SCMP (South China Morning Post) : Emmanuel Macron and the new imperialism in the South Pacific -Alex Lo, 28 July 2023

 Alex Lo - SCMP (South China Morning Post) Columnist

Emmanuel Macron and the new imperialism in the South Pacific

Besides countering China, France’s immediate interest is in exploiting New Caledonia’s nickel deposits as the EU fights Indonesia’s export ban

Alex Lo

Alex Lo

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Published: 9:00pm, 28 Jul, 2023

It’s funny to hear Emmanuel Macron warning the people of French New Caledonia against the dangers of foreign domination. It’s not just a matter of the colonisers telling the colonised about the dangers of imperialism. Rather, it’s more to do with what the French president is doing specifically in the tiny South Pacific territory at this time.

“If independence means that tomorrow you’ll decide to have a Chinese base here, or to be dependent on another maritime fleet, good luck with that – that’s no independence,” he said in Noumea, the New Caledonian capital, this week.

He then travelled to neighbouring Vanuatu where he warned explicitly against the “new imperialism”; as opposed to the old – and current – imperialism?

The conventional explanation is that Macron has been part of an entourage of top Western officials travelling to the region to counter growing Chinese influence. Well, there is an element of that. But there is also a much simpler explanation. In a word: nickel.

Well, maybe not so simple.

 1) You have to understand why the French have a particularly keen interest in nickel deposits in New Caledonia, which is estimated to hold, unbelievably, up to a quarter of nickel reserves in the world.

2) The European Union (EU) has been strong-arming Indonesia, which also has some of the world’s richest mineral deposits, to provide nickel supplies unhindered, instead of trying to add value to its production by processing deposits in the country.

3) 1 and 2 are intricately related.

Nickel is not only used in making stainless steel, but more importantly in today’s switch to the so-called green economy, vital to electric car batteries. That is why Tesla is heavily invested in New Caledonia.

Under President Joko Widodo, Indonesia has been moving up the value chain by progressively banning the exports of key minerals such as nickel, bauxite, copper and tin, and forcing foreign investors to build domestic smelters. Jakarta has pointed out that despite the large volume of exports, the country’s mining industry contributed only 5 per cent to gross domestic product (GDP) in 2019. Imposing restrictions on mineral exports is therefore essential for economic and industrial development. Indeed, mining as a percentage of GDP more than doubled to over 12 per cent last year.

Interestingly, Chinese companies have complied with Jakarta’s industrial or protectionist policies and have invested heavily in both domestic mines and smelters. However, the EU has been fighting Indonesia tooth and nail, even winning a World Trade Organization (WTO) ruling against the ban. Indonesia is trying to appeal the WTO ruling but can’t because its appeal body cannot be constituted as appointment of judges has been blocked by the United States. At least 127 member states have collectively protested against Washington’s unilateral blockage of the selection of judges to the WTO’s Appellate Body. Whatever happens to “the rules-based international order”?

Not unreasonably, Indonesia has said the ban will stay because who knows when the US will stop its sabotage of the WTO’s appeal process.

The EU is completely hypocritical. It has cried uncle to Washington’s Inflation Reduction Act – which is protectionism times 100 – by begging for US subsidies while adding more of its own to European companies. But it cries foul against Indonesia, which, unlike the mighty US, is a developing country.

New Caledonia could theoretically take up the slack in nickel supplies from Indonesia. But, to put it mildly, labour relations are not the best in New Caledonia, with frequent strikes and protests disrupting production. And who can blame the independence-seeking natives, who have lived under the legacy of brutal enslavement by the French in the 19th century and economic exploitation in the 20th?

Paris could get New Caledonia to play ball, and reassert French leadership in the EU that has slipped over the war in Ukraine. Or the territory could declare independence, kick out the French, and invite the Chinese to invest in its mines and smelters, though probably not a military base. What a nightmare that would be.

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Alex Lo

Alex Lo

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Alex Lo has been a Post columnist since 2012, covering major issues affecting Hong Kong and the rest of China. A journalist for 25 years, he has worked for various publications in Hong Kong and Toronto as a news reporter and editor. He has also lectured in journalism at the University of Hong Kong.