The setting of the story is never explicitly stated by the author or the characters. But through context clues, the reader can infer that Jerry and his mother are vacationing somewhere on the African coast. Details that allow use to believe that he's in Africa are the black, French speaking boys he meets and the tropical surroundings. An important part of the setting is the bay that Jerry ventures into, because it's where he finds the underground tunnel and he finds himself as a person.
The point of view in the story is third person omniscient. This is because the story is told by an outside person, who reveals the character's feelings and thoughts.