The Hindu Business Line : France face-to-face with globalisation challenges

We often see developing countries struggling to accept the changes that come with globalisation, and rushing to protect their social structures, subsidies and companies. But France, which had the vision to initiate the move to form the European Union, appears to have regressed and is unable to adjust to the realities of today's world.

THE graffiti spray painted in black on the concrete barrier serving as a road divider reads `Arabphobia' (presumably meaning fear of the Arab). It was one expression of what had gripped France for almost two weeks in end of October.

The riots began when two teenagers of North African origin died of electrocution when they hid in a substation to get away from police who were chasing them. Rumour and indignation did the rest as groups of youth went on a rampage burning cars, dustbins, and property such as schools and other public institutions. Newspapers report that about 8,400 cars were burnt during that period.

I was driving from Avignon to Aix en Provence in the South of France, when I noticed the graffiti, but was told that not many cars were burnt in those parts. In Paris, which had borne the brunt of the rioting, I did not see any graffiti in at least the parts I visited two weeks after.

The riots disrupted normal life, caused destruction of property and gave all French people cause to stop and think about what was happening to their country. Several arguments have been put forth as an explanation for the riots. The level of unemployment in France is around 10 per cent and amongst the immigrants, estimated at around 40 per cent.

The frustration that unemployment causes combined with the discrimination immigrants perceive in availing themselves of economic opportunities is a chief reason why they give vent to their feelings so violently.

The French labour laws, aided and abetted by powerful labour unions, protect those who have jobs rather than help create new ones. Restrictions such as the 35-hour work-week and rules that make it difficult to hire and lay off workers easily have stifled entrepreneurship and growth of employment opportunities.

Till the 1970s, when France needed labour to deal with a domestic shortage, men from North Africa (Arabs and Africans) were allowed to come in to work. From then on, the French government allowed the workers to bring their families.

The sudden inflow and the consequent demand for low-cost housing gave rise to big multi-storeyed buildings in the outskirts of Paris, where land was available and cheap. Locally referred to as a `citié,' these complexes in the areas of Stains (Seine-Saint-Denis) and Place St Michel (two neighbourhoods on the outskirts of Paris) became ethnic ghettos and the hotbeds of frustration as unemployment grew. These areas were not easily accessible through public transport, and created communities that integrated poorly with the rest of the city. Migrants from North Africa are estimated at about 10 per cent of the population in France.

Socialistic France gave the immigrants good benefits and protection, for example, cash payments if you had more than two children, but unfortunately the government did not make any conscious efforts to provide them with opportunities or integrate them with the rest of the community.

During the riots, the Interior Minister referred to the rioters as `scum,' which not only did not help the situation but also showed that the immigrants feel alienated not just economically but also politically. It is a miracle that in all the rioting, only a couple of people lost their lives, and from events only indirectly related to the actual rioting. Perhaps, the events were not meant to harm but just send a message to the elites. If France attracted migrants from North Africa, it is part of its colonial legacy coming to roost in the era of globalisation.

But apart from migration, France has been coming to grips with other effects from its colonial past. This concerns how that very same colonial past is being taught in French schools. In February, a law was passed that asked for a more positive picture to be presented in the schools about how its past is taught. The purists will maintain that this is not a rewriting of history but only a more balanced presentation. Yet, it is leading to some re-writing of school level history textbooks.

France's management of its colonies is a touchy subject. The Algerian battle for independence from France during the 1950s and the 1960s was quite bloody. The French have their own version of the idea of a `commonwealth' that the British adopted, and certainly help many of their former colonies economically. But colonialism was never a bed of roses for the subjects and the news that the government officially wants to reinterpret its past is enough to raise the blood pressure.

Former French colonies such as Martinique and Guadeloupe have seen protests against the French law, perhaps also a demonstration of their feelings ahead of the visit of a French Minister. Even in France, posters in immigrant settled areas are said to stress the role of immigrants in the growth of France and in her defence. Dealing with the past is as difficult as dealing with the future. The future that France is grappling with, in this era of globalisation, is that it cannot continue to pamper its farmers when poor countries are suffering due to their inability to compete against the subsidised agricultural products of the developed world.

Under the Common Agricultural Programme in the European Union, farmers get subsidies of about $52 billiona year. Out of that, French farmers are estimated to receive about 20 per cent and so the country has been adamant about not cutting the subsidies. This issue was at the heart of the recently-concluded Doha round of negotiations of the WTO. To accommodate the needs of the rich countries, the deadline to end subsidies has now been moved to 2013 (which was originally to have ended three years earlier).

Ironically, even in France, it is the bigger and well-to-do farmers who grab a bigger share of these benefits so it is not even a question of the `poor' farmer being protected, but just the usual game of the more powerful protecting a benefit they have got used to. Hopefully, the decisions taken at Hong Kong will be an excuse the government can use to bring about change.

As though these challenges are not enough, the French government has decided that some sectors of its economy need protection. It is working on developing a list of sectors and a policy whereby these areas would be considered to be of strategic interest in which it will attempt to protect French ownership of the companies — prevent foreign companies from acquiring French ones. It is the old `national interest' argument. Some of the items in the list make sense, such as armaments and dual civil-military technologies. But on closer scrutiny, you will see casinos also figuring in the list. Makes you wonder whose interest is being protected.

We often see developing countries struggling to accept the changes that come with globalisation, and rushing to protect their social structures, subsidies, and companies. But France, which had the vision to initiate the move to form the European Union, appears to have regressed and is unable to adjust to the realities of today's world.

(The author is professor of international business and strategic management at Suffolk University, Boston, US. His Internet address is cgopinat@suffolk.edu)

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