New Caledonia is facing a crisis both politically and economically, with the territory’s businesses struggling since mid-May. The State has provided over 250 million euros in exceptional aid to revive the economy of the archipelago, which has been hit hard by clashes between Kanak separatists, loyalists, and law enforcement. These tensions have resulted in significant financial losses for the territory, with 1.5 billion euros already paid by the Caledonian government.
The metallurgical industries have been impacted by these clashes, with some even shutting down during the unrest. In response to this economic challenge, the French government has been asked for assistance to help address New Caledonia’s needs. The State has established a solidarity fund to compensate for lost turnover between May and June and made a repayable advance of 100 million euros available to the New Caledonian government.
This aid could total close to 20 million euros, with thousands of small and medium-sized enterprises applying for support through the solidarity fund. However, despite this support, New Caledonia has still lost around 6,000 jobs due to the economic difficulties caused by these clashes. An additional 15,000 employees are expected to be on partial unemployment in the coming weeks, resulting in a direct loss of around 20,000 private sector jobs – one-third of all jobs in the archipelago prior to the crisis.
The future support from the State will be determined by discussions on New Caledonia’s future as outlined in the 2025 finance bill. It remains to be seen whether this aid will be sufficient to help New Caledonia recover from its current crisis or if further action is needed from both political and economic perspectives.
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