isatou's address:

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--- Ylva Hernlund <[log in to unmask]> wrote:
> ---------- Forwarded message ----------
> Date: Tue, 4 Nov 2003 18:08:28 -0600
> From: [log in to unmask]
> To: [log in to unmask]
> Subject: Senegal: Debt and Destruction
>
>
> AfricaFocus Bulletin
> November 4, 2003 (031104)
>
> Senegal: Debt and Destruction
> (Reposted from sources cited below)
>
> Editor's Note
>
> As the U.S. Congress approves $87 billion for the
> U.S. occupation
> of Iraq, long-standing promises by rich creditors to
> provide debt
> "relief" of some $49 billion for 42 countries remain
> unfulfilled,
> and largely off the radar screen for policymakers.
> Yet debt remains
> a crippling burden not only for the 34 African
> countries that
> qualify as Heavily Indebted Poor Countries (HIPC),
> but also for
> major African powers such as Nigeria and South
> Africa.
>
> This issue of AfricaFocus Bulletin contains the
> summary of a new
> report on Debt and Destruction in Senegal by Dembe
> Moussa Dembele, director of the Forum for African
> Alternatives. The summary and full report are
> available on the website of the World Development
> Movement at: http://www.wdm.org.uk
>
> A separate issue of AfricaFocus Bulletin, also
> distributed today,
> contains excerpts from a new analysis of the
> failures of the HIPC
> initiative, released in September by Jubilee
> Research.
>
> +++++++++++++++++++++++end editor's
> note+++++++++++++++++++++++
>
> October 2003
>
> Debt and Destruction in Senegal
> A study of twenty years of IMF and World Bank
> policies
>
> By Dembe Moussa Dembele
>
> Electronic versions of the full report are available
> at
> http://www.wdm.org.uk
>
> For hard copies of the full report please contact
> [log in to unmask]
> World Development Movement
> 25 Beehive Place, London SW9 7QR, UK
> +44 (0)20 7737 6215 http://www.wdm.org.uk
> [log in to unmask]
>
> Executive Summary
>
> From the early years of Senegal's Independence up to
> the late 1980s
> the State played a major role in economic and social
> development,
> due to the dearth of an indigenous private sector
> and the necessity
> to meet some of the most pressing needs of the
> population. The
> legitimacy and stability of the post-Independence
> political system
> depended in large measure on its ability to satisfy
> those needs.
> During the 1960s and 1970s, Senegal achieved some
> significant
> results, thanks to the performance of the
> agricultural sector and
> the strength of its exports.
>
> However, by the mid-1970s, a succession of droughts,
> combined with
> a series of external shocks, led to an economic
> downturn. The
> country's external debt reached unsustainable
> levels, prompting the
> government of the day to turn to the International
> Monetary Fund
> (IMF) and the World Bank. From the late 1970s, until
> the present
> day, these institutions have dominated economic
> policy in Senegal
> and in other Sub-Saharan African countries through
> what are known
> as 'Stabilisation Programs' and 'Structural
> Adjustment Programs'
> (SAPs).
>
> The core policies associated with stabilisation and
> SAPs are cuts
> in public spending; tight monetary and fiscal
> policies; export-led
> growth; trade and investment liberalisation;
> deregulation of
> internal prices; dismantling of the public sector;
> privatisation of
> State-owned enterprises and of essential services;
> rolling back the
> State and eroding its ability to formulate
> autonomous national
> policies.
>
> However, far from rescuing Senegal from its debt
> problems, the
> implementation of such policies since the early
> 1980s has
> aggravated the debt burden and undermined the
> achievement of
> poverty eradication. Debt ratios have literally
> exploded, despite
> 13 rescheduling arrangements with the Paris Club of
> bilateral
> creditors since 1981. In 2002, the external debt
> accounted for 70
> per cent of the country's Gross Domestic Product
> (GDP) and for more
> than 200 per cent of its export revenues. In
> addition, more than 40
> per cent of the bilateral debt was composed of
> arrears, which is an
> indication of how unsustainable Senegal's debt
> burden has become.
>
> The deepening of the debt burden ran in parallel
> with the
> deterioration of the economic and social situation,
> due in large
> part to the numerous policy conditions attached to
> loans made by
> the IMF and the World Bank. Sweeping trade
> liberalisation and
> deregulation combined with the dismantling of the
> Senegalese public
> sector, from the mid-1980s to the late 1990s, led to
> the collapse
> of both the agricultural and industrial sectors. The
> agricultural
> sector, which employs more than 70 per cent of the
> population, has
> been severely affected by liberalisation and the
> dissolution of
> many state controlled enterprises (known as
> parastatals). As a
> result, peasants and small-scale farmers have seen
> their
> livelihoods deteriorate in the face of the invasion
> of the domestic
> market by cheap and subsidised imports from
> developed countries.
>
> It is against this background that Senegal entered
> into the Heavily
> Indebted Poor Countries (HIPC) Initiative, in June
> 2000, following
> its submission of an interim Poverty Reduction
> Strategy Paper
> (I-PRSP). Under HIPC, Senegal's debt is expected to
> be reduced by
> US$850 million, US$488 million in Net Present Value
> (NPV) terms,
> over a 10-year period. However, reaching the
> 'Completion Point' and
> receiving this debt relief (which will account for
> only 17 per cent
> of Senegal's total debt) is contingent upon
> fulfilling a range of
> structural policy conditions set by the World Bank
> and IMF. In
> other words, debt relief is being used as yet
> another lever with
> which the IMF and World Bank can push through more
> free market
> policy reforms.
>
> This is despite the evidence that the past twenty
> years of IMF and
> World Bank policies in Senegal have been
> unsuccessful in
> significantly reducing poverty. Low or stagnant
> economic growth, a
> deterioration in some social indicators and only
> modest
> improvements in others has characterised the period
> of 'structural
>
=== message truncated ===


=====
Yaikah M. Jeng
MPhil/PhD candidate
LSHTM
London

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