“It is better to be lucky than good,” is a saying the French squad at the Europe 2000 football tournament is likely to keep repeating this summer. Indeed, were it not for a controversial call awarding them a penalty in the final seconds of a game, or a missed penalty by the opponent in another encounter, the French wouldn’t have made it to the finals. And were it not for an overextended lost time that allowed the French to score in extremis, Italy should have been holding the European Championship.
The analogy seems appropriate to France’s long-standing relations with the Francophile segment of Lebanese society. Indeed, it is curious to see a section of Lebanese society still clinging to a romanticized version of close Franco-Lebanese economic and commercial relations. And it is peculiar that some Lebanese officials believe that the solutions to Lebanon’s economic problems should be inspired by the French model.
To be sure, Lebanon was created in the image of the older, unreformed French model of the state. What the Lebanese structure shares with the French state is a political class and political culture shaped by bureaucracy, a huge state machine and the traditional reflexes of interventionism. Civil service in France still accounts for 25% of total jobs and public spending remains above 50% of GDP, while the Lebanese government has 160,000 people on its payroll, accounting for nearly 40% of budgetary expenditures.
Further, the old generation from both countries still support public projects that drain the treasury. For instance, the French have a weakness for high-speed trains that travel at record-breaking speed and make huge losses, while the Lebanese government continues to subsidize money-losing state-owned companies against all business and economic logic.
The “feel-good factor” from a truncated sport victory that the French rely so much on to raise their morale cannot solve and will not hide the fundamental problems plaguing the country. France’s bureaucratic socialism explains its failures much better than its successes.
The role of government has yet to shift from controlling competition to improving the environment for competition, and still doesn’t trust the private sector’s ability and drive to compete. While attention has been focused on macroeconomic policies and the bailout of financial institutions, the real problems are microeconomic. Companies and industries in France suffer from a competitive disadvantage because of misguided intervention in competition coupled with failure to develop appropriate skills and institutions.
Modernization has become a code word in France for the American-style trend of free trade, free markets and intense competition. France is a country where farmers have been attacking McDonald’s restaurants as symbols of the US-led globalization they dread. And there is clear resistance to modern business practices.
Success, as every ambitious young executive knows, comes to those who start early, finish late and work at home during weekends. However, the French ushered in the new millennium by criminalizing hard work. That’s right. The French parliament approved a draft bill cutting the legal working week from 39 hours to 35 hours by the start of 2000 to “increase employment”. Since then, the government raided several companies to make sure executives and other professionals are not exceeding the legal limit. About 1,500 violations of working hours uncovered at a subsidiary of the defense electronic group ThomsonCSF left senior managers facing fines of up to $80,000 each.
And while the world advances technologically, the French culture police are busy protecting the language from English domination. So website becomes le site web, and French executives could be fined up to $500 for saying je close le deal in government offices.
Sadly, there are still some Lebanese who are enamored with the French model. In creating the Beirut Stock Exchange (BSE), the Lebanese government turned to the French bourse for advice and technical assistance. And as the BSE moves along its path of reform, the committee continues to seek the help of the French.
Consider the euro, the new currency of the European Union and a French-inspired fabrication to counterbalance the domination of the global economy by the US dollar. But the euro hardly made a dent on the local scene. The Lebanese economy is heavily dollarized, with two-thirds of bank deposits and 89% of loans to the private sector denominated in US dollars—rather than in French francs or euros. And regardless of the sustained marketing campaign to launch the euro, Lebanese businesses still prefer to deal with the more trusted dollar.
The tutorship of a bureaucratic state has been largely rejected by the new generation of Lebanese as well as by French. Many young French people have given up looking for jobs at home, where the unemployment rate for those under 25 is now about 25%. In fact, the daily Le Figaro estimated that more than 60,000 French citizens are now seeking their fortunes in London’s financial district.
In Lebanon, thousands of young Lebanese are flocking to Anglo-Saxon universities, realizing that it opens the doors wider to work opportunities. And even those who graduate from French-system colleges are realizing that acquiring English-language skills are essential.
Whether France’s influence in Lebanon is on the ascent or on the descent has stopped being a relevant question. It is more appropriate to note that, at the start of the 21st century, French culture and politics have become, by and large, irrelevant to the day-to-day life of the Lebanese people, while the French economic model has become a liability to Lebanon’s competitiveness in the global economy.
