New Caledonia’s Political and Economic Crisis: How the Archipelago is Struggling to Survive Amidst Separatist Unrest and Financial Losses

The archipelago of New Caledonia is facing a crisis, both politically and economically. The State has provided more than 250 million euros in exceptional aid to help revive the economy of the territory, which has been struggling since mid-May. The clashes between Kanak separatists, loyalists, and law enforcement have taken a toll on local businesses and have led to an economic slowdown.

Metallurgical industries have been impacted, with some even shutting down during the clashes. The archipelago has faced significant financial losses, with 1.5 billion euros already paid by the Caledonian government. In response, the French government has been asked for assistance to help address the economic challenges faced by the territory.

To support businesses, the State has established a solidarity fund to compensate for the loss of turnover between May and June. Additionally, a repayable advance of 100 million euros has been made available to the New Caledonian government. This aid for businesses could total close to 20 million euros, with thousands of small and medium-sized enterprises applying for support through the solidarity fund.

The economic difficulties have resulted in a direct loss of around 6,000 jobs, with an additional 15,000 employees expected to be on partial unemployment in the coming weeks. This amounts to 20,000 private sector jobs being affected, which makes up one-third of the jobs in the archipelago prior to the crisis. The 2025 finance bill will play a crucial role in determining the future support from the State and discussions on the territory’s future.