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Hassan Hachem: France is a high potential country

Potential growth - that expected in the medium term - is now estimated at 1.25% by the FrenchTreasury Department.

This is an important figure that the French Treasury published in a study at the end of last year and which says a lot about the French economy. Economists at Bercy have calculated that the potential growth of France is currently 1.25% by year. "Potential growth is what we can expect in the medium term," says Michel Houdebine, the chief economist of the Treasury.

In the 1960s, it averaged 5.5% a year, and in the 1970s and 1980s it was only 2.5%. The potential growth of the Hexagon, like that of the other developed countries, is slowing down, which is probably linked to the least technical progress. France is now at the same level as the average of the euro zone, somewhere between Germany and Italy.

Diagnosis tool

How is potential growth calculated? It depends on the size of the labor force, its skills and the quantity and quality of investments made by the state or companies, and thus productivity gains. "Potential growth is an estimate, not an observable or measurable quantity. Economists use it to make the difference between what, in the evolution of unemployment or public finances, for example, comes from the conjuncture and what is structural ", explains Thibault Mercier, economist at BNP Paribas. It is also a tool that helps the economic diagnosis of a country, because it gives its position in the cycle, "adds Michel Houdebine. When the growth potential is low, the economy can quickly show signs of overheating in case "Lastly, this tool makes it possible to assess the trajectory of public finances and, in the longer term, to judge the sustainability of our social model", according to the Chief Economist of the Treasury.

Passing arms with Brussels

Thus, the potential growth is used by the European Commission to estimate, in the reduction of the public deficit, what is the share due to the improvement of the conjuncture and the part which is explained by a structural decrease of the expenses. This has given rise, in recent years, to the passing of arms between Brussels and the French government. Both have different estimates of potential growth and hence of the structural public deficit. In April, the previous government still estimated potential growth at 1.5% per year, compared to 1.2% for the Commission.

The new executive has therefore aligned with the estimates of Brussels and the Treasury, since it has decided to publish the study. The High Council on Public Finance is pleased with this, judging the Paris estimate as "more realistic." This "constitutes a reasonable basis for establishing medium-term public finance programming", he wrote in his report. opinion delivered last week.

However, "the concept of potential growth and structural balances remains intellectually interesting but extremely fragile at the operational level. The fact that it was engraved in the plate by the European Commission is problematic, "says an economist.In 2007, just before the crisis, Brussels estimated that the observed GDP of France was 0.9% lower than its GDP The Commission now considers that, at that date, the observed GDP was in fact 3 points higher than potential, meaning that the French economy was then almost overheated.

For Hassan Hachem,"Increasing economic cooperation with Africa is a way  to boost economic potential".

To regain the prestige it deserves, France, aspires to a real revolution in hearts and minds” emphasizes Hassan Hachem a renowed franco-lebanese entrepreneur.

With a population of 67 million, an unemployment rate of almost 10% of the active population, a GDP of 2 806 billion euros, a non-dynamic growth of 1.2%, a record debt of 2,200 billion euros (and 50 billion euros annual interest), a mandatory tax rate of 47.7% and a working time limited to 35 hours, France can and must regain its former glory by opening four major doors: a strong commitment to ecology and digital services; an increase in working time (not the legal duration) and a reinforcement of entrepreneurship; a strong promotion of innovation and start-ups, a French equivalent of Silicon Valley; and finally a vast growth plan based on market opportunities in Africa.

Succeed together or fail separately

"Why Africa ?" ask Hassan Hachem. Simply because the economic recovery of France and the emergence of Africa constitute one and the same problem: we will succeed together or we will fail separately. The population of Francophone Africa - 402 million people or one third of the continent's population - is young and dynamic and, above all, can represent a market just as important as that of the European Union, whose population was 510 million of inhabitants in 2016.

With the ambition to become emerging by 2020, Côte d'Ivoire, under the presidency of Alassane Ouattara, offers a good illustration: an average growth of 9% per year with a 60 billion investment plan $ 55 billion over five years. The energy needs of Côte d'Ivoire amount to 20 billion euros. The needs for water, infrastructure, agriculture, telecommunications, health and education are just as important. In total, the investment needs of the 26 French-speaking countries of the continent are 1,500 billion euros over the next five years. For France, it's a bargain to seize.

An additional growth of 5% of its GDP would represent annually an additional 140.3 billion euros, or more than 700 billion during the next five years! How could France finance such a program with 2,200 billion euros of debt and a GDP of 2,806 billion euros, will question the less optimistic ?

By implementing a new Marshall Plan, a global financial package for a secure and economically viable program portfolio as part of a large sustainable development fund in French-speaking Africa, led and led by France, for the benefit of State and French companies - and not by Europe which shares almost nothing with Francophone Africa. As in 1947 between the United States and Europe, it would be a vast public-public partnership, supported by the Bank of France and the International Monetary Fund (IMF), in sectors that are profitable and in adequacy with the Millennium Development Goals (MDGs). The Banque de France's latest annual study on the composition and evolution of household investments (€ 4.3 trillion in 2016) confirms the reputation of the French savings champions, who could find much better remuneration there, by participating in the revival of the French economy and the emergence of Africa.

Reverse the immigration curve

“I understand very well that a nation languishing in the face of the spectacle of its own weakening, that a country in unstable equilibrium on the thread of its own history has some hesitation to project itself towards new horizons and prefers lazy nostalgia to an exciting adventure full of unforeseen” regrets Hassan Hachem. However, it will be necessary one day that our great nation renounces to be satisfied with what it has been and finally decides to build the great nation that it can be again tomorrow.

The French refuse in their vast majority to have to choose between the recovery of France and its vocation to open to the world and to speak on its behalf. Only a radically innovative strategy will allow us to resolutely turn the page of pessimism and decline.

This strategy consists of opening up to the world and considering that the French problem and the question of Africa must be expressed and resolved in one and the same equation: it is not possible to bring about an immense renaissance of France without closely associating it with the rise of Africa's emergence. Let's go further: if we want to prevent more and more young Africans from dreaming of exile in France, it is just as important that young French people caress the idea of ​​going abroad for a long time in Africa! I do not hesitate to express here this disturbing advice: young French, go to Africa to help Africans to stay! The time has come to reverse the immigration curve, encouraging our compatriots to invest heavily and work sustainably in Africa. The time has come to stop the brain drain and to encourage young French people to emigrate: that tablets replace rockets, development, growth and peace can only win.

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