We’re sitting on mats in the garden around a public housing tower in Noumea, as a small group of women and elders listen to updates from independence activists about the ongoing crisis in New Caledonia.
Local residents—mostly indigenous Kanak—are proudly flying the flag of Kanaky rather than the French tricolour. The apartment buildings are covered in graffiti, denouncing the French police and conservative anti-independence politicians. But our discussion soon moves from politics to the economy. People are doing it tough, losing work and access to public services since conflict erupted across New Caledonia in mid- May.
“We’re worried about next year,” one woman told me. “Many of us have lost our jobs or are only working two days a week. How do we feed the kids? They’ve even put up the bus fares – 500 CFP [Pacific francs or US$4.40] for every trip! The bills are piling up, but what happens if we can’t pay the rent or electricity? Will they try to evict us next year?”
For six months, New Caledonia has lived through clashes
between the independence movement and French security forces. A key trigger for the crisis was a vote in the French National Assembly on 13 May, as President Emmanuel Macron pushed forward a constitutional amendment that would add an estimated 25,800 people to voting rolls for New Caledonia’s provincial assemblies and national Congress. This legislation has now been abandoned, but only after months of riot and conflict.
The economic consequences for New Caledonians have been dire, especially in the capital Noumea and surrounding towns like Mont Dore, Paita and Dumbea: businesses and shopping centres burnt or looted; public transport disrupted; and crucial infrastructure damaged, including schools, medical centres and town halls.
After months of violence, there’s a fragile peace today. A series of French government ministers and parliamentarians have visited from Paris, seeking to restart political negotiations between supporters and opponents of independence. But for ordinary people, economic reconstruction remains a major priority, as they survey the wreckage created by President Macron’s failed policy.
“What happened…was really hell”
David Guyenne is President of New Caledonia’s Chamber of Commerce and Industry (CCI-NC), which represents business leaders from large corporations and small and medium enterprises.
“What happened to us on 13 May was really hell,” Guyenne told Islands Business. “My own business was burnt down two or three days after the beginning of the riots. The first night I tried to go to the site to protect it from fires, but to get there I had to cross five roundabouts which were held by rioters.
I saw that mostly it was indigenous youth from the slums or social housing.”
While rural areas have been less affected by the crisis, Noumea is a divided city. The southern suburbs of the capital feature wealthy apartments, yacht harbours and tourist beaches. In contrast, tourists rarely venture into working class and industrial suburbs in the north of the capital. Even with new housing estates that accommodate people moving into the Southern Province from rural areas, thousands of Kanak and Wallisian islanders still live in squatter settlements dotted around the capital.
CCI’s David Guyenne noted that “ever since 2018, more indigenous people are living in the city than on their customary land. That’s the first time this has happened in the history of the Kanak people. If you don’t have enough economic resources and business activity, you cannot integrate them, and that becomes a problem.”
Many young Kanak, however, can’t get good jobs. Despite training programs and educational reforms under the 1998 Noumea Accord, many Kanak are still pushed out of school early. They often lack the qualifications to compete with migrants in a job market that’s structured around French bureaucratic systems and can face racial discrimination.
The current crisis has amplified long-standing social inequalities that are documented by the Institute of Statistics and Economic Studies (ISEE-NC). This year, the French government agency has been gathering information on the economic and social fallout of the conflict. They report that one in six employees lost their jobs between March and September, especially in the private sector: “In the third quarter, salaried employment collapsed with 10,000 salaried jobs lost in the private sector since March 2024.”
According to ISEE: “The economic fabric is crumbling and there are 1000 fewer self-employed professional workers and 30 fewer companies than at the end of 2023…the destruction of salaried jobs in the private sector had started before the May events (particularly in connection with the Koniambo nickel announcements), but has increased since then.”
By the end of September, 5070 people were still receiving full unemployment benefits, double the normal rate. Another 11,300 people had kept their jobs but with reduced working hours, as companies received partial unemployment subsidies paid to employers by the French government. The subsidy scheme was due to finish on 30 October, but has now been extended until Christmas. After that, a lot depends on the size of France’s national budget for 2025, which was due in September, but is still being finalised.
Beyond the loss of skilled staff, small and medium enterprises face other problems that undercut their viability.
“Insurance is another urgent matter that needs to be addressed,” David Guyenne said. “Right now, insurance companies are not covering the risk of riot damage. Some of them will no longer provide cover for professional staff. This is a problem, because in the French system, you can’t take out bank loans without insurance. So that’s a major, major concern. We know that around €1 billion of funds are to be paid out by insurance companies, but they still have not paid the claims.”
At the Kenu-In Commercial Centre—burnt out by arson attacks—business owner Frederique Pentecost said: “There’s huge destruction and we’re not very well insured because we never thought that everything at once would disappear – maybe one shop or two shops, but not everything together. We’re not sure yet if we’re able to rebuild.”
Nickel crisis: A perfect storm
After Australian, New Zealand and French tourists were evacuated in June, the tourism industry has not fully recovered. For months, many hotels have survived by housing the thousands of French police deployed from Paris. Cruise ships are only now starting to return to the Loyalty Islands after months of delay.
Another challenge is to rebuild the nation’s main export industry, the mining and smelting of nickel. This year, New Caledonia’s three nickel smelters—operated by Koniambo Nickel SAS (KNS), Prony Resources NC and Société Le Nickel (SLN)—all cut back operations.
Even before the current conflict, all three companies faced a perfect storm, hit by soaring energy costs, industrial disputes, competition from Indonesia and fluctuating nickel prices that affected debt, productivity and production.
Exports of nickel ore and metal have tumbled over the last 18 months. In August 2023, New Caledonia exported 1,804,352 tonnes of humid nickel ore – for August this year, only 545,770 tonnes were shipped. In August 2023, 10,006 tonnes of nickel metal were produced for export – a year later, only 2732 tonnes.
The nickel industry was in trouble even before the recent clashes. Transnational corporation Glencore confirmed it would sell its 49% share in the KNS joint venture, forcing the suspension of mining and smelting operations last February. Glencore agreed to pay for workers’ wages and for the smelter’s furnaces to be kept hot until the end of August, but KNS finally shut down its furnaces in September, meaning job losses for most of its 1200 employees.
“The jobs lost at KNS were good jobs – unionised and highly paid,” trade union leader Mélanie Atapo told Islands Business. “So the loss of 1200 jobs in the Northern Province is a real blow. Many of those workers were Kanak, and their wages flowed through to family and community, paying school fees or contributing to their tribe through funerals, weddings and customary obligations.”
As President of the pro-independence trade union confederation USTKE, Atapo said her members were doing it hard: “We’ve already lost 300 members, mainly from private sector jobs in mining and tourism, but this number could rise to a 1000 by year’s end”. This is around 20% of the union confederation’s membership.
Shrinking population
For many years, the political crisis over New Caledonian voting rights and self-determination has impacted broader demographic trends, with thousands of French nationals emigrating over the last decade.
A 2020 ISEE-NC population study documented a stream of departures from New Caledonia between the national censuses in 2014 and 2019 – a trend that has continued since then. The study notes: “Between 2014-19, 27,600 people who lived in New Caledonia in 2014 left the archipelago (i.e., 1 in 10 inhabitants) … The apparent migratory balance is in deficit by 10,300 people between 2014 and 2019 (i.e., 2000 net departures per year).”
New Caledonia’s population peaked in 2019 at 271,285, dropping to 268,510 by 2023. Some of those leaving were New Caledonians seeking greener pastures, but as ISEE reported, “three quarters of the departures were people not born in New Caledonia.”
Guyenne said the recent riots will likely contribute to a further exodus: “The ongoing crises have impacted the attractiveness of New Caledonia and many people have left. The CCI predicts that for all of this year, New Caledonia will lose (net) another 10,000 people.
“Of course,” he added, “all those people contribute to revenues, they are contributors to companies with their skills, they are consumers in the economy, they are entrepreneurs and they are people who train young people. We want to stop people leaving – that is killing our country. We need to stop the brain drain, the skills drain, the wealth drain.”
Most people I met in Noumea last month had anecdotes about friends or colleagues leaving New Caledonia, although it’s difficult to determine exact numbers. Normally, a national census is conducted every five years, to gather precise data on demographic, economic and business trends. The last census was held in 2019 with another due this year – but it was impossible to organise during the crisis. ISEE currently plans to conduct the census in the first half of 2025, if security conditions permit.
In the meantime, government, business and French agencies are attempting to gather data from a range of sources that might give an idea of the scale of movement: data from estate agents and moving companies; the sale of airline tickets; the number of electricity disconnections or apartments for rent.
Even with this limited data, it’s been hard to get a clear picture of whether people are departing for good or just leaving temporarily to take some time-out, or engage in military service, medical care, or overseas tertiary studies.
While most French nationals are heading back to Europe, some have relocated to other Pacific dependencies like French Polynesia. At this year’s Pacific Islands Forum in Nuku’alofa, President Moetai Brotherson told Islands Business that a few hundred people had arrived in Tahiti from New Caledonia since the start of the crisis.
“Two thirds of them are Tahitians who have been living there for many years and who have decided to come back home,” Brotherson said. “But the rest of them are people from New Caledonia, especially small business owners, who due to the economic situation are thinking about moving. Every one of them that I’ve met with, I told them that it’s not my intent to lure you to come in French Polynesia – your country is New Caledonia and your country needs you to rebuild.”
Damage to community health
The months of crisis have led to the departure of many French public servants who work in the health and education sector, along with self-employed doctors and professional staff.
As France’s Overseas Minister Francois-Noël Buffet visited Noumea’s main hospital Médipôle on 19 October, Dr Thierry de Greslan said that “the number of caregivers has fallen by around 15%, and this decline will continue to worsen before the end of the year.”
The figures presented to the Overseas Minister were stark: a third of emergency doctors and physiotherapists have left since May; all three oncologists in the country have left, along with four of six doctors who specialise in lung and respiratory systems. By year’s end, it’s estimated there will only be five gynaecological-obstetrics doctors remaining.
The problem extends to rural areas as well as the capital. By late October, a third of the staff had left the Centre hospitalier du nord (CHN)—the main hospital in the Northern provincial capital Koohnê—and only five doctors remain across the whole province.
Ironically, the overnight curfew in operation since May, and police restrictions on the sale of alcohol have led to a reduction in the number of accidents, especially on the roads.
Doctors noted that “the reduction in alcohol consumption and the curfew have caused fewer road accidents and fewer deaths.”
The bureaucratic ‘layer cake’
Across the political spectrum, politicians, business leaders and trade unionists have been calling on the French State to assist with economic reform, reconstruction and rebuilding, while looking to neighbouring countries for trade and tourism.
After meeting a visiting mission of Pacific Islands Forum leaders in late October, President Louis Mapou told Islands Business that “New Caledonia is at a turning point in its evolution, and the political, economic and social system that’s existed for many years has reached its end.”
His multi-party government has developed a three-year economic reconstruction plan dubbed PS2R – the ‘Plan de Sauvegarde, de Reconstruction et de Refondation’. Last month, Mapou hosted a conference at the Jean-Marie Tjibaou Cultural Centre for business, union and community leaders, to discuss the PS2R and economic reform. In November, Mapou also led a government delegation to Paris, meeting French President Macron to call for commitments from Paris to stabilise the economy, invest in reconstruction and reform the tax base.
Even though business leaders, government officials and unions have all agreed to work together on the PS2R proposal, they differ on who should bear the costs of restructuring, and the role of the public sector in generating jobs.
“You cannot reconstruct New Caledonia as it was before – it’s over,” Guyenne argued. “What the business world wants is to force the public sector to reform in terms of delivery, cost efficiency and performance.
“A big problem is the ‘mille-feuilles administratifs’ [the bureaucratic layer cake],” he said. “Nobody has the single responsibility and administration is spread across the French State, the Government of New Caledonia, the provinces and town councils. There are too many people trying to address the problems, but no one is fully responsible. We’ll have to go through drastic, severe cost reductions in the public sector.
Without that, New Caledonia has no future. It’s going to be painful for some years, but it’s a necessary pain.”
In contrast, leaders of the Kanak Customary Senate highlight the longstanding gulf between Noumea’s wealthy southern suburbs and Kanak and Wallisians living in housing estates and squatter settlements. Senate President Mahé Gowe told visiting Forum leaders that any rebuilding should draw on Pacific values: “We hope to see the effects of the economic and social crisis addressed, while repositioning the decolonisation process in which our country is engaged, so that the process can reach its conclusion.”
As political leaders stress the need for regional integration, the business community is also grappling with practical ways to engage with Australia, New Zealand and Pacific Island neighbours like PNG and Vanuatu. However this will take time: neighbouring countries like Australia have a range of non-tariff trade barriers that hamper exports.
“We must understand how, for mutual benefit, we can organise ourselves in order to further open New Caledonia to neighbouring countries,” said Mimsy Daly, spokesperson for the employers’ federation MEDEF. “The New Caledonian market has become considerably restricted, and therefore we will need new outlets for New Caledonian products. In this context, cooperation with the Pacific is very strategic.”
New Caledonia’s colonial status means that the political and economic are intertwined. While welcoming support from the Pacific Islands Forum and its members, President Mapou noted that, “We aren’t an independent state that has the freedom to work on many of these issues that we must all address in the future. Members of my government, for example, raised with the Forum delegation that we have a trade agreement with Vanuatu, but we have been unable to bring it to fruition for more than two years.” Beyond this, New Caledonia’s ongoing crisis has dropped from the headlines, largely invisible in a media environment focussed on Donald Trump’s re-election. Even as politicians gather next year for talks on New Caledonia’s political status, the economic crisis will remain high on the agenda, and a central concern for ordinary New Caledonians as they head for elections in November 2025.
