At this moment, it is easy to make fun of France. The
country – jokingly, but with a serious undertone, called ‘The Sick Man of
Europe’ – has not been doing well during the last decades, from an economic
point-of-view.
Generally, France enjoyed too little economic growth
since the nineties and – to make things worse – only few of the indispensable economic
reforms – according to many – were actually carried through. This has been a
consequence of reluctance among French politicians to take decisive measures.
Too often, presidents like Jaques Chirac, Nicolas Sarkozy and
François Hollande, as well as their teams of ministers, refused to take the
painful, but necessary measures that would modernize the French economy and
bring the country back on top of things. They were simply too afraid to
mobilize countering forces and alienate large shares of their (sometimes short-tempered) population.
In spite of this reluctance for change among French politicians, the atmosphere in the cities and
villages in France has yet been very tense, during the last ten years. This was especially true in the poorer regions and urban areas of this country.
Everybody probably remembers the very violent clashes between groups of poor, unemployed and
deprived youngsters (often descending from (North)African minorities) and the
French police, in which total city areas changed into war zones and numerous cars were set
on fire.
These events, for their part, led to (verbally)
aggressive counter-reactions from f.i. the rightwing-populist Front National
and their unsavoury, but nevertheless charismatic leaders Jean-Marie Le Pen and Marine Le Pen (his daughter). They represented the dissatisfied voices of the poor, white classes in France. In
some cases, only a little spark (i.e. a little provocation) was enough to put the fat in the fire again in
France.
All in all, France’s reluctance to seriously deploy
structural changes in its economy is almost as legendary, as the French workers’
aggressive ways of striking and France’s dependency upon (some might call it
‘addiction to’) European agricultural subsidies.
On the other hand, nobody in Europe should have the
foolishness to underestimate French politicians and their ways of reaching
their political goals. The French are (in)famous for their extremely fine-tuned
diplomatic and political skills and – consequently – for their enormous influence
in the heart of the European Union. An influence, which almost seems to outstretch their
economic importance for Europe.
How many North-West European leaders have not seen
their ‘groundbreaking’ ideas being shipwrecked by a firm ‘Non!’ from the seemingly
stubborn French, who always seemed to have the last laugh, when it came to a
political shoot-out.
And personally, I especially admire the French for not
giving in to the ubiquitous cultural and economic predominance from the
Anglo-Saxon countries. Instead, the French stand tall for their own society, culture and heritage.
Although
France has not proved to be immune for the British and American popular culture, the
‘McDonaldization’ of French society and cultural life is far less than in other countries. Irrespective
whether you call this a pro or a con; you have to give this to the French. After
every holiday in France, I must admit that the French do have a point when it
comes to some of their opinions on food, drinks, recreation, culture and(luxurious) consumer
products.
Besides that, with f.i. Thomson, Alstom, GdfSuez and
Airbus, the French do still have plenty of companies, which are at the cutting
edge of technology.
Nevertheless, the French economy is currently in a deep
trough, from which it is very hard to come out. Many French small and medium
enterprise (SME) companies have already defaulted during the crisis years. Some
industrial zones in the heartland of France seem like ghost towns, after the
buildings have been abandoned by their owners/occupants.
Many parts of the
earlier mighty, French manufacturing industries have been moved to the Far East
and Eastern Europe, where the production costs are much lower than domestically.
All these notions sounded through in the public outcry
of Minister of Industrial Recovery, Arnaud Montebourg, after he ‘discovered’
that the shirts of the French football (i.e. soccer) team for the Brazil 2014 World
Championship had been manufactured in Thailand.
The following snippets come from the Dutch Volkskrant:
At the World Championship football in
Brazil, the French football teams plays in a classic blue jersey with a
fashionable white polo collar. From an esthetical point of view, this outfit is
undisputed. However, from a political point of view, it isn’t. Minister
Arnaud Montebourg of
Industrial Recovery is not amused that Nike has produced the jersey in
Thailand. “These jerseys could have been produced in France just as easy”,
according to Montebourg
The flamboyant minister is on a crusade in
order to promote the ‘Made in France’ concept. Every French person should buy
as much French products as possible, in order to stop the decay of the domestic
industry. For Montebourg, purchasing French-made goods is almost
a moral duty. “This is what the French should do in their daily life, within
their own means. And the French football association has undoubtedly more than enough means
to do so”.
For a year, the journalist Benjamin
Carle tried to live according to the commandment of Montebourg. He exclusively
used French products, while making a documentary that will be broadcasted on
Canal Plus next week. That wasn’t very easy:
A French jeans was impossible to
get. Only 4.5% of Carle's furniture consisted of products, made in France. He had
to learn to cook himself, using products that he purchased at the butcher and
the greengrocer, as ready-made products were seldomly fully made in France, in the
cases that the descent of the food was clear in the first place.
It became also impossible for Carle to
move through Paris, using a Vélib (a bike for common usage), as this bike is
produced in Hungary. Carle’s conclusion: living ‘the French way’ is
time-consuming and expensive.
It
is easy to disqualify this gaudy, French attempt towards protectionism and
promotion of French goods at the expense of goods from other countries. And
from an economic point of view, we should do this indeed, as protectionism has proven to be a flawed strategy on numerous occasions in the past.
Nevertheless,
we can make some marginal comments in favor of Montebourg’s statements:
First,
although the clothing and sportswear industries have undoubtedly brought
prosperity to the low wage countries in Asia and Eastern Europe, there has been
a race to the bottom for the lowest production costs.
Especially among the
sports brands Nike, Puma and Adidas, the enormous marketing budgets and
skyrocketing sponsoring contracts with the ‘stars’ of sports and leisure must be
compensated by reducing the production costs of sportswear to the bare minimum, in order to
earn a decent profit.
During
the last decade, there have been multiple small
and large accidents and incidents within the clothing factories in
countries like Vietnam, Cambodia, Bangladesh, India and Pakistan. These
incidents have proven beyond a reasonable doubt that the financial well-being,
working pleasure and safety of their foreign personnel in these low-wage countries has not the highest priority for
the large European and American brands that produce in the Far East or
elsewhere.
Second,
the extremely low production costs for the world-leading brands, which
produce in the Far East, have caused the decay of many formerly successful, local
brands. These brands often did produce goods and sportswear of very good and sometimes exceptional
quality, but their production costs and – consequently – sales prices were just much too high, while their marketing budgets were only a fraction of the leading brands' budgets.
Fashion
brands with a ‘domestic’ look-and-feel – in The Netherlands, these are for instance brands
like Gaastra, Mexx, Quick Sportswear and a dozen others – almost all feel
forced to produce in the low wage countries.
This is of course with an exception for… the ultimate luxury
brands, like Louis Vuiton, Hermés, Chanel and others. These brands have the luxury of producing uncompromising quality at astonishing prices and they can survive, due to the fact that their clientèle has a nearly unlimited budget and unstoppable consumption power. However, very few brands reached this status in Europe and the United States.
Third,
the way in which food and agricultural produce is produced and processed all
around the world, has been the 'raison d'etre' for numerous documentaries and scientific
investigations:
- Green beans from Kenia;
- Asparagus from Chile;
- Prawns that are full of antibiotics and food preservants, from Vietnam;
- Garlic from China;
- And especially Dutch grey shrimps, which are peeled in Morocco, only to return to The Netherlands for consumption;
People have got used to eating unripe fruit, which had been picked much too early and had been stored in containers for weeks, and tasteless vegetables that has been imported from around the globe, instead of eating domestic and closely produced vegetables and fruit, within the proper season.
Nevertheless,
besides these remarks, this heartfelt plea by minister Montebourg to buy French
products, ‘in order to stop the decay of the French industry’ (see red and bold text), seemingly ignores the two elephants in the room:
The
circumstance that the French can’t or won’t buy more French-made products, in order
to save their own industry, is caused by the fact that French-made products either
became too expensive or are not available anymore at all. It is the same as
what happened in for instance The Netherlands (Philips), the United Kingdom, Italy and Germany
(Braun, Siemens, Bosch).
Loyalty
to domestic (or European) brands and to a domestic descent of goods and
appliances generally lasts for about 10% price difference at the most (warning: this is
my own rule-of-thumb), presuming equal quality.
If the discount of the
foreignly produced good exceeds this 10% in price difference, the people will
definitely go for the cheaper brand or the cheaper produced goods. This is – of
course – what happened in the past with many household appliances and consumer
electronics
Some
brands can escape this rule of thumb, due to their exceptional quality and the life
expectancy of their goods (f.i. the German brand Miele is one of these
exceptions), but most brands simply can’t. Their manufacturers therefore choose the easy
way out and also start producing in the Far East or Eastern Europe.
And
there is more: especially French politicians have ignored for decades the need to
change the French industry and economic landscape and reduce the power of the too mighty French labour unions and representatives of the agricultural industry.
While this might have been a wise policy to maintain the domestic
peace-and-quiet, it has definitely been killing for some important parts of the genuine, French manufacturing
industry; especially the ones that produced the French household appliances, consumer electronics and inexpensive consumption goods. And perhaps, even if the French politicians would have acted earlier, it would be questionable whether the French manufacturing industry could have battled the cheap labour and production circumstances in the Far East. His battle has been lost for many European manufacturers...
Nevertheless, also the French agricultural industry is confronted with the fact that many
countries can almost do what the French do, and they can do so for a fraction of the price.
Taking
this into consideration, it is easy to see that this attempt to save the French
industry by Arnaud Montebourg skims the edges of unhealthy nationalism and
protectionism: it tries to cover up the problems of the French industries and
economy, instead of exposing them and trying to solve them.
Still,
there is no reason to be too pessimistic about France, in my opinion. I have no
doubt that this stubborn and somewhat eccentric country, with its centuries-old
traditions and heritage, still has everything it needs to invent the cutting
edge technology of the future. Were it not the French, who invented the Deux
Chevaux car and who brought the TGV trains into full development?!
No comments:
Post a Comment