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🇦🇺 Australia /Economy & Trade

Debt crisis threatens New Caledonia two years after riots

From ABC Australia · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

In-depth Named sources New plan
  • New Caledonia remains in a severe economic and financial crisis two years after riots caused more than $3 billion in damage and drove down tourism and business activity.
  • President Milakulo Tukumuli warned that more than 40,000 people could lose access to pensions within months and said the territory would not pass 2027 without fresh French support.
  • France agreed to provide $600 million to $900 million in additional assistance, plus $96 million for the territory’s 2026 and 2027 budgets, conditional on urgent reforms to reduce spending.

Two years after riots devastated New Caledonia, businesses are still waiting to rebuild while the territory’s finances approach what its president calls the brink of total collapse.

Gaetan Babout moved to the South Pacific territory 14 years ago for a quieter life. When deadly riots over proposed voting reforms engulfed Nouméa in 2024, the French national found himself caught up in a long-running conflict over independence from France. His tour company lost between 50 and 70 per cent of its business after clashes between Kanak protesters and French security forces brought tourism to a halt.

2024 and last year were really, really hard. The economy has totally crashed.

· Gaetan BaboutThe tourism operator described the continuing economic impact of the riots.

The unrest caused more than $3 billion in damage across the territory. David Guyenne, president of New Caledonia’s Chamber of Commerce, said about 12,000 people have left since 2024, creating critical gaps in healthcare and essential services. His shopping centre was burned on the second day of the riots, leaving 120 people without work, and he is still waiting for insurance funding to rebuild.

It’s a very painful process. I personally lost 95 per cent of my businesses.

· David GuyenneThe Chamber of Commerce president discussed the destruction of his businesses and the prolonged rebuilding process.

Guyenne said he personally lost 95 per cent of his businesses. “It’s a very painful process,” he said. Babout described the past two years as extremely difficult and said the economy had completely crashed.

President Milakulo Tukumuli has warned that more than 40,000 New Caledonians could become pensionless within months unless the territory’s failing pension scheme is rescued. He also put cumulative healthcare debt at $578 million and said New Caledonia would not make it through 2027 without new financial support from France.

Brink of total collapse.

· Milakulo TukumuliThe New Caledonian president used the phrase to describe the territory’s financial condition.

France has agreed to provide between $600 million and $900 million, along with another $96 million to close the 2026 financial year and balance the 2027 budget. Most of the new assistance will come as grants, but the support depends on urgent reforms to cut spending.

New Caledonia will not pass 2027 without fresh financial support from the French state.

· Milakulo TukumuliHe warned Congress that the territory needed additional French assistance.
About this summary

Originally published by ABC Australia in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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