Looking inside New Caledonia’s era of economic change
New Caledonia is a unique jewel in the Pacific crown. Its triple identity (French, European and Pacific) means it has trade access to the coveted EU markets, as well as working regularly with the Australian and NZ governments. As the third-largest Pacific nation by GDP per capita (behind Australia and New Zealand), it is a strong trade partner for many nations across the globe.
However, for the average New Zealand business or expat worker, it might not be the first country you think of for your next opportunity. We spoke with Yves Lafoy from the New Caledonian Delegation to New Zealand for more information on the business landscape in Noumea and beyond.
Building trade between New Caledonia and New Zealand
NC and NZ have had a fruitful trade relationship, albeit one weighted in NZ's favour. Yves notes that in 2016, NZ supplied some $90m of exports to NC, with $3.4m coming back the other way. Exports to the Pacific nation from NZ consisted primarily of meat and dairy, with real estate investments and tourism also strong-performing commodities.
In September 2016, the two nations signed the NZ-NC Joint Co-operation Plan, to build relationships in more areas from education and health to research, innovation and sustainable development.
Looking forward, Yves believes this deal will play a crucial role in New Caledonia's growing role on the world stage.
"The implementation of the NC-NZ Joint Cooperation Plan will contribute to strengthening bilateral trade relations, by facilitating opportunities for work and investment in the two countries," he notes. However, anyone looking to do business in New Caledonia needs to take into account a few more factors.
The economic outlook for New Caledonia
Moving beyond the nickel industry
Core to New Caledonia's economy are its nickel exports. They are the 5th largest nickel producer in the world, and the metal comprised an immense 90 per cent of all exports in 2015. But despite holding 25 per cent of the world's nickel deposits, declining prices have necessitated rapid action on diversifying the NC economy.
"In 2007 a tonne of nickel was worth USD$37,000, compared to less than $10,000 in 2017," Yves states. "To compensate for the lack of revenue traditionally generated by nickel ore exploitation, in October 2016 the Government established an "export support policy" aimed at reducing the trade deficit."
In 2018 and beyond, Yves believes this policy will break down trade barriers and develop more competitive industries outside the nickel sector. Currently, New Caledonia's alternative industries for growth are construction, transport and tourism.
Self-determination and Pacific trade
New Caledonia also signed on to thePacific Islands Forum in 2016 – a move which Yves thinks will improve the nation's standing further. However, the exact level of growth and types of trade to be fostered remain unclear, until the self-determination referendum takes place.
This will happen between May and November 2018, with New Caledonian residents voting on the level of autonomy they want from France. Options on the table range from full sovereignty with no preferential ties to France, all the way to retaining New Caledonia's status as asui-generis(unique) entity under France's dominion.
Creating wealth at a local level
The final large-scale change to impact New Caledonia's trade ties is the Consumption Tax, which replaces import duties and is generally a more secure and economically neutral measure. Introduced in April 2017, Yves notes that this "will, when fully implemented, directly contribute to New Caledonia's economic wealth and impact its bilateral and regional ties".
Building better business in New Caledonia
It is a period of uncertainty and change for New Caledonia, but with strong growth prospects on the horizon. The strength of its industrial facilities and unique political standing mean New Caledonia is well-positioned as a trade partner, providing a stable economic environment and well-developed infrastructure.
In short, New Caledonia is an excellent prospect for those looking at business or expat work opportunities across the Pacific. If you want to learn more about New Caledonian opportunities or trade, speak to the team at Tradestaff Global.