France’s overseas minister Naïma Moutchou faces a tough debut in New Caledonia, where economic hardship and political tensions are testing Paris’s resolve to rebuild trust in the South Pacific territory.
France’s new minister for the overseas territories, Naïma Moutchou, begins a four-day visit to New Caledonia on Monday with a double mission – to restart long-stalled political dialogue and to take stock of an economy still reeling from last year’s unrest.
Her trip comes at a delicate moment for the South Pacific archipelago, which has been mired in an unprecedented financial crisis since the violent riots of 2024.
The turmoil caused billions of euros in damage, sent the local economy into freefall and left deep scars across the territory’s fragile political landscape.
According to government estimates, New Caledonia’s GDP plunged by 13 percent in 2024, and hopes of a recovery this year have failed to materialise.
Fiscal revenues are also shrinking sharply – down by 26 percent instead of the 20 percent originally forecast – putting even more strain on already overstretched public finances.
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Economy in freefall
To stave off bankruptcy, the territory took out a one-billion-euro state-guaranteed loan from the French Development Agency (AFD). But most of that safety net has already been used, leaving just €200 million earmarked for 2026 and 2027.
“I don’t give much for our collective chances,” warned Philippe Michel, head of the anti-independence Calédonie Ensemble group in the territorial Congress. He estimates a “gap” of around 500 million euros to balance next year’s budget. “And it’s not with the usurious interest rates imposed by the State that we’re going to get through this,” he added bluntly.
The AFD loan has pushed New Caledonia’s debt-to-GDP ratio to a worrying 360 percent, with repayments due to begin in 2026.
The interest rate – set at 4.54 percent – has caused an outcry among local politicians, who are calling for “national solidarity” and the conversion of part of the loan into direct grants.
However, the upcoming Overseas Territories budget, to be debated in mid-November as part of France’s 2026 finance bill, includes no such provision.
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Hardship and calls for reform
The social fallout from the crisis is equally alarming. Around 11,000 jobs have been lost in the territory of 260,000 people since last year’s violence.
In Dumbéa-sur-mer, a suburb of Nouméa that was particularly hard hit, mayor Yohann Lecourieux of the conservative Les Républicains party said the situation was deteriorating rapidly.
“We have 800 fewer pupils eating in our school canteens because families simply can’t afford it anymore,” he said. “We’ve been promised an envelope for social aid, but it’s nowhere near enough given the scale of the hardship.”
In the rural commune of Bourail, mayor Patrick Robelin painted a slightly less bleak picture – at least for now.
“It’s harvest season, and seasonal jobs have helped families make it to the end of the year,” he said. “But I’m very worried about what’s coming next.” He urged “far-reaching reforms” and “a collective wake-up call” to prevent a deeper crisis.
The two associations representing New Caledonia’s mayors have written to Minister Moutchou to raise the alarm over the situation in their municipalities.
They are expected to meet her on the final day of her visit.
(with newswires)
