France’s debt crisis and the boycott call
The Muslim world has once again erupted in anger as the French government led by President Macron vows to support the caricatures of Prophet Muhammad (PBUH). Macron responded such after Samuel Paty, a middle school teacher, was beheaded for showing the cartoon of Prophet Muhammad (PBUH) in his class. Calls to boycott French products have become intense since then.
It all started in 2006 when a Danish daily named Jyllands-Posten first published the caricatures of Prophet Muhammad (PBUH),and this caricature was picked up by Charlie Hebdo, a satirical French magazine. The Danish daily later apologized, citing it as an unintentional act, but Charlie Hebdo was never sorry for their actions, claiming it to be an exercise of freedom of expression. Attackers killed 12 people in and around the Charlie Hebdo office in Paris due to this blasphemous stance in 2015. Three killers were shot dead by the police after the incident.This September, a trial was set up to punish the accused associates of the attack. The magazine republished the cartoon ahead of the trial, which made the call for protests inexorable.
France has a trade volume of more than $100 billion with Muslim majority countries, which is now at stake due to the recent dwindling relation between France and these countries, reports Daily Sabah.Turkish President Erdogan was the first to denounce Macron to support anti-Islamic agenda and requested citizens to boycott French products. Muslims in Pakistan, Qatar, Bangladesh, Indonesia, Jordan, Kuwait, Iran has supported the call to boycott and demonstrated on the street, setting fire to Macron's effigy.
Globally, France had a trade deficit of $54 billion in the year 2019. According to Anadolu Agency (AA), In 2019, France has imported $58 billion worth of products from Muslim countries while it made exports worth $45.8 billion to these countries. Turkey is the leading Muslim country to have an impressive trade record with France and is the seventh-largest market for French exports. Saudi Arabia, Morocco, and Qatar rank top among the other countries having robust trade relation with France besides Turkey in the Muslim world.
Machinery, aeronautics, and transport sector are the top export industries contributing a share of 12%, 9.6%, and 9.5%, respectively, to France's overall exports. Pharmaceutical and Perfumes & Cosmetic sector accounted for 6.4% and 3.6% respectively. Agricultural and energy products, arms, weapons, aeronautic technology, military jets, energy products are the main export items of France in Muslim-majority countries.Turkey, UAE, Saudi Arabia, Qatar imports armaments, aeronautics technology. Qatar and Egypt are also beneficial trade hub for French private jets as potential demand exists in this region.
'Dassault Aviation SA', a French aircraft manufacturer, plans to capture the market here. French energy giant 'Total' also has significant exposure in Muslim nations investing in the production, exploration, and refining process of petrochemical products. Although renowned perfume and cosmetic brands like 'Louis Vuitton', 'Chanel', and 'Givenchy' persist in Muslim countries, the target population is very narrow due to the expensiveness of the products.
France imported crude oil, natural gas, mineral oils, clothes, cars largely in 2019 from Muslim states.Last year,the total import value from Turkey accounted for $9.8 billion. Algeria, Morocco, Tunisia, Lebanon, Senegal are African Muslim majority countries that were under the colony of France. France still exploits natural resources from these countries. Morocco, Tunisia, and Algeria exported goods worth $6.3billion, $5 billion, and $4.7 billion, respectively, to France. Crude oil, natural gas, chemicals, and fertilizers were the main import items of France.
Impact on Bangladesh economy : Bangladesh-France trade relationship has been impressive over the years. According to the World Integrated Trade Solution (WITS), France is the fifth-largest exporter of Bangladeshi goods. French exports to Bangladesh amounted to $0.3 billion, whereas French imports amounted to $2.1 billion as per Comtrade's latest data. So, there exists a trade deficit of $1.8 billion, which isn't new in this trade relationship. Trade between Bangladesh and France totaled $3.19 billion, with a huge trade deficit for France worth $2.61 billion in 2016. Exports to Bangladesh remained moreover the same whereas imports from Bangladesh fell by 27.5%.
France exports mainly powered aircraft, turbo-jets, turbo-propellers, petroleum gas to Bangladesh. Other than that, manufacturing products, agricultural products, fashionable goods, pharmaceutical goods, electrical equipment are also exported from France. The most valued French investment in Bangladesh was Lafarge-Surma cement factory, which was worth $253 million.Total, a French energy giant, has also invested in an LPG industry in Chittagong. Joint ventures between Bangladeshi and French companies are also operating in Bangladesh. 'Grameen Danone' is such a joint venture effective since March 16,2016. Their target is to ensure nutrition for lower-income people and alleviate poverty in Bangladesh. 'NatUpFibres' is a major supplier of car components, planning to set up joint ventures in Bangladesh. French companies Alcatel, Ondeo, Degrement, ADEX, Vieola are also operating in Bangladesh.
Bangladesh's export to France is mostly Ready-Made Garments (RMG) centered. RMG sector generates approximately 90% of the export earnings.Goods and services are very costly in France, for which the country has been a net importer. French importers find Bangladesh attractive as production costs are very low due to cheap and surplus labor in the RMG sector.The minimum wage is only Tk. 8000 in this sector. European Union's (EU) "Everything But Arms" initiative has further accelerated the export process. The quality of Bangladeshi RMG products is renowned worldwide, which has contributed to the demand even more. Although there are concerns regarding losing imports from France, it is not credible as France also benefits importing from Bangladesh.
The total debt was 98.1% of GDP in 2019, which is alarmingly high for France. The coronavirus pandemic has slowed down economic activities and further surged debt crisis. Unemployment can lead to economic austerity in the long term. In this situation, if the boycott continues for an extended period, the French economy may get affected significantly.
The writer is currently pursuing his MSS in Economics degree at Bangladesh University of Professionals (BUP)