"We're witnessing the collapse of a country." The feeling expressed by Isabelle, a self-employed entrepreneur who did not want to give her full name, is widespread among the population of New Caledonia. Born in France, the graphic designer has spent over 20 years in the territory in the Pacific Ocean and has recently taken the decision to leave. She shared offices with a dozen freelancers who, like her, have seen their order books shrink, by 50% at best. The majority of them are considering leaving, adding to but not officially counting in the immense wave of unemployment following the destruction of businesses, shops and public infrastructure that has hit New Caledonia since May 13.

The archipelago of 270,000 inhabitants, whose annual GDP is in the region of €8 billion, is undergoing a cataclysm. According to the authorities, is likely to force almost 24,000 New Caledonians into unemployment in the very short term. This represents more than a third of the 68,000 employees in the private sector. Loss of wages and the many expected departures will seriously affect consumption. According to the national statistics institute, consumption accounts for around 60% of the archipelago's growth.

"In New Caledonia, the riots took place at a time when the territory's economic situation was already particularly gloomy and its outlook highly uncertain, in connection with the crisis in the nickel industry," pointed out the Banque de France's Overseas Issuing Institute, in its latest economic outlook published on July 11.

Since the beginning of the events, the New Caledonian government has set up an economic unit to keep track of the cost of the crisis. At the end of June, the provisional cost of damage was estimated at over €2.2 billion for the public and private sectors, not including business operating losses. The local government's funding needs are estimated to be €675 million.

After being completely halted for more than six weeks, the functioning of the economy remains severely restricted. Entire sectors of activity are unable to resume, with expected knock-on effects on businesses that hadn’t been directly affected. This is the case not only for tourism but also for the nickel industry, which has been at a virtual standstill since May 13 and accounts for nearly one in four jobs in the territory. The closure of subcontractors and the disappearance of suppliers will make recovery difficult.

"The ecosystem is deteriorating. We are now blacklisted by shipping companies, which has led to a 10% to 15% increase in freight prices," complained Thomas Sevêtre, a member of the metallurgy union. "Our Chinese and Korean customers are now sourcing elsewhere, in the Philippines and Indonesia. They're making long-term commitments, so it's going to be difficult to get them to come back."

You have 67.89% of this article left to read. The rest is for subscribers only.