France: La Joie De Vivre

Breathtaking natural beauty, the world´s haute couture hub and food capital, champagne, perfumes, the Riviera, a bastion of intellect and philosophy, the birth place of many a movement and crusade - France stands for all of these and much more. Perhaps it is this splendor and profundity that make the nation the most visited country of the globe. Every year, an estimated 79 million tourists get a taste of the French Joie de Vivre (joy of living). A formidable economic power in Europe, France is also one of the founding members of the European Union (EU) and has always played a key role in economic integration within the EU region. Often referred to as L´Hexagone in French due to its unique hexagonal shape, Western Europe´s largest country has seas, rivers, and mountains as natural frontiers of its territory, which is about 80% of the size of Texas.

History

Rule of the sword

"France was made by the sword" - this quote by Charles de Gaulle, the 18^th President of the French Republic (1959-69), best sums up the nation´s strife-ridden history. Ancient France can be closely identified with Gaul, a Western European region comprising contemporary northern Italy, France, Belgium, western Switzerland, as well as some parts of the Netherlands and Germany. After its conquest by Julius Caesar in first century BC, Gaul remained a part of the Roman Empire until the empire´s disintegration in fourth Century A.D. The nomenclature, France, owes its origin to the Germanic Franks who invaded the region towards the end of the Roman era. Subsequently, the country was ruled by a series of monarchies belonging to the Germanic, Capetian, Valois, Bourbon, and Orlean dynasties until the French Revolution erupted in 1789. The genesis of the revolution lay in the bourgeoisie or the French middle class´ growing disenchantment with the upper class.

The aristocracy promoted an unequal society by systematically extending socio-economic privileges to the feudalistic nobility and the clergy at the cost of the common man. The revolution, which lasted a decade, crushed the monarchy and virtually transformed the social and political landscape of France. Although the rising espoused the principles of freedom and sovereignty, it was accompanied by unprecedented violence, repression, and executions, including those of King Louis XVI and Queen Marie Antoinette. This period of chaos and bloodshed, known in history as the Reign of Terror (1793-94), also spread to the European sub-continent. Other European powers, viewing the uprising as a threat to their own regimes, attempted to stifle the movement.

The revolution was followed by a series of short-lived, unstable attempts at establishing a democratic government.

Eventually, army general Napoleon Bonaparte successfully led a coup and gradually consolidated his position to assume power as emperor of the First French Empire in 1804. His reign (1804-14) oversaw the strengthening of the France, which expanded in the European sub-continent through a series of military triumphs. An astute administrator, Napoleon also brought about several reforms in government and society, including centralized administration of various departments, an organized tax system, a central bank, and law codes. The Napoleonic era, one of the most significant phases in the history of France, finally came to an end with the defeat of this legendary emperor at the hands of the British in 1815.

The period 1815-1870 was fraught with divisive politics, unrest, upheavals, and a quick succession of regimes, such as the House of Orleans and Bourbons. Louis Napoleon, the nephew of Napoleon Bonaparte and the last monarch of France, ruled France during the period 1852-70. The period from 1870 onwards until the early 20^th century, was witness to the rise of nationalism, with the country distinctly moving towards a republican democracy. In the 20^th century, France suffered greatly in the two world wars, especially during World War II when it was occupied by Nazi Germany for almost six years. The Allied Forces liberated the country in 1944, which also marked the beginning of a phase of economic reconstruction. Today, France is a democratic republic, with Nicolas Sarkozy as the nation’s President.

Culture

Crème de la Crème

France has always been the cultural icon of the western world. With over 40,000 monuments, including 10,000 chateaux, abbeys, and manor houses, 6,000 museums and over a 1,000 festivals, the country perhaps has as many colors in its cultural palette as there are textures in its wine. Since the Middle Ages, France has been the nursery of exceptionally talented artistes, be it painters such as Cezanne, Degas, Renoir, and Claude Monet, or sculptors like Jean Goujon, Germain Pilon, and Auguste Rodin. With their unparalleled intellect and power of reasoning, French philosophers and thinkers like Descartes, Rousseau, Voltaire, and Sartre have been a beacon to the world.

Therefore, it is no surprise that France has been the stronghold of such cultural movements as Impressionism in painting, Mannerism in art and architecture, Realism in visual arts, as well as the Age of Enlightenment and French Renaissance in philosophy. The 118-year-old Eiffel Tower, which was built to commemorate the centennial of the French Revolution, stands 312 meters tall. A symbol of French architectural excellence, it serves as a reminder of the values that the movement inculcated and instilled in the French people.

French literature reflects the nation’s multi-hued culture and political dynamism. Several literary movements like Dadaism, Surrealism, and Existentialism have been started and nurtured in France. Since the late 19^th century, the nation has also come to be known as a sort of focal point for modern art, cinema, fashion, and cuisine. Cocteau, Dumont, and Godard are some of its celebrated film-makers, while Pierre Cardin, Chanel, Givenchy, and Louis Vuitton are iconic names in the contemporary world of fashion.

France is a superpower in the world of gastronomy. The French are not only great connoisseurs of food but also the makers of the planet’s finest wine and cheese. The sparkling wine from the district of Champagne, red and white wines from Burgundy, fine fruit preserves from Lorraine, white wine from Alsace, and red wine from Bordeaux have enjoyed legendary status for centuries.

The ethnic diversity notwithstanding, France’s main religion is Christianity. Muslims and Jews constitute a small minority. Immigrants from all over the world, especially from North African countries, make up around 7.5% of the population. France also has indigenous ethnic minorities such as the Flemings in its far north, the Bretons in its west, and the Basques in its southwest.

Economy

The dark years

The country, which has a rather tumultuous economic history, is today the sixth largest economy in the world and the third largest in Europe.

However, in the middle ages, from the 14^th century to the 17^th century, France was predominantly a rural economy that used medieval agricultural techniques. It did have some amount of trade and commerce, but frequent wars and harsh weather proved to be its nemesis. By the end of the 17^th century, innumerable people had lost their lives and the economy lay in ruins.

Things changed for the better after the 1730s when the nation saw 30 continuous years of population as well as economic growth. During this phase, France emerged as the richest country in Europe and its growth rate was only second to the United Kingdom’s. Prices and wages rose, agriculture and industry were modernized, and trade increased. Despite competition from British industry, especially in textiles and cotton, French industries saw a period of steady growth until the end of the 18th century.

In the 19^th century, the French economy was influenced by three watershed events - Napoleon Bonaparte’s rule, a phase of rapid industrialization, and the wars in late 19^th century and early 20^th century. France experienced broad-based economic expansion as an imperial power under the reign of Napoleon (1795-1815). However, the Napoleonic era culminated with the defeat of the French forces by the British army, putting the economy in the doldrums yet again. Nevertheless, the products of the grandes ecoles or elite schools of France came to the rescue and became the architects of French industrialization. The country greatly benefited from the industrial techniques it had developed for the wars.

Through most of the 19^th century, France experienced industrial development, which was bolstered by rapid urbanization as well as an emphasis on education and workers’ skill development. The end of the 19^th century saw France in the league of industrialized nations, rubbing shoulders with the likes of Germany and Great Britain. Thereafter, in late 19^th century and the first half of the 20^th century, wars played havoc with the economy of France. The hostilities that stemmed from Bismarck’s re-united Germany and later Hitler’s Nazi Germany were particularly debilitating.

A truly global leader

The post-war period or the latter half of the 20^th century is often referred to as Les Trente Glorieuses, or the 30 glorious years. This period witnessed the emergence of France as a modern global economic power. Interestingly, though we see France as a capitalist or a free-market economy today, it is actually a blend of interventionist and free market policies that have propelled the economy to the global center stage.

France played a key role in fostering co-operation among members of the European Community. This eventually led to the formation of the European Union in 1993. The economic and monetary integration actually took place over a period of five decades and France was one of the six founding members of the geo-political entity.

France has successfully sustained a reasonable pace of economic growth since the mid - 1980s. Between 1984 and 1991, its GDP grew at an annual average rate of 2.5%, but moderated to around 2% in the early 1990s. After expanding at an impressive rate of 3.3% in 1998, and 4% in 2000, the GDP expansion decelerated to 1.4% in 2000 because of a global economic slowdown. Since 2004, the French economy has been averaging 2% growth. In 2007 the country recorded a growth of 1.9% due to the uncertainties in the global economy as a fallout of the subprime crisis in the U.S, but it is expected to maintain a growth rate of 2% in 2008.

Pillars of strength

Ranked 10th worldwide in terms of human development, France boasts of one of the most qualified workforces in Europe. Higher education graduates form 37% of the population in the 25-34 age group compared to the European Union average of 29%. This, coupled with the French’s natural inclination toward innovation and R&D, has been driving the country’s economy. In 2007, France boasted the distinction of having the highest number of Fortune 500 companies in Europe. While the country is largely powered by its services sector, which contributes almost 77% of its GDP, the significance of the industrial sector, which accounts for 21% of the GDP, cannot be undermined.

The country has a vibrant, R&D-intensive aerospace sector, which comprises leading manufacturers of aircraft, helicopters, military planes, and private jets. Thanks to the availability of a highly skilled workforce and a plethora of specialist training schools supporting the segment, it is no surprise that foreign companies operating in France account for 47% of the turnover in this space.

France’s agro-food sector, especially the health foods and the intermediate foods categories, have been expanding steadily. Many renowned multinationals have their research centers in the country. The nation is also home to a flourishing bio-fuels market. It has established clusters to develop partnerships between the industrial sector and research laboratories. Already a magnet for global bio-fuel companies, France seems poised to become Europe’s front-runner in the non-nutritional use of agro-resources by 2015.

France is also Europe’s second largest manufacturer in the automobile sector and accounts for 17% of the continent’s total production. The country has been one of the most preferred foreign investment destinations for global auto majors in the European sub-continent. The sector boasts of two leading global players in the auto industry.

In the chemical segment, the country is the fifth largest producer and third biggest exporter worldwide. The nation’s applied chemicals and specialty chemicals sector is also the second largest in Europe. France prides itself in being the world’s leading producer of glass products and industrial glass, as well as the global leader in the production of building materials. The country ranks third in the European Union in terms of steel production and first in terms of base aluminum production. Numerous foreign companies operate in France’s chemical sector and account for 55.4% of the turnover in the specialty chemicals space, 44.9% in the soaps and perfumes category, 40% in the base chemicals market, and 38% in the plastics segment.

France is one of Europe’s biggest players in the Information and Communications Technologies (ICT) segment because of its large pool of skilled workforce and a strong proclivity for innovation.

The pharmaceutical sector is also a core area of the French economy, riding high on a strong research foundation. The globe’s leading producers of pharmaceutical drugs operate in the country, capitalizing on the easy availability of research scientists and technicians. This space has been doing particularly well because it has built linkages with other fast-growing sectors like agro-food and cosmetics.

Owing to its favorable economic environment and quality infrastructure, France also has a flourishing market for outsourced tertiary services, which have seen an upsurge in Europe recently. The French capital, Paris, has turned out to be an attractive outsourcing location for European businesses.

A unique competitive advantage in the fashion arena is another feather in France’s cap. Paris is the largest and undisputed fashion center of the world, a benchmark for trends, and styles. The country has more than 11,000 companies in the fashion, textile, and design space.

With the advantage of bordering six countries, France is situated at the crossroads of Europe’s north-south and east-west transport routes. This virtually makes the country the nucleus of the European economy. Indeed, within a 1242 mile radius around Paris, the largest market in the world - a whopping 600 million consumers - can be accessed in less than 48 hours. The country has turned itself into a natural hub for international transport activities largely on the back of its infrastructure facilities. France possesses an 11,000 km motorway network, the most extensive high-speed rail network in Europe, several major maritime ports, and 190 airports, including six international ones. Paris is a worldwide air transport hub. This explains how the country has produced and nurtured a modern and efficient logistics services industry.

The personal services industry, which provides a wide array of family and health-care services, is one of the fastest-growing sectors in the French economy. It is also one of the largest employers in the country. Companies operating in this space are expanding globally, leveraging France’s stature as a universal benchmark for standard of living.

The fact that France is the recipient of one of the largest foreign investment inflows in Europe substantiates its enviable position in the globalized world. Foreign investments in the nation stood at over $81 billion in 2006, less than that of only the U.K. The country has invested over $115 billion globally. In fact, it has the distinction of the being the second largest source of foreign investment in the world after the U.S.

Paris houses the Euronext N.V., a pan-European stock exchange with subsidiaries in Belgium, France, the Netherlands, Portugal, and the United Kingdom. Euronext merged with the NYSE Group to form NYSE Euronext in April 2007, the first truly global stock exchange.

Creeping concerns

Unemployment, an aging population, poverty, and social exclusion are some of the issues that can constrain France’s growth. Ever since the end of its post-war expansion in 1970, the country has had very high unemployment rates, which exceeded 10% in 1985. In 2004, the unemployment rate was around 9.6% and, in 2007, 8.7%. Moreover, the labor market is extremely rigid and regulated. The procedures for the dismissal of permanent workers are complex and slow, which not only hurts the prospects of the nation’s unemployed youth but also hampers productivity.

Truly embodying the French cultural essence, Les Deux Magots Café in Paris, has the proud legacy of being a favored haunt of the intellectual and literary elite of the city. Opening up in 1813 as a drapery, selling silk and other luxury items, it was transformed in 1914 into a café, and in 1933 instituted a Deux Magots literary prize.

An aging population is a major liability, as traditionally generous social sector schemes like public pensions as well as health and dependency care are a drag on the government’s finances. The current President’s commitment to reduce taxes makes it difficult for the government to meet expenditures. The government deficit, though on a declining trajectory since 2004, stood at an estimated 2.4% of GDP in 2007. The government intends to eliminate it by 2012.

The steep escalation in oil prices, rising strength of the euro, and weak economic prospects in neighboring countries could be growth dampeners for the French economy. In fact, export performance in 2007 does not seem very encouraging. The trade deficit increased from 1.4% of GDP in 2006 to 2% last year. Reducing the minimum cost of labor, which is rather high compared to other developed countries, reforming the employment protection legislation, and removing regulatory barriers that constrain productivity growth would go a long way in correcting some of the problems in the French economy. Furthermore, a reasonably robust domestic demand is expected to keep fueling economic performance.

French affair forever

"Après moi, le déluge" (After me, the deluge), a remark King Louis XV of France apparently made referring to the imminent doom of the French monarchy, was indeed prophetic. More than two centuries ago, this ‘deluge’ was triggered by a revolution that galvanized millions against oppression. The country has come a long way since then. Today, the world sees France as a pioneer, and a trendsetter of sorts in many fields. Be it culture, cuisine, art, architecture, literature, music, philosophy, fashion, science and technology, lifestyle, or business, France seems to be occupying a pride of place everywhere. And, it has taught the world la Joie de Vivre.