FRENCH ANTILLES AND FRENCH GUIANA

French Guiana Martinique Guadeloupe

Exports:

French Guiana, US$155 million; Martinique, US$250 million; Guadeloupe, US$140 million (all f.o.b., 1997). Imports: French Guiana, US$625 million; Martinique, US$2 billion; Guadeloupe, US$1.7 billion (all c.i.f., 1997).

COUNTRY OVERVIEW

LOCATION AND SIZE.

French Guiana, Martinique, and Guadeloupe are each separate overseas departments of France. Martinique and Guadeloupe are collectively referred to as the French Antilles, while the 3 countries together comprise the 3 Caribbean Departments of France. Located in northern South America, French Guiana is bordered by Brazil to the south and the east, the Atlantic Ocean to the north, and Suriname to the west. The total area of French Guiana is 91,000 square kilometers (35,135 square miles), rendering it slightly smaller than Indiana, while the coastline spans 378 kilometers (235 miles). Cayenne, the capital of the country, is situated slightly east of the center point along the coastline.

Martinique, a small island that lies between Dominica and St. Lucia in the eastern Caribbean sea, has a total area of 1,103 square kilometers (426 square miles). The capital of Martinique, Fort-de-France, is situated on the northern tip of the island. Martinique is about 6 times the size of Washington D.C.

Guadeloupe, which actually consists of an archipelago of 9 inhabited islands, is also located in the east Caribbean sea, to the north of Martinique, south of the British island Montserrat. The islands of Guadeloupe, including the French part of the island of Saint Martin that is divided with the Netherlands (whose southern portion is named Sint Maarten and is part of the Netherlands Antilles), have a total area of 1,780 square kilometers (687 square miles). The capital of Guadeloupe, the town of Basse-Terre, is located on one of the 9 islands with the same name. Comparatively, Guadeloupe is about 10 times the size of Washington, D.C.

POPULATION.

The total population of French Guiana was estimated at 172,605 in 2000, a 4.0 percent increase from the population of 115,930 in 1990. In 2000, the total birth rate was 22.4 births per 1,000 people, while the death rate was reported at 4.76 deaths per 1,000 people. In the same year, life expectancy was estimated at 76.1 years for the total population. With a net migration rate estimated at 11.59 migrants per 1,000 people in 2000, a significant number of French Guianese leave the country in search of opportunities abroad as a result of high levels of unemployment. Still, population growth is quite high and the government has taken measures to increase knowledge and availability of birth control in all the Caribbean Departments of France (CDF). Population growth rates are expected to decline considerably in the near future, reaching 2.1 percent between 2000-10 and 1.3 percent between 2010 and 2020, at which time the population is expected to equal 244,440. The age structure of the population is generally young, with 31 percent of the population between the ages of 0-14 years, 64 percent between the ages of 15-64 years, and only 5 percent over 65 years (2000 est.).

The total population of Guadeloupe was reported at 426,493 in 2000, a 1.2 percent increase from the population of 377,678 in 1990. Similarly, the total population of Martinique was reported at 414,516 in 2000, an increase of 1.0 percent from the population of 373,565 in 1990. Also in 2000, the birth rate in the French Antilles was estimated at 17.25 births per 1,000 people, while the death rate was 6.01 deaths per 1,000 people. Life expectancy for the average person from the French Antilles was 76.99 years. About 25 percent of all persons from the French Antilles are under 14 years of age, 66 percent are between the ages of 15-64 years, and only 9 percent are 65 years and over (2000). For the French Antilles and French Guiana, young populations have confronted the government with the major task of creating employment to accommodate young workers entering the market. Unemployment rates are exceptionally high (above 20 percent for all 3 departments). With a net migration ratio of-0.15 migrant(s) per 1,000 people in 2000, migration levels are low, despite the high levels of unemployment. As in French Guiana, the population growth is expected to decline considerably over the next 20 years in the French Antilles, from 0.9 percent between 2000 to 2010 and 0.7 percent between 2010 and 2020 in Guadeloupe; and 0.8 percent and 0.5 percent between the same periods in Martinique. The population of Guadeloupe is expected to reach 499,215 in 2020, while the population of Martinique is expected to reach 469,724.

The vast majority of the inhabitants of Martinique and Guadeloupe are of African or mixed African/European ancestry (90 percent). Persons of European ancestry form about 5 percent of the populations of both departments, while the remaining population consists mostly of persons of East Indian, Lebanese, and Chinese descent. Comprising 66 percent of the population in French Guiana, persons of African or mixed ancestry constitute a smaller majority of the population than their compatriots in the French Antilles. Other ethnic groups in French Guiana include persons of European descent (12 percent), Amerindians (12 percent), and persons of East Indian and Chinese descent. Almost all the inhabitants of the 3 separate departments speak French, though many communicate primarily in the French dialect (patois) known as Creole. Approximately 95 percent of the populations of French Guiana and the French Antilles are Roman Catholic.

OVERVIEW OF ECONOMY

The territories that now comprise the 3 Caribbean Departments of France (CDF) were for the most part settled by French settlers throughout the 17th century. The original Carib inhabitants of the islands in the French Antilles were mostly wiped out by the settlers, who subsequently established an economic system based on large sugar plantations and imported African slave labor. Slavery based on African bondage formed the basis of the economy in French Guiana as well, though a significant number of indigenous peoples survived the French onslaught. France abolished slavery in 1848, after which time thousands of Indian and Chinese migrants came to the French Caribbean territories to supplement the newly freed labor force on the plantations. The French Caribbean territories continued under colonial rule until 1946, when they became official French departments.

Throughout the post-war period, the economies of the CDF have benefitted from high subsidies from the French government (the French mainland is referred to as the metropolis). According to the Canadian Department of Foreign Affairs (DFAIT) A Guide for Canadian Exporters (1997), for instance, French government transfers in the form of salaries, grants, and social welfare equaled approximately 55 percent of the combined GDP of the CDF in 1996. As such, many areas of activity in the economies of the CDF are controlled by the government, although there is certainly much free-market activity. In this sense, the CDF are similar to the larger French economy, which is characterized by a mixed economic system that consists of both public and private economic activity. Indeed, of the 4 largest industrialized economies in the world, France has the highest rate of public economic activity.

Economic policies of the 3 departments have generally been export-oriented, with the vast majority of exports being directed towards France, each other, and other EU members. Exports from the CDF consist mainly of agricultural products. Imports of the CDF consist mostly of higher value-added goods, such as machinery, construction equipment, and vehicles, which are more expensive than agricultural commodities. Moreover, since none of the CDF are sufficient in terms of food production, they must import large quantities of foodstuffs. As a result of these factors, the CDF run large balance of payments deficits which have led to the accumulation of massive debts. Fortunately, France has helped alleviate debt through annual transfers of aid, thereby preventing the CDF from falling into the structural adjustment program (SAP) trap that has negatively affected most of the developing world. SAPs are packages of conditions that developing countries must implement in return for debt-servicing funds from the World Bank and the International Monetary Fund (IMF). SAP conditions intended to increase revenue to pay back loans—such as cuts to social spending—have been severely detrimental to the populations of developing countries.

Despite the generous French subsidies designed to encourage development, industrial growth has been slow in the CDF, while unemployment rates remain exceedingly high. The majority of the inhabitants in the CDF are engaged in the service sector, which is also the largest contributor to GDP. In terms of employment and contribution to GDP, industry is the second leading sector, though agriculture remains highly important.

In 1986, the French government adopted a legislative program designed to stimulate the productive sectors of the CDF. The program, which included tax incentives and subsidies for new construction and business investment, has helped stimulate the CDF economies, though they remain subsidy-dependent and agriculturally export-oriented. Further pro-business reforms implemented in the 1990s led to the creation of numerous industrial and commercial zones across the CDF, characterized by tax and import duty exemptions.

POLITICS, GOVERNMENT, AND TAXATION

As overseas departments of France, the French Antilles and French Guiana are incorporated into the French political system. As such, the executive branch of the CDF is currently headed by the French president Jacques Chirac, who is represented by a prefect in each respective department. The French legal system and the French constitution are applicable in the CDF, and the Court of Appeals, located in Martinique, has jurisdiction over all the CDF as the highest local court. As semi-autonomous departments, however, the CDF each have a unicameral General Council and a unicameral Regional Council, the presidents of which constitute the heads of government. Both councils are elected by popular vote, generally for a 6-year term. Each department also sends representatives to the French National Assembly and to the Senate.

Mainstream leftist parties in the French tradition have dominated politics in the CDF throughout the post-war era. In French Guiana, the Guianese Socialist Party controls both councils, while the General Council and the Regional Council in Martinique are ruled by the leftist parties, the Progressive Martinique Party and the Martinique Communist Party. In Guadeloupe, the General Council is headed by the left-wing Progressive Democratic Party, while the presidency of the Regional Council is headed by the gaullist (right-wing) Rally for the Republic. The presidency of a rightist candidate represents a discontinuity in Guadeloupian politics, though it can be explained by the inability of 2 socialist groupings in the council to co-operate effectively. Recent elections for all the councils in all the CDF took place at various points in the late 1990s. Major themes in the politics of the CDF revolve around the economy and the high levels of unemployment. A wide variety of rightist and centrist parties are represented in the councils. There are also a number of small separatist political parties in each CDF, though most parties acknowledge economic dependency on France and are content with seeking further autonomy without independence.

There are 6 tax brackets in the CDF, with taxation rates progressively increasing according to income. Most people are taxed in the bottom tax bracket, however. In Martinique, for example, 118,989 individuals were taxed at the lowest bracket of income, which encompasses those who earn between 0 to 7,624 euros, while 17,341 were taxed at the next lowest bracket and only 6,462 were taxed at the highest (2000 est.). In terms of duties on imports, tariffs in the CDF are generally set at the same level as tariffs in metropolitan France. As such, tariff rates fall into 2 categories: liberalized imports and non-liberalized imports. Tariffs for the former are generally low, while tariffs on the latter can be as high as 73 percent, in the case of cigarettes, and up to 40 percent in the case of alcohol.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Infrastructure in the CDF varies according to the type and the specific department. Railways are entirely absent from both Martinique and French Guiana, though Guadeloupe has some private railway lines, all of which are small-gauge and used for commercial purposes. In terms of paved roads, the islands of the French Antilles collectively have about 3,000 kilometers of paved road network (est. 1997), while French Guiana only has 727 kilometers (est. 1995). The lack of roads and railway in the latter are largely explained by the density of the rain-forest, which covers 90 percent of all land. Guadeloupe has a total of 8 airports with permanent surface runways (est. 1997), while French Guiana has 4 airports with paved runways (est. 1999), and Martinique only has 2 (est. 1997). Airlines that operate services to and from the French Antilles include Air France, Air Martinique, Air Caraibes, Air Guadeloupe, and Air Canada.

The French Antilles have ports at Fort-de-France on Martinique, and Basse-Terre and Point-a-Pitre on Guadeloupe. The containerization port on Basse-Terre has a quay length of 250 meters (820 feet) with a depth of water alongside of 10 meters (32.8 feet), while the containerization port on Pointe-a-Pitre, the largest in Guadeloupe, has a considerable capacity of 16 berths and wharves with a total berthing space of 2,000 meters (6,562 feet). French Guiana has ports on Cayenne, Degrad des Cannes, and Saint-Laurent du Maroni (est. 1997).

According to the DFAIT A Guide for Canadian Exporters, telecommunications in the French Antilles are generally inadequate. It can take up to a week, for example, to obtain usage of a fax or telephone in certain places. In Guadeloupe, there were only 159,000 telephones in 1995, while there were 68,900 telephones in Martinique in the same year. With a total of 159,000 main telephone lines in use in 1995 and a population of 172,605 in 2000, the telecommunications system in French Guiana is considerably more developed than in the French Antilles.

Producing all of their electricity domestically through fossil fuels, none of the CDF import electricity from abroad. Total electricity consumption in Guadeloupe was 1.135 billion kilowatt hours (kWh) in 1998, 588 million kWh in Martinique in 1992, and 430 million kWh in French Guiana in 1998. All of French Guiana's electricity is generated from a single dam at Petit Saut. Both the telecommunications sector and the electricity sector are monopolized by the French government through parastatal control.

ECONOMIC SECTORS

Throughout the colonial period, the economies of the CDF were dominated by sugar production on large plantations. Currently, agriculture has been largely replaced in importance by the service and industry sectors, though the latter remains considerably underdeveloped. Key industries in the CDF include food processing activities in the French Antilles, construction in Guadeloupe, and gold mining in French Guiana. Service-oriented activities are by far the largest contributors to GDP and employment in the CDF, with significant percentages of the labor forces of all 3 departments working in the government bureaucracy. Tourism and retail are also important activities in the service sector.

The CIA World Factbook estimated the percentage of each sector's contribution to GDP. In Martinique, the agriculture sector accounted for 6 percent, the industry sector 11 percent, and the service sector 83 percent in 1997. In Guadeloupe, the agriculture sector accounted for 15 percent, the industry sector 17 percent, and the service sector 68 percent in 1997. No recent information was available for French Guiana.

AGRICULTURE

Agriculture continues to play an integral, albeit declining, role in the CDF, especially in terms of generating revenue through exports. At the same time, however, none of the CDF are self-sufficient in food production, which means that they have to spend large annual amounts on importing foodstuffs. Most food is imported from France. Agriculture in the French Antilles periodically suffers from the devastating hurricanes that afflict the Caribbean. In 1998, for example, the French Antilles were affected by Hurricane George, and, in 1999 and 2000, hurricanes Jose and Lenny.

GUADELOUPE.

In Guadeloupe, agriculture constituted 6 percent of GDP and employed 15 percent of the work-force in 1997, which equaled approximately 120,000. Agricultural produce includes bananas, sugarcane, tropical fruits and vegetables, cattle, pigs, and goats. Large sugar plantations that produce for both export and local consumption purposes continue to dominate, though many have been turned over to the cultivation of bananas. In 2000, the latter accounted for 82 percent of Guadeloupe's total exports, as opposed to 75 percent in 1998. In 2000, 121,758 tons of bananas were exported, 72 percent of which were purchased by the French metropolis. Sugarcane production—Guadeloupe's second most important export—declined by 6 percent (674,822 tons) in 2000 as a result of excessive rain in cultivating regions. Melons, the third largest agricultural export, have increased enormously in production in the past 6 years, rising from 2,561 tons in 1995 to 4,939 tons in 2000.

An estimated 36 percent of the total area of the islands of Guadeloupe are cultivable arable lands, while 10 percent are pasture and 15 percent woodland (1997). Offshore fishing is a traditional source of food, and the main catches include lobster, crab, and octopus. By the end of the 1990s, 11 fishing farms were registered in Guadeloupe and experiments are under way to catch and market sea bream and grayling fish in order to respond to growing demand.

MARTINIQUE.

In 1997, agriculture constituted 6 percent of GDP in Martinique and employed 10 percent of the workforce, which equaled approximately 100,000. Agricultural activity is centered on the production of sugar cane, pineapples, and bananas, mainly for industrial processing and export. In 1997, exports of bananas represented 40 percent of Martinique's total exports. Crops such as sweet potatoes, yams, manioc, beans, cabbages, and tomatoes are grown primarily for domestic consumption. The majority of farms in Martinique are privately run by small-holders . An estimated 48 percent of the total area of the islands of Martinique are cultivable arable lands, while 25 percent are forest, and 19 percent savannah (1997). Virtually all of Martinique's meat requirements are met by imports. Fishing of lobster, cray-fish, crabs, and clams are important for domestic consumption.

FRENCH GUIANA.

According to the CIA World Fact-book, recent statistics on agricultural contribution to GDP and employment in French Guiana are unavailable (nor are they available for other sectoral contributions to GDP and employment). In 1980, however, approximately 18.2 percent of the Guianese workforce engaged in agriculture. Cultivation in French Guiana, where the land is mostly rainforest, is limited to the coastal area. Only 0.18 percent of the land is thus cultivated, with production being dominated by subsistence crops such as rice, maize, and bananas. Sugar cane is also grown for rum production, which is an important, albeit declining, export. Land tenure in French Guiana is highly unequal, with 56 percent and 3 percent of all farming operations occupying 13 percent and 57 percent of the land, respectively.

With shrimp accounting for approximately 50 percent of annual export trading value throughout the 1990s, fishing is the most important agricultural activity in French Guiana. Unfortunately, shrimp exports declined by 26.4 percent from 1999 to 2001, due, in large part, to increases in fuel prices—the largest expenditure for shrimp fishermen. Such increases meant that fishermen could not conduct their activities as often as in the past.

INDUSTRY

GUADELOUPE.

In 1997, industry in Guadeloupe constituted 9 percent of GDP and provided employment for 17 percent of the labor force. Industry is largely devoted to processing agricultural products and light manufactured goods. Major industrial activities include sugar refining, rum distilling, food processing, cement and brick manufacture, box and mail/wire making, mineral water bottling, and ship repair. An industrial free-port with tax and import duty exemptions was recently established at Jarry. Guadeloupe does not possess any mineral resources.

The construction industry, which is the third largest sector of activity in the Guadeloupian economy, employs 12 percent of the workforce in Guadeloupe. Most of the construction sector is dominated by government in the form of public works. Such works provide an enormous boost to the economy and help relieve unemployment. Indeed, the 5,500 public work enterprises in the construction sector comprise 19 percent of all industrial enterprises and engage approximately 10 percent of the entire labor force.

MARTINIQUE.

The industrial sector in Martinique is very similar to the industrial sector in Guadeloupe, but slightly more important to the economy in relative terms. Industry in Martinique constituted 11 percent of GDP and engaged 10 percent of the labor force in 1997. Major industries include a cement works, rum distilling, sugar refining, dairy produce, fruit canning, soft drinks manufacture, mineral water bottling and a polyethylene plant. Additionally, a major oil refinery boasts a capacity of 16,090 barrels per day (2000). As of 2000, 5 industrial zones with generous tax and import duty exemptions have been established in order to encourage light industrial development. According to World Information.Com, an online encyclopedic organization, the industrial sector remains underdeveloped in spite of the legislated incentives. Martinique, like Guadeloupe, does not possess any mineral resources.

The construction industry, also dominated by governmental public works in Martinique, experienced considerable growth in 2001 when total cement production rose to 243.1 thousand tons from 237.5 thousand the year before. Much of this production was designated for the building of large establishments such as a hospital and a large court.

FRENCH GUIANA.

With the exception of a few small factories processing agricultural or seafood products and a few sawmills, manufacturing is virtually non-existent in French Guiana. A rocket-launching site owned by the European Space Agency at Kourou comprises one of the most important economic activities. As a result of the space center, which was built in Kourou in 1964 because of its proximity to the equator, ultra-modern buildings now dominate the city.

In terms of mining, bauxite deposits of 42 million tons and kaolin deposits of 40 million tons were recently discovered, though extraction is not economically viable in the near future due to the department's poor infrastructure. There are also reserves of silica, niobium, and tantalite.

Significantly, gold is mined by a dozen Guianese companies and over 100 small-scale miners. Official figures for the mid-1990s indicate an annual gold production of approximately 3 tons. In 2000, gold accounted for almost half of the department's exports. The United States has played an important role in boosting Guianese gold exports. In 2000, the United States, which did not import any Guianese gold in 1999, imported 7 million euros worth of gold.

According to an article that appeared in the French paper Le Monde Diplomatique, gold mining, which exploded in 1993 following the discovery of reserves in Maripasoula, has engendered considerable negative environmental impacts. Forest areas have been cleared, upsetting the ecosystem, and mercury waste, a threat to both fauna and humans, has been dumped in streams and rivers. The Cayode, a group of Amerindians, have protested the environmental destruction. To make matters worse, violent conflict has erupted between opposing gold prospectors, who often hire Brazilians brought into the department illegally to work for highly exploitative wages. The government has not been very receptive to those that are dissatisfied with the situation, as gold mining provides employment for many individuals who would not be able to earn a livelihood otherwise. A contentious debate as to whether certain areas with gold reserves should be set aside for eco-tourism has raged in Guianese politics throughout the 1990s. Thus far, the anti-restriction perspective of the miners has prevailed.

SERVICES

In 1997, the service sector in Guadeloupe constituted a whopping 85 percent of GDP and provided employment for 68 percent of the labor force. Similarly, in the same year, the service sector in Martinique constituted 83 percent of GDP and engaged 73 percent of the labor force. Many of the people employed by the service sector in the CDF work for the government in bureaucratic positions. Government and parastatal employees are paid, on average, 30 percent higher than their metropolitan French counterparts. The generous salaries, intended, in part, to boost consumption and stimulate the economy, provide an essential form of transfer to the highly dependent economies of the CDF.

According to the Australian Department of Foreign Affairs and Trade French Antilles Fact Sheet 2000, tourism, which accounted for 7 percent of GDP in both Guadeloupe and Martinique in 2000, has been the fastest growing sector of the economy in the French Antilles throughout the 1990s. In 2000, the number of tourists to Guadeloupe reached 623,000, a significant increase from the approximately 500,000 tourists in 1997. Unfortunately, more recent trends in tourism in Martinique have not been as positive. Indeed, the total number of tourists visiting the department declined from 993,441 in 1999 to 928,197 in 2000. This sharp downward trend illustrates the insecurity of a tourist economy, which depends on the economic well-being and whims of individuals in developed countries for revenue. In both departments, the vast majority of stop-over tourists are from France (80 to 90 percent), while most cruise ship visitors are from North America.

Tourism is an important economic activity in French Guiana with much potential for growth. The major tourist attraction is currently the space center, which received 27,293 tourists in 2000, when there were a total of 12 rocket launchings. With its exotic rainforests and beautiful mountainous scenery, however, eco-tourism could very well surpass the space center in tourist importance. Unfortunately, promises made by former French president Francois Mitterand in 1992 to create eco-parks have failed to materialize. Impediments include conflict over land with gold prospectors and, to a lesser extent, debates concerning whether restrictions should be placed on Amerindians using slash-and-burn agricultural techniques (which are detrimental to the environment). French Guiana received 451,805 tourists in 2000, a significant increase from the 422,075 tourists that visited in 1998.

With several shopping centers, markets, and restaurants in the major cities, the retail sector is relatively well developed in the CDF. Foreign direct investment in services has also become more prevalent, and American companies such as McDonald's, Baskin Robbins, and Subway have established operations in Martinique. The real area of growth is in the number of small and mediumsized retail outlets, however, which have increased exponentially. In 2000, there were a total of 10,324 retail outlets in the CDF. Three hundred new outlets, mostly in the leisure and supermarket sectors, were created in Guadeloupe alone. In French Guiana, 900 small enterprises were established in 2000, many of which specialized in commercial or reparation-related activities. According to INSEE, a French government statistical institute, the small enterprise commercial sector is the most dynamic engine of growth in the CDF economies.

The unemployed that do not have the resources to establish small-scale enterprises often find retail work in the informal sector by selling products such as fruits and small consumer commodities on the street corners. The informal sector, which is neither taxed nor regulated by the government, also offers services such as machinery and equipment repairs. Incomes acquired through the informal sector are exceedingly low.

INTERNATIONAL TRADE

The CDF trade primarily with each other, France, other EU members, and the United States. Principal exports from Guadeloupe include bananas, sugar, and rum, while imports consist of foodstuffs, fuels, vehicles, clothing and other consumer goods , and construction material. About 60 percent of exports are directed towards France, 18 percent to Martinique, and 4 percent to the United States. Sixty-three percent of imports come from France, 4 percent from Germany, 3 percent from the United States, 2 percent from Japan, and 2 percent from the Netherlands Antilles. Martinique's exports are mostly refined petroleum products, bananas, and rum, while imports include petroleum products, crude oil, foodstuffs, construction materials, vehicles, clothing, and other consumer goods. Around 45 percent of exports are directed towards France and 28 percent go to Guadeloupe. Sixty-two percent of imports are from France, 6 percent from Venezuela, 4 percent from Germany, 4 percent from Italy, and 3 percent from the United States. French Guiana mostly exports shrimp, timber, gold, rum, and rosewood essence, while imports consist of food (grains, processed meat), machinery and transport equipment, fuels, and chemicals. Fifty-two percent of exports go to France, 14 percent to the United States, and 6 percent to Trinidad and Tobago. Sixty-two percent of imports come from France, 7 percent from Switzerland, and 2 percent from the United States.

As agricultural exporting and capital goods importing departments, the CDF routinely run balance of trade deficits that render them highly dependent on French

loans and aid to finance needed imports. Dependency on badly needed foodstuff exacerbates the trade deficits, which, for each CDF, have actually increased in recent years. In 1999, for example, the deficit in French Guiana equaled 427 million euros, whereas this figure increased to 503 million euros in 2000. In 1998, French Guiana's total external debt reached $1.2 billion. In terms of trade deficits, however, Martinique is in the worst position, with its deficits surpassing even the total debt of French Guiana. The department, which only had a GDP of $250 million in 1997, had a total deficit of 1.5 billion euros in 2000, a considerable increase from the total deficit of 1.4 million euros in 1999. As a result of these massive deficits, the need for the CDF to further develop their domestic industries and food-producing capacity is all the more urgent.

As departments of France, the CDF are members of the most highly integrated regional economic association in the world—the European Union (EU)—with the least barriers for the movement of goods, services, capital, and labor. Many critics have argued that less developed countries cannot engage in free trade with industrialized countries because they do not possess the ability to compete. In other words, lowering of tariffs simply means that domestic industries in developing countries will falter under competitive pressures, which, in turn, will lead to further entrenchment of the agricultural sector in the economy and a prolonging of uneven patterns of trade. At the same time, however, the CDF have benefitted within the EU as recipients of aid programs and in gaining preferential access to EU markets for agricultural produce. Unfortunately, the World Trade Organization (WTO), which binds the EU economies and most countries of the world in an international free trade arrangement, has criticized EU preferential treatment for CDF agricultural products, such as bananas. WTO members that export bananas argue that EU preferential access for the French Antilles is a violation of WTO free trade rules, which are supposed to guarantee equal access to EU markets for all WTO members on the same terms.

MONEY

As departments of France, the CDF benefit from 2 major international currencies: the French franc and the European euro. The value of the French franc is locked to the euro at F6.56 per euro. The value of the euro, in turn, fluctuates according to European market strength and supply and demand in international money markets. The European Central Bank determines monetary policy . Since the euro was introduced in 1999, it has steadily appreciated in value against the U.S. dollar. In 1999, 0.9386 euros equaled US$1, whereas in January 2000 the euro appreciated in value to 0.9867 euros per US$1. While a higher euro value reflects the growing strength

of the EU market, less developed areas of the EU such as the CDF suffer from a high currency since it means that more money is needed to purchase their exports. This, in turn, means that their exports are less attractive. In the case of the CDF, this is especially detrimental given the already large trade deficits.

The central bank of the CDF, the bank of issue , is the Caisse Centrale de Co-operation Economique. There are also numerous state-owned development banks, intended to help foster business through loans and investment, in addition to several commercial banks. The former include the Societe de Credit pour le Developpement des Departement d'Outre Mer (SOCREDOM), the Caisse Regionale de Credit Agricole Mutuael, and the Societe de Credit pour le Developpement Regional Antilles Guyane (SODERAG). The latter include the Banque des Antilles Francaise, Banque Francaise Commerciale, Banque National de Paris, and Societe Generale de Banque aux Antilles.

POVERTY AND WEALTH

According to the DFAIT A Guide for Canadian Exporters, the elite class in the CDF is composed primarily of government employees with the most prestigious positions. This segment of society shop in very expensive

boutiques that sell large varieties of high-quality products that are imported to the departments on jumbo jets on a weekly basis. As a result of this type of consumption, much of the money that the elites earn escapes the local economy and directly benefits France and other EU members. This is a major impediment to development, especially considering that the rationale behind awarding CDF government officials higher salaries than their metropolitan counterparts relates to increasing demand in the local economy. Supermarkets provide the same basic goods for both the elites and the middle and lower classes, though the latter must be much more cautious about what they buy. People with high incomes represent about 20 percent of the populations of the CDF, while those with middle or lower incomes constitute the remaining 80 percent.

The French government allocates a significant amount of resources to the CDF to ensure that the standard of living in the departments is similar to the standard of living in the metropolis. Consequently, the CDF enjoy some of the highest standards of living in the Caribbean and South America. Poverty is acute, but it is generally nowhere near the levels of poverty experienced by developing countries with similar economies. This notwithstanding, the standard of living in the CDF in reality falls considerably below that of the standard of living in the French metropolis. In 1997, for instance, GDP per capita in purchasing power parity in French Guiana, Martinique, and Guadeloupe equaled $6,000, $10,700, and $9,000, respectively, in contrast to the overall GDP per capita (PPP) in France, which equaled $27,975 in 1998. Evidently, there is considerable discrepancy in the social conditions between France and the CDF as a whole, not to mention within the CDF themselves.

Health care and education are generally accessible in the CDF. Free health care is provided for the poorest segments of society, while education is universally free. Furthermore, expenditure on such services has actually increased in some cases, in sharp contrast to the general decline in social expenditures in OECD countries. In Martinique, for example, total expenditure on health care increased from 583 million euros in 1999 to 610 million in 2000. Education is compulsory between the ages of 6 to 16 in the CDF and university is available for those seeking to further their education. In many cases, however, students must leave school early in order to help provide for the family.

WORKING CONDITIONS

In terms of size, the total workforce of Guadeloupe, Martinique, and French Guiana are approximately 120,000, 100,000, and 58,800, respectively (1997 est.) Labor policies are generally quite progressive, reflecting strict French labor codes that enshrine the rights of workers. There are virtually no incidents of child labor, though some children must help their parents in agricultural activities to increase household incomes. Unionization is high in the industrial sector and parts of the service sector. Agricultural workers are also unionized, though to a lesser extent. The major union federations in Guadeloupe are the General Federation of Guadeloupe Workers and the General Union of Guadeloupe Workers, while the major union federation in Martinique is the Central Union for Martinique Workers. Most unions in the CDF are strongly socialist in orientation.

By far, the most daunting problem faced by the CDF in the area of labor relates to the massive levels of unemployment characteristic of each department. Unemployment is especially acute for young workers and, to a lesser extent, women. Strikes and riots have erupted in the CDF as a result of the high unemployment rates, most notably in French Guiana in November 1996, when a general strike was triggered by student frustration with lack of prospects. The nation-wide strike lasted for 2 days, bringing the economy to a standstill.

The unemployment rate in Guadeloupe was 24 percent in 1999, though this represented a substantial improvement from the 27 percent rate in 2000. Job opportunities, particularly in the service sector, expanded by 18.7 percent in 2000 from the year before. Around 14.5 percent of all unemployed in Guadeloupe are young workers between the ages of 16 to 25 years. Unemployment rate figures suggest gender inequalities in terms of employers being more inclined to hire men. In Guadeloupe, for instance, 57.7 percent of all unemployed are women, while these figures are 53 percent and 59.3 percent, respectively, in French Guiana and Martinique. In French Guiana, the unemployment rate in 2000 was 25.8 percent—a marginal decrease of less than 1 percent from the year before. In Martinique, unemployment in absolute terms declined considerably from 48,667 unemployed in 1999 to 43,521 in 2000. The CDF are highly dependent upon the French government for job creation, and unemployment rates would be considerably higher without the support of the government service sector.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1493. Columbus is the first European to arrive in the islands that are now the French Antilles. In 1496, Europeans report their first sightings of South America.

1604. The French establish their first settlement in the area that is now French Guiana.

1635. The French establish their first settlements on the islands of the Antilles, and hostilities with the indigenous inhabitants escalate.

17TH CENTURY. The territories comprising the French Antilles and French Guiana become French colonies characterized by large settler plantations and African slave labor. Control over French Guiana changes several times between France, Britain, the Netherlands, and Brazil.

1848. France abolishes slavery and the liberated slaves in the French Caribbean colonies become a free labor force, though they remain exploited and land-less.

1915. France gains final domination over Guiana.

1946. The French Caribbean colonies become overseas departments with little autonomy over their own affairs. France highly subsidizes the CDF throughout the post-war period and the economies remain dependent on France for aid and transfers to this day.

1964. The Kourou space center is established in French Guiana.

1974. French Guiana is granted regional status and thus greater economic autonomy.

1982-83. The CDF receive considerable autonomy through a process of devolution.

1990s. The French government seeks to encourage industrial development through the creation of commercial zones with special tax and import duty exemptions.

1998-99. Hurricanes George, Lenny, and Jose wreak havoc in the French Antilles. The Basse-Terre declaration issued by the CDF in 1999 calls for greater departmental control over local affairs.

2001. Unemployment and dependency continue to afflict the CDF economies.

FUTURE TRENDS

The Caribbean departments of France are in a unique position in the developing world. Despite the underdeveloped nature of their individual economies, status as French departments has ensured high amounts of subsidization and transfers that have helped to maintain relatively high levels of living standards, especially in the context of South America and the Caribbean. High levels of unemployment would be even higher without the large number of jobs provided by the French governmental bureaucracy and public works. The major challenge for the CDF, therefore, relates to achieving a level of sustainable development that will end this pattern of dependency. The massive increases in the number of small- and medium-size enterprises in the commercial sector is a promising sign. Activities such as those found in the industrial sector must also be strengthened, however, while food production capacity must be increased. Terminating the pattern of unequal trade is of the utmost importance. Tourism and agricultural exports, though important, cannot be promoted as the bases of the CDF economies. Of course, sustainable development is highly elusive, and the French government will have to continue providing support and aid in a context of careful developmental planning in order to realize this goal.

DEPENDENCIES

The French Antilles and French Guiana have no territories or colonies.

BIBLIOGRAPHY

Australian Department of Foreign Affairs and Trade. Country, Economy, and Regional Information: French Antilles. <http://www.dfat.gov.au/geo/French_antilles/index.html>. Accessed May 2001.

Australian Department of Foreign Affairs and Trade. Country, Economy, and Regional Information: French Guiana. <http://www.dfat.gov.au/geo/french_guiana/index.html>. Accessed May 2001.

"Country Profile: French Guiana." World Information.Com. <http://www.worldinformation.com>. Accessed September 2001.

"Country Profile: Guadeloupe." World Information.Com. <http://www.worldinformation.com>. Accessed September 2001.

"Country Profile: Martinique." World Information.Com. <http://www.worldinformation.com>. Accessed September 2001.

Department of Foreign Affairs and International Trade (Canada). The French Antilles: Martinique and Guadeloupe, A Guide for Canadian Exporters. <http://www.dfait-maeci.gc.ca/geo/html_documents/4131-e.htm>. Accessed September 2001.

INSEE. "Antilles-Guyanne: Bilan de Guadeloupe, Martinique etGuyane." Antiane (No. 49, June 2001). <http:www.insee.fr>. Accessed September 2001.

Lemoine, Maurice. "Sustainable Development in French Guiana:The Politics of Gold-Prospecting." Le Monde Diplomatique. <http://www.monde-diplomatique.fr>. Accessed September 2001. (Available by subscription only.)

United Nations Development Programme. Human Development Report 2000. New York: Oxford University Press, 2000.

U.S. Central Intelligence Agency. World Factbook 2001. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed September 2001.

—Neil Burron

CAPITAL:

French Guiana: Cayenne; Martinique: Fort-de-France; Guadeloupe: Basse-Terre.

MONETARY UNIT:

French franc (F). 1 franc equals 100 centimes. Notes are available in denominations of 20, 50, 100, 200, and 500 francs. Coins are in denominations of 5, 10, 20, and 50 centimes, and 1, 2, 5, 10, and 20 francs.

CHIEF EXPORTS:

French Guiana: Shrimp, timber, gold, rum, rosewood essence; Martinique: Refined petroleum products, bananas, rum; Guadeloupe: Bananas, sugar, and rum.

CHIEF IMPORTS:

French Guiana: Food (grains, processed meat), machinery and transport equipment, fuels, chemicals; Martinique: Petroleum products, crude oil, foodstuffs, construction materials, vehicles, clothing, other consumer goods; Guadeloupe: Foodstuffs, fuels, vehicles, clothing and other consumer goods, construction material.

GROSS DOMESTIC PRODUCT:

French Guiana: US$1 billion; Martinique: US$4.39 billion; Guadeloupe: US$3.7 billion (all in purchasing power parity, 1997 est.).

BALANCE OF TRADE: