3.2 Economic enigma

France has a tax burden that accounts for 45% of GDP. That's the bad news. On the other hand, the French economy, although not as strong as in recent years, scores 89 points in our 2007 Index.

The world's fourth-largest exporter, France has a per-capita GDP of $27,500, and inflation stands at just 2%. With last year's growth rate coming in at 1.1%, and this year's forecast to be 2.6%, the French economy has lots of things going for it-including ultra-modern transport and communications systems, competitive energy costs, and a AAA credit rating.

But, yes, it also has a 35-hour work week, 9% unemployment (in comparison, Ireland, with one of the strongest economies in the world right now, has a 4.5% unemployment rate), and all kinds of generous provisions for the workforce that would result in much wailing and gnashing of teeth in the lean, mean, business world of North America. Approximately one in four employees work in France's cumbersome public sector.

Yet, despite France's long tradition of state involvement in the economy, successive recent governments, both left and right, have been striving to create the kind of pro-business environment sought by international investors. The former socialist prime minister, Lionel Jospin, privatized or partially privatized more companies than his four predecessors combined. Air France, France Telecom, and Thomson Multimedia are the flagships, but other telecommunications, defense, aviation, and banking companies have also moved in recent years from state to private sector.

For most overseas onlookers, France's marketplace image conjures up visions of perfumes, cosmetics, fashion, top-quality wines, and gourmet foods. All are valuable exports, but so too are Exocet missiles, Mirage jets, and Renault, Peugeot, and Citröen cars.

Although e-business is growing significantly, the country's traditional muscle lies in engineering and transportation-few would disagree with the fact that TGV trains rank among the world's best, for example. Some engineering talent has recently been lured into the glitzy world of web ventures, but the metal-bashing industries still attract top graduates; likewise the nuclear, defense, chemical, telecommunications, and pharmaceutical sectors.

With sales totaling $23.5 billion, France represents 24% of the European pharmaceutical market and is the continent's number-one producer of drugs. More than 150 North American biotech and pharmaceutical companies now operate in France, including Amgen, Abbott Labs, Baxter, Genzyme, and Quintiles.

Furthermore, France is the European Union's largest agricultural producer, and farmers here are a powerful political lobby group. Most of us have traveler's tales about being halted at the Channel ports by the blockades and barricades of those fuming sons of the soil.

3.3 A long, healthy life

According to the World Health Organization France has the best overall health care system in the world. Life expec­tancy now averages 83 years for women and 76 for men. In the past 10 years, the number of people living over the age of 100 has doubled, with 6,840 people reaching the three-digit mark. The infant mortality rate is five per 1,000 live births, on a par with Denmark. By comparison, Singapore has the lowest infant mortality rate in the world with 2.9 per 1,000 live births.