New Caledonia
Settled by both Britain and France during the first half of the 19th century, the island was made a French possession in 1853. It served as a penal colony for four decades after 1864. It is now a French overseas territory in the Pacific. New Caledonia has seen deep divisions between its indigenous and European populations, notably over the thorny question of independence.
Agitation for independence during the 1980s and early 1990s has dissipated. The Noumea Accord, reached after negotiations in 1998 and which received popular support at referendum in November 1998, defines New Caledonia's institutions and relations with France for the next 15-20 years.
The native people are Melanesians called the Kanak. Kanaks represent about 45% of the population. Europeans, most of them born in the territory, account for about a third of the inhabitants.
In 1984, the French National Assembly passed a law that granted internal autonomy to New Caledonia, and in May 1998 reached an agreement with New Caledonia to end its status as an overseas territory by the end of 1999, and to work toward complete independence within 20 years. The moves toward autonomy and independence culminated from a 26-year violent insurgency by the National Kanak Socialist Liberation Front, mostly in rural areas. The violence died down during the 1990s, however, the 1998 accords were a blow to the pro-independence movement, as they put off full independence for the territory until 2013 at the earliest.
The national referendum in November 1998 led to 72% of the voters in favor of taking the first steps to independence by approving a national referendum on independence. The referendum allows for a gradual assumption of power by a local assembly. The referendum allows New Caledonia to directly control taxes, foreign trade, transport and communication issues, while France controls the areas of defense, the justice system, and the police.
New Caledonia has a well-established nickel industry (and around one-quarter of the world's known nickel deposits). Financial transfers from France are an important source of income - accounting for around 20 percent of GDP. Of this, 80 percent covers expenditure on health, education and public service salaries and 20 per cent on special development projects (mostly in the Northern and Islands Provinces - most of New Caledonia's wealth being concentrated in the Southern Province around Noumea). French assistance to New Caledonia and a pegged exchange rate (formerly to the French franc, now to the Euro) protect New Caledonia's economy from major fluctuations. Inflation is low (less than 1 per cent), though unemployment is high (and difficult to measure). New Caledonians enjoy one of the highest average per capita incomes in the Pacific.
The archipelago lies around 2,000 km from Sydney, Australia. The main island, Grande Terre, is ringed by a coral reef. Mountains divide the verdant east from a drier west. The territory boasts abundant plant and animal life. Colonial buildings and fine beaches contrast with the infrastructure of the nickel industry.
During 2006, there were significant incidents of civil unrest (please see "Recent Incidents" below).
