Historic drop in population, labor shortage

For the first time in its history, New Caledonia is seeing its population decline, with significant consequences for certain sectors of activity, in particular due to departures from the territory due to institutional instability and the Covid-19 crisis.

The population of the South Pacific archipelago fell below 270,000 inhabitants on January 1, falling for two consecutive years (-330 people in 2020 and -1,050 in 2021), according to the Institute of Statistics and Studies. Economics (Isee) of New Caledonia which ensures that this is a totally unprecedented situation for the territory.

Departures are the main cause of this decline: 2,999 in 2021 and 2,782 the previous year. As a result, net migration no longer compensates for the decline in the birth rate, which began in the 1980s. A dynamic already observed during the 2019 census, which reported 13,000 departures since the previous census in 2014.

“We have lost 18,000 people since 2014”

Fears about the future of the territory after three self-determination referendums which have not yet resulted in a new status and the closure of borders for two years due to the global health crisis explain this phenomenon, according to the Isee.

This fall is causing serious concern in the economic community. “We have lost 18,000 people since 2014”, calculates Thibaut Martelin, president of the economy-taxation commission of Medef, “and the phenomenon is accelerating”. The employers’ organization estimates the cost of these departures in 2021 at 30 billion Pacific francs (252 million euros), mainly from the qualified middle classes, or 3% of GDP. With also deleterious consequences on social accounts already in the red.

The Medef, which calls for “emergency economic recovery measures”, believes that the financing of social accounts must be extended to taxes and lower social charges on wages. A reform that would have the double benefit of strengthening the Social Security financing system and “to restore the attractiveness of New Caledonia, by allowing salary increases of up to 15%”, according to Mr. Martelin.

Recruitment issues

Deserted by part of the skills, the territory must face new competition, between French regions, to recruit certain professionals whose shortage is national. Thus, whereas until now New Caledonia, with its high salaries and a preserved living environment, recruited medical and paramedical personnel without difficulty, entire services are today forced to close.

At the Kuindo-Magnin clinic in Nouméa, 30 surgery and internal medicine beds are empty due to a lack of nurses. Outside Greater Noumea, some dispensaries are no longer able to provide emergencies, while the nearest hospital is sometimes several hundred kilometers away. To remedy the situation, the province of the Loyalty Islands has set up a partnership with the Bordeaux University Hospital to provide six hospital interns and allow the reopening of emergencies.

Negative GDP?

In all sectors, the shortage of personnel is such that a hypothetical resumption of economic activity would be immediately hampered by the lack of qualified labour, according to several employer representatives interviewed by AFP. “The 2022 GDP will end in a slight negative, as has been the case for three years”, notes the IEOM, the institute responsible for monetary issuance in Overseas France.

Real estate, however, gives hope, if not of recovery, at least of catch-up: “We note in the 1st quarter of 2022 a 26% increase in real estate transactions”, underlines Olivier Fagnot, director of Isee which publishes Thursday its annual survey of the sector.

An improvement which comes after a catastrophic year 2021 where transactions fell by 11.2% compared to the previous year, reaching their lowest level since 2014. An improvement which concerns only the old one. “The new has become anecdotal, down 90% compared to 2015”, according to Isee.

The third self-determination referendum organized on December 12, 2021 gave the victory to the “no”, but was marked by the boycott of the separatists, who had asked for it to be postponed due to the Covid-19 pandemic.

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