The economy of New Caledonia is in a precarious condition. Economic problems preoccupy the minds of leaders in that territory, in business, in the local legislature, and those in France who are responsible for the development of her territories overseas. The standard of living is based on the production of minerals of which one, nickel, is by far the most important. World competition for markets much nearer the sources of supply than are those of New Caledonia makes the future of mining in that far flung island of France uncertain.
Situated 12, 500 miles from the mother country, between the Tropic of Capricorn and the Equator, in the south-west Pacific, New Caledonia is part of a large group of archipelagoes which geographers call Melanesia. The archipelago is made up of three elements, La Grande-Terre
(The Big Island), the Loyalty Islands and the Chesterfield Islands. New Caledonia is by far the largest ; it is also the most densely populated and the richest. The island is 230 miles long and averages about 28 miles wide ; its area is 6, 533 square miles. It is surrounded by a great barrier reef from five to ten miles offshore, between which there is a lagoon good for fishing and safe for navigation. The Big Island includes the Isle of Pines on the south and on the north the Belep archipelago and the Entrecasteaux reefs.
The Loyalty Islands, parallel to New Caledonia about 60 miles to the east, include Maré, Lifou and Ouvea, the three more important. All together they have an area of about 770 square miles. The Chesterfield Islands about 250 miles west, in the Coral Sea, are coral formations, uninhabited.
The dominant feature of the location of New Caledonia (until the development of aviation) is its isolation. It is not only far from France but also 6000 miles from the United States, about 4400 miles from Japan, 1000 miles from New Zealand, and 900 miles from Australia.