Sat, Feb 02, 2002 page19

• Marseille's fiesty nature reflected in its economy

  In recent years, the economy of the city once synonymous with corruption and drug-trafficking, has been revived by the laying of an undersea fibre-optic cable, an ambitious public works project and a new high-speed train link with Paris

  • By Robert Elliott / REUTERS
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  Once the post-war heroin capital of the world, France's second city, Marseille, is being transformed from a crime-ridden moribund port into a vibrant, technology-driven center to rival Paris.

  Its resurgence has fuelled competition with the capital, as shown in 2001 Christmas cards sent by a local development agency that read: "Paris: a close suburb of Marseille."

  "You can establish your office in Marseille for half the price of Paris. Paris is fine, but ... many people want a good job and good quality of life. We have both," said managing director Guy Guistini of economic development agency Provence Promotion.

  In recent years, the economy of the city once synonymous with corruption and drug trafficking has been revived by the laying of an undersea fibre-optic cable, an ambitious public works project and a high-speed train link with Paris.

  Foreign investment in Marseille and its environs topped that of the Paris area in 2000, led by telecommunications, microelectronics, biotechnology and other industries. US firms lead with 110 of some 500 companies backed by foreign capital.

  "There was one telecom operator here in 1995. Now we have over 30," said city deputy general secretary Alain Jouanjus.

  The town's unemployment, while still high, has fallen three percentage points since late 1997, and public spending climbed 20 percent between 1995 and 2001. Rents have risen.

  The drug trade which once made Marseille notorious -- in the mid 1960s it supplied 80 percent of the heroin bound for the US -- vanished long ago, and the boom is bringing people back. Some 10,000 people left Marseille annually in the 1970s and 80s, but last year the population reached 800,000, compared with 784,000 in 1995.

  "Before, when corporate managers came here to work they lived outside of town in reputable districts like Cassis and Aix-en-Provence. Now they live in Marseille," Jouanjus said.

  Location, Location, Location

  It rains only 55 days a year in the attractive, sun-drenched port, and ski resorts in the Alps are just over two hours away.

  France's biggest port, Marseille sits between limestone cliffs and mountains at the Rhone valley's mouth, and lies on an arc stretching between Milan and Barcelona.

  A major revitalization of transport and the city center is underway: two tunnels are being built to allow drivers to head out to Italy, Spain and Paris directly from downtown Marseille.

  The tunnels are part of the EuroMediterranee project to rejuvenate 310 hectares of city property, a bold plan begun in 1995 and financed with private and public funds.

  It is the largest public works project in French history after La Defense, the high-tech business district west of Paris.

  "It was a dead city before the government decided to launch the docklands rehabilitation," said Phillippe Tannenbaum, European property analyst for Credit Lyonnais Securities.

  Euromediterranee hopes to create 20,000 jobs while overseeing construction of a film studio, housing, a new port terminal and a waterfront business district.

  In June 2001 the TGV Mediterranee high-speed train from Paris to Marseille made its debut, cutting travel time to three hours from over four. Within six months, the US$3.5 billion line celebrated its 10-millionth passenger.

  "The TGV symbolizes that the government wants to solidify ties with Marseille and that the city is fully part of France. There has always been local indifference and resentment towards the central authority in Paris," said US Consul Samuel Brock.

  The train underpins a transport network that encourages growing tourism. The number of cruise passengers docking in Marseille leapt to 240,000 in 2001 from 19,000 in 1995.

  Euromediterranee project spokesman Guillaume Bruge said he saw the Mediterranean, with Marseille in tow, challenging the Caribbean as a leading world cruise destination.

  "Marseille has the advantage of having the TGV line and being in Europe's centre. The city has an obvious role to play."

  Six three- and four-star hotels with at least 100 rooms each are being planned over the next seven years, says Jean-Louis Tourret, deputy-mayor for finance. Currently, city rooms are booked a healthy 200 days a year.

  High-tech Haven

  Marseille has come into its own as a high-tech haven for France.

  Donning baby-blue hospital smocks and white clogs, workers at leading world smart-card maker Gemplus monitor diamond-edged saws that cut microchips to be laced with gold wire.

  Gemplus is one of the major companies based near Marseille which produce more than 35 percent of the nation's microchips. Top European chipmaker Franco-Italian STMicroelectronics and US microchip maker Atmel also have facilities there.

  Telecoms money poured in after the submarine fibre-optic cable "Sea Me We II" was laid in 1994, connecting Marseille with the rest of Europe and Asia as far as Singapore.

  Marseille is one of France Telecom's four international communications terminals, while US long-distance phone company WorldCom has pumped a quarter of its total French investments into the city.

  In September 2001, AOL Time Warner Inc opened its southern Europe call centre in Marseille. The industry is attracted by its multi-lingual labour pool, authorities say.

  Despite the technology rush, the modern Marseille still relies heavily on its port -- the third largest in Europe -- and in turn on the ups and downs of the world economy and shipping.

  Racial powderkeg

  The port's operation relies on a balance among Marseille's "powderkeg" social mix including North Africans, black Africans, East Europeans, Vietnamese and others, Brock said.

  "If the equilibrium that delicately exists right now ... would somehow come apart, the implications for the rest of France would be very grave. A lot of France's exports to the Americas, Asia and Africa come through the port," he said.

  And despite the bite taken out of Marseille's unemployment, it is still 17.2 percent, almost double the national rate.

  "There is a recognition in Paris and amongst many of the leaders here that Marseille has got to succeed. It's too big a city to become a center of disfunctionality," Brock said.
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