The Pacific island of New Caledonia, home to 270,000 people, is slated to hold its second referendum on independence from France this weekend, amid bids for self-government in a region that has become a focus of geopolitical rivalry among the United States, China and Australia and has been late to the decolonisation process.
The former penal colony, which is reliant on Paris for about US$1.5 billion in funding annually, has an agreement with France for up to three referendums – each held two years apart – on the question of independence. In the first poll in 2018, close to 57 per cent of voters chose to stay with France.
New Caledonia gets most of the rest of its funding from the sale of nickel deposits to China, which is one of its strongest trading partners. In 2018, New Caledonia’s exports to China totalled US$1.06 billion, more than its combined exports to all other countries. The overseas territory also has one of the highest GDPs per capita in the Pacific region, at around US$38,270 in 2018.
The cost of cutting ties with France would likely hit hard. Anti-independence leaders have used the economic aspect to sway voters, claiming that New Caledonia would become a “Chinese colony” if it gained independence.
“People talk about China. They say if we are no longer French, we will be Chinese. It’s the fear that China will be everywhere in the world,” said Dr Catherine Ris, director of the Research Centre on Economics and Law at the University of New Caledonia.
During New Caledonia’s independence poll two years ago, French President Emmanuel Macron, on a visit to the territory, warned that China was “building its hegemony step by step … a hegemony which will reduce our freedom, our opportunities” in the Pacific.
He also pointed to the need for a “Paris-Delhi-Canberra axis” during a stop in Australia on the same trip, saying it was “absolutely key for the region and our joint objectives in the Indo-Pacific”.
Indeed, New Delhi has taken a growing interest in the Pacific region as a way to balance Beijing’s rise, with India’s foreign ministry now viewing the islands as a destination for diplomatic assistance and investment, according to Indian media reports.
China’s footprint in the Pacific has grown in the past decade, with 10 of the 14 Pacific island countries and territories now officially recognising Beijing. Two – the Solomon Islands and Kiribati – switched diplomatic relations from Taiwan last year. According to the Lowy Institute, a think tank based in Sydney, China was the second-largest donor in the region after Australia from 2011 to 2018.
The decision in the Solomon Islands has pitted the country’s largest province against the rest of the country. Earlier this month, a statement from the premier of Malaita province, Daniel Suidani, who prefers relations with Taiwan, announced his government’s intention to hold a referendum on secession.
Regional players will also be watching Bougainville, a province of Papua New Guinea, as its leader, Ishmael Toroama, looks to get Bougainville’s independence from Papua New Guinea ratified by the central government and gain support for its development.
Anna Powles, a senior lecturer at the Centre for Defence and Security Studies at Massey University in New Zealand, said the Pacific region had “significant maritime real estate, including the corridor to Antarctica [and] its extensive natural resources”.
The Lowy Institute noted in a recent report that the region was vital to the US and its allies for two reasons: “First, it is in US interests to prevent the emergence of a regional hegemon that could threaten America and its allies; and second, the US wants to maintain the free flow of goods and ideas to Asia.”
A consensus among regional security experts is that China is interested in the region primarily to secure votes in the United Nations General Assembly and to gain access to resources such as timber, minerals and fish, but some have raised alarms over whether the islands could end up serving China as military bases.
A US-China Economic and Security Review Commission report from 2018 found that a Chinese military base in the South Pacific could prevent US military access to the region and affect key US allies New Zealand and Australia.
France’s hold on New Caledonia specifically ensures access to vast fishing resources and around a quarter of the world’s nickel deposits. The Indo-Pacific is currently home to around 8,000 French troops.
One of the concerns for Paris ahead of the referendum, said Denise Fisher, a former Australian consul-general to New Caledonia and now a visiting fellow at Australian National University’s Centre for European Studies, is the knock-on effect the referendum could have on other French overseas territories.
“French Polynesia didn’t get everything they wanted in [the 2004 statutory changes granting autonomies] and so we know they’re watching very closely, and we know what happens in one affects another. A couple years ago there was a major strike in Guadeloupe, about living conditions and living costs, and that rippled around the French ‘string of pearls’,” she said referring to the French overseas territories in the Caribbean.
As for China, Fisher from ANU said it was perfectly normal that a rising littoral Pacific power, in need of resources and economic links, would look to the Pacific, although he added that “China has its own way of doing things, and the Pacific is very unique and different”.
“When you set it against China’s pattern elsewhere, for example, the way it manages its fisheries, the way it competes in the South China Sea and the way it looks at its ethnic people, then that creates concern, and I think that’s where it becomes incumbent on China, when it’s dealing with the small island states, to be respectful of the way they like to do things,” she said.
Alexandre Dayant, a research fellow at the Lowy Institute, said that becauseof the effect the Covid-19 pandemic had had on the world economy, demand for nickel had actually decreased by 17 per cent, which could end up cutting into the revenues of New Caledonia ahead of potential independence.
“The main argument against independence is an economic one, and I think Covid-19 will strengthen that position but it doesn’t mean more people will vote against it,” Dayant said. “And pro-independence people, of course, want to minimise the economic impact a vote for independence would have,” he added.
“If they vote for independence, they might enter an agreement with France where they can keep their military base and assets there in exchange for funding, or they might make a deal with China and sign up to the Belt and Road Initiative,” he said, referring to China’s supranational infrastructure investment plan.
“It’s just not clear what actually happens if New Caledonia pulls out.”