INTRODUCTION

Good morning ladies and gentlemen. It is a real pleasure to be here with you. Before starting this presentation, I would like to thank the Maui Pacific Center for inviting New Caledonia to this conference. I am here today to talk about the functioning of the New Caledonia Chamber of Commerce and Industry. The chairman of the Chamber of Commerce thought it would be interesting for ADECAL to make this presentation. Although I'm not myself a member of the Chamber of Commerce staff, we work very closely. And so my presentation will be in three parts: first I will give you a short overview of the New Caledonia economy, next I will talk about the Chamber of Commerce itself, then I will finish with a short presentation of ADECAL, our mission and how we compliment the Chamber of Commerce.

OVERVIEW OF NEW CALEDONIA

Location

As you probably already know, New Caledonia is located in the South Pacific region. We are 4,000 miles from Hawaii, 4,500 miles from South Tokyo, and 1,000 miles from Brisbane. The distance itself is not necessarily relevant because it takes only eight hours to go to Tokyo, but its more than 24 hours to come to Hawaii. This is a map of New Caledonia. Let me tell you that New Caledonia is the third largest island in the South Pacific region after Papua New Guinea and New Zealand. It's 7,400 square miles so it's a bit larger than Fiji. The main part of it is what we call in French "la grande terre" which means the main island. It's almost 90% of the total area. New Caledonia is larger than the Hawaiian islands all together. We have an economic marine zone of 1.7 million kilometers, which is five times the size of Japan.

Population

As far as the population is concerned, it is quite limited compared to the size of the country. At the beginning of this year we had 206,000 inhabitants. Below is the breakdown:

• Melanesian - 47%
  
• European - 36%
  
• Polynesian - 12% mainly people coming from Wallis and Futuna
  
• Asian - 5%

Besides that, 49% of the population is under 25 years of age. So it's quite a young population, which means a lot of potential, of course, but it also means that a lot of training is needed for these young people.

Economy

The currency of New Caledonia is the Pacific franc, which is linked now with the Euro, the new European currency. Before that it was linked with the French franc. It was a fixed exchange rate for 50 years before it was linked to the Euro. The exchange rate with the U.S. dollar is roughly one U.S. dollar for 125 Pacific franks.

The GDP of New Caledonia last year was U.S.$3.4 billion, and the GDP per capita is a bit above $16,000. It's quite high in the region as we will see later. In fact, it's more than the 41% export/import ratio. This is mainly due to the nickel ore, which allows us to export quite a lot. The French government expenditures are around $800 million per year, which is about 20% of the local GDP.

New Caledonia's economy is based on five economic fields:

• Nickel
  

  New Caledonia benefits from huge deposits of nickel ore. It is estimated that we have roughly 25% of world known resources, which is a great opportunity for the country. The mineral production last year was eight million tons, half of which is exported as an ore, and half which is smelted locally in a processing plant. The export value of last year was more than U.S.$1 billion. One last point concerning nickel is that it directly employs 2,300 jobs. That is quite a lot.

• Tourism
  

  As far as tourism is concerned, it is still an emerging industry in New Caledonia, with 103,835 arrivals in 1998. For many years we have been based really on nickel, and now we realize we have to diversify our economy. So we try to develop tourism. Here on this slide there are pictures of two investments. The picture on the left is Le Mèridien Isle des Pins resort hotel, which opened exactly one year ago in November 1998. On the right side you have the J.M Tjibaou Cultural Center, designed by the Italian architect Renzo Piano, and which is, of course, one of the main assets of Noumea as a tourist destination. Just to give you one or two figures, over the last seven years the number of tourist arrivals has been increasing by 5% per year. We have our main tourist markets as France, Japan, Australia, and New Zealand. In fact, it's the country that we have direct access. Tourism provides jobs for 3,000 people.

• Agriculture
  

  The other economic field that provides a lot of jobs that are mostly inland, is agriculture. We have three main activities: cattle farming; deer farming (which is still quite new, but we trying to export our deers); and fruits and cropping, especially counter-season fruit production for Japan in products such as lychee or mango.

• Aquaculture & Fishing
  

  We have great hopes in this field. We believe that it is a good way to develop our exports. As you can see, last year we produced 1,600 tons and exported 964 tons of that for prawn farming. We have 13 farms with three other farms with Australian investors. Tuna and associated fish species are industries that are also growing. Production is 1,700 tons with export value of U.S.$4 million.

• Manufacturing Industries & Commerce
  

  To finish on the economic side, I would like to say that the manufacturing industry is quite significant once again compared to the limited size of the market. It employs 9% of the active population which is 5,700 jobs, and our manufacturing activities are mainly based on import substitution products.

Political Status

We can now talk about the political status of New Caledonia. Maybe you have heard that the political status of New Caledonia has been a big issue for the past few years. As of last June we have a new status which has been decided after the Noumea Agreement. Now, New Caledonia is called a French overseas country with more competencies and more autonomy than it had before. The structure of the institution is as follows:

• Government
  
• Congress
  
• North Province President, Elected Assembly
  
• South Province President, Elected Assembly
  
• Islands Province President, Elected Assembly

These provinces have elected assembly and together they form the Congress of New Caledonia. The Congress elects the Government. The map of New Caledonia shows the three provinces: north; south; and the three loyalty islands. Just to give you an idea, 68% of the population is in the southern province, 21% in the northern province, and 11% in the loyalty islands. So it is unbalanced and one of the issues of the coming years is to try to re-balance the economic activity as well as demographics.

Pacific Island Facts

To finish with this overview of the New Caledonia economy, here are some references with other islands. The first chart is about the land area where New Caledonia is in blue. You can see that it is a bit larger than Fiji. The other is about population, where you can see that there is a big difference, and the GDP and the GDP per capita. As I have told you, we are in a mid situation between Hawaii and Fiji, for example.

• Land area
  Hawaii - 6,423
  Fiji - 7055
  New Caledonia - 7,376

• Population
  Hawaii - 1,205,126
  Fiji - 815,045
  New Caledonia - 206,000

• GDP
  Hawaii - $35,148 million
  Fiji - $2,149 million
  New Caledonia - $3,373 million

• GDP per capita
  Hawaii - $29,164
  Fiji - $2,637
  New Caledonia - $16,561

THE CHAMBER OF COMMERCE & INDUSTRY OF NEW CALEDONIA

I will talk about our friends of the Chamber of Commerce of New Caledonia, which was founded in 1879. Noumea was quite small at this time with fewer than 1,400 inhabitants. In the history of New Caledonia, the Chamber was involved in the set up of the first railway, which has disappeared since then. They have been involved in the port development because it is so important for an island. Another field of interest has been the air accessibility and the management of the airport facilities.

This is a bit of history for you... By airplane today it takes about 24 hours to come to Hawaii. In 1949, it took 10 days to go to the United States and 15 days to go to Europe. It was progress compared to the ship, but it was still quite a trip.

The Chamber of Commerce is summarized in the slide. You can see that they are acting in the following fields:

• Provision of information and advice to the Government

• Advisor to the Government on how to improve the prosperity of the private sector.

• Authorities wishing to introduce or change laws, regulations etc. applying to business must seek Chamber's opinion.

• Empowered to run training facilities, airports, warehouses, haulage companies etc.

How the Chamber of Commerce Functions

• All registered businesses are all automatically members.

• Today you have more than 6,000 members in the Chamber with 29 elected representatives split according to the different trade services. Each province has three members.

• They have a six year mandate, 50% of members re-elected every three years.

• The members of the consul elect a committee of nine every three years.

• You have a Chairman, Vice-Chairman, Secretary and assistant, Treasurer and assistant.

Financing

• Share of annual statutory business tax.

• Profits from enterprises created and run by the Chamber, e.g. airports, freeways, etc.

• Income from internal activities such as training, rents etc.

• External aid from sources such as: EEC (European Economic Community) and EDF (European Development Fund)

• The breakdown of the revenue of the Chamber is as follows:

  Business tax 18%
  Territory of New Caledonia 3%
  EDF 1%
  CCI 78%
  

CCI Today

The Chamber's total budget is U.S.$12.5 million. This has allowed the Chamber to build their headquarters and training facilities. The newer of their two buildings houses the business school and the Adult Training Center. New Caledonia Chamber of Commerce employs roughly 100 staff. This may seem like a lot, but remember that they run the airport and cold storage facilities, and so are involved in very operational activities. These are the locations of the different offices of the Chamber. There are offices in the southern and northern provinces as well as in loyalty islands.

Services

They have several missions, among them is the publication and releasing of several supports such as a magazine for the members, a Legal Advice Center, and an Import and Export Center. The Chamber provides the following to the business community:

• Library and publications
• Free monthly magazines (CCI and Memento)
• Information Center
• Legal Advice Center
• Business Creation Center
• Import and Export Center
• Central registry of local businesses

Training

The Chamber operates four structures:

• Business school - EGC

• Adult education - FPC

• Apprentice training - ATC

• Training in and outside of Noumea - DCE

The business school was set up in 1986 and it's a three year attrition. There are roughly 20-25 students per year. The Adult Education Center was also established in 1986, and since its creation, has trained more than 2,000 people. The Apprentice Training Center is involved in training different fields, among them are hospitality and tourism activities. Last year, they had 280 apprentice trained at the center. Finally, the Chamber is involved in the training of inland and island small businesses, and provide day to day operational assistance.

Investment Structure and Management

The final mission of the Chamber is the management of facilities and investments. They have three main parts: the airport, Savexpress — which is the highway, and Sedef — which is the cold storage.

• Tontouta International Airport
  The Chamber took over management of the airport in 1968, more than 30 years ago, before that it was managed by the French authority. The airport today handles 350,000 international passengers per year, and it is estimated that the local impact on the economy is U.S.$60 million. There are currently six international airlines servicing New Caledonia.

• Savexpress
  The highway was created in 1981, in order to make it easier to go to the airport, which is north of Noumea. The Chamber is the main shareholder of the freeway so that they have 30% equity in this investment. It was conceived as a private investment so when you use it, you have to pay. It is an 18 kilometers long freeway. There is now a new project underway for a freeway in the south of Noumea.

• Sedef
  The last facility is the cold storage, Sedef, which was created to help the fishing and prawn farming industry. When you produce more 1,000 tons you need to store some before exportation. The storage costs U.S.$1.3 million. It was a Chamber investment along with the port authority and was built in 1982.

ADECAL

We are a Governmental agency and also a non-profit organization set up in 1995 in accordance with the French Government and local authorities. We are financed by the French state, the Congress of New Caledonia, and the three provinces of New Caledonia. The breakdown is roughly 1/3 for each. Our board includes representatives of the Chamber of Commerce and financial institutions. We also have members of the Congress, and our Chairman is the President of the Government of New Caledonia. We have a staff of seven so it is a quite a limited staff.

Mission

• Promote New Caledonia as a business place (investment and trade)
  
• Identify and assist private investors (foreign and local)
  
• Promote exports of goods and services (new service)
  
• Identify new development opportunities (new ideas)
  
• Advise Provinces and Townships (economic development)
  

Services

We provide services and economic, legal, and fiscal data to foreign investors who are not familiar with New Caledonia. It is quite important to get a first opinion as to what is going on and how we do business, especially when they realize that we are not an English speaking country. We provide information on exportable goods and services, provide assistance in project management and business plan preparation. We also arrange contact with relevant officials and business partners. We go with investors to meet the officials thus providing operational assistance. We also provide facilitation for administrative procedures, which as you know the French are world champions for that. Lastly, our services are free of charge because we were founded by the local as well as French Government.

Thank you for your attention.