whythawk ratings: measuring effective development

Beautiful, but where are the elephants?

If you can cast your mind back far enough to August 2001, the world had a different hue.  Tony Blair, a major Africanist, was working away at George W Bush – then still considered a buffoon who became the accidental president – and France was sufficiently aligned with Atlantic interests to have placed Africa on the agenda.

Africa, let’s face it, is a mess of conflicting ideologies, bad governments and hideous poverty.  Some is the fault of outside meddling, some is self-inflicted, and some arises from the nature of the environment of Africa itself (big weather, big diseases, lots of space).

Then comes 11 September 2001, and the excuse for war with Iraq in 2003.  Africa left the agenda.  The major political factions have never been as polarised.  Russia is fast becoming an autocratic dictatorship.  China has become a major, but self-involved, world player.  Europe’s economy is sickly but significant.  The US has alienated all of these other elephants.

The leaders themselves have become personally involved with their nation’s relationships.  Bush lead the pack with his determination to simplify countries into good and evil, and now everyone has joined in.

The best that us small players, the grass that is being trampled, can hope for is that the elephants settle their differences and notice the damage they’re causing.

France is pivotal to the European project.  They are still one of the biggest European economies, with a massive population and independent ideas about the way in which they would see the world run.  Chirac, their outgoing president, hoped that the EU would form the counterbalance to US power.  Much of this was simply smoking his own socks, but it was an attractive idea, particularly in the wake of the Iraq invasion.  Anyone who has watched Europeans turn out to protest in their hundreds of thousands about US aggression would imagine that Bush was their president.

Enter the debate between Segolene Royal and Nicolas Sarkozy.  Each is a mix of good and bad points.  Sarkozy has spoken of "rupture" since he first started on the election trail; the "rupture" from the past that has lead to the gradual decline of French power and influence.

Sarkozy reached out to the most conservative elements of his nation to build his support base.  Royal, having no other choice, reached out to the most left-wing and communist elements; promising vast amounts of state intervention and state spending.

Now, here’s the thing.  When a country promises massive benefits to its citizens, or to its major corporations, that raises the prices of the goods that are produced in that country.  Raise minimum wage and the cost gets passed onto consumers through higher prices.  Raise taxes, increase legislative overhead, you name it, prices go up.

This increases the cost of local manufactures and decreases the competitiveness of these products against imports.  The companies who have been affected promptly declare that the imported products are only cheaper as a result of commercial dumping; the process by which companies sell products at less than their cost.

When a major retailer does this to get an edge on weekend trading and discounts one product it is known as a "loss leader" and is considered good business.  When a foreign company does so it is considered an evil interference designed to put locals out of work.

Politicians enjoy nationalism and respond by increasing trade tariffs to exclude the imports.

This destroys the viability of foreign firms and increases the costs for consumers EVERYWHERE.  It is only through unfettered competition that the poorest amongst us benefit.  When purified water costs a packet only the rich can remain healthy.  When it costs cents then the poor can be healthy too.  When you protect an incumbent because of the jobs that may be lost they have no incentive to improve and so prices remain high.

The victory for Sarkozy does not guarantee that France will begin to unbundle its vast and costly dependence on grants from the Common Agricultural Policy.  The CAP is a dramatic example of the hypocrisy of rich-nation intentions towards the poor.  France would rather make donations to African countries and protect its tiny number of farmers, than it would to compensate and retrain those farmers and buy what they need from cheaper African sources.

The US has a similar attitude to sugar-cane, preferring to give its corn farmers massive subsidies to produce biofuels rather than buy from Brazil where sugar-cane is cheaper and more environmentally friendly.

With Europe being protectionist the US has no competition to unbundle its own expensive habits. 

Sarkozy is, at the very least, interested in finding common ground with the US.  This bodes well for the future of the Doha round of world trade talks and the future of international trade parity agreements.

Now it is important for the US to reach back to France.

Keywords : France, Sarkozy, elections, protectionism, world trade, Africa