The Lands of Far, Far Away

Somewhere between foreign policy and the home front, lies the question of governing the overseas territories of France. Like the UK, France has retained a link with far flung territories acquired through years of empire. Unlike the UK however, France retains a strong cultural and political link with these territories, with some being treated as wholly part of the mainland, irrespective of the thousands of miles that separate them.

In the popular imagination, these lands are idyllic paradises, full of happy smiling people (waiters and waitresses for the large part). But real people live there: 2.6 million of them.

For many years, the Dom-Tom (the acronym describing both overseas departments and territories – denominating different levels of autonomy enjoyed by the region in question), now evolving into Dom-Com, enjoyed the benefits of vertiginous growth, albeit from an extraordinarily low base. However the economic crisis has hit these territories hard, and social unrest has broken out in many. When unemployment reaches 30%, and even 60% amongst the under 25 years, how can France save these territories, when it seems powerless to save itself?

One of the first round tables this weekend sought to answer this question. Sadly Victorin Lurel, Overseas Territories Minister, was absent, attending a funeral, and so Marie-Noelle Linnemann, senator for Paris, and a longtime defender of the tax subsidies for private investment in the Dom-Com, provided some sensible suggestions for tweaks to tax policy, including decentralised the decisions regarding what industrial equipment is subsidised and converting the private investment in social housing into a direct subsidy by the state, to cut out the middlemen.

Perhaps irritated by the technicity ofnthe debate, which had begun to have a very metropolitain tone, Ericka Bareigts, member of parliament for La Reunion, lying to the east of Madagascar in the Indian Ocean, spoke movingly of her frustration. She explained that her island benefited from the same policies as the mainland, particularly in respect of subsidised employment contracts for young unqualified workers, but had a massively more serious unemployment problem. Her use of the word “equality” in this context highlighted the frustration of the ultramarins that the legacies of physical slavery have been transformed into economic slavery. However her speech indicated a fundamental misunderstanding of the problem. She separated unemployment from the wider economic question, when it is itself a direct consequence of the same economic question. Her suggestion of more subsidised jobs is sensible (within the limits that the budget can stand) but is a palliative and not the solution.

She also highlighted the problems of education, in particular the fact that foreign languages were neglected leading to citizens in the Dom-Com unable to talk to their neighbours. Such situations lead to La Reunion’s marginalization when India is looking to invest, and Guadeloupe and Martinique having almost no tourists from the US, despite it being two hours’ flight away. Again, a franco-centric approach has led to an overly uniform approach to language teaching in schools. It is more likely that this, and not Marie-Luce Penchard’s frankly insulting view that the legacy of slavery will never allow a level of adequate service in the Caribbean for white tourists, is the reason why these territories never seem to be able to move beyond low budget French tourists.

The economic background to the social problems the territories face was provided by Olivier Sudrie, researcher at Cemotev, a frequent advisor to Dom-Coms and a perennial member of commissions and author of reports. He highlighted a number of the problems that the territories face that are specific to them and thus require specific solutions. Whilst economies that have to import much (due to a limited amount of industry and lack of scale), there is a troubling dependence on much food nd consumer products on oligopolistic suppliers and transporters that often maintain rather archaic links to France, rather than developing links with large neighbours, such as India for La Reunion or the US for Guadeloupe. The lack of competition led to the Lurel Law last year, which strengthened the ability for the competition authorities to identify and combat these structural irregularities. It also prohibits some exclusivity agreements between retailers and suppliers and encourage more negotiation between the concentrated suppliers and the fragmented retailers. It’s interesting to note that those relationships are largely reversed in the mainland. Whilst the Lurel Law is a welcome step towards the solidarity economy (in fact it is remarkably free market, and should be celebrated for this), Sudrie argued that it was not enough in itself to generate growth.

His solution was beautifully simple, although its reliance on macroeconomic theory seemed to unsettle the room. Building on the longstanding policy of participation, in which a quotient of a company’s profit goes to the employees, he suggests reserving a quotient of the increase in productivity (in practice, the additional profit generated – let’s leave aside the fact that this is not actually the same thing…) to the employees, thus increasing their wages. Only by consumer spending growth, could the overseas territories begin to expand their economies once more.

The suspicious reception of the room to this idea reflects perhaps the old adage of the one-handed economist, but it might be the next step, after the competition law aspects have begun to break down the sclerotic nature of the market.

What is clear however, is that the solutions to the overseas territories’ problems, lie in economic and educational change, and not simply dolling out low paying jobs to the unemployed.

Perhaps not all that different from the mainland after all.

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