Islands were made a British protectorate in 1889. They were transferred to New Zealand administration in 1925.
Referenda held in 2006 and 2007 to change the status of the islands from that of a New Zealand territory to one of free association with New Zealand did not meet the needed threshold for approval.
With a total area of 12 square km, Tokelau consists of three low-lying atolls, enclosing large lagoons. Current environment issues include the very limited natural resources and overcrowding, which is contributing to emigration to New Zealand.
Tokelau's small size (three atolls), isolation, and lack of resources greatly restrain economic development and confine agriculture to the subsistence level.
The people rely heavily on aid from New Zealand - about $10 million annually in 2008 and 2009 - to maintain public services.
New Zealand's support amounts to 80% of Tokelau''s recurrent government budget. An international trust fund, currently worth nearly US$32 million, was established in 2004 to provide Tokelau an independent source of revenue.
The principal sources of revenue come from sales of copra, postage stamps, souvenir coins, and handicrafts. Money is also remitted to families from relatives in New Zealand.