Country Report New Caledonia December 2005 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The Economist Intelligence Unit delivers its information in four ways: through its digital portfolio, where the latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group. 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New Caledonia 1 Contents New Caledonia 3 Summary 4 Political structure 5 Economic structure 5 Annual indicators 6 Outlook for 2006-07 7 The political scene 9 Economic policy 11 The domestic economy The region 12 Summary 13 Outlook for 2006-07 15 The political scene 16 Economic policy and the domestic economy Country Report December 2005 www.eiu.com © The Economist Intelligence Unit Limited 2005 New Caledonia 3 New Caledonia December 2005 Summary Outlook for 2006-07 The Avenir Ensemble (AE)-led territorial government will continue to show greater commitment than its predecessor to political progress in collaboration with indigenous Kanak leaders, as well as to social reform. However, Kanak leaders are becoming increasingly impatient with the slow pace of imple- mentation of the Nouméa Accord, an agreement signed in 1998 that outlines processes for the progressive transfer of government functions from France to the local government and for a referendum on independence to be held between 2013 and 2018. Industrial disputes, strikes and occasional riots will remain a feature of the economic and political scene. Nickel output is set to expand rapidly, although New Caledonia will remain heavily dependent on direct financial transfers from France. The Pacific franc could be replaced by the euro in 2007. The pace of New Caledonia’s political and economic integration with the Pacific’s independent island states is accelerating. The political scene A former Kanak leader has protested to the UN over the slow pace of political reform and the expansion of the nickel mining industry. The president of the territorial government, Marie-Noelle Théméreau, has reaffirmed her commit- ment to greater regional co-operation. A new Kanak resource-management lobby group has been formed. Economic policy The AE has pledged to reduce personal taxation in the expectation that the resulting loss of revenue will be more than offset by rising income from the expansion of nickel mining. The prospect of an imminent merger between the two Canadian mining companies behind New Caledonia’s new nickel projects has been met with concern. The Territorial Congress (the legislature) has given its approval in principle to New Caledonia’s future membership of the Pacific Island Countries Trade Agreement (PICTA). The domestic economy The primary sector produced a record US$100m worth of output in 2004, although floods have reduced the 2005 pumpkin crop. Editors: Kate Allard (editor); Kil Dosanjh (consulting editor) Editorial closing date: November 29th 2005 All queries: Tel: (44.20) 7830 1007 E-mail: [email protected] Next report: Full schedule on www.eiu.com/schedule Country Report December 2005 www.eiu.com © The Economist Intelligence Unit Limited 2005 4 New Caledonia Political structure Official name New Caledonia Form of state A French overseas territory, largely autonomous except in areas such as foreign relations, defence, justice, currency and credit. The Nouméa Accord, signed in May 1998, provides for the devolution of power to New Caledonia. A referendum on complete independence is due to be held between 2013 and the end of 2018 The executive The French high commissioner for New Caledonia and Wallis and Futuna, Michel Mathieu Head of state The president of France, Jacques Chirac Territorial legislature The 54-seat Territorial Congress, comprising a proportion of the combined elected membership of the three provincial assemblies (15 members from the Northern province, 32 from the Southern province and seven from the province of the Loyalty Islands). Members are elected for terms of five years by universal suffrage Local government Three provincial assemblies, plus 32 basic local government units known as communes Legal system The French system, augmented by mandatory consultation with the Advisory Council on Customs (Conseil coutumier territorial, comprising 40 members drawn from eight areas) in matters of customary and land law. Magistrates preside over the decentralised lower courts. The Court of Appeal is based in the capital, Nouméa, and there is access to the higher appeal court of France for certain matters National elections Provincial assembly elections, May 2004. These elections also determine the composition of the Territorial Congress and thus of the government. The next provincial elections are due in 2009 National government The first president, Jean Lèques, of the Rassemblement pour la Calédonie dans la République (RPCR), resigned in March 2001 and was replaced by Pierre Frogier, also of the RPCR. The election in May 2004 brought to power a restructured coalition, led by Marie-Noelle Théméreau of Avenir Ensemble (AE), a new political group that had broken away from the RPCR. AE and the RPCR each hold four of the 11 executive positions in the territorial government; a pro-independence grouping, the Front de libération nationale kanak socialiste (FLNKS), holds three Main political organisations The main groupings are the RPCR, AE and the FLNKS. The RPCR is affiliated with the Rassemblement pour la République (RPR) in France. AE was formed in 2004 by dissidents from the RPCR. The FLNKS comprises the Union Calédonienne (UC), Parti de libération kanak (Palika), the Rassemblement démocratique océanien (RDO), the Union progressiste mélanésienne (UPM) and the Union nationale pour l’indépendance (UPI). The Libération kanak socialiste (LKS) is strong in the Loyalty Islands President of the territorial government Marie-Noelle Théméreau (AE) President of the Northern province Paul Néaoutyne (FLNKS) President of the Southern province Philippe Gomes (AE) President of the Loyalty Islands Hnepeune Neko (UC) Vice-president Déwé Gorodé (FLNKS) Deputies to the French Assemblée nationale Jacques Lafleur (RPCR) Pierre Frogier (RPCR) Representative to the French Senate Simon Loueckhote (RPCR) Country Report December 2005 www.eiu.com © The Economist Intelligence Unit Limited 2005 New Caledonia 5 Economic structure Annual indicators 2001a 2002a 2003a 2004a 2005b GDP at current prices (CFPfr m)c n/a n/a n/a n/a n/a Real GDP growth (av; %)c n/a n/a n/a n/a n/a Consumer price inflation (av; %)d 2.2 1.6 1.0 0.9 2.2 Population (‘000)c n/a 215.9 219.0 222.0 n/a Exports fob (US$ m)e 453.1 493.4 797.3 1,015.1 n/a Imports cif (US$ m)e 932.2 1,007.0 1,595.1 1,626.1 n/a Exchange rate (av; CFPfr:US$) 133.2 126.3 103.8 95.5 94.7 a Actual. b Economist Intelligence Unit estimates. c Institut Territorial de la statistique et études économiques. d Central Bank of the French Territories in the Pacific. e Customs Service, New Caledonia. Origins of gross domestic product 1997 % of total Agriculture 3.7 Mining & metallurgy 10.7 Construction & energy 4.0 Miscellaneous industries 5.0 Transport & communications 6.7 Commerce 43.7 Other services 26.2 Principal exports fob 2003a US$ m Principal imports cif 2003a US$ m Ferro-nickels 486.2 Air navigation equipment 243.1 Metals & metal products 91.9 Vehicles 190.0 Nickel ore 89.7 Petroleum products 167.5 Fish & crustaceans 25.9 Electrical machinery 106.4 Main destinations of exports 2004a % of total Main origins of imports 2004a % of total Japan 23.3 France 41.0 France 16.5 Singapore 11.1 Taiwan 13.8 Australia 9.1 South Korea 12.8 New Zealand 5.0 Spain 6.5 US 3.8 a Customs Service, New Caledonia. Country Report December 2005 www.eiu.com © The Economist Intelligence Unit Limited 2005 6 New Caledonia Outlook for 2006-07 Kanaks are impatient with the The Avenir Ensemble (AE)-led territorial government, which came to power in slow pace of political reform mid-2004 after 25 years of dominance by the anti-independence Rassemble- ment pour la Calédonie dans la République (RPCR), will continue to show greater commitment than its predecessor to political progress in collaboration with indigenous Kanak leaders, as well as to social reform.