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World

ORIGINAL FRENCH ARTICLE: Juteuse aide au développement Development

by Rosa Moussaoui

Development Aid For a Fat Return

Translated Friday 11 July 2014, by Isabelle Métral

Is the French Foreign Minister’s beloved « economic diplomacy » compatible with a disinterested commitment to international cooperation and solidarity? As it unveiled its Sub-Saharan intervention strategy for 2014 to 2016 last week, AFD, the French Development Agency, made French intentions clear: namely to “seize the opportunities” opened up by the “unprecedented” economic growth on the African continent. “Sub-Saharan Africa is more than ever at the center of AFD’s activities.

While investments in the region totaled a record 2.8 billion euro –nearly half AFD’s investments abroad, our forecast for 2014 to 2016 is set at 9.2 billion euro in order to meet the 20-billion objective set for the whole continent by the President of the Republic over the next five years,” Yves Bouchot, head of the African department declared.

Aid in the poorest countries keeps declining...

As development bank and second biggest bi-lateral backer south of the Sahara (second to US aid), this public financial institution, together with its Proparco subsidiary, is the linchpin of co-operation policies based on the “conviction that the promotion of growth and of the private sector is essential for Africa to pull out of poverty”, to quote from the Senate’s Autumn report entitled “Africa is our future”. This orientation is indeed clearly reflected in the policy statement: while financing of the private sector and sovereign loans to the most solvent countries soar, aid and subsidies for development projects in the poorest countries decline. Dominique Josse, in charge of the African sector for the French Communist Party, reckons that “The logic consisting in supporting the development of markets in order that the big French groups can position themselves on these markets vitiates French co-operation policies. When all’s told their impact on the populations is negligible.”

On February 18th last, the AFD boasted a 10-million-euro budget to the State of Niger, of which 7 million were earmarked for ‘the partial reduction of the State’s arrears in the water, electricity, and health sectors’. One of the direct beneficiaries of this “help with bills” is no other than Veolia, the Nigerian water-supply company liberalized in 2001 to the benefit of the French multinational, Veolia being also a shareholder of Proparco, AFD’s financial arm for the private sector. “This marked tendency to channel funds towards the private sector is a matter of great concern to us, especially as no guarantee is given as to the transparency of their use and their effective impact in terms of development,” confides Mathilde Dupré – a CCFD-Terre solidaire official.

For the next two years, AFD displays commitments in favor of big infra-structure projects in the transport, water, energy and urban development sectors – all of which will further the positioning of French big groups already established on the African continent. ‘We are requested to be present where French companies can also be present,’ Yves Boudot concedes. Early this year, Nicole Bricq, then minister for Foreign Trade, in a letter to AFD’s head manager, relayed the dissatisfaction of the French business sector over the inadequate “return on investments” of French development aid - an indirect plea for a return to tied aid in favor of donor countries’ companies. To which AFD retorts that “a return to tied aid would run counter OECD rules and above all would be detrimental to French interests.”

In point of fact, if French companies are confronted with serious competition in emerging countries on the cooperation and development aid “market”, the situation is quite the reverse in France’s former “private preserve” where they can rely on the support of firmly rooted influence networks. For instance, French companies took only about 5% of the 30 billion dollar public market financed by the World Bank in 2013, against 50% in Sub-Saharan Africa. AFD, which directly finances markets to the tune of about one billion euro a year, considers using the “social and environmental responsibility” lever in order to give French companies an edge on their competitors – even though their reliability in these fields remains to be proven.

As a matter of fact there has been no perceptible break with the privatization of development aid instituted under Sarkozy. François Hollande’s promise to honor France’s international commitments by raising public development aid to 0.7% of GDP has been driven into oblivion by virtue of budgetary austerity. Lacking the necessary financing and political vigor, the orientation and programming law for development and international solidarity passed on June 23rd last might well remain a rosary of pious intentions too.


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