Re: [Salon] How France Underdevelops Africa



Dear Mr. Coats,

If moneatry stability requires keeping 70% of export earnings of commodity producing nations; and limiting them to loans from those funds;then even countries with good leaders would have a hard time improving.  Former French colonies are also most prone to coups;and the French have internvened more than 20 times, see 
https://scheerpost.com/2021/02/07/the-folly-of-backing-frances-african-adventures/
The Folly of Backing France’s African Adventures
https://www.newagebd.net/article/139158/debys-death-chads-crisis-ghosts-of-libya
Deby’s death, Chad’s crisis, ghosts of Libya


France's continued involvement should have produced the most peroductive and successful African nations. Chicrac admitted the French relied on these countries, I rthink France culd hae done better without this dependence.

From a German newspaper:

 the 28-nation European Union, of which France is a member, is becoming more active in Africa. The impact on France's own national policy on Africa could be profound, said Stefan Brüne.                    

"It would mean that part of the Parisian political elite would lose the means to exert influence and I do not think that they would be prepared to accept that," he said.
..
Several presidents and presidential candidates have promised to reform France's policy on Africa and to move from a position of dominance to that of a partner among equals. In practice, however, such promises have changed very little.     "
https://www.dw.com/en/why-are-ex-colonies-in-africa-so-important-to-france/a-38680154
Why are ex-colonies in Africa so important to France?
France is facing a second and final round in its presidential election. The winner has the daunting task of reviewing policy on Africa as the former colonies still play a significant role in French national life.


Seems to me British institutions were also weak in Africa.

Some years ago, I read a history of the British colonial civil service;in which I learned that the British civil service was not established for as long as in India. My parents were born in India;and I have studied it because I wanted to understand  why local governance was so inadequate. The region (Bengal) in India that had the longest direct rule by the British is more impoverished than other parts. The local self government law was introduced by Lord Ripon, who was of a rare progressive mindset. He was too progressive for the British in India, so he was pushed out. His successors never nothered to improve what he established. 

The British didn't invest in basic education;but they did pay some attention to higher education as they wanted a pro-British elite. My maternal grandfather was a beneficiary. He was very bright and received a scholarship to study mathematics at Cambridge. My paternal great grandfather was a lawyer;and the first Indian admitted to the first Bar Association in India. He becamse very wealthy litigating inheritance of title to princely states of Awadh  a subregion of present state of Uttar Pradesh. My great grandfather ensured  all relatives were well educated and paid for their foreign education.

The Indians have maintaoned failure to invest in basic education (with exception of southern states) and paid a high price for it.

The British treated their Asian colonies on the other side of the continent much better (and were around for less time than in India);and they have benefitted from it in the post colonial era.

The Indian civil service has not worked well in the post colonial era. It's extractive and aloof orientation  was not sufficiently changed.  Indians needed to work hard on doing that as Lee Kuan Yew did in Singapore;but didn't have his mettle.

;    The British bequeathed us hierarchical machinery-but when it comes to hierarchical institutions, nobody can teach India anything. 
https://www.dailypioneer.com/2018/columnists/how-civil-is-indias-civil-service.html
How civil is India's civil service?

On Wednesday, August 31, 2022 at 09:43:32 PM GMT+5, Warren Coats <wcoats@gmail.com> wrote:


Dear Mr. Fahim,

Former French colonies have grown more slowly than former British colonies, in part, in very large part in my view, because the British left behind well-functioning institutions of government and the French didn’t. I have spent 40 years providing technical assistance to central banks and it has never been the case that stable money and fiscal prudence caused slower economic growth. 

You report that the central banks of the BCEAO and the BEAC were required to hold 100% of their FX reserves with the French Treasury at independence and that it has eroded since to almost half that more recently. I helped draft the monetary provisions of the Dayton Peace agreement that established the legal foundations of the Central Bank of Bosnia and Herzegovina and then led the IMF missions that established that bank in the late 1990s. It has tight currency board rules, i.e., all of its monetary liabilities must be fully (at least 100%) back by foreign currency assets (deposits/investments abroad). Thus, there can be no monetary policy. The money supply is determined by the market, which buys local currency with Euros whenever it wants more M. Over the last three decades Bosnia’s real GDP has grown more rapidly than has Germany’s. Bosnia has many serious problems, but they are political (religious hatreds, etc.). The three religious blocks disagreed about almost everything except currency board rules for money.

Estonia, which established currency board rules at about the same time was the fastest growing country in Europe. It has now replaced its currency board governed currency with the Euro itself.

Capital flows (investors being greedy people) to where the expected risk adjusted return is highest. You should be investigating what policies and conditions cause capital to flow out rather than into the BCEAO and the BEAC. It is not stable money.

 Warren Coats

On Aug 31, 2022, at 1:50 AM, Mayraj Fahim <fmayraj@yahoo.com> wrote:




 Since 2005, the two central banks – the Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC) – have been required to deposit 50 per cent of their foreign exchange reserves in a special French Treasury ‘operating account’. Immediately following independence, this figure stood at 100 per cent (and from 1973 to 2005, at 65 per cent).





The credit-to-GDP ratio stands around 25% for the WAEMU zone, and 13% for the CAEMC zone, but averages 60%+ for sub-Saharan Africa, and 100%+ for South Africa etc. The CFA franc also encourages massive capital outflows. In brief, membership of the franc zone is synonymous with poverty and under-employment, as evidenced by the fact that 11 of its 15 adherents are classed as Least Developed Countries (LDCs), while the remainder (Côte d’Ivoire, Cameroon, Congo, Gabon) have all experienced real-term economic decline.

The CFA Franc: French Monetary Imperialism in Africa
  • The combination of an overvalued convertible currency, corruption, macroeconomic uncertainty and the free movement of resources across most of Francophone Africa encourages serious capital flight.
  • A recent estimate places aggregate net capital flight out of the African currency union during the period 1970 to 2010 at around US$83.5 billion,117% of combined GDP.
  • Capital flight of this order will have seriously reduced domestic investment and depressed economic growth.
France Benefits at the expense of the African Franc Zone

I think EU should press France because Africa so close to some European countries it is visible from their coasts. Africa has a booming young (and jobless population). CFA Franc must be contributing to that.
Africa’s Youth Unemployment Crisis Is a Global Problem


"Youths account for 60% of all of Africa’s jobless, according to the World Bank. In North Africa, the youth unemployment rate is 25% but is even greater in Botswana, the Republic of the Congo, Senegal, and South Africa, among others. With 200 million people aged between 15 and 24, Africa has the largest population of young people in the world."
Africa's jobless youth cast a shadow over economic growth






Increasing and Diminishing Returns – Africa’s Opportunity to Develop

On Wednesday, August 31, 2022 at 02:27:56 AM GMT+5, Warren Coats <wcoats@gmail.com> wrote:


You need to look else where for their slow growth than a stable currency.

Warren Coats

On Aug 30, 2022, at 4:43 AM, Mayraj Fahim via Salon <salon@listserve.com> wrote:




 
How France Underdevelops Africa
By Anis Chowdhury and Jomo Kwame Sundaram


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