Tuesday, February 17, 2009

Dom-Tom Blues

Guadeloupe, Martinique, Reunion Island and Guyane are the islands/areas that make up the French 'départements' outre-mer (overseas). They are supposed to be idyllic spots in the Antilles, South America and Indian Ocean, but at the moment, Guadeloupe and Martinique are anything but idyllic.

In Guadeloupe, there has been a general strike going on now for over a month which has also caught on in Martinique. Schools are shut, public buildings are closed, petrol is in short supply and shops are having problems stocking their shelves. Now is not the time to be taking a winter vacation in pursuit of the sun there!

The main problem is the high price of everything, even of foods grown on the islands which seems ridiculous! Supermarkets are free to fix whatever price they choose and there seems to be a tacit agreement not to rock this particular boat. Prices are 15% higher in Guadeloupe and Martinique than in France, but it's impossible to compare when you are there because there is no official office which publishes this information.

Competition is non-existent, and the first to offer a price comparison would probably cause a riot according to Loïc Becquart of Nielson.

Added to the lack of competition, high prices are exacerbated by high taxes. Everything which is imported from France has a plethora of taxes added to it, the fruits of which are used by local authorities. Despite Guadeloupe and Martinique being considered Départements, and part of Europe, produce is subjected to customs fees as though exported from outside France.

Small markets - the total population of the two islands is less than a million - mean that producers can not even take advantage of economies of scale which again leads to more expensive production costs.

This morning I heard on Europe 1 that of all the regions in the EU, Guadeloupe, Guyane, Reunion and Martinique are at the bottom of the wealth table, and they have the highest level of unemployed youth - up to 53%. In Reunion practically 50% of the population is living on the RMI - I'm sure that paradise is not so paradisical when you are living in unsalubrious conditions.

So, should these islands be given their independence? It would certainly save the French tax payer (including me) a packet. Despite their discontent, however, no one seems to be calling for freedom from France. Instead they want the state to reduce the price of petrol by 50cts and increase the minimum wage by 200euros. Would this really work though? It would do nothing to deal with the basic issues of the high prices and strikes me as being a sticking plaster solution. As we all know, plasters are notorious for becoming unstuck resulting in an open wound that may even be supurating by then.

Patching the status quo is to leave the original problem festering underneath. There'll be tears yet...

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