Small island economies

French overseas departments and territories are in the unusual position of being influenced by metropolitan France, which is located far from their geographical environment.

They have thus enjoyed a protective economic and social environment that has led them to an inward-looking mode of development – a radically different course from that usually taken by sovereign island economies. This sheltered environment has enabled the overseas French economies to achieve a measure of economic dynamism and raise their standards of living.

This positive assessment needs to be qualified in two respects, however: structural problems remain intact, and growth driven by the catching-up process may well run out of steam. In the light of these considerations, what are the growth prospects of these economies?

To answer this question, AFD conducts and organises a number of research projects, studies and events.

The CEROM partnership

Since 2003, AFD, the French National Institute for Statistics and Economic Research (INSEE), the Overseas France Issuing Institute (IEOM), the French Overseas Departments Issuing Institute (IEDOM), the Statistical Institute of French Polynesia (ISPF), the Planning and Economic Forecasting Department (SPPE) of French Polynesia and the Institute for Statistics and Economic Research (ISEE) of New Caledonia have been working together in the CEROM (Early Economic Accounts for Overseas France) partnership. The partnership has three main purposes: to produce an annual macroeconomic summary on the preceding year using economic models derived from the system of national accounts (“early accounts" produced in year N for year N-1); to improve statistics production in the overseas economies by exchanging information about our methods; and to publish macroeconomic and thematic analyses on the overseas economies.

For further information: www.cerom-outremer.org

Studies of the public policies of the overseas French economies

As part of its new positioning as a provider of support to public policy in overseas France, AFD wants to pursue and intensify, in conjunction with the local governments concerned, certain research programmes that it is conducting or with which it is involved (reform of indirect taxation in New Caledonia, local tax exemption measures in French Polynesia).

Current research

- Public spending in French overseas departments.

- Methods of analysing the economic effects of local tax exemption measures on investment in French Polynesia.

- New prospects for the New Caledonian economy.

- Living standards and inequality in French Polynesia.

Recent meetings on this topic

AFD-CEROM conference, “The Overseas French Economies: Opening Up to Boost Growth?”, 26 June 2007, Paris

The Agence Française de Développement sought to initiate a dialogue between analysts and economic agents in the overseas French economies by organising, with its CEROM partners, a conference on opening up to trade as a way for these economies to move ahead. The event was attended by nearly 300 experts: academics from a number of universities, business leaders and representatives of institutions working on overseas France. Openness was presented as one way of completing the catching-up process initiated some 15 years ago. Aspects such as regional integration and exploitation of the advantages of these overseas economies were explored in the light of practical experience. The emphasis was laid on opportunities and threats, illustrated in particular by a presentation on the environmental question, which encompasses a number of issues: the overseas French economies have considerable assets that they need to exploit in a controlled and sustainable manner.